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 28, 2025 to October 04, 2025.

Supreme Court

Reopening of Assessment regarding Excess claim of Depreciation: Supreme Court dismisses SLP due to lack of Sufficient Reason for Delay

ASSISTANT COMMISSIONER OF INCOMETAX ACIT vs P.C. PATEL AND COMPANY CITATION : 2025 TAXSCAN (SC) 301

The Supreme Court addressed a challenge to the reopening of assessment concerning an excess claim of depreciation under Section 148 of the Income Tax Act, 1961. The case stemmed from the High Court of Gujarat’s judgment that quashed the revenue department’s attempt to reopen the assessment for AY 2016-2017, where a partnership firm engaged in hiring earth-moving equipment had claimed 30% depreciation on tippers, a matter previously settled by the High Court in its order dated 01.05.2018. The assessee had already made a full and true disclosure of relevant facts, and the Gujarat High Court held that there was no valid basis for the Assessing Officer to issue a fresh notice under Section 148A(b), as the information cited did not result in income escapement on identical and concluded facts.

A two judge bench of Justice Pamidighantam Sri Narasimha and Justice Atul S. Chandurkar dismissed the Special Leave Petition (SLP) filed by the Revenue against the order of the Gujarat High Court in SCA No. 19096/2022. The bench found that the explanation offered did not constitute sufficient cause for the 244-day delay in filing the SLP and refused to condone the delay, resulting in dismissal of the petition against P.C. Patel and Company. Thus, the SupremeCourt left intact the High Court’s order quashing the notice for reopening assessment, reinforcing that a concluded issue cannot be reopened merely on a change of opinion.

Challenge on nature of income from Growing Mushrooms in trays by utilizing the artificial climate: Supreme Court Allows SLP of British Agro Product

M/S. BRITISH AGRO PRODUCTS vs THE PRINCIPAL COMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (SC) 302

The Supreme Court entertained a Special Leave Petition (SLP) filed by British Agro Products against a decision of the High Court of Judicature at Madras, which had ruled against the petitioner in TCA No. 500/2023 dated 09-05-2025. The core legal issue concerns whether income derived from the cultivation of white button mushrooms in factory trays under artificial climatic conditions constitutes "agricultural income" for the purposes of exemption under Section 2(1A) of the Income Tax Act, 1961. The Madras High Court had previously held that mushrooms, being fungi and not classified as plants, fruits, or vegetables, fall outside the ambit of agricultural income when grown under fully regulated conditions, overturning a prior ruling by the Income Tax Appellate Tribunal (ITAT) that favored the assessee.

A two judge bench of Justice Manoj Misra and Justice Ujjal Bhuyan admitted the SLP and issued notice returnable in four weeks, directing that the petitioner may serve the Central Agency representing the Revenue in Court. Importantly, the Supreme Court ordered a stay on any recovery pursuant to the impugned High Court order during the pendency of proceedings. This direction temporarily shields British Agro Products from immediate tax liability, while the Supreme Court examines the interpretation and scope of "agricultural income" under the Income Tax Act in the context of mushroom cultivation under artificial conditions.

Supreme Court confirms CESTAT Order Assigning CTH 2712 to Waksol Products: Notes Products Derived from Refining Petroleum

COMMISSIONER OF CUSTOMS vs PANOLI INTERMEDIATES INDIA PRIVATE LIMITED CITATION : 2025 TAXSCAN (SC) 303

The Supreme Court resolved the legal issue surrounding the tariff classification of Waksol series products, imported by Panoli Intermediates India Private Limited, under the Customs Act, 1962. The dispute, originating with the Commissioner of Customs House, Kandla, pertained to whether Waksol A, Waksol B, and blended grades such as Waksol 9-11A/9-11B products derived from petroleum refining should be classified as petroleum-derived wax under Customs Tariff Heading (CTH) 2712 or instead under CTH 3405, which covers polishes and similar preparations. The CESTAT had, after remand for technical assessment, reviewed laboratory test reports and the HSN notes, finding that the intrinsic nature and composition of Waksol products supported classification under Heading 2712, emphasizing the goods’ identity as petroleum wax rather than as cleaning or polishing preparations.

A two judge bench consisting of Justice Manoj Misra and Justice Ujjal Bhuyan upheld the CESTAT order, finding no legal infirmity in the decision classifying Waksol products under CTH 2712. Having examined the detailed reasoning on laboratory reports, manufacturer literature, and international tariff guidance, the bench dismissed the civil appeal by the Commissioner of Customs.

No Trade Tax on Reselling Used/Refined Mobil Oil after Cleaning; Not a Manufactured Product: Supreme Court Affirms Allahabad HC Ruling

COMMISSIONER OF TRADE TAX UP vs M/S. UNIVERSAL BISCOS OIL PRODUCTS CITATION : 2025 TAXSCAN (SC) 304

The Supreme Court upheld an important ruling delivered by the Allahabad High Court concerning the assessment of M/s Universal Biscos Oil Products under the Uttar Pradesh Trade Tax Act, 1948. The central legal issue was whether the process of cleaning used or burnt mobil oil and reselling it as mobil oil constituted "manufacture" of a new product liable for trade tax under Section 3AAAA of the Act. The assessing authority originally treated the cleaning process as manufacturing and levied tax on both the purchases and sales, but the High Court found that the essential character of the oil remained unchanged before and after the cleaning process, relying on precedents including CST v. Roopji and Sons and CST v. Oil Processors Pvt. Ltd.

