Supreme Court & High Courts Weekly Round-Up

This weekly round-up analytically summarises the key stories related to the Supreme Court & High Courts reported at Taxscan.in during the previous week, from September 21, 2025 to September 27, 2025.

Supreme Court

Relief to Adani Power, Export Duty Not applicable on Transfer from Domestic Tariff Area to SEZ: Supreme Court

UNION OF INDIA vs M/S ADANI POWER LTD CITATION: 2025 TAXSCAN (SC) 284

The Supreme Court of India dealt with the legal issue of whether movement of goods from a Domestic TariffArea (DTA) to a Special Economic Zone (SEZ) amounts to an “export” under the Customs Act, 1962. The Union of India had levied export duty under Section 12 of the Customs Act, 1962, contending that such supplies constituted exports since SEZs are treated as foreign territory for trade purposes. However, Adani Power Ltd and other companies challenged the levy, arguing that the SEZ Act, 2005, particularly Section 2(m), provides a distinct and expansive definition of “export” which deems DTA–SEZ supplies as exports only for the purpose of extending SEZ benefits, not for imposing customs duty. The Court emphasized that the charging provision under Section 12 applies only to goods physically exported out of India, and therefore, export duty cannot be imposed on DTA–SEZ transactions.

The bench comprising Justice B.V. Nagarathna and Justice R. Mahadevan dismissed the Union Government’s appeal and upheld the Gujarat High Court’s ruling in favour of Adani Power Ltd. The bench clarified that while Section 26 of the SEZ Act empowers the government to grant exemptions or concessions, it does not create a separate charge of duty independent of Section 12 of the Customs Act. Accordingly, the Court concluded that the movement of goods from DTA to SEZ constitutes a domestic supply and not an export outside India, thereby exempting such transactions from export duty. All appeals by the Union of India were consequently dismissed.

Cheque Bounce Cases Fail if Demand Notice Mentions Wrong Amount: Supreme Court

KAVERI PLASTICS vs MAHDOOM BAWA BAHRUDEEN NOORUL CITATION: 2025 TAXSCAN (SC) 285

The Supreme Court of India recently addressed the legal issue of whether a cheque bounce demand notice under Section 138(b) of the Negotiable Instruments Act, 1881 remains valid if it mentions an amount different from the actual cheque amount. The case arose from a special leave petition filed by Kaveri Plastics, after the Delhi High Court (26 February 2024) quashed its criminal complaint under Sections 138, 141, and 142 of the NI Act. The dispute originated when Nafto Gaz India Pvt. Ltd. issued a cheque for ₹1 crore in favour of Kaveri Plastics, which was dishonoured due to insufficient funds. However, the demand notices mistakenly claimed ₹2 crores, prompting the High Court to rule that the notices were invalid for not demanding the exact cheque amount.

The bench of Justice B.R. Gavai and Justice N.V. Anjaria upheld the Delhi High Court’s ruling and dismissed the appeals. The Court clarified that Section 138(b) specifically requires the notice to demand “the said amount of money,” i.e., the cheque amount alone. Any demand of a lesser or higher amount fails to satisfy the statutory requirement. Since the error was repeated in two separate notices, the Court rejected the argument that it was a mere typographical mistake. Emphasizing that penal provisions must be strictly construed, the Bench held that even minor discrepancies are fatal if the notice does not exactly match the cheque amount. Accordingly, the appeals were dismissed.

Handling Export Cargo falls within the ambit of “Taxable Services”: Supreme Court Dismisses Airports Authority's Appeal

AIRPORTS AUTHORITY OF INDIA vs COMMISSIONER OF SERVICE TAX CITATION: 2025 TAXSCAN (SC) 286

The Supreme Court of India examined the issue of whether services relating to handling export cargo at airports are excluded from the ambit of service tax under the Finance Act, 1994. The Airports Authority of India (AAI), a statutory body under the Ministry of Civil Aviation, challenged the levy of service tax confirmed for the period 01.10.2003 to 31.03.2007. The dispute turned on the interpretation of Section 65(23), which defines “cargo handling service” and excludes handling of export cargo, and Section 65(105)(zzm) read with Section 66, which defines and imposes tax on “taxable services” including those provided by AAI in an airport or civil enclave.

The bench comprising Justice Pankaj Mithal and Justice Prasanna B. Varale dismissed AAI’s appeal under Section 35L of the Central Excise Act, 1944, upholding the decision of the CESTAT dated 01.03.2017. The Court held that while “export cargo” is excluded from the definition of “cargo handling service” under Section 65(23), that exclusion does not override the wider definition of “taxable service” under Section 65(105)(zzm). Since AAI provides services at airports to any person, such activities fall squarely within “taxable service” and are subject to levy under Section 66 of the Finance Act. The Court clarified that statutory provisions prevail over circulars relied upon by the appellant, and therefore, the service of handling export cargo is liable to service tax.

Supreme Court Upholds 3 Years Suspension of Advocate for Making Scandalous Allegations Against an Individual

MANOJ KUMAR SHARMA vs PRIYANKA BANSAL CITATION: 2025 TAXSCAN (SC) 287

The Supreme Court of India recently dealt with the issue of professional misconduct by an advocate under the Advocates Act, 1961, in a case where Manoj Kumar Sharma was suspended for making scandalous allegations against complainant Priyanka Bansal. The matter arose from a statutory appeal challenging the Bar Council of India’s order dated 19 December 2023, which found the advocate guilty of misconduct and suspended him for three years from the roll of advocates.

The bench comprising Justice Surya Kant and Justice Joymalya Bagchi upheld the disciplinary order and refused to show leniency, holding that the appellant’s obstinacy in making scandalous allegations amounted to serious misconduct. The Court dismissed the appeal with costs of ₹1,00,000, directed the Collector of Agra to attach the appellant’s properties for recovery, and ordered that the amount be paid as compensation to Priyanka Bansal within three months. Further, the Court instructed the Bar Council not to renew the appellant’s license without prior permission and to submit a compliance report to the Secretary General after the suspension period. The matter was accordingly disposed of with these directions.

VAT Exemption Only for Goods Produced in Same State is Discriminatory: Supreme Court Quashes Notification Violating Art. 304(a)

M/s. U.P. ASBESTOS LIMITED vs STATE OF RAJASTHAN & OTHERS CITATION: 2025 TAXSCAN (SC) 288

The Supreme Court of India dealt with the constitutional validity of Notification No. S.O.377 dated 09.03.2007, issued under Section 8(3) of the Rajasthan VAT Act, 2003, which granted VAT exemption exclusively to asbestos cement sheets and bricks manufactured within Rajasthan. A number of appeals were filed by M/s U.P. Asbestos Limited and M/s Everest Industries Limited, challenging the Rajasthan High Court’s order upholding the notification.

The bench comprising Justice B.V. Nagarathna and Justice K.V. Viswanathan struck down the impugned notification, holding that it created a fiscal barrier against identical goods manufactured outside the State and was therefore unconstitutional. The Court observed that the exemption was granted purely on the basis of the place of manufacture, without mandating the use of fly ash sourced from Rajasthan as claimed by the State. Emphasizing that taxation cannot be used as a tool for creating fiscal barriers, the Bench clarified that while States may incentivize industries, they cannot do so in a manner that offends the principle of non-discrimination under Article 304(a). Accordingly, the appeals were allowed, the Rajasthan High Court’s order was set aside, and the notification was quashed as unconstitutional.

Apollo Tyres’ Weighted Deduction Claim u/s 35(2AB) Rejected: Supreme Court Refuses to Re-open Case

APOLLO TYRES LTD vs THE ASSISTANT COMMISSIONER OF INCOME TAX CITATION: 2025 TAXSCAN (SC) 289

The Supreme Court of India dealt with the issue of eligibility for weighted deduction under Section 35(2AB) of the Income-tax Act, 1961, in relation to Research and Development (R&D) expenditure incurred by Apollo Tyres Ltd. The company had established two in-house R&D facilities at Perambra (Cochin) and Limda (Vadodara), both recognized by the Department of Scientific and Industrial Research (DSIR). While Apollo regularly availed normal deduction under Section 35(1), it later sought the higher 150% weighted deduction under Section 35(2AB). The DSIR, however, restricted the benefit on the ground that the mandatory cooperation agreement under Section 35(2AB)(3) was executed only on 21 August 2008, after the close of the relevant financial year. The Assessing Officer disallowed the claim citing both this delay and the absence of a revised return, and the disallowance was subsequently upheld by the CIT(A), ITAT, and the Kerala High Court, which relied on the Delhi High Court’s 2010 ruling in Apollo’s own case.

The bench comprising Justice Surya Kant, Justice Ujjal Bhuyan, and Justice N. Kotiswar Singh dismissed Apollo Tyres’ Special Leave Petition (SLP), holding that the matter had already been conclusively adjudicated. The Court recalled that Apollo had earlier challenged the DSIR’s approval period before the Delhi High Court, which dismissed its writ petition in 2010. A subsequent SLP against that decision was dismissed in 2015 on account of a delay of 1,251 days. Observing that it was “difficult to re-open the case” after multiple rounds of litigation, the Supreme Court declined to interfere and dismissed the appeal, thereby affirming that Apollo Tyres was not entitled to the weighted deduction claimed under Section 35(2AB).

Service Tax on Marketing of Film Songs on Sony Music: Supreme Court likely hear Matter on Next Month

COMMISSIONER OF CGST vs SONY MUSIC ENTERTAINMENT INDIA PRIVATE LIMITED CITATION: 2025 TAXSCAN (SC) 290

The Supreme Court of India is scheduled to hear next month a crucial issue on the levy of service tax on the marketing and promotion of film songs by Sony Music Entertainment India Pvt. Ltd. The case arises from an appeal filed by the GST Department against a ruling of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai, which had set aside service tax demands raised on Sony Music for the period 2009–2017. The Directorate General of GST Intelligence (DGGI) alleged that Sony’s contractual obligation to incur expenditure on publicity and promotion of film songs indirectly promoted the films themselves, thereby constituting Business Auxiliary Services (BAS) to film producers under the Finance Act, 1994.

The bench of Justices Manoj Misra and Ujjal Bhuyan on 9 September 2025 adjourned the matter on request of counsel and directed it to be listed after two weeks, making 7 October 2025 the tentative date for substantive hearings. Earlier, the CESTAT had ruled in favour of Sony Music, holding that once the music rights were assigned, Sony became the owner and its promotional expenditure was for its own commercial benefit, not as a service to film producers. It rejected the department’s classification under BAS, observing that there was no consideration flowing from producers to Sony. The Tribunal’s reasoning relied on precedents such as McDonalds India Pvt. Ltd. and Bhayana Builders (P) Ltd., which clarified that self-promotional expenses cannot be treated as taxable services. The Supreme Court will now examine whether such promotional spend is taxable under service tax law.

No Fresh Income Tax Claims or Reassessment Permissible Post Approval of Resolution Plan: Supreme Court CJ Bench refuses to Interfere with Gujarat HC Order

ASSISTANT /DEPUTY COMMISSIONER OF INCOME TAX CIRCLE vs AUSIL CORPORATIONPRIVATE LIMITED CITATION: 2025 TAXSCAN (SC) 291

The Supreme Court of India recently dealt with the legal issue of whether reassessment proceedings under Sections 148 and 148A(d) of the Income Tax Act, 1961 can be initiated once a resolution plan under the Insolvency and Bankruptcy Code (IBC), 2016 has been approved by the adjudicating authority. The case arose after reassessment notices were issued to Ausil Corporation for AY 2015–16 despite the fact that the Income Tax Department had already filed and received partial satisfaction of its claim during the Corporate Insolvency Resolution Process (CIRP).

The bench comprising Chief Justice K. Vinod Chandran and Justice Atul S. Chandurkar dismissed the Department’s Special Leave Petition, thereby upholding the Gujarat High Court’s ruling that fresh reassessment proceedings are impermissible post-approval of a resolution plan. The Court, while condoning delay, declined to interfere with the High Court’s judgment, reiterating the principle laid down in Ghanashyam Mishra & Sons v. Edelweiss ARC (2021) that all prior claims, including statutory dues, stand extinguished once a resolution plan is approved under the IBC.

Relief for LG Electronics: Supreme Court Rules Classification Not Decisive when Customs Duty Exemption under India-Korea CEPA Applies

M/S L.G. ELECTRONICS INDIA PRIVATE LIMITED vs COMMISSIONER OF CUSTOMS CITATION: 2025 TAXSCAN (SC) 292

The Supreme Court of India recently adjudicated on the issue of customs duty liability in relation to the classification of imported smart watches and the applicability of Notification No. 152/2009 issued under the India–Korea Comprehensive Economic Partnership Agreement (CEPA). The dispute arose when the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) upheld the Commissioner’s classification of the goods under tariff entry 8517 6290 instead of 9102 1900, denied the benefit of the exemption notification, and confirmed the duty demand against M/s L.G. Electronics India Private Limited.

The bench comprising Justice J.B. Pardiwala and Justice Sandeep Mehta set aside the Tribunal’s order and directed a refund of the duty already deposited, along with applicable interest. While affirming that the imported items were correctly identified as smart watches, the Court clarified that this classification did not preclude the company’s right to claim exemption under the CEPA notification. Observing that a valid Certificate of Origin from the Republic of Korea was furnished and that there was no mala fide conduct, the Court held that the denial of exemption was erroneous. It accordingly allowed the appeal and disposed of pending applications.

Challenge on Service Tax Demand on ‘Mandap Keeper Services’: Supreme Court Stays Chhattisgarh HC Remand Order

M/S SAUBHAGYA TILAK HOTELS PVT. LTD vs PRINCIPAL COMMISSIONER OF CENTRALEXCISE CITATION: 2025 TAXSCAN (SC) 293

The Supreme Court of India recently stayed the remand order of the Chhattisgarh High Court in a case concerning the levy of service tax on alleged “Mandap Keeper Services” by Saubhagya Tilak Hotels Pvt. Ltd. The dispute arose under Section 65(105)(m) of the Finance Act, 1994 and involved the imposition of service tax for the period 2008–09 to 2011–12, following a search at the assessee’s premises and reliance on statements recorded under Section 14 of the Central Excise Act, 1944. The assessee had operated a non-air-conditioned restaurant without alcohol and supplied bakery and confectionery items, activities not subject to service tax at that time. The controversy centered on whether statements of the manager and director could be relied upon without allowing cross-examination, in violation of Section 9D of the Central Excise Act, 1944 and principles of natural justice.

The bench of Justices J.B. Pardiwala and K.V. Viswanathan issued notice in the appeal on 8 September 2025 and stayed the Chhattisgarh High Court’s order that had remanded the matter for fresh adjudication. The High Court, comprising Justices Sanjay K. Agrawal and Sanjay Kumar Jaiswal, had earlier directed the adjudicating authority to allow cross-examination of the witnesses and pass a fresh order within three months. By staying the remand, the Supreme Court has paused the fresh proceedings, while notice has been returnable in four weeks, allowing Dasti service. The Supreme Court will now examine the admissibility of the statements relied upon and the correctness of the service tax demand.

ALP of Intra-Group Services Cannot be Nil without Sec. 92C(3) Compliance: Supreme Court Dismisses SLP of American Express Banking Corp

AMERICAN EXPRESS BANKING CORPORATION vs ASSISTANT DIRECTOR OF INCOME TAX CITATION: 2025 TAXSCAN (SC) 294

The Supreme Court of India recently dealt with the issue of transfer pricing under Section 92C(3) of the Income Tax Act, 1961, concerning the determination of Arm’s Length Price (ALP) for intra-group services. The case arose from a Special Leave Petition filed by American Express Banking Corporation challenging the Delhi High Court’s decision, which had upheld the ITAT’s remand directing the Transfer Pricing Officer (TPO) to recompute the ALP for intra-group services. The dispute originated from international transactions between American Express India and its Associate Enterprises, where the TPO initially made a transfer pricing adjustment of over Rs. 24 crore, and the CIT(A) had restricted the adjustment to 50% of the TPO’s determination due to lack of third-party documentation.

The bench comprising Justice J.B. Pardiwala and Justice K.V. Viswanathan dismissed the SLP, observing that there was no ground to interfere with the High Court’s order. The Supreme Court upheld the Delhi High Court’s decision, agreeing with ITAT’s finding that some intra-group services had indeed been received by the assessee and therefore the ALP could not be taken as nil. The matter was remanded back to the TPO to consider afresh, ensuring that the conditions under Section 92C(3) are satisfied before making transfer pricing adjustments for intra-group services.

Customs Duty Exemption Allowed for ‘hCG Pregnancy Test Kits’ Based on Essential Character from Agglutinating Sera: Supreme Court Upholds CESTAT Order

COMMISSIONER OF CUSTOMS vs M/S RAPID DIAGNOSTICS PVT. LTD.ETC. CITATION: 2025 TAXSCAN (SC) 295

The Supreme Court of India recently upheld the CESTAT order allowing customs duty exemption for imported hCG Pregnancy Test Kits imported by Rapid Diagnostics Pvt. Ltd., holding that their essential character derived from agglutinating sera. The dispute arose under the Customs Tariff Act, 1975, specifically concerning the classification of the imported “hCG Pregnancy Rapid Test Strip” and “hCG Pregnancy Rapid Test Cassette” under CTH 3002, and the applicability of Notification Nos. 12/2012-Cus and 50/2017-Cus providing exemption from basic customs duty. The Department had challenged the exemption on the ground that the exemption applied only to agglutinating sera and not to finished test kits, whereas the assessee argued that the kits derived their essential character from agglutinating sera and were thus eligible for exemption.

The bench comprising Justice J.B. Pardiwala and Justice Manmohan dismissed the appeals filed by the Department, finding no reason to interfere with the CESTAT order dated 19.11.2024, which had upheld the Commissioner of Customs’ decision. The Court observed that the essential character of the kits was provided by agglutinating sera containing monoclonal hCG antibodies, and that other kit components were passive. Relying on the Tribunal’s reasoning and precedents, including Inter Care Ltd., the Court held that the classification and exemption were correct. Consequently, the appeals were dismissed, and all pending applications were disposed of.

Supreme Court Dismisses Plea Against Expanded Definition of “Sikkimese”, Rules Change Limited to Income Tax Exemption Purpose Only

DOMA T BHUTIA vs UNION OF INDIA CITATION: 2025 TAXSCAN (SC) 296

The Supreme Court of India recently dealt with a challenge concerning the expanded definition of “Sikkimese” under Section 10(26AAA) of the Income Tax Act, 1961, which grants income tax exemptions. The case arose from a Special Leave Petition filed by Doma T. Bhutia against the High Court of Sikkim’s order dated 4 March 2025 in W.P. (PIL) No. 01/2025, which had upheld the amendment made by Parliament following the Supreme Court’s earlier judgment in Association of Old Settlers of Sikkim and Others v. Union of India. The petitioner contended that broadening the definition diluted the distinct identity of the Sikkimese people.

The bench comprising Justice B.V. Nagarathna and Justice R. Mahadevan dismissed the petition, observing that the expansion of “Sikkimese” is limited solely for the purpose of granting tax exemption under Section 10(26AAA) and does not affect the cultural or constitutional identity of the Sikkimese community. The Court clarified that Parliament has the authority to widen the scope of a provision to extend benefits, and such a policy decision cannot constitute a grievance. The Supreme Court disposed of the case and directed that the Union of India may issue a formal notification consistent with its press release, if not already done, while also disposing of all pending applications.

Delhi HC Quashed Reassessment as AO’s 95%-5% Revenue Split Dispute Found Unjustified: Supreme Court Declines to Intervene

DEPUTY COMMISSIONER OF INCOME TAX vs TRANS WORLD INTERNATIONAL LTD CITATION: 2025 TAXSCAN (SC) 297

The Supreme Court of India recently addressed a challenge to the reassessment proceedings initiated under Sections 148 and 148A(d) of the Income Tax Act, 1961 against Trans World International Ltd. LLC. The matter arose from a Special Leave Petition filed by the Deputy Commissioner of Income Tax, Circle 3(1)(1), International Tax, New Delhi, against the Delhi High Court’s order dated 14 August 2024 in W.P.(C) No. 16672/2022, which had quashed the reassessment order and corresponding notice. The High Court observed that the Assessing Officer’s dispute over the 95%-5% revenue bifurcation in the contract was perverse and had no legal basis, relying on the precedent set in the Fox Network decision. Consequently, the reassessment proceedings were set aside.

The bench comprising Justice J.B. Pardiwala and Justice K.V. Viswanathan dismissed the Revenue’s appeal, noting that the assessee intended to challenge the final assessment through proper statutory channels. The Supreme Court observed that there was no purpose in continuing the appeal on the issue of reopening the assessment and disposed of the matter accordingly, while also disposing of all pending applications. The Court clarified that the assessee retains the liberty to pursue remedies against the final assessment order in accordance with law.

Supreme Court Refuses Anticipatory Bail for Accused Involved in Fraudulent Financial Transactions Worth Several Crores of Rupees

HARSH VERMA vs STATE OF MADHYA PRADESH CITATION: 2025 TAXSCAN (SC) 298

The Supreme Court of India recently dismissed a plea seeking anticipatory bail filed by Harsh Verma, accused of involvement in large-scale fraudulent financial transactions. The matter arose from a Special Leave Petition challenging the Madhya Pradesh High Court’s order dated 20 December 2024 in MCRC No. 49671/2024, which had rejected his anticipatory bail application in connection with FIR No. 385/2023 registered at Police Station Maharana Pratap Nagar, District Bhopal Shehari, under Sections 406 and 420 of the Indian Penal Code.

The bench comprising Justice Rajesh Bindal and Justice Manmohan observed that the transactions under scrutiny involved several crores and that allegations regarding ownership of the funds were yet unresolved. Considering the gravity and magnitude of the financial dealings, the Court found no reason to grant anticipatory bail. The Supreme Court also directed the investigating agency to coordinate with the local Income Tax Department to further examine potential tax violations. Consequently, the plea was dismissed along with all pending applications.

Supreme Court Upholds JSW Steel's Resolution Plan for BPSL

KALYANI TRANSCO vs M/S BHUSHAN POWER AND STEEL LIMITED AND OTHERS CITATION: 2025 TAXSCAN (SC) 299

The Supreme Court of India recently upheld JSW Steel Ltd’s resolution plan for Bhushan Power and Steel Ltd (BPSL) under the Insolvency and Bankruptcy Code, 2016, agreeing with the Solicitor General of India that the Committee of Creditors’ (CoC) role continues only until the approved resolution plan is put into effect. The matter arose from a challenge to JSW’s ₹19,700 crore resolution plan, which was previously denied by the Court on May 2, 2025, citing alleged violations of Sections 30(2) and 31(2) of the IBC, and ordering liquidation of BPSL. The Supreme Court’s review addressed issues regarding the execution of the resolution plan, the CoC’s authority, and the rights of former promoters to contest NCLAT orders at a late stage.

The bench comprising Chief Justice B.R. Gavai and Justice Satish Chandra Sharma observed that the resolution plan implemented by JSW had transformed BPSL from a loss-making entity into a financially healthy company, protecting thousands of employees and maintaining the Corporate Debtor as an ongoing concern. The Court emphasized that allowing the CoC or former promoters to challenge the NCLAT ruling at this stage would undermine the intent of the IBC and confirmed that JSW’s implementation of the resolution plan is valid. The Supreme Court accordingly upheld the NCLAT’s decision authorizing the resolution plan, while maintaining status quo on liquidation proceedings to avoid procedural complications.

Cheque Bounce Complaints can be filed against Cash Loans even when Amount Exceeds ₹20000: Supreme Court sets aside Kerala HC Ruling

SANJABWTART vs KISHORE S. BORCAR & ANR. CITATION: 2025 TAXSCAN (SC) 300

The Supreme Court of India recently clarified that complaints under Section 138 of the Negotiable Instruments Act, 1881 are maintainable for dishonoured cheques issued towards repayment of cash loans, even when the loan amount exceeds ₹20,000. The ruling arose from a special appeal challenging the Kerala High Court’s decision in P.C. Hari v. Shine Varghese (2025), which had held that cash loans exceeding ₹20,000 in violation of Section 269SS of the Income Tax Act, 1961 could not constitute a “legally enforceable debt” for the purposes of the NI Act.

The bench comprising Justices Manmohan and N.V. Anjaria observed that statutory presumptions under Sections 118 and 139 of the NI Act favor the complainant once the execution of a cheque is admitted. The Court noted that procedural safeguards must be strengthened to reduce pendency in Section 138 cases, including permitting service of summons via email, WhatsApp, or dasti; establishing online payment mechanisms; and filing structured case synopses. Restoring the trial court’s conviction, the Supreme Court directed the accused to repay ₹7.5 lakh in 15 instalments and reaffirmed that income tax restrictions cannot dilute criminal liability under the NI Act, thereby upholding the enforceability of cash loan repayments through cheque bounce proceedings.

High court

Win for Parle Products: Bombay HC Rules Freight Charges Reimbursed by Wholesalers Do Not Form Part of Sale Price, No Sales Tax Payable

The Commissioner Of Sales Tax vs Parle Products Ltd. CITATION: 2025 TAXSCAN (HC) 1871

The Bombay High Court recently addressed the legal issue of whether freight charges reimbursed by wholesalers form part of the sale price for the purposes of sales tax under Section 2(29) of the Bombay Sales Tax Act, 1959. The matter arose when the Commissioner of Sales Tax questioned whether amounts collected by Parle Products Ltd. for transporting goods from its factory to wholesalers’ premises should be included in taxable turnover, and therefore attract sales tax.

The case was heard by a Division Bench comprising Justices M.S. Sonak and Advait M. Sethna, who examined the terms of the contracts and prior judicial precedents. The court held that freight charges reimbursed by the purchasers were not part of the sale price and could not be subjected to sales tax. Observing that the contracts clearly provided for ex-factory delivery and that earlier rulings had rejected similar revenue arguments, the court ruled in favor of Parle Products Ltd., setting aside the inclusion of freight in taxable turnover.

Income Tax Penalty Cannot Be Levied on Estimated Additions for Alleged Bogus Purchases: Bombay HC

The Principal Commissioner of Income Tax vs Colo Colour Pvt. Ltd CITATION: 2025 TAXSCAN (HC) 1872

The Bombay High Court recently dealt with the issue of whether a penalty under Section 271(1)(c) of the Income Tax Act, 1961 can be imposed when additions to income are made solely on an estimated basis in cases of alleged bogus purchases. The case arose in relation to Colo Colour Pvt. Ltd., which had filed its return for the assessment year 2011-12 declaring an income of Rs. 4,32,530. During reassessment under Section 143(3) read with Section 147, the Assessing Officer made additions totaling Rs. 7,40,776 on alleged bogus purchases and Rs. 59,262 as commission thereon, subsequently initiating penalty proceedings of Rs. 2,75,000 for alleged concealment of income and furnishing inaccurate particulars.

The case was heard by a Division Bench comprising Justices G. S. Kulkarni and Aarti Sathe, who upheld the concurrent findings of the CIT(A) and the Income Tax Appellate Tribunal that penalty could not be levied in this situation. The court observed that penalty under Section 271(1)(c) applies only in cases of conscious concealment of income or deliberate furnishing of inaccurate particulars, and that ad hoc or estimated additions without concrete evidence cannot form the basis for penalty. Accordingly, the Bombay High Court dismissed the Revenue’s appeal, confirming that the deletion of penalty in favor of Colo Colour Pvt. Ltd. was legally justified.

Deputy Commissioner (Administration) Cannot Revise Orders of Deputy Commissioner (Appeals) u/s 57 of Sales Tax Act: Bombay HC

The Commissioner of Sales Tax, Mumbai VS M/s. Mardia Steel Ltd CITATION: 2025 TAXSCAN (HC) 1873

The Bombay High Court recently examined whether the Deputy Commissioner (Administration) can exercise revisional powers under Section 57 of the Bombay Sales Tax Act, 1959 over orders passed by the Deputy Commissioner (Appeals). The matter arose in the case of Mardia Steel Ltd., where the Assistant Commissioner of Sales Tax had granted a refund but also levied penalty and interest. The company’s appeal led the Deputy Commissioner (Appeals) to set aside the penalty and interest. Subsequently, the Deputy Commissioner (Administration) attempted to revise the appellate order under Section 57, raising an additional demand of Rs. 1,40,070.

The case was heard by a Division Bench comprising Justices M. S. Sonak and Advait M. Sethna, who held that the Deputy Commissioner (Administration) had no jurisdiction to revise the order of the Deputy Commissioner (Appeals), as both officers are of co-equal rank. The court explained that Section 57(1)(a) allows revision only of orders passed by officers subordinate to the revising authority, and that delegation cannot be used to override the statute’s clear language. Accordingly, the High Court upheld the Tribunal’s order and ruled in favor of Mardia Steel Ltd., rejecting the Revenue’s attempt to exercise revisional powers.

Subsequent Court Ruling Cannot be Ground for ITAT to Recall Order u/s 254(2): Bombay HC

Vaibhav Maruti Dombale vs The Assistant Registrar CITATION: 2025 TAXSCAN (HC) 1874

The Bombay High Court recently addressed the legal issue of whether the Income Tax Appellate Tribunal (ITAT) can recall its earlier order under Section 254(2) of the Income Tax Act, 1961 on the basis of a subsequent judicial ruling. The matter arose when Vaibhav Maruti Dombale challenged the ITAT Pune Bench’s order dated 17 September 2024, which had recalled its earlier order of 5 September 2022 following the Supreme Court’s judgment in Checkmate Services Pvt. Ltd. v. CIT, delivered after the 2022 order.

The case was heard by a Division Bench comprising Justices B. P. Colabawalla and Firdosh P. Pooniwalla, who held that the ITAT’s recall was impermissible. The court observed that powers under Section 254(2) are similar to Order 47 Rule 1 of the Civil Procedure Code, which bars review on the basis of a later judgment. Since the Supreme Court ruling in Checkmate Services came after the ITAT’s original order, no apparent mistake existed on the record. Accordingly, the High Court set aside the ITAT’s 2024 order, restored the 2022 order in favor of the petitioner, and clarified that the Revenue could still challenge the 2022 order under Section 260A if legally permissible.