A two judge bench of Justice J.B. Pardiwala and Justice Sandeep Mehta dismissed the appeals filed by the Revenue, affirming the Allahabad High Court’s judgment that the cleaning of used mobil oil does not amount to manufacture and, therefore, attracts no trade tax liability on resale. The bench agreed with the High Court’s reliance on statutory notifications and judicial precedents to hold that neither purchase tax under Section 3AAAA nor sales tax liability would arise in such cases.

Challenge against Bombay HC order refusing claim of revenue citing NCLT’s Approval of Resolution Plan: Supreme Court Dismisses Delayed SLP

ASSISTANT COMMISSIONER OF INCOMETAX vs AMNS KHOPOLI LIMITED CITATION : 2025 TAXSCAN (SC) 305

The Supreme Court addressed the legal issue of whether the Revenue could pursue claims against AMNS Khopoli Limited (formerly Uttam Galva Steels Limited) following approval of a Resolution Plan by the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code, 2016. The Bombay High Court, in WPL No. 6313/2024 dated 23rd April 2024, had already ruled in favor of AMNS Khopoli Limited, noting that the NCLT’s order dated 14th October 2022 approving the Resolution Plan was binding on all stakeholders including the Revenue and all pre-effective date claims and liabilities were extinguished. As a result, the High Court held that notices or proceedings covering periods prior to November 10, 2022, were bad in law.

A two judge bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan dismissed the Revenue’s Special Leave Petition, citing both gross delay of over 300 days and absence of merit as reasons. The bench noted that similar SLPs had previously been dismissed, and reaffirmed that after NCLT’s approval, neither government departments nor other creditors could enforce claims not incorporated in the approved Resolution Plan for periods prior to the effective date.

Supreme Court upholds ITAT order refusing to condone Delay in filing Appeal due to Gross Negligence of Assessee

C.I. BUILDERS PRIVATE LIMITED vsPRINCIPAL COMMISSIONER OF INCOME TAX BHOPAL CITATION : 2025 TAXSCAN (SC) 306

The Supreme Court upheld the order of the Income Tax Appellate Tribunal (ITAT) which refused to condone the delay in filing an appeal due to the gross negligence of the assessee, C.I. Builders Private Limited. The Special Leave Petition (SLP) challenged the final judgment of the Madhya Pradesh High Court at Jabalpur dated 02-05-2025 in ITA No. 75/2024, which dismissed the Income Tax appeals for assessment years 2010-2011 and 2012-2013 as time barred. The appeals were delayed by over six and seven years respectively, attributed to the negligence of the appellant’s previous advocate. The ITAT and High Court found no sufficient cause to condone such inordinate delay as the assessee failed to exercise due diligence in prosecuting the appeals and knowingly allowed the ex parte dismissal by the Commissioner of Income Tax (Appeals).

The two judge bench of Justice J.B. Pardiwala and Justice Manmohan dismissed the SLP, affirming that the expression "sufficient cause" under Section 5 of the Limitation Act requires a reasonable, practical, and bona fide explanation, which was missing in the present case. The Court emphasized that merely shifting blame to the counsel does not absolve the assessee of responsibility to actively monitor and pursue its appeals. The gross negligence and lethargic attitude of the assessee in failing to file appeals in time despite knowledge of adverse orders do not warrant condonation of delay. Consequently, the appeals were held to be barred by limitation and rightly dismissed.

Supreme Court upholds Bombay HC ruling Dismisses Reopening Assessment against Genesys International Corps

ASSISTANT COMMISSIONER OF INCOMETAX & ORS vs GENESYS INTERNATIONAL CORP. LIMITED CITATION : 2025 TAXSCAN (SC) 307

The Supreme Court upheld the Bombay High Court's ruling that dismissed the reopening assessment against Genesys International Corp Limited for the assessment year 2015-16. The Special Leave Petition (SLP) arose from the final judgment dated 24-03-2025 in WP No. 2845/2022 passed by the Bombay High Court. The petitioner challenged a notice issued under Section 148 of the Income Tax Act, 1961, dated 30 March 2021, and subsequent orders disposing objections to the reopening. The High Court observed that the reopening was beyond the prescribed four-year period without satisfying the jurisdictional parameters, constituting a mere change of opinion.

A two judge bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan of the Supreme Court found no grounds to interfere with the High Court's order and dismissed the SLP. The Court recorded that the reasons for reopening given in letters dated 20 May 2021 and 4 August 2021 were inconsistent and insufficient to justify reopening the assessment order originally passed on 20 December 2017.

Classification of Tinted Float Glass with Tin Layer: Supreme Court Lists Case with Similar Appeals for Joint Hearing

COMMISSIONER OF CUSTOMS vs M/SASAHI INDIA GLASS LTD. CITATION : 2025 TAXSCAN (SC) 308

The Supreme Court has taken up the classification dispute concerning tinted float glass with a tin layer for a joint hearing with similar appeals. The issue arose from the department’s challenge against orders by the Assistant Commissioner and Commissioner (Appeals) rejecting revenue’s claim to classify the imported Light Green Float Glass under Customs Tariff Item (CTI) 7005 21 10 instead of 7005 10 10. The classification affects the eligibility for exemption from basic customs duty under the Exemption Notification dated 01.06.2011. The Assistant Commissioner and appellate authority relied on a prior order dated 20.07.2022 holding that the glass, having a tin layer acting as an absorbent and reflective layer, fits the classification under CTI 7005 10 10 as per Note 2(c) of Chapter 70 of the Customs Tariff.