Goods Sent for Job Work must Accompanied with Delivery Challan and E-way Bill: Allahabad HC

M/s Usha Wire Netting vs State of UP and others CITATION: 2025 TAXSCAN (HC) 1875

The Allahabad High Court recently dealt with the issue of mandatory documentation for goods sent for job work under the Goods and Services Tax (GST) regime, specifically under Section 129(3) of the CGST/UPGST Act. The case arose when Usha Wire Netting, a proprietorship firm engaged in manufacturing wire netting, barbed wires, nails, and welded mesh, had goods intercepted en route to a job worker in Ghaziabad, U.P. The vehicle carrying the goods did not have a delivery challan or job work-specific documents at the time of interception, though such documents were subsequently generated by the petitioner. The petitioner challenged the proceedings, claiming there was no intention to evade tax.

The matter was heard by Justice Piyush Agrawal, who held that compliance with Rules 45 and 55 of the GST Rules, which mandate a delivery challan for goods sent for job work, is mandatory, and an accompanying e-way bill is also required as per Rule 138. The Court observed that the absence of such documentation at the time of interception justified action under Section 129. Citing the precedent set in Nippon Tubes, the Court ruled that the petitioner could not claim protection for non-compliance and dismissed the writ petition, upholding the impugned order.

Part Payment Orders Can Be Challenged in Second Appeal, Sales Tax Tribunal Empowered to Modify u/s 55: Bombay HC

The Commissioner of Sales Tax vs M/s Superphone India Ltd CITATION: 2025 TAXSCAN (HC) 1876

The Bombay High Court recently examined whether part payment orders passed by the first appellate authority under the Bombay Sales Tax Act, 1959 can be challenged in a second appeal before the Tribunal, and whether the Tribunal has the power to modify such orders under Section 55. The matter arose in the case of Superphone India Ltd., which had filed first appeals against six assessment orders for the period 1989-1992. The appellate authority had directed part payments on 11 July 1995, and when the assessee failed to comply, the appeals were summarily dismissed on 28 August 1995. The assessee then approached the Maharashtra Sales Tax Tribunal, which set aside the summary dismissal, reduced the part payment amounts, and remanded the appeals for disposal on merits.

The case was heard by a Division Bench comprising Justices M.S. Sonak and Advait M. Sethna, who held that interlocutory orders, such as part payment directions, can be challenged in an appeal against the final dismissal order. The court observed that, similar to principles under Section 105 of the Civil Procedure Code, procedural or interlocutory orders do not attain finality and can be questioned during subsequent appeals. Further, the Tribunal, acting under Section 55(6), had the authority to modify the part payment order while deciding the second appeal. Accordingly, the High Court upheld the Tribunal’s 1996 order, allowing the challenge to the part payment order and disposing of the matter in favor of the assessee.

No Eligibility Certificate Needed for Excise Special Rebate: Gauhati HC Rejects Cent Ply’s Appeal as Rebate sought after Limitation Period

M/S CENT PLY vs COMMISSIONER CGST AND CX CITATION: 2025 TAXSCAN (HC) 1877

The Gauhati High Court recently addressed the issue of whether a special excise rebate under Notification No. 20/2007-CE dated 25 April 2007 can be claimed beyond the statutory limitation period. The case arose when Cent Ply, a new industrial unit manufacturing plywood, filed an application for a 65% value addition rebate for FY 2009-10. The appellant argued that the delay in claiming the rebate was due to the late issuance of an Eligibility Certificate by the tax authorities on 14 May 2010, which it claimed was necessary before applying for the rebate. The company contended that this delay made its application time-barred through no fault of its own.

The matter was heard by a Division Bench comprising Justices Micheal Zothankhuma and Ajan Moni Kalita, who held that the Notification did not mandate the issuance of an Eligibility Certificate as a precondition for claiming the rebate. The court observed that the appellant had been regularly filing monthly refund claims and could have applied for fixation of the rebate within the statutory period. Since Cent Ply failed to submit its application by the prescribed deadline, the claim was barred by limitation. Accordingly, the High Court dismissed the appeal, upholding the orders of the Commissioner and the CESTAT.

One E-Way Bill for Multiple Invoices Acceptable: Allahabad HC Rules E-Way Bill’s Purpose is Goods Movt Disclosure, Minor Human Errors should not Attract Penalty

M/S Kent Cables Pvt. Ltd. vs State Of U.P. And 2 Others CITATION: 2025 TAXSCAN (HC) 1878

The Allahabad High Court recently addressed the issue of whether the issuance of a single e-way bill for multiple invoices under the Goods and Services Tax (GST) regime can attract a penalty under Section 129 of the GST Act. The case arose when a consignment of cables from Delhi to Sultanpur was intercepted, and the authorities noted that four tax invoices were accompanied by only one e-way bill, with minor differences in invoice dates. The petitioner contended that all invoices, goods receipts, and the e-way bill were available, the total value of goods was disclosed, and there was no concealment or intent to evade tax, making the issue a mere technical error.

The matter was heard by Justice Piyush Agrawal, who held that issuance of a single e-way bill covering multiple invoices, in the absence of any mismatch in goods or quantity and without evidence of tax evasion, cannot be treated as a contravention warranting penalty. The Court emphasized that human errors in generating e-way bills should not attract harsh penalties unless there is cogent material showing an intent to evade tax. Accordingly, the High Court quashed the penalty order, directed a refund of any deposits made, and reaffirmed that mere procedural or technical lapses cannot form the sole basis for punitive action under GST.

Delhi HC upholds ITAT order allowing Exemption Claim made by Charitable Trust u/s 10(23C)(iv) of Income Tax Act, Considering Previous year Position

COMMISSIONER OF INCOME TAX (EXEMPTIONS) DELHI vs COMMISSIONER OF INCOMETAX (EXEMPTIONS) DELHI CITATION: 2025 TAXSCAN (HC) 1879

The Delhi High Court recently addressed the issue of whether a charitable trust can claim exemption under Section 10(23C)(iv) of the Income Tax Act, 1961, taking into account its historical position of enjoying tax exemptions. The case arose when Hamdard Laboratories (India), a registered Trust under Section 12A, filed its return for AY 2016-17 claiming exemption under Sections 11 and 12, disclosing nil income. The Assessing Officer (AO) had completed the assessment on 30 December 2018, disallowing certain deductions and adding income from leased properties under Section 13(2)(b), thereby taxing the trust at Rs.1,93,93,48,991/-. The assessee appealed before the CIT(A), which held that the trust was eligible for exemption under Section 10(23C)(iv), following a remand report and submissions.

The matter was heard by a Division Bench comprising Justices Nitin Wasudeo Sambre and Anish Dayal, which upheld the ITAT Delhi’s order allowing the exemption under Section 10(23C)(iv). The Court noted that the Revenue had failed to produce cogent evidence showing inadequacy of rent received, and the material collected was largely from internet sources and estate agents, lacking corroboration. Given that the assessee had consistently enjoyed exemption since AY 2004-05 and no substantial question of law arose, the High Court dismissed the appeal, confirming the trust’s entitlement to exemption and upholding the ITAT’s findings in favor of Hamdard Laboratories.

Delayed filing of ITR due to mistake by Accountant: Delhi HC sets aside Income tax order

VRG ELECTRONICS PVT LTD vs PRINCIPAL COMMISSIONER OF INCOME TAX DELHI CITATION: 2025 TAXSCAN (HC) 1880

The Delhi High Court recently examined the issue of whether a delay in filing an Income Tax Return (ITR) and Form 10-IC due to the negligence of an accountant can be considered a reasonable cause for condonation under Section 119(2)(b) of the Income Tax Act, 1961. The case arose when VRG Electronics Pvt. Ltd. filed an application seeking condonation of a 60-day delay for AY 2023-24, attributing the delay to the accountant’s illness and workload. The Principal Commissioner of Income Tax (PCIT) had rejected the application, holding that negligence on the part of the accountant did not constitute genuine hardship, and denied the benefits of Section 115BAA.

The matter was heard by a Division Bench comprising Justices V. Kameswar Rao and Vinod Kumar, which held that the impugned order was unreasoned, as it failed to consider the petitioner’s averments regarding the accountant’s mistake. The Court emphasized that Section 119(2)(b) empowers authorities to condone delays to avoid genuine hardship, and that reasonable cause arising from reliance on a professional should not be dismissed mechanically. Accordingly, the High Court set aside the impugned order dated 21.06.2024 and remanded the matter to the PCIT for de novo consideration, directing a reasoned evaluation of the condonation application on merits.

12 days delay in filing ITR: Delhi HC Quashes order passed in Mechanical Manner

UDIT GOYAL vs PRINCIPAL COMMISSIONER OF INCOME TAX DELHI CITATION: 2025 TAXSCAN (HC) 1881

The Delhi High Court recently examined the issue of whether a 12-day delay in filing an Income Tax Return (ITR) due to difficulties caused by the COVID-19 pandemic could be condoned under Section 119(2)(b) of the Income Tax Act, 1961. The petitioner, Udit Goyal, filed his ITR for AY 2021-22 on 12.01.2022, after the due date of 31.12.2021, citing pandemic-related hardships and limited office staff during the second and third waves. An application for condonation of delay, filed on 28.02.2023, was rejected by the Principal Commissioner of Income Tax (PCIT), which held that the delay was not a case of genuine hardship, citing CBDT Circular No. 09/2015.

The matter was heard by a Division Bench comprising Justices V. Kameswar Rao and Vinod Kumar, which observed that the impugned order was mechanical and unreasoned, failing to consider the petitioner’s explanations regarding pandemic-related difficulties and bona fide conduct in filing the ITR. The Court emphasized that Section 119(2)(b) empowers authorities to condone delays to avoid genuine hardship, and that each application must be examined on its merits with reasoned findings. Accordingly, the High Court set aside the impugned order dated 30.05.2023 and remanded the matter to the PCIT for de novo consideration, directing a proper evaluation of the condonation application in accordance with law and CBDT guidelines.

GST Evasion Allegations Surface after Truck with Defaced Number Plate: Allahabad HC Stays Coercive Action

Smt. Neema Mangal vs State of U.P. and Another CITATION: 2025 TAXSCAN (HC) 1882

The Allahabad High Court recently dealt with a case involving allegations of GST evasion linked to a dumper truck found with a defaced registration plate, seized during a police check in Agra on 18 August 2022. The truck, belonging to M/s Shakti India Traders, was empty at the time of seizure, and the registration plate was smeared with black grease. The applicant, Smt. Neema Mangal, was implicated based on statements made during the investigation, facing charges under Sections 420, 467, and 468 of the Indian Penal Code for cheating and forgery, following the filing of a charge-sheet on 13 November 2022.

The matter was heard by Justice Ram Manohar Narayan Mishra, who noted the need for careful judicial scrutiny, particularly given that the vehicle was empty and no independent witnesses were present at the seizure. The Court observed that the allegations required detailed examination and, in the interim, stayed all coercive action against the applicant, issuing notice to the respondents. The case has been listed for further hearing on 16 October 2025.

Section 93 of GST Act Covers Liability of Legal Heirs, But Determination against Dead Person Invalid: Allahabad HC

Mudit Gupta vs State Of U.P CITATION: 2025 TAXSCAN (HC) 1883

The Allahabad High Court recently clarified the scope of Section 93 of the Goods and Services Tax Act, 2017, ruling that tax liability cannot be determined in the name of a deceased proprietor. The case arose after multiple GST demands totaling nearly ₹68 lakh were issued in the name of late Pushpa Gupta, proprietor of M/s M.G. Sarees, for the financial years 2017-18 to 2020-21, despite her GST registration being cancelled following her death in June 2021. Her son and legal heir, Mudit Gupta, challenged the proceedings, contending that the department had no jurisdiction to issue notices or pass demand orders against a deceased individual, rendering such orders void ab initio.

The matter was heard by Justice Shekhar B. Saraf and Justice Praveen Kumar Giri, who held that while Section 93 contemplates recovery from legal heirs, it does not authorize determination directly against a deceased person. The Court emphasized that a legal heir must be issued a show cause notice and given an opportunity to respond before any liability can be enforced. Consequently, all four posthumous demand orders were quashed, with the High Court permitting the department to initiate fresh proceedings in accordance with law against the legal representative of the deceased.

Electricity Consumption Alone Cannot Prove Suppressed Purchase and Sale: Allahabad HC quashes GST S. 74 Order

M/S Eco Cement India Ltd. vs State Of U.P CITATION: 2025 TAXSCAN (HC) 1884

The Allahabad High Court has held that mere electricity consumption cannot form the sole basis for alleging suppression of purchases and sales under the GST Act. The case involved M/s Eco Cement India Ltd., a public limited company engaged in cement manufacturing and trading in iron and steel, which faced inspections beginning on 9 January 2019. Initial proceedings under Sections 130 and 122 of the GST Act were dropped, but fresh proceedings under Section 74 were later initiated, alleging suppression of purchases and sales. The adjudicating authority passed an adverse order on 20 October 2022, partly upheld on appeal on 6 June 2023, prompting the company to challenge the orders.

The matter was heard by Justice Piyush Agrawal who observed that electricity usage can fluctuate due to various factors such as manufacturing load and crushing operations, none of which had been examined by the authorities. The Court emphasized that electricity consumption alone cannot determine suppressed purchases or sales, and that the company’s submissions and supporting material had been ignored. The orders were set aside, and the matter was remanded to the Assessing Authority for reconsideration within three months, with both parties allowed to submit further evidence.

GST Order Not Properly Uploaded on Portal: Allahabad HC Directs Assessee to Treat Impugned Order as Final and Reply

M/S Uma Shankar Mishra Thekedar vs State of U.P. and Another CITATION: 2025 TAXSCAN (HC) 1885

The Allahabad High Court addressed concerns regarding the manner of uploading GST orders on the portal, in the case of M/s Uma Shankar Mishra Thekedar, challenging an ex-parte assessment order dated 20.04.2024 under Section 73(9) of the U.P. GST Act for FY 2018-19, along with the consequential demand in Form GST DRC-07. The petitioner contended that the impugned order appeared under the “Additional Notices and Orders” tab instead of the regular “View Notices and Orders” tab, causing difficulty in tracing the order and filing a timely reply. The petitioner relied on the precedent set in M/s Mohini Traders v. State of U.P. (2023), where similar portal-related issues were considered by the Court.

The matter was heard by Justices Shekhar B. Saraf and Praveen Kumar Giri who directed that the assessee may treat the impugned order as a final notice and file a reply within two weeks. The assessing officer was instructed to issue a fresh notice in the prescribed manner, provide at least fifteen days for response, and pass a reasoned and speaking order within one month.

No Extraordinary Circumstances: Rajasthan HC Dismisses Second Bail Application of GST Accused without approaching Trial Court

Ankit Bansal vs Union Of India CITATION: 2025 TAXSCAN (HC) 1886

The Rajasthan High Court dismissed the second bail application of Ankit Bansal, accused in a GST-related offence, holding that no extraordinary circumstances justified bypassing the trial court. The petitioner had directly approached the High Court instead of first seeking relief from the trial court, citing only potential delay as justification.

The matter was heard by Justice Anand Sharma noted that while the High Court has concurrent jurisdiction to hear bail applications, judicial propriety requires that a second bail plea should ordinarily be moved before the trial court. Since no exceptional circumstances were shown, the petition was not maintainable. The Court allowed the petitioner to withdraw the application with liberty to approach the trial court, directing that any bail application there be decided expeditiously, preferably within seven working days.

5th Proviso of Rule 27(1) Imposing Export Duty on DTA–SEZ Supplies is Ultra Vires to SEZ Act: Andhra Pradesh HC strikes down Proviso

M/s. TUF Metallurgical Private Limited vs Union of India and others CITATION: 2025 TAXSCAN (HC) 1887

The Andhra Pradesh High Court dealt with the legal issue of whether supplies from the Domestic Tariff Area (DTA) to Special Economic Zones (SEZs) could be subjected to export duty under the 5th proviso to Rule 27(1) of the SEZ Rules, 2006, in light of the Special Economic Zones Act, 2005. The case specifically addressed whether the department could lawfully impose export duty on DTA–SEZ supplies, and whether such levy had statutory authority, given the provisions of Sections 26 and 30 of the SEZ Act which provide for exemptions and levy of duty only on goods moving from SEZs to DTA.

The matter was heard by Chief Justice Dhiraj Singh Thakur and Justice R. Raghunandan Rao held that the 5th proviso to Rule 27(1) was ultra vires the SEZ Act and struck it down. The Court clarified that there is no statutory or constitutional basis, under Article 265, to levy export duty on DTA–SEZ supplies. Consequently, the departmental rejection order dated 26 April 2024 denying exemption was quashed, affirming that such supplies are not subject to export duty.

Entry Tax on Transmission of Natural Gas Cannot Be Levied on Sale Price When Purchase Value Ascertainable: Allahabad HC in GAIL Case

M/S Gail India Ltd vs Commissioner Of Commercial Taxes CITATION: 2025 TAXSCAN (HC) 1888

The Allahabad High Court addressed the legal issue of whether entry tax under the U.P. Tax on Entry of Goods Act, 2000 can be levied on the sale price of natural gas, including transmission charges and marketing margins, when the purchase value at the time of entry into the State is ascertainable. The case focused on whether the taxable value for entry tax should be determined based on the sale price charged to consumers or the actual purchase price of gas procured from ONGC.

The matter was heard by Justice Piyush Agrawal, held that entry tax could only be levied on the ascertainable purchase value at the point of entry, and it was impermissible to include transmission charges and marketing margins in the taxable value. Accordingly, the Tribunal’s order of remand was quashed, and the matter was directed to be decided afresh within three months, affirming that the levy on subsequent sale price to consumers was legally unsustainable.

GST Dept’s Review Petition Dismissed: J&K HC confirms Quashment of Demand against Deceased Person

Deputy Commissioner vs Khurshid Bibi CITATION: 2025 TAXSCAN (HC) 1889

The High Court of Jammu & Kashmir and Ladakh at Jammu dealt with the issue of whether GST demands can be validly raised against a deceased taxpayer under the J&K GST/CGST Act, 2017, particularly concerning proceedings under Section 74. The case involved a show-cause notice, reminder, and recovery notice issued against a deceased person, which had earlier been quashed on the ground that no opportunity of hearing was provided.

The matter was heard by Division Bench of Justice Sanjeev Kumar and Justice Sanjay Parihar dismissed the review petition filed by the State authorities, holding that once the show-cause notice was quashed, all consequential proceedings, including the final demand of ₹33.19 lakh, automatically stood vitiated. The Court reaffirmed that raising tax demands against a deceased individual violates principles of natural justice, while also allowing the Department to initiate fresh proceedings in accordance with law with proper notice and hearing.

Customs Circular violating S. 110A Held Void: Delhi HC Orders Provisional Release of Imported Multi-Functional Printer and photocopier Machine

M/S. NAGESWARA TRADE vs JOINT COMMISSIONER OF CUSTOMS CITATION: 2025 TAXSCAN (HC) 1890

The Delhi High Court dealt with the issue of provisional release of imported multi-functional printers and photocopier machines seized by Customs, in light of Section 110A of the Customs Act, 1962. The legal question revolved around whether Customs Circular No. 35/2017-Cus dated 16 August 2017 could bar provisional release of goods, and whether such circulars could override statutory provisions permitting release upon deposit of duty and furnishing of a bond.

The matter was heard by the Division Bench of Justice Prathiba M. Singh and Justice Shail Jain allowed the provisional release of the seized goods valued at ₹47.56 lakh, directing the petitioner, M/s Nageswara Trade, to deposit 50% of the applicable duty and furnish a bond for the balance. The Court held that Circular 35/2017 was ultra vires Section 110A, reaffirming that adjudicating authorities retain discretion to grant provisional release, and emphasized that while confiscation or penalties may proceed, outright denial of provisional release based on the circular was unlawful.

No Income Tax on ₹73 Lakh Compensation for Compulsory Land Acquisition by NHAI: Chhattisgarh HC

Sanjay Kumar Baid vs Income Tax Officer CITATION: 2025 TAXSCAN (HC) 1891

The Chhattisgarh High Court addressed the issue of whether compensation received for compulsory acquisition of land under the National Highways Act, 1956 is taxable under the Income Tax Act or exempt under Section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The legal question concerned whether the exemption under Section 96, which applies to compensation determined under the 2013 Act, extends to land acquired under enactments listed in the Fourth Schedule, including the National Highways Act.

The matter was heard by the Division Bench of Justice Sanjay K. Agrawal and Justice Sanjay Kumar Jaiswal allowed the appeal of Sanjay Kumar Baid, holding that compensation received under the National Highways Act is exempt from income tax under Section 96 of the 2013 Act. The Court emphasized that denying the exemption would discriminate between landowners and contravene legislative intent. The ITAT’s order affirming taxability was set aside, and the Assessing Officer was directed to pass consequential orders granting relief, with parties bearing their own costs.

Imported of Parts of Gas Lighters Found to be DGFT-Prohibited SKD Kits: Delhi HC Orders Expeditious Adjudication of SCN

JNRB INTERNATIONAL LLP vs COMMISSIONER OF CUSTOMS CITATION: 2025 TAXSCAN (HC) 1892

The Delhi High Court dealt with the issue of delayed adjudication of a Show Cause Notice (SCN) issued under the Customs Act, 1962 against JNRB International LLP concerning the import of parts of gas lighters. The dispute revolved around whether the imported consignment constituted mere “parts” or Semi-Knocked Down (SKD) kits of complete gas lighters, which are prohibited under DGFT Notification No. 15/2023.

The matter was heard by the Division Bench of Justice Prathiba M. Singh and Justice Shail Jain directed the Customs Department to complete adjudication of the SCN by 31st October 2025, emphasizing the need for a time-bound resolution given the consignment had been imported nearly a year prior. The Court clarified that all rights and remedies of both parties remain open, and disposed of the writ petition while ensuring procedural compliance.

IGST Refunds Withheld Over ‘Risky Exporter’ Tag and Portal Issues: Delhi HC Directs GSTIN and Uttarakhand GST to Enable Re-Credit Without PMT-03

ANKUR AGARWAL vs CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS & ANR CITATION: 2025 TAXSCAN (HC) 1893

The Delhi High Court addressed the issue of withholding and procedural blockage of Integrated Goods and Services Tax (IGST) refunds for a petitioner flagged as a ‘Risky Exporter’ under the Uttarakhand GST regime. The petitioner, Ankur Agarwal, operating M/s Safecon Lifesciences, faced difficulties in re-crediting IGST refunds due to portal access issues and the inability to submit PMT-03 forms, despite having deposited IGST at the time of export.

The matter was heard by the Division Bench of Justice Prathiba M. Singh and Justice Shail Jain directed GSTIN and the Uttarakhand GST Department to enable re-credit of the petitioner’s IGST refunds without requiring PMT-03 submission, coordinating between the State and GST Network. The Court also added the State GST Commissioner, Rudraprayag as a party to facilitate the process and scheduled the matter for further hearing on 31st October 2025 to ensure refunds were properly processed.

No Tax on Buildings providing Free Housing to Aged, disabled persons who served Religious/Charitable Institutions: Kerala HC

MARTHOMA SYRIAN CHURCH vs STATE OF KERALA CITATION: 2025 TAXSCAN (HC) 1894

The Kerala High Court examined the issue of exemption from building tax under Section 3(1)(b) of the Kerala Building Tax Act, 1975 for a building used to provide free accommodation to aged and disabled persons and their dependents. The petitioner, Marthoma Syrian Church, challenged the rejection of its application seeking tax exemption for a building constructed to house retired clergymen, aged priests, and families of deceased clergymen, asserting that the building was used for charitable purposes.

The matter was heard by Justice Ziyad Rahman A.A. held that if the building is used to provide free accommodation to persons who had rendered services to charitable or religious institutions managed by the petitioner, the use would constitute a charitable purpose under Section 3(1)(b). The Court quashed the rejection order and directed the authorities to reconsider the exemption application, clarifying that the benefit shall be extended if the accommodation is indeed provided without charge to eligible persons and their dependents.

Rejection of Settlement proposal by Bank does not meant to be principles of natural justice: Calcutta HC Dismisses Writ Petition

Dr. Tushar Kanti Karmakar vs Shilabati Hospital Private Limited &Ors CITATION: 2025 TAXSCAN (CESTAT) 1012

The Calcutta High Court dealt with the interpretation of Rule 8(8) of the Security Interest (Enforcement) Rules, 2002, under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), specifically addressing whether the term “parties” includes the borrower and guarantor. The Court clarified that “parties” under Rule 8(8), whether pre- or post-amendment, refers only to the Bank and the proposed purchaser and does not mandate inclusion of borrowers or guarantors in the proceedings.

The matter was heard by the Division Bench of Justice Rajasekhar Mantha and Justice Ajay Kumar Gupta upheld that the rejection of a settlement proposal by the Bank does not attract principles of natural justice outside the statutory scheme. The Court held that once remedies under the SARFAESI Act are exhausted, parties cannot invoke writ jurisdiction to reopen proceedings. It was observed that the writ petitioners, having already failed before the DRT and not seeking a hearing from the Bank, had abused writ jurisdiction, and therefore, the petition ought to have been dismissed or relegated to the appropriate forum.

Calcined Petroleum Coke Supply By Domestic Calciners To SEZ Units Permissible Under FTP 2023 And CAQM Order: Telangana HC

M/s. Rain CH Carbon (Vizag) Ltd vs Office of the Additional Director General of Foreign Trade CITATION: 2025 TAXSCAN (HC) 1896

The Telangana High Court dealt with the legality of supply of Calcined Petroleum Coke (CPC) by domestic calciners to SEZ units under the Foreign Trade Policy (FTP), 2023 and relevant orders of the Commission for Air Quality Management (CAQM). The legal issue revolved around whether Advance Authorisation for import of Raw Petroleum Coke (RPC) and subsequent supply of CPC to SEZ units is permissible as deemed exports under the FTP.

The matter was heard by the Division Bench of Justice N.V. Shravan Kumar quashed the DGFT rejection order dated 5 February 2025 and the deficiency letter of 15 January 2025, holding that the authorities had failed to consider the petitioner’s explanation and the CAQM order permitting deemed exports. The Court remitted the matter to DGFT for fresh consideration, directing that the petitioner be given a personal hearing. In the interim, the petitioner was allowed to supply CPC to Vedanta SEZ, and the writ petition was disposed of without costs.

Assistant Sub-Inspector of SSB Not Competent to Seize Wheat under Customs Act: Patna HC Orders Refund with Interest

Fariyad Alam vs The Union of India CITATION: 2025 TAXSCAN (HC) 1897

The Patna High Court addressed the legality of seizure and confiscation of goods under the Customs Act, 1962, specifically whether an Assistant Sub-Inspector of the Sashastra Seema Bal (SSB) had the authority to seize wheat and whether the seizure memo complied with statutory requirements under Section 110 of the Act. The legal issue centered on the absence of a mandatory “reason to believe” in the seizure memo and the competence of the officer executing the seizure.

The matter was heard by the Division Bench of Justice Rajeev Ranjan Prasad and Justice Ashok Kumar Pandey held that the seizure by the ASI of SSB was unauthorized and that the seizure memo and subsequent confiscation order were invalid. The Court quashed both orders and directed the authorities to refund ₹46,200 with 6% interest from the date of seizure and ₹5,000 as litigation costs within six weeks. The auction conducted during the pendency of the writ was also declared unlawful, and the writ petition was allowed.

Drying And Roasting Are ‘Diametrically Different’ Processes: Allahabad HC Rules Roasted Areca Nuts Classifiable As Roasted, Not Dried

M/S Rawder Petroleum Pvt Ltd. vs Union Of India Ministry Of Finance CITATION: 2025 TAXSCAN (HC) 1898

The Allahabad High Court dealt with the classification of imported areca nuts under the Customs Tariff, examining whether the nuts should be treated as roasted or dried. The legal issue arose from a seizure by Customs authorities, who contended that the imported nuts from Indonesia were dried, based on laboratory reports, whereas the importer maintained they were roasted and correctly classified under the tariff entry for roasted nuts, following an advance ruling by the Customs Authority for Advance Rulings (CAAR).

The matter was heard by the Division Bench of Justice Rajan Roy and Justice Om Prakash Shukla held that drying and roasting are “diametrically different” processes, and that the imported nuts were roasted, as confirmed by timely laboratory tests. The Court quashed the seizure, directed release of the goods (subject to Gamma Irradiation due to the time elapsed), and dismissed the connected Customs appeals filed by the department, upholding the classification under roasted nuts.

MEIS Certificates Qualify as ‘Instruments’ u/s 28AAA of Customs Act, But Only DGFT Has Authority to Suspend Or Cancel them: Madras HC

M/s.Kwalitee Fabs vs The Commissioner of Customs CITATION: 2025 TAXSCAN (HC) 1899

The Madras High Court examined whether MEIS (Merchandise Exports from India Scheme) certificates could be acted upon by Customs under Section 28AAA of the Customs Act, 1962. The legal issue involved the authority to suspend, cancel, or adjudicate the validity of such certificates, which the appellant, Kwalitee Fabs, claimed lies solely with the Directorate General of Foreign Trade (DGFT) under the Foreign Trade (Development & Regulation) Act, 1992.

The matter was heard by the Division Bench of Justice G.R. Swaminathan and Justice K. Rajasekar held that MEIS certificates qualify as “instruments” under Section 28AAA, but only the DGFT has the statutory power to suspend or cancel them. The Court set aside the impugned order passed by the Commissioner of Customs as lacking jurisdiction and allowed the writ appeal, while permitting Customs to approach DGFT for appropriate action.

Illegal Export of ‘Red Sanders’ by Freight Forwarder: Delhi HC Upholds Rs.10 Lakh Penalty

COMMISSIONEROFCUSTOMSEXPORT vs RAVINDRAKUMAR CITATION: 2025 TAXSCAN (HC) 1900

The High Court of Delhi addressed the legality of a Rs. 10 lakh penalty imposed under Section 114 of the Customs Act, 1962 on a freight forwarder, Ravindra Kumar, for his role in the attempted illegal export of Red Sanders. The matter involved the application of Section 114AA as well, which provides for enhanced penalties where documents are knowingly false, but the Court examined whether the respondent had knowledge of misdeclaration.

The matter was heard by the Division Bench of Justice Prathiba M. Singh and Justice Shail Jain upheld the Rs. 10 lakh penalty under Section 114, noting that the assessee had coordinated airway bills, documents, and consignment details that facilitated the illegal export, even though he claimed to have gained no personal benefit. The Court held that a penalty under Section 114AA was not warranted due to his limited role and lack of knowledge of misdeclaration. The appeal was dismissed, and the penalty confirmed.