The department argued that the tin layer forms naturally on all float glass through manufacturing, so it should not be treated as an absorbent layer warranting classification under 7005 10 10 and claimed the glass should be classified under CTI 7005 21 10. However, the Commissioner (Appeals) rejected reliance on the department’s Circular dated 14.11.2024, which stated that a tin layer alone does not qualify as an absorbent layer. Technical test reports from CSIR Kolkata demonstrated the tin layer to qualify as an absorbent and reflective layer, supporting the classification under 7005 10 10. The Supreme Court, has listed the matter on 06.10.2025 with other connected appeals for a joint hearing to decide the correct classification.

Customs Duty Exemption on Imported Parts for Lithium-Ion Batteries allowed for Ambrane India as Assembly Qualifies as ‘Manufacture’: Supreme Court Upholds CESTAT Order

COMMISSIONER OF CUSTOMS(PREVENTIVE) NEW DELHI vs M/S AMBRANE INDIA PVT. LTD. CITATION : 2025 TAXSCAN (SC) 309

The Supreme Court upheld the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) order allowing customs duty exemption on imported parts used to manufacture Lithium-ion batteries for Ambrane India Pvt Ltd. The key issue was whether assembling imported Lithium-ion cells and components into batteries qualified as ‘manufacture’ under the Import of Goods at Concessional Rate of Duty (IGCR) Rules, 2017, thereby entitling the assessee to exemption under Notification No. 50/2017-Cus, Entry No. 512. The department had contended that the exemption did not apply since the imported goods were used to manufacture power banks, not Lithium-ion batteries, and issued a Show Cause Notice seeking recovery of differential duty.

CESTAT, through a two-member bench, held that ‘manufacture’ under IGCR Rules means creating a new product with distinct name, character, and use, and assembling cells and components into Lithium-ion batteries qualified as manufacture even if those batteries were later used to assemble power banks. The Tribunal rejected the department’s argument requiring manufacture of the final product, pointing out that before Notification No. 02/2019, lithium-ion cells were exempted under Notification No. 50/2017 and the term ‘power bank’ did not exist in HSN or tariff entries. The Supreme Court, in a bench comprising Justice J.B. Pardiwala and Justice K.V. Viswanathan, upheld the CESTAT order dated 18.10.2024 and dismissed the department’s appeal, confirming the exemption and setting aside penalties.

Service Tax Liability for Overseas Employee Secondments: Supreme Court Issues Notice to Revenue in Tesco Bengaluru Case

TESCO BENGALURU PRIVATE LIMITED vs THE COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX CITATION : 2025 TAXSCAN (SC) 310

The Supreme Court of India has issued notice to the Revenue in the appeal filed by Tesco Bengaluru Private Limited concerning service tax liability on cross-border employee secondments from April 2008 to March 2013. The dispute relates to whether the assignment of employees by overseas entities to the Indian affiliate qualifies as “Manpower Recruitment and Supply Agency Service” taxable under reverse charge. Relying on its 2022 ruling in Northern Operating Systems Pvt. Ltd., the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Bangalore upheld the tax demand for the normal limitation period, but struck down penalties and disallowed extended limitation.

A two judge bench of Justices J.B. Pardiwala and K.V. Viswanathan condoned the delay in filing the appeal and issued notice to the Revenue, returnable in four weeks. The Tribunal held that the overseas employer seconded employees to the Indian company but remained their employer and paid their salaries, making the Indian entity liable to reverse charge service tax on manpower supply services received. The matter now awaits further hearing before the Supreme Court for final determination.

High Court

Interconnect Service Payments Do Not Constitute “Royalty” Under Income Tax Act: Supreme Court sustains Karnataka HC Decision

DEPUTY COMMISSIONER OF INCOMETAX vs M/S. BELGACOM INTERNATIONAL CITATION : 2025 TAXSCAN (HC) 1957

The Supreme Court of India dealt with the issue of whether interconnect service charges paid to non-resident telecom carriers constitute “royalty” under Section 9(1)(vi) of the Income Tax Act, 1961. The Revenue’s SLP arose from the Karnataka High Court’s decision in Writ Appeal No.668/2024, which, relying on Vodafone Idea Ltd. v. DDIT, held that such charges are not royalty and hence not liable to tax in India.

A Bench of Justice B.V. Nagarathna and Justice R. Mahadevan dismissed the SLP citing a 227-day delay and also upheld the Karnataka High Court’s ruling on merits. Referring to its earlier order in DCIT v. M.I. Limited, the Supreme Court affirmed that interconnect payments to non-resident telecom operators are not taxable as royalty, leaving intact the Karnataka High Court’s 2024 judgment by Justices S.G. Pandit and C.M. Poonacha.

Bombay HC raps Customs for Resisting Re-Test, orders Fresh Sampling of Seized Cashew Imports

Shri Vyom Dipesh Raichanna vs Union of India CITATION : 2025 TAXSCAN (HC) 1958

The Bombay High Court addressed a dispute involving the Customs and Directorate of Revenue Intelligence seizure of cashew nut consignments in March-April 2025. The petitioner sought re-testing of samples based on Public Notice No.97 of 2017 after adverse reports from a Kerala lab contradicted earlier favorable tests conducted in Maharashtra. Customs opposed re-testing, alleging delay and arguing that only remnants of prior samples, not fresh samples, could be tested.

The Division Bench of Justices M.S. Sonak and Advait M. Sethna allowed the petition, holding that re-testing is a trade facilitation measure meant to ensure fairness and should rarely be denied. The Court ordered fresh samples drawn within five days in the presence of the petitioner’s representative to be sent to the Central Revenues Control Laboratory (CRCL), New Delhi, with the report due within a month. Noting Customs' resistance was contrary to the government’s Ease of Doing Business policies, the Court refrained from imposing costs, expressing hope Customs would promote trade facilitation in the future.

Honorary Doctors are not Employees, TDS to be Deducted u/s 194J, Bombay HC remands AMC TDS Issue to ITAT

The Commissioner of Income Taxvs Dr. Balabhai Nanavati Hospital CITATION : 2025 TAXSCAN (HC) 1959

The Bombay High Court held that consultant and honorary doctors engaged by Dr. Balabhai Nanavati Hospital are independent professionals, not employees, and hence, tax deducted at source (TDS) on their payments must be under Section 194J of the Income Tax Act, 1961, and not Section 192. The Court upheld the ITAT and Commissioner of Income Tax (Appeals) decisions, noting that the doctors had autonomy, received no fixed salary or benefits, and filed income tax returns under "Income from Business or Profession," confirming the absence of an employer-employee relationship for assessment years 2007-08 to 2012-13.

However, on the issue of Annual Maintenance Contracts (AMCs) for medical equipment, the Court found the ITAT had not independently examined whether payments fell under Section 194J (fees for technical services) or Section 194C (contractual payments). The Division bench of Justices B.P. Colabawalla and Firdosh P. Pooniwalla remanded the AMC issue back to the ITAT for detailed fact-finding for assessment years 2007-08 to 2010-11. The Court clarified that the hospital’s liability as an "assessee in default" under Section 201 would depend on the ITAT’s fresh findings regarding the nature of these AMC payments.

Bombay HC issues Notice to Income Tax Department on Delay in Return of Gold and Silver Ornaments Seized in 2007

Chaitanya Kochar vs Income TaxOfficer 1 CITATION : 2025 TAXSCAN (HC) 1960

The Nagpur Bench of the Bombay High Court has issued notice to the Income Tax Department in a petition filed by Chaitanya Kochar, seeking the return of gold and silver ornaments seized during a search conducted in 2007. The petitioner contended that 4,275.15 grams of gold, 39,075 grams of silver, and certain documents were seized during the search. Though assessment orders were passed holding the petitioner liable for tax, these orders were quashed by the Income Tax Appellate Tribunal (ITAT) in April 2022. Despite this, the petitioner alleged the authorities have not returned the seized items, prompting judicial intervention.

The Division Bench of Justices Anil L. Pansare and Siddheshwar S. Thombre directed the issuance of notice to the Income Tax Department, requiring a response within three weeks. This case highlights the issue where taxpayers face delays in the return of seized assets even after receiving appellate relief. The Bombay High Court’s decision aims to address this delay and ensure compliance with the ITAT’s orders.

Bright Line Test Cannot Be Used by AO to Make AMP Adjustments: Delhi HC

COMMISSIONER OF INCOME TAX vs CASIO INDIA COMPANY PVT. LTD. CITATION : 2025 TAXSCAN (HC) 1961

The Delhi High Court ruled that the Assessing Officer (AO) cannot apply the Bright Line Test (BLT) to make transfer pricing adjustments on Advertisement, Marketing, and Promotion (AMP) expenses, as these expenses cannot be automatically considered international transactions under the Income Tax Act. In appeals challenging the ITAT’s deletion of an AMP adjustment to Casio India Private Limited’s income for AY 2012-13 and 2013-14, the Court emphasized the need for tangible evidence of an international transaction, noting that mere incurrence of AMP expenses does not suffice.

The Division Bench of Justices V. Kameswar Rao and Renu Bhatnagar dismissed the Revenue’s appeals, affirming that AMP expenses must be scrutinized based on specific facts and contractual obligations rather than a mechanical test like the BLT. The Court underlined that a transfer pricing adjustment requires a substantive international transaction with an agreed price, which was absent here.

Operation Numkhor : 7 Central Agencies to Probe Bhutan Car Smuggling Case as Dulquer Salmaan Challenges Customs Seizure in Kerala HC

DULQUER SALMAN vs COMMISSIONEROFFICE OF THE COMMISSIONER OF CUSTOMS (PREVENTIVE) CITATION : 2025 TAXSCAN (HC) 1962

The controversy surrounding the alleged smuggling of luxury cars into Kerala through Bhutan has intensified with the seizure of a third vehicle linked to actor Dulquer Salmaan. Customs Preventive officials, under “Operation Numkhor,” seized a red Nissan Patrol SUV from a relative’s flat in Vennala, Kochi, marking the third such vehicle connected to the actor. The Customs allege that the vehicle was smuggled through Bhutan, re-registered in Himachal Pradesh, and later sold to Dulquer. Earlier, Dulquer had approached the Kerala High Court challenging the seizure of a 2004 Land Rover Defender, asserting the purchase was legitimate and accusing Customs of arbitrary action. The Court directed the Customs to obtain instructions and posted the matter for further hearing.

Operation Numkhor, launched earlier in September 2025, uncovered a large racket smuggling abandoned Bhutanese Army vehicles and stolen foreign cars into Kerala, involving registration irregularities and suspected money laundering via off-banking channels. Multiple agencies including Customs, CBI, Enforcement Directorate, GST Intelligence, NIA, Intelligence Bureau, and DRI are jointly investigating. Reports estimate nearly 200 vehicles may have been sold under the guise of Bhutanese Army auctions in the last five years. The operation has escalated from a state level crackdown to a national probe tracing the entire illegal supply chain, making it one of the largest vehicle smuggling investigations in Kerala

Freight Charges Form Part of Sale Price When Seller Retains Responsibility Till Delivery, Taxable under TNGST Act: Madras HC

Sterlite Industries (India)Limited vs The State of Tamil Nadu CITATION : 2025 TAXSCAN (HC) 1963

The Madras High Court ruled that freight charges form part of the sale price under the Tamil Nadu General Sales Tax Act, 1959, when the seller retains responsibility for the goods until delivery at the buyer’s site. In the case involving Sterlite Industries (India) Limited, the Court upheld the Assessing Officer’s view that although freight was charged separately, the seller’s obligation extended beyond the factory gate, including transit insurance and control over goods during transport, thereby making freight charges taxable sales consideration.