NSL Mining Resource case: Telangana HC directs Income Tax dept to issue fresh order for Rs 143 cr tax demand with NCLT plan

NSL Mining Resources India Pvt Ltd vs Union of India CITATION: 2025 TAXSCAN (HC) 1901

The Telangana High Court dealt with a dispute regarding a tax demand of ₹143.97 crore issued to NSL Mining Resources India Pvt Ltd for the assessment year 2019-20 under Section 147 read with Section 144B of the Income Tax Act, 1961. The issue arose because the petitioner’s Resolution Plan approved by the National Company Law Tribunal (NCLT), Hyderabad Bench-II, on 1 February 2024, extinguished all Income Tax dues, yet a demand notice was still issued. The Court examined the applicability of Section 156A of the Income Tax Act, which mandates modification of tax demands in light of adjudicating authority orders under the Insolvency and Bankruptcy Code, 2016.

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The Division Bench of Chief Justice Aparesh Kumar Singh and Justice G.M. Mohiuddin disposed of the writ petition by directing the Assessing Officer to issue a fresh order under Section 156A, taking into account the Resolution Plan approved by the NCLT. The Court specified that this fresh order should be passed within a reasonable time, preferably eight weeks from receipt of the order, ensuring that the petitioner’s tax liability reflects the extinguishment of dues under the approved Resolution Plan.

Delhi HC sets aside Compounding Order passed u/s 279(2) of Income Tax Act Charging 5% as Earlier offence was not Compounded

SANGEET SETH vs CHIEF COMMISSIONER OF INCOME TAX AND ORS CITATION: 2025 TAXSCAN (HC) 1902

The Delhi High Court recently dealt with the legal issue of compounding of TDS defaults under Section 279(2) of the Income Tax Act, 1961. The case examined whether a petitioner could be subjected to 5% compounding charges for a second application when the first compounding application had been rejected and no compounding had actually taken place. The Court considered the applicability of the CBDT 2014 guidelines on compounding, which prescribe higher rates for subsequent offences, and clarified that such rates are chargeable only if the earlier offence was duly compounded.

The Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar observed that since the petitioner’s first application for compounding had been rejected, the second application could not attract the higher 5% charges. The Court held that the higher rate is intended to incentivize compliance and penalize repeat offences, which was not the case here. Consequently, the Court set aside the departmental communication dated 8 February 2019 and affirmed that the 3% compounding charges initially applied were correct.

Failure to serve Form GST ASMT-10 Prevented Filing of proper reply: Orissa HC Sets aside Assessment order passed u/s 73 of GST Act against OLA Fleet Technologies

Ms. OLA Fleet Technologies Private Limited vs State of Odisha CITATION: 2025 TAXSCAN (HC) 1903

The Orissa High Court recently dealt with the legal issue of assessment under Section 73 of the Goods and Services Tax Act, 2017, concerning failure to properly serve notice in Form GST ASMT-10. The Court examined whether the petitioner, OLA Fleet Technologies Pvt. Ltd., was afforded a proper opportunity to respond to the assessment order for tax periods from April 2020 to March 2021, and whether principles of natural justice were violated when the demand order was passed ex parte.

The matter was heard by Chief Justice Harish Tandon and Justice Murahari Sri Raman, who observed that the petitioner had not received proper service of the scrutiny notice (GST ASMT-10), which prevented filing a meaningful reply. The Court set aside the assessment order dated 21st February 2025, directed the authorities to serve all relevant documents within seven days, and allowed the petitioner two weeks to file its explanation. The assessing authority was further directed to conclude the adjudication within three months from the date of receipt of the reply.

Imports of Luxury Cars under Diplomatic Privilege to Escape Duty: Madras HC Grants Conditional Interim Custody of Vehicles

M/s.Arun Fabricators vs The Additional Director General CITATION: 2025 TAXSCAN (HC) 1905

The Madras High Court recently addressed the legal issue of interim custody of a vehicle seized by the Directorate of Revenue Intelligence (DRI) in connection with alleged misuse of diplomatic privileges for evading customs duties on imported luxury cars. The matter arose under the Customs Act, 1962, relating to confiscation and redemption of a Toyota Vellfire purchased by M/s Arun Fabricators, a bona fide purchaser for value, amid a large-scale scam involving import of vehicles under diplomatic exemptions.

The matter was heard by Justice Anand Venkatesh, who granted conditional interim custody of the seized vehicle, directing the petitioner to pay a redemption fine of ₹19 lakh along with an additional penalty of ₹1 lakh. The Court clarified that the petitioner shall not sell or alienate the vehicle pending disposal of the appeal before the Commissioner (Appeals) and emphasized that interim release does not exonerate the petitioner from any alleged violations.

No Prejudice to Revenue If Pending GST Dues Paid: Uttarakhand HC allows Revocation of Cancelled Registration

M/s Barulal Contractor & Supplier vs Commissioner, Central Goods& Services Tax CITATION: 2025 TAXSCAN (HC) 1906

The Uttarakhand High Court recently dealt with the legal issue of revocation of cancelled GST registration under the Goods and Services Tax Act, 2017, holding that a taxpayer may seek restoration of registration provided all pending returns are filed and dues paid. The Court emphasized that such restoration does not cause prejudice to the Revenue and upholds the taxpayer’s fundamental right to carry on trade or business under Article 19(1)(g) of the Constitution.

The matter was heard by the Division Bench of Chief Justice G. Narendar and Justice Subhash Upadhyay, which granted the petitioner, M/s Barulal Contractor & Supplier, liberty to file an application for revocation of GST cancellation within two weeks. The bench directed the competent authority to consider the application and issue appropriate orders within four weeks, reiterating its earlier rulings in WP(M/B) No. 71 of 2025 and WP(S/B) No. 39 of 2025.

Customs Broker Penalised for Importer’s Misdeclaration of Value of Goods: Madras HC allows to Contest without 7.5% Pre-Deposit

M/s.Pentagon Shipping Services vs The Additional Commissioner of Customs CITATION: 2025 TAXSCAN (HC) 1907

The Madurai Bench of the Madras High Court recently addressed the issue of penal liability under Section 112(a) of the Customs Act, 1962 in the context of an importer’s alleged fraudulent misdeclaration of goods. The Court considered whether a licensed Customs broker could be penalized for alleged lapses in professional vigilance and clarified that mere lapses do not automatically attract Section 112(a) liability without evidence of active involvement in abetment.

The matter was heard by Justice G.R. Swaminathan, who allowed the petitioner, M/s Pentagon Shipping Services, to contest the penalty without pre-deposit under Section 129E. The Court granted liberty to file an appeal within two weeks and left all substantive contentions for determination by the appellate authority, noting that it had not examined the merits of the penalty.

Wrongful availment of GST ITC and Fake Invoices: Orissa HC Declines to Enter Disputed Facts, Directs to Avail Alternative Remedy

M/s. Shreenika Logistics vs Joint Commissioner of State Tax CITATION: 2025 TAXSCAN (HC) 1908

The Orissa High Court recently dealt with a writ petition challenging an order passed under Section 74 of the Goods and Services Tax Act, 2017, which demanded ₹34.64 lakh on account of alleged wrongful availment of Input Tax Credit (ITC) through purportedly fake invoices. The legal issue centered on whether the Court could interfere in a matter involving disputed factual questions regarding the existence of suppliers and genuineness of invoices.

The bench observed that the case raised seriously disputed questions of fact and that the Writ Court is not the forum to re-examine evidence. Accordingly, the High Court declined to interfere with the assessment order against M/s Shreenika Logistics and Trading Company and directed that the petitioner avail statutory remedies under the GST Act. Liberty was granted to file an appeal within four weeks, with the appellate authority instructed to consider it expeditiously.

GST S. 16(5) Relief: Jharkhand HC orders Fresh Adjudication of ITC Claim, Union Concedes with Decision

Vinod Udaipuri vs Union of India CITATION: 2025 TAXSCAN (HC) 1909

The Jharkhand High Court recently addressed a writ petition concerning the disallowance of Input Tax Credit (ITC) under Section 16(4) of the GST Act, 2017, in which the petitioner sought credit of ₹30.29 lakh for the period July 2018 to March 2019. The legal issue revolved around the retrospective applicability of Section 16(5), inserted through the Finance Act, 2024, which allows taxpayers to claim ITC beyond the restrictive timelines under Section 16(4).

The matter was heard by the Division Bench of Chief Justice Tarlok Singh Chauhan and Justice Rajesh Shankar quashed the ex-parte Order-in-Original dated 19.05.2023 and the consequential summary order dated 25.08.2023. The Court remanded the matter to the adjudicating authority for fresh consideration in light of Section 16(5), directing that a reasoned order be passed within two months, while leaving all substantive issues regarding the ITC claim open for adjudication.

Allegation of Duty free gold under replenishment Scheme Unsustainable: Madras HC Bars Criminal Proceedings against Jewellery Exporter

Jurassic Refiners & Jewels Private Ltd vs The Assistant Commissionerof Customs CITATION: 2025 TAXSCAN (HC) 1910

The Madras High Court recently dealt with the quashing of criminal prosecution initiated against Jurassic Refiners & Jewels Private Ltd in connection with alleged misuse of the duty-free gold replenishment scheme under the Foreign Trade Policy, invoking offences under Sections 132 and 135 of the Customs Act, 1962 read with Section 120B IPC. The legal issue concerned whether criminal proceedings could continue after the exporter had been exonerated in prior adjudication and appellate proceedings up to the High Court.

The matter was heard by Justice N. Sathish Kumar observed that continuation of prosecution on the same allegations, after factual exoneration in prior proceedings including CESTAT and Telangana High Court judgments, was unsustainable. Relying on the Supreme Court ruling in Ashoo Surendranath Tewari v. DSP, EOW, CBI (2020), the Court held that the likelihood of conviction was “bleak” and accordingly set aside the criminal proceedings pending before the Customs Court, Alandur.

Conflicting Lab Reports of Classification of Roasted Areca Nuts: Madras HC Orders Provisional Release, Directs to Execute Bond for Differential Duty

M/s. Genuine Spices vs The Commissioner of Customs CITATION: 2025 TAXSCAN (HC) 1911

The Madurai Bench of the Madras High Court recently addressed the provisional release of a consignment of roasted areca nuts imported by M/s. Genuine Spices, amidst conflicting laboratory reports regarding classification under the Customs Tariff. The legal issue concerned whether Customs could withhold clearance of perishable goods despite disputes over their proper classification under the Customs Act, 1962.

The matter was heard by Justice G.R. Swaminathan directed the provisional release of the consignment subject to payment of applicable duties, execution of a personal bond for differential duty, submission of requisite certificates, and cooperation in ongoing adjudication. The Court clarified that this release did not bar Customs from adjudicating the classification dispute nor affect potential penalties, and set conditions for expeditious release within 48 hours.

GST Restoration allowable on compliance with Rule 22(4) of CGST Rules: Gauhati HC

VEDANTA TALUKDAR vs THE STATE OF ASSAM CITATION: 2025 TAXSCAN (HC) 1912

The Gauhati High Court recently dealt with the restoration of GST registration under Section 29(2)(c) of the CGST Act, 2017, in cases where a taxpayer has failed to file returns for six continuous months. The legal issue concerned whether a taxpayer, having made full compliance by furnishing all pending returns and paying applicable tax, interest, and late fees under Rule 22(4) of the CGST Rules, 2017, can have the cancellation of registration revoked without prejudice to the Revenue.

The matter was heard by Justice Sanjay Kumar Medhi observed that the petitioner, M/s Vedanta Talukdar, could approach the competent authority for restoration of GST registration by fulfilling all requirements under Rule 22(4). The Court directed the authority to consider the application and pass orders in Form GST REG-20 within 60 days, emphasizing that compliance with pending returns and dues enables revocation without causing any revenue loss, thereby disposing of the writ petition.

Uttarakahand HC Sets aside GST Order Cancelling Registration due to non furnishing of returns

M/s Puran Singh vs Commissioner, Central Goods & Services Tax CITATION: 2025 TAXSCAN (HC) 1913

The Uttarakhand High Court recently addressed the issue of GST registration cancellation under the Goods and Services Tax Act, 2017, where a taxpayer was unable to furnish returns for the prescribed period. The legal question was whether a registered person whose GST registration was cancelled for non-filing of returns could seek revocation after submitting all pending returns and paying the due tax, interest, and penalty.

The matter was heard by the Division Bench of Chief Justice G. Narendar and Justice Subhash Upadhyay allowed the writ petition filed by M/s Puran Singh, directing that the petitioner may submit an application for revocation along with pending returns and dues. The Competent Authority was instructed to consider the request and pass appropriate orders within four weeks. The Court emphasized that revocation in such circumstances does not prejudice the Revenue and protects the fundamental right to carry on trade or business.

Unlawful GST Search and Seizure at Assessee's Residential and Business Premises: Delhi HC Upholds Action u/s 67 with Privacy Safeguards

GENESIS ENTERPRISES vs PRINCIPAL COMMISSIONER CGST DELHI EAST CITATION: 2025 TAXSCAN (HC) 1914

The High Court of Delhi recently addressed the legality of search and seizure operations under Section 67 of the Central Goods and Services Tax (CGST) Act, 2017, concerning alleged misuse of Input Tax Credit and suppression of transactions by Genesis Enterprises. The legal issue revolved around whether the GST Department’s searches at the residential and business premises of the petitioner were lawful and whether safeguards to protect privacy were adequately observed.

The matter was heard by the Division Bench of Justice Prathiba M Singh and Justice Shail Jain upheld the searches and seizures, noting that the GST officers acted on “reasons to believe” recorded by senior officers and followed procedural safeguards. The Court allowed the Department to continue investigations while directing that residential CCTV footage be accessed only in the presence of a family member and authorized representative, and that seized goods and electronic data be handled with due care. The writ petition and pending applications were disposed of, leaving other remedies open and clarifying that the order did not prejudice other proceedings.

Madras HC Eases Provisional Release Conditions for Imported Fabric, Substitutes Rs. 22 Lakh Bank Guarantee with Bond

M/s.Shree Sai Impex vs The Principal Commissioner of Customs CITATION: 2025 TAXSCAN (HC) 1915

The Madras High Court recently dealt with the legality of provisional release conditions under Section 110A of the Customs Act, 1962 in the matter of Shree Sai Impex. The legal issue concerned whether the customs authorities could insist on both a bond and a Bank Guarantee as security for the release of imported fabric, given that adjudication on misclassification and undervaluation was pending.

The matter was heard by a single-judge bench of Justice N. Anand Venkatesh modified the provisional release order, replacing the Rs. 22 lakh Bank Guarantee with a bond while retaining the Rs. 91 lakh bond and duty deposit requirements. The Court held that the department’s revenue interests could be safeguarded without the Bank Guarantee, and directed Customs to release the goods within seven days upon compliance, leaving the merits of the underlying customs case open for adjudication.

GST Registration Cannot Be Cancelled Retrospectively Unless Specifically Mentioned in SCN: Andhra Pradesh HC

R K I BUILDERS PRIVATE LIMITED vs THE SUPERINTENDENT OF CENTRAL TAXES CITATION: 2025 TAXSCAN (HC) 1916

The Andhra Pradesh High Court recently addressed the issue of retrospective cancellation of GST registration under the CGST Act, 2017, examining whether a show cause notice must explicitly mention retrospective action to validate such cancellation.

The matter was heard by the Division Bench of Justice R. Raghunandan Rao and Justice T.C.D. Sekhar held that the cancellation of GST registration of R K I Builders Pvt. Ltd. with effect from 1 July 2017 was invalid because the show cause notice did not propose retrospective cancellation. The Court set aside the cancellation order dated 15 June 2025 and remitted the matter to the Superintendent of Central Taxes to issue a fresh notice and give the petitioner an opportunity to be heard before taking further action.

Company’s GST Bank Attachment Challenge Fails for Not Stating Date or Producing Notice Proof: Calcutta HC

GSPS Developers Private Limited vs The Deputy Commissioner of State Tax CITATION: 2025 TAXSCAN (HC) 1917

The Calcutta High Court recently dealt with the legality of bank account attachment under Section 73 of the CGST/WBGST Act, 2017, considering whether the petitioner had adequately disclosed relevant facts and complied with procedural requirements.

The matter was heard by a single-judge bench of Justice Raja Basu Chowdhury dismissed the writ petition filed by GSPS Developers Pvt. Ltd., observing that the company had not disclosed the date of bank account attachment, nor provided proof of service of Form GST DRC-13 or any written communication from the bank. The Court held that in the absence of specific disclosure and supporting documents, no relief could be granted, while leaving open the petitioner’s option to pursue statutory remedies before the appellate authority.

Customs Inquiry Report Beyond 90 Days under Regulation 17(5) of CBLR is Invalid: Madras HC

M/s.Sea Queen Shipping Services Private Limited vs The Commissioner ofCustoms CITATION: 2025 TAXSCAN (HC) 1918

The Madras High Court recently addressed the validity of a customs inquiry report issued beyond the 90-day period under Regulation 17(5) of the Customs Brokers Licensing Regulations, 2018 (CBLR), examining whether delayed submission of the report vitiates the proceedings.

The matter was heard by a single-judge bench of Justice N. Anand Venkatesh allowed the writ petition filed by Sea Queen Shipping Services Pvt. Ltd., holding that the inquiry report dated 27 June 2025, submitted 161 days after the show-cause notice of 17 January 2025, was invalid. The Court emphasized that the 90-day period prescribed under Regulation 17(5) is mandatory, and delays, even where the petitioner participated in proceedings, cannot cure the statutory violation. The report was set aside, with no costs, and connected petitions were closed.

Quashing Seizure Memo Does Not Prevent Customs Dept. from Investigation and Process: Patna HC

Govind and Company vs The Union of India through the Chief Commissionerof Customs CITATION: 2025 TAXSCAN (HC) 1919

The Patna High Court recently dealt with the legality of a seizure memo issued under Section 110 of the Customs Act, 1962, involving alleged violations of Sections 7, 11, 46, 47 of the Customs Act, read with Section 3(2) of the Foreign Trade (Development and Regulation) Act, 1992, in relation to the seizure of 17,085 kilograms of betel nuts and a Tata truck.

The matter was heard by the Division Bench of Justice Rajeev Ranjan Prasad and Justice Ashok Kumar Pandey quashed the seizure memo dated 12 January 2020 against Govind and Company, observing that the memo lacked recorded “reasons to believe” as required under Section 110(1) and merely reproduced statutory provisions. The Court clarified that the quashal does not bar the Customs Department from continuing investigations or initiating proceedings under law through show-cause notices and adjudication. The writ petition was disposed of with these directions.

GST Adjudicating Authority cannot Pass Order without Examining Material Adduced by Appellant to Contest Case: Patna HC

Binay Rice Mill Trade Name vs State of Bihar through the Commissioner of State Tax CITATION: 2025 TAXSCAN (HC) 1920

The Patna High Court addressed the legal issue concerning the failure of GST adjudicating and appellate authorities to consider materials submitted by the petitioner in support of its refund claim under the Export Promotion Capital Goods (EPCG) Scheme. The case involved interpretation and application of Section 54(1) of the Goods and Services Tax Act, 2017, which governs refund claims for tax paid on procurement of capital goods.

The matter was heard by the Division Bench comprising Justice P. B. Bajanthri and Justice S. B. Pd. Singh observed that the adjudicating authority and the appellate authority had failed to pass reasoned and speaking orders, thereby violating principles of natural justice. Consequently, the High Court quashed the impugned orders and remanded the matter to the adjudicating authority to reconsider the petitioner’s submissions and pass a fresh reasoned order within four months.

No Revival of Balance Duty Credit after 7 Years: Calcutta HC Dismisses ₹66.37 Lakh Claim under Incremental Exports Incentivisation Scheme

S.A. Exports vs Additional District General of Foreign Trade & Ors CITATION: 2025 TAXSCAN (HC) 1921

The Calcutta High Court dealt with a writ petition concerning the claim of balance duty credit under the Incremental Exports Incentivisation Scheme. The issue centered on whether a petitioner could seek reconsideration of a long-settled duty credit claim originally limited to ₹1 crore under Notification No. 43/2013 after a period of nearly seven years, relying on a later judicial interpretation.

The matter was heard by a single-judge bench comprising Justice Raja Basu Chowdhury observed that the petitioner’s own 2015 application had expressly limited the claim and that no steps were taken for over seven years to press for additional credit. The Court dismissed the writ petition, holding that an attempt to resurrect a long-settled claim after such a delay was impermissible, and that settled issues cannot be reopened after a decade.

Tax Exemption Can Claim for Inter-State Purchases after Segregating Purchases made within in State and Other: Madras HC

M/s.Sivakumar and Co vs The Tamil Nadu Sales Tax Appellate Tribunal CITATION: 2025 TAXSCAN (HC) 1922

The Madras High Court dealt with a writ petition concerning the eligibility for tax exemption on inter-State sale of gingelly seeds purchased both within Tamil Nadu and from other States. The petitioner claimed exemption under G.O. No. 3602, Revenue, dated 28.12.1963, contending that tax-paid local purchases should not affect the exemption on inter-State sales. The legal issue revolved around whether inter-State sales of mingled goods could be exempt when records were maintained to distinguish local and inter-State purchases.

The matter was heard by a single-judge bench comprising Justice S.M. Subramaniam observed that the petitioner’s goods were found mingled during physical inspection, and mere maintenance of separate stock records was insufficient to claim exemption. The Court held that the decisions of both the Assessing Authority and the Tamil Nadu Sales Tax Appellate Tribunal, which denied exemption, were correct and in accordance with the provisions of the exemption order. The writ petition was accordingly dismissed.

Provision for discount once accepted by Income Tax Dept as an allowable expense cannot be changed later: Karnataka HC rules in favour of LTI Mindtree Ltd.

THE PR. COMMISSIONER OF INCOME TAX vs M/S. LTI MINDTREE LTD CITATION: 2025 TAXSCAN (HC) 1923

The Karnataka High Court dealt with an appeal concerning the allowability of provision for discount as a business expense under the Income Tax Act, 1961, particularly for Assessment Year 2014-15. The legal issue involved whether the provision for discount made by LTI Mindtree Ltd., a software development company, constituted an allowable deduction under the Act when the discount was contingent on achieving certain sales targets and was discharged in subsequent years.

The matter was heard by the Division bench comprising Justice Jayant Banerji and Justice S.G. Pandit observed that the provision for discount had been made on a scientific and specific method and fully discharged in subsequent years, demonstrating its bona fide nature. The Court held that once the Income Tax Department accepts a provision for discount as an allowable expense in earlier assessment years, it cannot later disallow it without violating its own stance. Accordingly, the High Court upheld the ITAT and CIT(A) decisions allowing the provision for discount as an allowable expense for the Assessment Year 2014-15.

Rectification in BTR Made After Re-Survey before Enactment of Paddy Land & Wetland Act is Valid: Kerala HC dismisses Petition of Revenue Dept.

THE DISTRICT COLLECTOR vs THANGAL KUNJU CITATION: 2025 TAXSCAN (HC) 1924

The Kerala High Court dealt with writ appeals concerning the validity of corrections made to the Basic Tax Register (BTR) following a re-survey prior to the enactment of the Kerala Conservation of Paddy Land and Wetland Act, 2008 (Act 28 of 2008). The legal issue centered on whether such corrections, which changed land classification from nilam to purayidam, required compliance with Section 27A of the Act or whether the entries made in the BTR prior to the Act’s enforcement are valid and binding.

The matter was heard by the Division bench comprising Justice A. Muhamed Mustaque and Justice Harisankar V. Menon held that the Revenue Authorities had the power to effect corrections in the BTR consequent to a re-survey conducted prior to the enactment of Act 28 of 2008. The court clarified that if the land was recorded as purayidam in the BTR for more than a decade, the State cannot now contend it was a mistaken entry, and such corrections do not require Section 27A compliance. Accordingly, the writ appeals were dismissed, upholding the validity of the BTR entries.

Customs Duty not leviable on lmport of capital good: Karnataka HC

COMMISSIONER OF CENTRAL EXCISE,CUSTOMS AND SERVICE TAX, MYSORE CITATION: 2025 TAXSCAN (HC) 1925

The Karnataka High Court examined whether customs duty and consequential penalty under Section 112(a) of the Customs Act, 1962 are leviable on duty-free imported capital goods by a 100% Export Oriented Unit (EOU) in the event of non-fulfillment of the Net Foreign Exchange Earnings as a Percentage of Exports (NFEP). The key legal issue was whether failure to achieve the NFEP obliges the unit to pay duty on capital goods already installed and used for manufacturing goods for export under Notifications No. 53/1997-Customs and 52/2003-Customs.

The matter was heard by the Division bench comprising Justice S.G. Pandit and Justice K. V. Aravind held that customs duty on capital goods is not leviable if the goods have been installed and used for export production, even if the NFEP is not achieved. The court clarified that General Exemption No. 42 limits the condition for exemption to installation and use, and the retrospective application of the Notification dated 31.03.2003 cannot be invoked. Consequently, the penalty under Section 112(a) of the Customs Act, 1962 was also set aside, upholding the Tribunal’s ruling in favor of the assessee, Such Silk International Ltd.

Driver’s Initial Statement Given More Weight than Subsequent Documents or Explanations: Allahabad HC Upholds GST Detention Order

M/S Aasar Scrap Traders vs State Of U.P CITATION: 2025 TAXSCAN (HC) 1926

The High Court of Allahabad dealt with the legality of a GST detention order under the Goods and Services Tax regime. The legal issue concerned whether the detention of goods and imposition of tax and penalty on the petitioner, Aasar Scrap Traders, could be set aside when the driver’s initial statement contradicted subsequent documents and explanations provided by the petitioner under GST provisions.

The matter was heard by Justice Piyush Agrawal upheld the detention order, observing that the driver’s first-instance statement carried greater evidentiary value than later explanations or documents. The Court noted that the driver’s statement remained unrebutted, was not made under duress, and was consistent with the facts, while the petitioner’s reliance on other judgments was found inapplicable. Consequently, the writ petition was dismissed, and the GST detention, along with the consequential tax and penalty, was held valid.

Relief to SBI, Refund u/s 11B of Excise Act can be Claimed within One Year from Date of Payment: Karnataka HC

STATE BANK OF INDIA vs THE PRINCIPAL COMMISSIONER OF CENTRAL GST CITATION: 2025 TAXSCAN (HC) 1927

The High Court of Karnataka examined the issue of refund of service tax under Section 11B of the Central Excise Act, 1944, in a case involving the State Bank of India (SBI). The legal question concerned whether the Bank could claim a refund of service tax paid on upfront commission for a Performance Bank Guarantee (PBG) after the PBG was surrendered early, and whether the one-year limitation under Section 11B should be calculated from the date of initial payment or from the date when the right to claim refund arose.

The matter was heard by the Division bench comprising Justice S.G. Pandit and Justice K. V. Aravind held in favour of SBI. The Court observed that the relevant date for claiming the refund is the date on which the HAL surrendered the Bank Guarantee (24.08.2009), as this was when the cause of action arose. The Revenue was directed to consider SBI’s refund claim for service tax proportionate to the unutilized period of the PBG, provided SBI establishes that it had not passed on the tax to HAL. The Court set aside the CESTAT order dated 22.11.2017, allowing the appeal.

Forest Dept. Invalidated Experience Certificate due to Belated Regn. of Company: Chhattisgarh HC Holds GST Regn. Proves Employer’s Validity

Shyam Sundar Sahu VS State Of Chhattisgarh CITATION: 2025 TAXSCAN (HC) 1928

The High Court of Chhattisgarh at Bilaspur dealt with the legal issue of the validity of an experience certificate produced by a candidate for recruitment as a Driver of Heavy Vehicle in the Forest Department. The petitioner, Shyam Sundar Sahu, had submitted a certificate from M/s Radhe Rice Mill covering employment from 2 January 2020 to 1 March 2023. The Forest Department had invalidated his candidature on the ground that the company was registered with the District Industries Centre (DIC) only on 19 March 2020, after the start date of the certificate. The Court examined whether the certificate could be treated as invalid despite the company having obtained GST registration under the GST Act in 2019, prior to its DIC registration.

The matter was heard by Justice Narendra Kumar Vyas, who held that the Forest Department’s reasoning was “purely imaginary and without any foundation.” The Court observed that GST registration in 2019 established the existence of Radhe Rice Mill and that workforce support during machinery installation and setup could validate work experience even before formal operations commenced. Consequently, the High Court set aside the Forest Department’s order dated 19 June 2025 and directed that the petitioner’s candidature be considered along with other eligible candidates strictly in accordance with law.

CLAT-PG Score not Valid for Public Employment to Legal Posts: Delhi HC Quashes NHAI’s Illegal Recruitment Criteria

SHANNU BAGHEL vs UNION OF INDIA & ANR. CITATION: 2025 TAXSCAN (HC) 1929

The Delhi High Court dealt with the legal issue of whether the Common Law Admission Test (CLAT-PG) score can be adopted as the sole criterion for recruitment to public employment in legal posts under the National Highways Authority of India (NHAI). The Court examined the challenge under Articles 14 and 16 of the Constitution of India, focusing on whether restricting recruitment eligibility to candidates with CLAT-PG scores from 2022 onwards had a rational nexus with suitability for employment and whether it violated the principles of equality and merit-based selection.

The matter was heard by a Division Bench comprising Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela, who held that the prescription of CLAT-PG scores as the sole criterion for recruitment was arbitrary and irrational, noting that the examination is designed for admission to postgraduate law courses and does not measure suitability for public employment. The Court emphasized that eligibility based solely on CLAT-PG unfairly excludes meritorious candidates from other universities and allowed the writ petition, quashing the NHAI notification dated 11 August 2025.

Stockguru Scam: Delhi HC Holds Seized Money as ‘Proceeds of Crime,’ Bars Income Tax Recovery Until PMLA Trial Ends

ASST. COMMISSIONER OF INCOME TAX vs STATE CITATION: 2025 TAXSCAN (HC) 1930

The Delhi High Court dealt with the legal issue of whether money seized by the Income Tax Department from the alleged masterminds of the Stockguru India Ponzi scheme could be appropriated toward outstanding tax liabilities, in the context of the Prevention of Money Laundering Act, 2002 (PMLA) and the Income Tax Act, 1961. The Court examined whether funds allegedly obtained through fraud and embezzlement could be treated as taxable income under the Income Tax Act or as “proceeds of crime” under PMLA, emphasizing the overriding effect of Section 71 of PMLA in case of conflict with other laws.