The Division Bench of Justice P. Velmurugan and Justice K.K. Ramakrishnan noted the contract’s Clauses 4 and 5, which fixed freight rates and required the petitioner to bear transit insurance costs, reflecting the seller’s responsibility during transit. The Court dismissed the petitioner’s argument that the sale concluded at the factory gate, holding that freight charges, inseparably linked to the sale, are liable to tax. The High Court upheld the findings of the Assessing Officer and the Sales Tax Appellate Tribunal, dismissing the petitioner’s revisions.

Dealer's Voluntary Admission of Sales Tax Turnover Suppression holds Strong Evidentiary Value, Cannot be Retracted without Proof: Madras HC

State of Tamil Nadu representedby the Deputy Commissioner vs Tvl.Jain Marketing CITATION : 2025 TAXSCAN (HC) 1964

The Madras High Court has held that a dealer's voluntary admission of turnover suppression during an inspection carries strong evidentiary value and cannot be retracted without credible proof. In a tax case involving Jain Marketing for AY 1999-2000, the Court noted that incriminating slips recovered during inspection indicated sales suppression of Paan Parrag. The Assessing Officer determined suppressed turnover and imposed tax and penalty under Section 12(3)(b) of the Tamil Nadu General Sales Tax Act.

The Division Bench of Justices P. Velmurugan and K.K. Ramakrishnan observed that once incriminating records are found, the burden shifts to the dealer to provide proof of accounting for those entries. The Court also rejected the dealer's claim that extra pouches were given free of cost since there was no supporting material and excess stock supported suppression. Consequently, the Court held that the Appellate Assistant Commissioner and Tribunal erred in deleting the additions and penalty and restored the Assessing Officer’s order, allowing the tax case revision in favor of the Revenue.

GST Order affecting Civil Rights of Citizen cannot Pass without Hearing: Uttarakhand HC Quashes S. 73 Demand Order

Shakumbari Engeineering Work vs Commissioner of the SGST CITATION : 2025 TAXSCAN (HC) 1965

The Uttarakhand High Court quashed a demand order under Section 73 of the Uttarakhand Goods and Services Tax Act, 2017, on the ground that the taxpayer was not given an opportunity of personal hearing before the order was passed. In the case of Shakumbari Engineering Work, the Court relied on its earlier ruling in M/s Sri Sai Vishwas Polymers v. Deputy Commissioner, which emphasized that no order affecting civil rights can be passed without hearing the affected party. The Court held that the mandate of personal hearing is a constitutional and statutory requirement under the GST Act.

The Division Bench of Justices Ravindra Maithani and Alok Mahra set aside the demand order dated 27 December 2023 and remitted the matter back to the appellate authority for reconsideration after affording the petitioner a proper hearing opportunity. The decision underscored the sacrosanct principle of natural justice that demands a fair hearing before adverse orders affecting taxpayers can be passed.

Appeals Involving Taxability or Valuation Should Be Filed Directly Before Supreme Court u/s 35L of Central Excise Act: Delhi HC

COMMISSIONER OF SERVICE TAXDELHI vs M/S KONARK EXIM PVT. LTD. CITATION : 2025 TAXSCAN (HC) 1966

The Delhi High Court held that appeals involving questions of taxability or valuation must be filed directly before the Supreme Court under Section 35L of the Central Excise Act, 1944, and cannot be entertained by the High Court. This ruling arose from appeals filed by the Commissioner of Service Tax, Delhi, against the CESTAT’s order favoring Konark Exim Pvt. Ltd. on whether commission payments to overseas companies were taxable under "Business Auxiliary Service" as per Section 65(19) of the Finance Act, 1994.

The Division Bench of Justices Prathiba M. Singh and Shail Jain observed that under Section 35G, the High Court’s jurisdiction excludes appeals concerning questions of taxability or valuation, which fall exclusively under Section 35L to the Supreme Court. Citing earlier judgments like Commissioner of Service Tax v. Delhi Gymkhana Club Ltd. and Commissioner of Service Tax v. Bharti Airtel Ltd., the Court ruled that even if issues of limitation arise, the primary nature of the appeal involving taxability directs the matter to the Supreme Court. The Court dismissed the appeals as not maintainable before the High Court but granted liberty to file before the Supreme Court, allowing for exclusion of time spent before the High Court under the Limitation Act.

Fictitious Firm, Fake GST ITC, False E-Way Bills & Wrong Bank Accounts: Punjab & Haryana HC Refuses Anticipatory Bail due to Non-Cooperation

Jatinder Kumar vs State ofPunjab and others CITATION : 2025 TAXSCAN (HC) 1967

The Punjab & Haryana High Court refused anticipatory bail to a proprietor accused of orchestrating a large-scale fake input tax credit (ITC) fraud under GST, involving about ₹54.4 crores by fictitious entities and shell transactions. The petitioner’s firm, M/s Manvi Steels, had allegedly passed on fake ITC, shown itself as availing fraudulent ITC, and was found to be non-existent at its registered address. The investigation uncovered major irregularities, such as false e-way bills, bogus suppliers, and the use of fake or non-functional bank accounts. Field inquiries confirmed the firm was a front for generating sham transactions, and RFID toll data disproved any real movement of goods.