The matter was heard by Justice Neena Bansal Krishna, who held that the Rs. 34.69 crore seized from Ulhas Prabhakar Khair, Priyanka Saraswat, and associates constitutes “proceeds of crime” under PMLA and cannot be appropriated for tax recovery until the conclusion of the PMLA trial. The Court rejected the Income Tax Department’s application to release the funds for adjusting outstanding tax liabilities, noting that premature appropriation would prejudice ongoing criminal proceedings and undermine victims’ rights. The judgment clarifies that while illegal profits may sometimes be taxed, embezzled or entrusted funds cannot be treated as income in the hands of fraudsters.

J&K HC Allows Secondary & Higher Education Cess Refund to Coromandel Intl. Ltd. noting Finality of Supreme Court’s SRD Nutrients Ruling

M/s Coromandel International Limited vs Union of India CITATION: 2025 TAXSCAN (HC) 1932

The Jammu & Kashmir High Court addressed the legal issue concerning the refund of Secondary and Higher Education (SHE) Cess under Notification No. 56/2002-CE dated 14.11.2002, where the petitioner, M/s Coromandel International Ltd., sought release of excise duty refunds that had been denied by authorities despite the company being entitled under the law. The case revolved around whether the education cess and SHE cess could be refunded once the primary excise duty itself was exempted, in light of the Supreme Court’s ruling in SRD Nutrients Pvt. Ltd. v. CCE, Guwahati (2018).

The matter was heard by Justice Sanjeev Kumar and Justice Sanjay Parihar, who held that the petitioner’s entitlement to refund was conclusive and that the CESTAT order in its favor had attained finality, as it was not challenged further. The Court directed the Union of India and excise authorities to release the refund of education cess and SHE cess, along with applicable interest, within two months, noting that pending applications seeking modification of the SRD Nutrients decision could not delay relief.

GST Appeal Limitation Runs from Actual Communication, Not Mere Upload of Order in Portal: Madras HC

Sharp Tanks and Structurals Private Limited vs The Deputy Commissioner(GST) (Appeals) CITATION: 2025 TAXSCAN (HC) 1933

The Madurai Bench of Madras High Court dealt with the legal issue concerning the limitation period for filing GST appeals under Section 107 read with Section 169 of the CGST/TNGST Act, specifically addressing whether the limitation commences from mere upload of adjudication orders on the GST portal or from their actual communication to the assessee. The petitioner, Sharp Tanks and Structurals Pvt. Ltd., challenged adjudication orders under Section 74 of the TNGST Act for FY 2020-21 and 2021-22, contending that the orders were only uploaded on the GSTN portal and not communicated, resulting in a missed statutory deadline.

The matter was heard by Justice Swaminathan, who distinguished the concepts of “service” and “communication,” holding that mere upload on the portal does not amount to communication. The Court emphasized that effective communication requires a positive act, such as sending the order to the assessee’s last known address by post, courier, or email. Observing practical difficulties faced by small and medium taxpayers, the Court allowed the petitioner to file a GST appeal and recommended that the GST authorities consider systemic reforms, including physical service for cancelled registrations and OTP-based acknowledgment, to ensure compliance with principles of natural justice.

Deduction u/s 54F of Income Tax Act can be Allowed on Substantiating Assessee’s Intention to Repay Borrowed Funds with Capital Gains: Kerala HC

MRS. SAINABA HAMZA KOYA vs THE INCOME TAX OFFICER CITATION: 2025 TAXSCAN (HC) 1934

The Kerala High Court dealt with the legal issue regarding the allowability of deduction under Section 54F of the Income Tax Act, 1961, specifically whether an assessee can claim exemption for capital gains when the funds for purchase or construction of a residential property are initially borrowed and later repaid using the capital gains. The petitioner, Sainaba Hamza Koya, challenged the refusal of the bank and income tax authorities to permit closure of her Capital Gain SB Account and release of funds deposited for claiming exemption under Section 54F, asserting that she had utilized borrowed funds to construct a residential property with the intention to repay from the capital gains.

The matter was heard by Justice Ziyad Rahman A.A., who observed that Section 54F permits the assessee to utilize borrowed funds for constructing or purchasing a residential property, provided there is an intention and link to appropriate the capital gains for repayment. The Court held that the petitioner must satisfy the assessing authorities by producing relevant materials demonstrating that the capital gains would be applied for the intended purpose. While final entitlement and tax implications are to be determined in an assessment proceeding, the Court directed the authorities to permit the petitioner to release the excess amount in her Capital Gain SB Account after retaining sums necessary to cover tax liability, interest, and other charges.

GST ITC Claim rejected on Allegation of Non-existent Wntity and Fake invoices: Orissa HC Directs to avail statutory Remedy, Dismisses Petition

M/s. Amit Metalics Company vs Joint Commissioner of State Tax CITATION: 2025 TAXSCAN (HC) 1935

The Orissa High Court dealt with the legal issue concerning the rejection of Input Tax Credit (ITC) under Section 74 of the Central Goods and Services Tax Act, 2017 / Odisha GST Act, 2017, in cases where the assessee is alleged to have claimed ITC through transactions with non-existent suppliers or via fake invoices. The petitioner, Amit Metalics Company, challenged the order directing payment of Rs.72,63,912/- for tax periods from December 2023 to March 2024, contending that the authorities had wrongly held the transactions to be fraudulent despite documents submitted to substantiate the ITC claims.

The matter was heard by Chief Justice Harish Tandon and Justice Murahari Sri Raman, who observed that the determination of eligibility for ITC involves detailed factual scrutiny and analysis of evidence by authorities empowered under the GST Act. The Court held that it would not interfere with the findings of fact regarding the alleged non-existent suppliers and fake invoices and emphasized that the petitioner has an alternative statutory remedy to present its evidence and claim before the appropriate authority. Consequently, the writ petition was dismissed, directing the petitioner to pursue the claim through the statutory process.

Pending NCLT Proceedings Does Not bar Arbitration Application if underlying dispute is Arbitrable: Calcutta HC Allows Application of SREI Equipment Finance

SREI EQUIPMENT FINANCE LIMITED vs KITPLY INDUSTRIES LIMITED CITATION: 2025 TAXSCAN (HC) 1936

The Calcutta High Court addressed the legal issue of whether pending proceedings before the National Company Law Tribunal (NCLT) bar an arbitration application, particularly when the underlying dispute is arbitrable under the Arbitration and Conciliation Act, 1996. The case involved SREI Equipment Finance Limited, which filed an application for appointment of an arbitrator under clause 9.4(b) of a Rupee Loan Agreement and a related arbitration agreement, seeking resolution of disputes arising from non-payment of loan principal and interest by the respondent.

The matter was heard by Justice Shampa Sarkar, who held that the existence of an arbitration clause and proper invocation thereof was sufficient for the Court to allow the arbitration application. The Court clarified that objections regarding pending NCLT proceedings, unstamped or unregistered documents, or allegations of fraudulent transactions would be addressed by the arbitrator at the appropriate stage. Consequently, the Calcutta High Court allowed the arbitration application, confirming that the invocation of arbitration is not barred by parallel NCLT proceedings when the dispute is otherwise arbitrable.

Chhattisgarh HC Grants Bail to ₹16 Crore GST ITC Fraud-Accused noting 1 Year+ Incarceration without Trial

Ajay Singh S/o Sh vs Union Of India CITATION: 2025 TAXSCAN (HC) 1938

The Chhattisgarh High Court recently dealt with a case concerning the grant of regular bail to an accused under the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) in connection with alleged fraudulent availment of Input Tax Credit (ITC) under the Central Goods and Services Tax Act, 2017. The legal issue centered on whether prolonged pre-trial incarceration without commencement of trial justified the release of the petitioner on bail.

The matter was heard by Justice Parth Prateem Sahu, who noted that the petitioner, Ajay Singh, had been in custody since 7 April 2025 and the trial had not yet begun. Observing that continued detention under such circumstances was unjustified, the Court granted bail, directing the petitioner’s release upon furnishing a personal bond of ₹1,00,000 and one solvent surety to the satisfaction of the trial court, without commenting on the merits of the allegations.

Punjab & Haryana HC Declares 30-Hour Detention at DGGI Illegal, Directs Statements be Recorded Only in Office Hours under CCTV

Barkha Bansal vs State of U.T. Chandigarh CITATION: 2025 TAXSCAN (HC) 1939

The Punjab & Haryana High Court recently addressed the legality of detention and prolonged interrogation of a person summoned by the Directorate General of GST Intelligence (DGGI) under the Central Goods and Services Tax Act, 2017 (CGST Act). The legal issue revolved around whether detention of the detenue beyond office hours without cognizable offence, and procedural irregularities during interrogation, violated Articles 21 and 22 of the Constitution of India.

The matter was heard by Justice Harpreet Singh Brar, who observed that the detenue, Bharat Lal Garg, had been kept for over 30 hours without urgency, and that procedural lapses including delayed grounds of arrest and absence of proper authorizations rendered the detention unlawful. Relying on Supreme Court and High Court precedents, the Court directed the immediate release of the detenue, emphasizing that statements under DGGI proceedings must be recorded during office hours with appropriate safeguards such as counsel presence and CCTV monitoring.

Ministry of Sports Claims Locus Standi After Disbandment of Commonwealth Games Committee: Delhi HC Remands Appeals to ITAT

UNION OF INDIA vs ADDITIONAL DIRECTOR OF INCOME TAX CITATION: 2025 TAXSCAN (HC) 1940

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The High Court of Delhi recently addressed the issue of locus standi in income tax appeals under Section 143(3) of the Income Tax Act, 1961. The matter arose after the Ministry of Sports, appellant-assessee, sought to challenge ITAT orders rejecting appeals relating to the Commonwealth Games Committee on the ground that the assessee was not an aggrieved party following the Committee’s disbandment.

The matter was heard by the Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar, which held that after the disbandment, the Union of India assumed the role of the aggrieved party. The Court remanded ITA Nos. 1677/Del/2019 and 1678/Del/2019 (Assessment Years 2010-11 and 2008-09) to the ITAT for adjudication on merits, directing the tribunal to decide the appeals in accordance with law. Pending applications were treated as infructuous.

EDC Charges Paid to Haryana Development Board Not Rent: Delhi HC Holds Real Estate Developer Not Liable to Deduct TDS

COMMISSIONER OF INCOME TAX vs M/S SS GROUP PVT. LTD. CITATION: 2025 TAXSCAN (HC) 1941

The Delhi High Court recently dealt with the issue of Tax Deducted at Source (TDS) on External Development Charges (EDC) paid by real estate developers to the Haryana Urban Development Authority (HUDA). The legal question revolved around whether such EDC payments constitute “rent” under Section 194I of the Income Tax Act, 1961, thereby mandating TDS deduction by the developer.

The matter was heard by the Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar dismissed the Revenue’s appeal, holding that EDC payments are not “rent” and do not attract TDS. The Court relied on its earlier decision in DLF Homes Panchkula Pvt. Ltd. v. JCIT (2023) and noted that the Supreme Court had refused to grant special leave in Union of India v. SS Group Pvt. Ltd. (2024), affirming that no fresh adjudication was required and that the Revenue’s appeal lacked merit.

Delhi HC waives GST Pre-deposit on finding Assessee Entitled to Refund of ITC

HEAL HEALTH CONNECT SOLUTIONS PRIVATE LIMITED vs THE COMMISSIONER DELHIGOODS AND SERVICES TAX AND ORS CITATION: 2025 TAXSCAN (HC) 1943

The Delhi High Court dealt with a matter concerning the waiver of pre-deposit in a GST dispute, specifically regarding the entitlement of the petitioner, Heal Health Connect Solutions Pvt. Ltd., to claim Input Tax Credit (ITC) refund for the financial year 2018-19. The case involved challenges to Notification No. 09/2023-Central Tax, a Show Cause Notice dated 05.12.2023, and a Demand Order dated 20.02.2024, which alleged excess ITC claimed and invalid ITC under Section 16(4) of the Central Goods and Services Tax Act, 2017. The Court examined whether the limitation for claiming ITC was extended under Section 16(5) of the CGST Act, 2017, and whether the Revenue’s demand was legally sustainable.

The matter was heard by the Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain, which waived the requirement of pre-deposit in view of the petitioner’s entitlement to ITC. The Court directed that the petitioner may approach the Appellate Authority by 15th October, 2025, which shall decide the matter on merits without being influenced by the Court’s observations. Additionally, the petitioner was to be provided access to the portal to download any required documents within a week, ensuring the appellate process could proceed effectively.

Allegations of Fraudulent GST ITC Involve Multiple Factual Questions Unsuitable for Writ Adjudication: Delhi HC Directs Alternate Approach

M/S RST BATTERIES & ANR vs DIRECTORATE GENERAL OF GOODS AND SERVICETAX INTELLIGENCE GURUGRAM ZONAL UNIT CITATION: 2025 TAXSCAN (HC) 1944

The Delhi High Court addressed a legal issue concerning the challenge to a demand of Rs. 18.83 crore raised against RST Batteries and RST Batteries Pvt. Ltd. for allegedly availing and passing on fraudulent Input Tax Credit (ITC) through bogus invoices. The petitioners contended that as per a CBIC circular dated 6 July 2022, only penalties under Sections 122(1)(ii) and 122(1)(vii) of the CGST Act, 2017 could be imposed in such cases, and no tax demand should be raised. The matter raised the question of whether writ jurisdiction could be invoked to examine disputed factual questions in cases involving allegations of fake ITC.

The matter was heard by the Division Bench of Justice Prathiba M. Singh and Justice Shail Jain, which dismissed the writ petition, observing that factual disputes in fraudulent ITC cases cannot be resolved in writ proceedings and that the petitioners must avail the statutory appellate remedy under Section 107 of the CGST Act. The Court extended the time to file the appeal until 15 November 2025, ensuring it would not be dismissed on limitation grounds, and left it to the appellate authority to consider the applicability of the 2022 CBIC circular.

Indexation Benefit on LTCG Available Only from Date of Builder Buyer Agreement, Not Provisional Allotment: Delhi HC

PRAVEEN GUPTA vs DCIT CIRCLE INTL TAXATION (1) (3) (1) CITATION: 2025 TAXSCAN (HC) 1945

In a recent ruling, the Delhi High Court addressed the legal issue of the commencement of indexation on long-term capital gains under Section 48 read with Section 2(42A) of the Income Tax Act, 1961. The case arose when Praveen Gupta, the appellant, challenged the order of the Income Tax Appellate Tribunal (ITAT) for the assessment year 2016-17, claiming that indexation on the sale of his property should begin from the date of provisional allotment in 2007-08, rather than from the date of execution of the Builder Buyer Agreement in 2010. The appellant argued that his provisional allotment conferred enforceable rights in the property, whereas the department contended that rights in immovable property accrue only upon execution of the buyer’s agreement.

The matter was heard by the Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar, relying on the earlier ruling in Gulshan Malik v. CIT (2014), observed that booking or provisional allotment letters do not create enforceable rights in property. The Bench held that rights in immovable property accrue only upon execution of the Builder Buyer Agreement. Consequently, the Court dismissed the appeal as devoid of merit, holding that the addition of Rs. 4,12,812 towards long-term capital gains was justified, with indexation to be calculated from the financial year 2010-11, corresponding to the date of the executed agreement.

GST Assessee not Entitled to Additional Personal Hearing Opportunity if they Fail to Appear on Scheduled Date: Delhi HC

FUTURE ART AND DISPLAY vs SALES TAX OFFICER CLASS II/AVATO CITATION: 2025 TAXSCAN (HC) 1946

The Delhi High Court recently addressed the issue of entitlement to personal hearing under the Goods and Services Tax (GST) regime, particularly under Section 107 of the Central Goods and Services Tax Act, 2017. The case arose when M/s Future Art & Display, through its partner Tariq Ahmad, filed a writ petition challenging an adjudication order dated 25 December 2023 issued by the Sales Tax Officer Class II/AVATO, Ward 94, for the financial year 2017-18. The petitioner contended that despite filing a reply to the show cause notice dated 26 September 2023, they were not provided a personal hearing before passing the impugned order. The petitioner also questioned the validity of Notification No. 9/2023-Central Tax dated 31 March 2023 and Notification No. 9/2023-State Tax dated 22 June 2023.

The matter was heard by the Division Bench of Justice Prathiba M. Singh and Justice Shail Jain held that no violation of principles of natural justice occurred, as the petitioner had been provided a specific date for personal hearing on 17 November 2023, which they failed to attend. The Court observed that the impugned order, based on the reply already filed, did not warrant interference in writ jurisdiction. While the validity of the notifications remained under consideration in related cases, the Court allowed the petitioner the liberty to file a statutory appeal under Section 107 of the CGST Act before the Appellate Authority by 30 September 2025, subject to pre-deposit requirements. The Court further directed portal access within one week for downloading necessary documents and clarified that the appeal would not be dismissed on the ground of limitation if filed by the stipulated date.

ITRs, Cash Books & Bank Records Proved Income: Delhi HC Upholds Income Tax Deletion of ₹2.8 Cr Demonetization Cash Addition

PR. COMMISSIONER OF INCOME TAX vs PANCHAM REALCON PVT. LTD. CITATION: 2025 TAXSCAN (HC) 1947

The Delhi High Court recently considered an appeal filed by the Pr. Commissioner of Income Tax (Central), Gurugram, challenging the deletion of an income tax addition of ₹2.8 crore on cash deposits made during the demonetization period by Pancham Realcon Pvt. Ltd. The Assessing Officer had treated the deposits as unexplained under Section 68 of the Income Tax Act, 1961 for the assessment year 2017-18, adding the sum to the total income of the assessee. The assessee contended that the deposits were substantiated through prior withdrawals, main and site cash books, comparative charts of financial balances for 2015-16 and 2016-17, bank statements, and ITR filings prior to demonetization.

The matter was heard by the Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar upheld the reasoning of the CIT(A) and ITAT, observing that the assessee had consistently maintained high cash balances in previous years and that large withdrawals recorded in mid-2016, supported by ITRs and audit reports, explained the disputed deposits. The Bench noted that the AO erred in ignoring the main cash book, which accounted for significant withdrawals and deposits, and relied only on site cash books. The Court held that these were factual conclusions supported by evidence and that an appeal under Section 260A cannot permit re-examination of pure questions of fact. Consequently, no substantial question of law arose, and the appeal of the Revenue was dismissed.

Jharkhand HC quashes GST Order Passed without considering stipulation u/s 16(5) of CGST Act, Remands Matter

Vinod Udaipuri vs Union of India CITATION: 2025 TAXSCAN (HC) 1948

In a recent ruling, the Jharkhand High Court considered a challenge to an order passed under the Central Goods and Services Tax (CGST) Act, 2017, concerning the availment of Input Tax Credit (ITC) under Section 16(4) and Section 16(5) of the Act. The petitioner, Vinod Udaipuri, contended that Section 16(4), which imposes a time limit for claiming ITC, was ultra vires the Constitution of India, violating Articles 14, 19(1)(g), and 300A, and also sought to challenge Rule 61(5) of the CGST Rules, 2017. The petitioner argued that the retrospective declaration of GSTR-3B as a valid return infringed upon vested rights and affected his entitlement to claim ITC.

The matter was heard by Chief Justice Tarlok Singh Chauhan and Justice Rajesh Shankar quashed the impugned Order-in-Original dated 19 May 2023 and Summary of Order dated 25 August 2023, noting that the authority had failed to consider the stipulations of Section 16(5), which had been made effective retrospectively from 1 July 2017. The Court observed that the Union had consented to a fresh adjudication in light of Section 16(5), which allows ITC for invoices or debit notes pertaining to FY 2017-18 to 2020-21 to be claimed in returns filed up to 30 November 2021. The matter was thus remitted for reconsideration, directing the authority to pass a fresh order while taking into account the implications of Section 16(5) of the CGST Act.

Notice on MD/Director in Alleged Economic Offence of Company: Telangana HC directs Company to take Further Steps

Mr. Kishore Kumar Gani vs The State of Telangana CITATION: 2025 TAXSCAN (HC) 1949

The Telangana High Court recently dealt with a challenge to a notice issued under Sections 94 and 179 of the BNSS Act, 2023, in connection with Crime No. 63 of 2025 registered with the Cyberabad Economic Offences Wing. The petitioner, Kishore Kumar Ganjil, former Managing Director of Airis Pharma Pvt. Ltd., sought a writ of mandamus declaring the notice issued on 09 September 2025 as without jurisdiction and violative of Article 20(3) of the Constitution of India. The petitioner contended that the notice improperly required him to produce company documents personally, despite already being named as an accused in the FIR, and alleged that the notice sought to transfer company records unlawfully to the respondent’s office amid ongoing disputes over management and control of the company.

The matter was heard by Justice N.V. Shravan Kumar observed that the impugned notice had already been duly served on the Human Resources Manager of the company, who had accepted it. The Court held that, as the notice was issued to the company and not to the petitioner in his personal capacity, it was for the company to respond and take appropriate action as provided under law. Consequently, the Court declined to issue any writ or mandamus in favor of the petitioner, noting that remedies were available to the company to address the notice, and dismissed the petition accordingly.

VAT Act and Finance Act are Disparate in Character, Demand based on difference in value between WCT Returns and ST-3 Returns is invalid: Delhi HC

THE COMMISSIONER OF CENTRAL TAX vs THE INDURE (P) LIMITED CITATION: 2025 TAXSCAN (HC) 1950

The Delhi High Court recently examined a dispute concerning the levy of service tax on differences between Value Added Tax (VAT) returns and Service Tax (ST-3) returns. The petitioner, Indure (P) Limited, challenged the CESTAT Principal Bench’s dismissal of the Department’s appeal against an order dated 10 April 2017 by the adjudicating authority. The key legal question was whether the respondent was liable to pay service tax on the differential amounts reflected in VAT returns under the VAT Act, 2005 and service tax returns under the Finance Act, 1994, given that VAT works contract tax is accounted on an accrual basis, whereas service tax prior to 30 June 2011 was payable on a receipt basis under Rule 6(1) of the Service Tax Rules, 2004.

The matter was heard by the Division Bench of Justice Prathiba M. Singh and Justice Shail Jain upheld the findings of both the adjudicating authority and CESTAT, observing that the VAT Act and Finance Act are disparate in character and that comparison of returns filed under the two laws is erroneous. The Bench noted that the difference in amounts had been satisfactorily explained through documents and a Chartered Accountant’s certificate. Consequently, the Court held that no additional liability arose on the respondent, and the impugned order did not warrant interference, as no substantial question of law was involved.

Challenge on illegal Transfer of Shares of Company and on Unauthorised Appointment of Directors: Orissa HC directs to approach NCLT

Harbinder Singh vs The Registrar of Companies CITATION: 2025 TAXSCAN (HC) 1951

The Orissa High Court recently addressed a petition concerning alleged illegal transfer of shares and unauthorized appointment of directors in a company. The petitioner, Harbinder Singh, sought to set aside an order dated 04 July 2025 passed by the ROC-cum-OL, Odisha, and requested directions for a de novo inquiry and inspection of statutory filings and e-forms with the Ministry of Corporate Affairs (MCA). The legal issue raised pertained to whether the petitioner could seek such relief directly from the High Court or whether a specialized forum under the Companies Act, 2013, was the appropriate authority to adjudicate such company-related disputes.

The matter was heard by a single bench of Dr. Justice Sanjeeb K. Panigrahi observed that the National Company Law Tribunal (NCLT), Cuttack, being the specialized forum for company-related matters including mismanagement, fraud, and disputes over directors and shares, was the appropriate forum to address the petitioner’s grievances. The Court granted the petitioner liberty to approach the NCLT, Cuttack within two weeks to raise the issues, including those raised in the present petition. Meanwhile, the operation of the impugned ROC order dated 04 July 2025 and any further consequential proceedings was stayed until the matter is listed before the NCLT.

Income Tax Reassessment Order Passed without Considering Assessee’s plea: Delhi HC Directs to approach CIT(A)

MEENA CHAWLA vs INCOME TAX OFFICER CITATION: 2025 TAXSCAN (HC) 1952

The Delhi High Court dealt with the legal issue of whether a writ petition challenging reassessment notices issued under Section 148 of the Income Tax Act, 1961 and the consequent assessment orders could be entertained when the petitioner had an alternative remedy before the CIT (Appeals). The Court examined whether the petitioner could bypass the statutory appellate mechanism and approach the High Court under Article 226 of the Constitution.

The matter was heard by the Division Bench comprising Justice V. Kameswar Rao and Justice Vinod Kumar, which held that the petitioner had a more efficacious remedy before the CIT (Appeals) to raise all contentions regarding the reassessment orders. Relying on the Supreme Court’s decision in Commissioner of Income Tax v. Chhabil Dass Agarwal, the Court dismissed the writ petition, observing that the Income Tax Act provides a complete statutory mechanism for assessment, reassessment, and appeals, and the petitioner cannot circumvent it by filing a writ. The Bench granted the petitioner the liberty to pursue remedies available in law before the appellate authority.

Delhi HC Allows Operation of Salary Account for Subsistence Allowance, Directs PCIT to Decide Appeal Within Eight Weeks

SAUMYACHAURASIA vs ASSISTANT/DEPUTY COMMISSIONEROFINCOMETAX& ORS. CITATION: 2025 TAXSCAN (HC) 1953

The Delhi High Court recently considered a petition filed by Saumya Chaurasia concerning the operation of her salary account amidst an attachment under Section 226(3) of the Income Tax Act, 1961. The petitioner sought directions to operate her bank account for receiving subsistence allowance credited by her employer and requested the Principal Commissioner of Income Tax (PCIT) to dispose of her pending appeal/revision within a specified timeframe. The legal issue revolved around whether the subsistence allowance credited to the salary account could be accessed despite the attachment of other accounts by the tax authorities.

The matter was heard by the Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar allowed the petitioner to operate her salary account specifically for the subsistence allowance while maintaining the attachment of other accounts, including Recurring Deposits, Fixed Deposits, and Savings Accounts. The Court directed the PCIT to dispose of the pending appeal/revision within eight weeks. The bench noted that, as per the proviso to Section 226(2) read with Section 60 of the Civil Procedure Code, subsistence allowances are exempt from attachment, and the respondents were directed to ensure that the bank allowed the petitioner access to these funds. The petition was disposed of accordingly, and the pending application was marked as infructuous.

Rs. 9.98 Lakh Income Tax Refund with Interest Delayed by Tax Authorities: Delhi HC Directs Payment within Eight Weeks

MR. ANILKUMARGOEL vs PR. COMMISSIONEROFINCOMETAX CITATION: 2025 TAXSCAN (HC) 1954

The Delhi High Court recently addressed a petition filed by Anil Kumar Goel seeking release of income tax refunds along with interest for four assessment years, which had been delayed by the tax authorities. The petitioner sought a writ directing payment of refunds for AY 2007-08 and other years, including statutory and penal interest under Section 244A of the Income Tax Act, 1961, in compliance with an earlier order of the Commissioner of Income Tax (Appeals) dated 08 February 2017. The legal issue centered on the non-payment of refunds and interest by the tax authorities, causing inconvenience and financial hardship to the assessee.

The matter was heard by the Division Bench of Justice V. Kameshwar Rao and Justice Vinod Kumar directed the respondents to release the total refund of Rs. 9,98,236.80 along with interest within eight weeks, providing a detailed breakup of the payment. The Court allowed the petitioner to submit a representation to the Assessing Officer if the amount paid was considered short, which was to be decided within four weeks. The Bench also granted the petitioner the liberty to revive the petition if aggrieved by the AO’s subsequent decision. The petition was disposed of accordingly.

Relief for HUL: Madhya Pradesh HC Rules White Petroleum Jelly I.P. is a 'Drug', Not a Cosmetic, Entitled to Lower VAT Rate

M/S HINDUSTAN UNILEVER LTD vs COMMERCIAL TAXES DEPARTMENT CITATION: 2025 TAXSCAN (HC) 1955

The Madhya Pradesh High Court recently considered the classification of White Petroleum Jelly I.P., manufactured by Hindustan Unilever Ltd. (HUL), under the Madhya Pradesh Value Added Tax Act, 2002. The petitioner challenged the Commercial Tax Appellate Board’s orders, which classified the product as a cosmetic, attracting a higher VAT rate. The legal issue was whether White Petroleum Jelly I.P., manufactured under a valid drug licence and possessing therapeutic and protective properties, should be classified as a “drug” eligible for a lower tax rate under Entry 19A, Part II, Schedule II of the MP VAT Act, or as a cosmetic, based on its over-the-counter availability and common skincare use.

The matter was heard by the Division Bench of Justice Vivek Rusia and Justice Jai Kumar Pillai held that White Petroleum Jelly I.P., being manufactured under a drug licence and having curative and prophylactic properties, is a drug and not a cosmetic. The Court observed that classification must depend on the product’s primary purpose and functional use, rather than trade perception or marketing pattern, referring to Supreme Court rulings in Ponds India Ltd. v. CCT and Hindustan Lever Ltd. v. Commissioner of Central Excise. The High Court quashed the impugned orders of the Commercial Tax Appellate Board, directed that White Petroleum Jelly I.P. be taxed under Entry 19A as a drug, and set aside the levy of interest under Section 18(1)(a). The appeals and connected tax references were allowed.

Settled Issues against Income Tax Assessment Order passed u/s 143 not Challengable: Delhi HC dismisses appeal against Maruti Suzuki

PRINCIPAL COMMISSIONER OF INCOME TAX vs MARUTI SUZUKI INDIA LTD CITATION: 2025 TAXSCAN (HC) 1956

The Delhi High Court recently considered the Revenue’s appeal in the Maruti Suzuki India Ltd. case challenging the Income Tax Assessment Order passed under Section 143 of the Income Tax Act, 1961 for the Assessment Year (AY) 2010-11. The petitioner, Maruti Suzuki India Ltd., had filed an appeal under Section 260A against the ITAT order, which had allowed the assessee’s appeal and dismissed the Revenue’s appeal. The legal issue revolved around whether the Revenue could re-open settled questions relating to transfer pricing adjustments and other assessment matters that had been adjudicated in prior proceedings.

The matter was heard by the Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar observed that the issues raised by the Revenue were already settled in earlier judgments for prior assessment years, including ITA No. 196/2017 for AY 2007-08, ITA No. 250/2005 for AY 1999-2000, and ITA No. 976/2005 for AY 2000-01. Relying on these precedents, the Court held that the settled issues could not be challenged again and dismissed the Revenue’s appeal, upholding the ITAT’s order for the assessee.

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