The Bench of Justice Manisha Batra held that the seriousness of the allegations, nascent stage of investigation, risk of evidence tampering, and need for custodial interrogation outweighed the arguments for pre-arrest bail. The application for anticipatory bail was dismissed, with the Court expressly noting that the findings would not influence the merits of any subsequent trial.

GSTIN Inactivity Blocks Appeal Process: Calcutta HC Steps Directs Reactivation of Ashirvad Food Products’ GST Portal

M/s Ashirvad Food Products Private Limited vs Additional/Joint Commissioner CITATION : 2025 TAXSCAN (HC) 1968

The Calcutta High Court directed the GST department to reactivate the GSTIN of Ashirvad Food Products so the company could pay the statutory pre-deposit required for filing its appeal against a tax order. Ashirvad Food Products faced a technical issue because its GST portal displayed the GSTIN as “inactive,” preventing it from making the mandatory deposit online a precondition for the appeal’s maintainability. The Court observed that this technical irregularity had deprived the company of its substantive right to appeal, noting that the registration was not cancelled but only reflected as inactive.

The Bench of Justice Raja Basu Chowdhury ordered the GSTN to reactivate the company’s portal within four weeks and stayed the effect of the impugned order until two weeks after reactivation, but not beyond November 2025. Once reactivated, the petitioner can pay the statutory deposit and the appeal will be heard on merits. This decision ensures technical hurdles do not override substantive legal rights and protects the company’s right to challenge tax orders through due process.

GST Commissioner’s Forged Signature used to Facilitate Credit Withdrawal to Bank: Punjab & Haryana HC Grants Conditional Bail

Rohit vs State of Haryana CITATION : 2025 TAXSCAN (HC) 1969

The Punjab & Haryana High Court at Chandigarh granted conditional bail to Rohit, an exporter charged with criminal conspiracy, forgery, and GST fraud in relation to the withdrawal of funds through a forged letter using the purported signature of the GST Commissioner. The complaint revealed the accused coordinated with others to defraud the exchequer by siphoning ₹1.10 crore from a frozen bank account after forging and misusing official documents.

The Bench of Justice Anoop Chitkara, while granting bail, highlighted the constitutional principle that pre-trial incarceration should not amount to punitive action, especially given the petitioner’s six-month detention and the presumption of innocence. The order required Rohit to furnish bonds, provide full identification, and strictly prohibited him from tampering with evidence, influencing witnesses, or reoffending. If any violation occurs or another serious, non-bailable offense is committed, the State will be entitled to seek immediate cancellation of bail. The order affirmed that right to liberty and a speedy trial under Article 21 must be balanced against the gravity of economic offenses, offering bail only on stringent terms.

FIRC Need Not Match Transaction-Wise for ITC Claims if Total Benefit Supported by Foreign Remittances: Delhi HC

TRANSFORMATIVE LEARNINGSOLUTIONS PVT LTD vs COMMISSIONER CENTRAL GOODS AND SERVICE TAX DELHI EAST& ANR CITATION : 2025 TAXSCAN (HC) 1970

The Delhi High Court ruled that for Input Tax Credit (ITC) claims, Foreign Inward Remittance Certificates (FIRCs) do not need to be matched on a transaction-by-transaction basis, provided the overall benefit claimed is substantiated by total foreign remittances received. In the case of Transformative Learning Solutions Pvt Ltd, the Court found that the department’s insistence on transaction-wise matching of FIRCs with export invoices was unwarranted, as long as aggregate remittances fully supported the refund claim.

The Bench of Justice Prathiba M Singh and Justice Shail Jain set aside the tax demand order, observing that the company had regularly filed ITC refund claims with supporting documents, and directed the Adjudicating Authority to provide a fresh personal hearing and reconsider the matter after proper examination of the petitioner’s records. The Court emphasized fair procedure and the need to consider the substance of export and foreign remittance documentation in such refund disputes.

Overlapping GST Demands Involving Fictitious ITC Claims: Delhi HC Allows Appeals with Requisite Pre-Deposit

M/S R.U. OVERSEAS THROUGH ITSPROPRIETOR SH. UJALA GOEL vs DIRECTORATE GENERAL OF GOODS AND SERVICES TAXINTELLIGENCE DGGI AND ORS CITATION : 2025 TAXSCAN (HC) 1971

The Delhi High Court allowed R.U. Overseas to file appeals with the requisite pre-deposit in cases involving overlapping GST demands and fictitious Input Tax Credit claims. The Court recognized that the impugned assessment orders involved several instances of double demand and fictitious ITC claims arising from the same transactions and entities, notably M/s Ganpati Enterprises and M/s Fortune Graphics Limited. The petitioner was permitted to file statutory appeals against these overlapping orders before the Appellate Authority.

The Bench of Justice Prathiba M Singh and Justice Shail Jain clarified pre-deposit requirements: the petitioner must pay the statutory pre-deposit only for the main demand under DRC-07 dated 3rd February 2025 (impugned order No.2), after deducting amounts already paid for overlapping demands. No further pre-deposit is mandated for the appeal against impugned order No.3 because the demand is already covered by order No.2. The petitioner was instructed to file all appeals by 15th November 2025, after which the Appellate Authority will adjudicate the claims on merits, factoring in the overlaps and duplications in demands.

Non-Grant of Partial Advance Tax Credit on Predecessor’s PAN: Delhi HC Directs Manual Refund Within Three Weeks

LANDMARK PROPERTY DEVELOPMENT COLTD vs DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 1 CITATION : 2025 TAXSCAN (HC) 1972

The Delhi High Court dealt with the issue of non-grant of partial advance tax credit on the Permanent Account Number (PAN) of the petitioner’s predecessor entity. The legal issue concerned the refusal by the tax authorities to allow credit of partial advance tax paid by the predecessor due to technical system limitations under the Income Tax Act. The Court directed that manual intervention was necessary to grant the credit, as automated systems lacked the capacity to adjust the advance tax in the demerged entity’s account, highlighting the need to safeguard the petitioner’s substantive tax rights.

The Bench of Justice V. Kameshwar Rao and Justice Vinod Kumar disposed of the writ petition after recording the stand of the respondent authorities, who had proposed a manual resolution of the issue and marking the demand as 'stayed' to prevent adjustment against future refunds. The Court ordered that the manual crediting of the advance tax must be completed within three weeks, failing which the petitioner could revive the writ petition. Pending applications were dismissed as infructuous, emphasizing prompt administrative action to uphold tax credit rights.

Assistant Commissioner (ST) Found Explanations in 39 Slips “Very Satisfactory” Yet Ordered Remand Instead of Allowing: Madras HC Quashes Order

M/s.V.V.Vanniaperumal & Sonsvs The State of Tamil Nadu CITATION : 2025 TAXSCAN (HC) 1973

The Madras High Court addressed the issue of whether an appellate authority should remand a case for fresh consideration when it has already recorded that an assessee’s explanations for entries in seized records are “very satisfactory.” The legal question pertained to the principle of natural justice and the duty of the appellate authority under the Tamil Nadu General Sales Tax Act. The case involved V.V. Vanniaperumal & Sons, whose business records (39 D7 slips) were seized, and explanations were provided during assessment for the alleged suppression of sales.

The Division Bench of Justice P. Velmurugan and Justice K.K. Ramakrishnan held that if the appellate authority finds the explanations satisfactory and the assessee has discharged the burden of proof, it must dispose of the appeal on merits instead of remanding the matter. The Court quashed the remand order issued for alleged procedural lapses and allowed the appeal, emphasizing adherence to precedent and consistency, as the same factual matrix had led to allowance of appeals under the Central Sales Tax (CST) Act.

Dealer Fails to Appear Due to Illness: Madras HC Quashes Sales Tax Ex Parte Order, Remands Matter on Sales of Children’s Educational Books

M/s. Standard Press (India)(Pvt) Ltd vs The State of Tamil Nadu CITATION : 2025 TAXSCAN (HC) 1974

The Madras High Court ruled on the issue of an ex parte order passed by the Sales Tax Appellate Tribunal due to the dealer's non-appearance caused by illness in a case concerning tax exemption for sales of children’s educational books under the Tamil Nadu General Sales Tax Act, 1959. The Assessing Officer had disallowed the exemption claims related to these sales, and the Appellate Assistant Commissioner had modified the assessment order to grant exemption; however, the Tribunal dismissed the Revenue’s appeal ex parte when the dealer's representative could not attend the hearing due to illness.

The Division Bench of Justice P. Velmurugan and Justice K.K. Ramakrishnan quashed the ex parte order, holding that such a dismissal without granting another opportunity to the dealer violated the principles of natural justice. The Court remanded the matter back to the Tribunal for a fresh hearing on merits, directing that both parties be given a fair chance to present their arguments. The Tribunal was also instructed to dispose of the appeal within three months, with the substantial questions of law left open and the tax case revision allowed.

Madras HC Orders Fresh Adjudication on Former Director’s Liability for Company’s GST Dues, Treats Bank Attachment as SCN

Subir Ghosh vs The DeputyCommissioner (ST) (FAC) CITATION : 2025 TAXSCAN (HC) 1975

The Madras High Court addressed the liability of a former director for a company’s tax arrears under Sections 79(1)(c) and 89(1) of the GST Acts. The case involved Subir Ghosh, whose bank account was attached by the Deputy Commissioner (ST) for recovery of tax dues owed by EWIE Services India Pvt. Ltd., where he formerly served as director.

The Bench of Justice C. Saravanan, sitting singly, directed that the bank attachment be treated as a show-cause notice, allowing the petitioner to submit a detailed representation within 30 days. The Court further ordered the Deputy Commissioner to decide on the matter on merits after providing a personal hearing within two months. Meanwhile, the bank attachment was to be lifted, with the petitioner restrained from any unusual transfers that may frustrate the proceedings. The writ petition was disposed of with no order as to costs, ensuring due process and fair adjudication of director liability.

Statutory charge u/s 232 KMC Act overrides IBC’s General Priority Mechanism: Calcutta HC upholds Property Tax Liabilities on Auction Buyers, dismisses Writ Petition

COTTON CASUALS INDIA PRIVATELIMITED & ORS vs THE STATE OF WEST BENGAL & ORS. CITATION : 2025 TAXSCAN (HC) 1976

The Calcutta High Court ruled on the property tax liability of auction purchasers in a case involving pre-purchase arrears and the Insolvency Bankruptcy Code (IBC), 2016. The Court observed that the statutory charge under Section 232 of the Kolkata Municipal Corporation (KMC) Act, 1980, overrides the IBC’s general priority mechanism. The petitioners, auction purchasers of factory units and car parking spaces previously owned by a company undergoing liquidation, challenged the demand for outstanding property tax arrears and penalties dating back to 2008. The Court held that sales conducted on an "as is where is" basis transfer all liabilities and encumbrances to the purchaser, who is responsible for conducting due diligence and satisfying themselves of any pre-existing statutory dues.

The Bench of Justice Gaurang Kanth dismissed the writ petition, upholding the Kolkata Municipal Corporation’s authority under Sections 183(5) and 232 of the KMC Act to enforce the statutory first charge for property tax independently of the IBC’s priority scheme. It was emphasized that the petitioners, as auction purchasers, were sufficiently warned through the Expression of Interest and sale notices to investigate outstanding dues and that the ownership transfer included these liabilities.

Provident Fund Dues Not Part of Liquidating Company’s Estate: Madras HC Allows 255-Day Late Claim by EPFO

Central Board of Trustees vs TheDeputy Registrar CITATION : 2025 TAXSCAN (HC) 1977

The Madras High Court ruled that provident fund dues are excluded from the liquidation estate of a company as per Section 36(4)(a)(iii) of the Insolvency and Bankruptcy Code, 2016, and thus cannot be denied to claimants on grounds of delay. The case arose from the liquidation proceedings of K.N. Interior Designs and Engineering Pvt. Ltd., where the Employees' Provident Fund Organisation (EPFO) filed a claim for provident fund dues that was rejected by the liquidator due to a two-day delay in filing. The NCLT initially dismissed the EPFO’s petition for condonation of delay, holding the liquidation process to be time-bound.

The Bench of Justice S. M. Subramaniam and Justice C. Saravanan held that provident fund contributions are statutory dues protected under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, and cannot be treated as part of the liquidation estate. The Court observed that the marginal delay should not defeat the social security purpose of the statute and set aside the NCLT’s order. It directed the liquidator to consider the EPFO’s claim on merits, recover the dues from stakeholders who received distributions if payable, and complete the process within six months while keeping the company’s dissolution in abeyance.

Delhi HC Sets Aside GST Demand Order, Directs Fresh Hearing over Improper Service of SCN and RUDs

HIND PAPER HOUSE vs THECOMMISSIONER STATE GOODS AND SERVICE TAX DELHI & ANR CITATION : 2025 TAXSCAN (HC) 1978

The Delhi High Court set aside a Goods and Services Tax (GST) demand order on the grounds of alleged improper service of the Show Cause Notice (SCN) and the supporting documents (RUDs). The petitioner, Hind Paper House, challenged the SCN issued for a demand of over Rs. 4 crore for the period April 2019 to March 2020, contending that the SCN and relevant documents were not made available as required, and the hearing on the matter was not conducted adequately. The Court found that while the Department initially failed to upload the full SCN and documents due to a technical glitch, the physical copies were duly delivered to the petitioner, who then repeatedly requested adjournments without addressing the merits.

The Bench of Justice Prathiba M. Singh and Justice Shail Jain observed that there were errors on both sides but emphasized the petitioner’s right to a proper hearing and sufficient details before a demand is confirmed. Consequently, the Court set aside the impugned order and directed the Adjudicating Authority to grant a proper hearing on the matter, allowing the petitioner to raise any limitation plea. All contentions were kept open and the petition was disposed of with pending applications dismissed, ensuring compliance with principles of natural justice in GST adjudication.

Revenue Bound to Refund Excess VAT Once Form-P is Issued: Madras HC Orders Return of ₹1.14 Crore with 6% Interest

The Assistant Commissioner(CT)vs Madhucon Projects Limited CITATION : 2025 TAXSCAN (HC) 1979

The Madras High Court affirmed that once the Revenue issues Form-P indicating nil arrears and an excess tax refund, it is bound to refund the excess tax to the assessee. The case involved M/s Madhucon Projects Limited for the assessment year 2008-09, where the Assistant Commissioner had fixed the turnover and issued Form-P confirming an excess VAT payment of ₹1,14,89,741. Despite this, the refund was not processed, and the assessee filed a writ petition seeking the refund along with applicable interest.

The Division Bench of Justice C.V. Karthikeyan and Justice R. Vijayakumar upheld the single judge’s order directing the refund with 6% interest per annum within twelve weeks. The Court rejected the Revenue’s plea to remand the matter for further verification, emphasizing that issuance of Form-P conclusively shows the Revenue’s acknowledgment of the excess payment and obligation to refund.

Property Retention not allowable only based on Confirmation of Attachment under PMLA: Delhi HC

ANIRUDH PRATAP AGARWAL vsENFORCEMENT DIRECTORATE CITATION : 2025 TAXSCAN (HC) 1980

The Delhi High Court observed that the confirmation of attachment of property connected to money laundering under Section 8(3) of the Prevention of Money Laundering Act (PMLA), 2002, does not itself authorize the retention of such property. The Court clarified that Section 20 of the PMLA mandates a valid, independent order for retention, which must be reasoned and recorded in writing by an authorized officer, distinct from the officer conducting the search or seizure under Section 17. The procedural safeguards under Section 20 are substantive and cannot be bypassed, ensuring that property rights are protected until full adjudication takes place under Section 8.

The Division Bench of Justice Subramonium Prasad and Justice Harish Vaidyanathan Shankar emphasized that failing to adhere to the proper retention order protocol under Section 20 renders subsequent retention orders invalid and void ab initio. Despite the robust powers granted to enforcement agencies under the PMLA, the Court upheld the constitutional guarantee of property rights under Article 300A and mandated strict compliance with statutory procedures.

Delhi HC upholds ITAT order Invalidating Penalty Imposed u/s 271 citing Absence of Valid Notice

PR. COMMISSIONER OF INCOME TAXvs M/S. CORTEVA AGRISCIENCE PVT. LTD CITATION : 2025 TAXSCAN (HC) 1981

The Delhi High Court upheld the order of the Income Tax Appellate Tribunal (ITAT) invalidating a penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961, on the ground that the penalty notice lacked specificity and was therefore invalid. The case involved Corteva Agriscience Pvt. Ltd. for the Assessment Years 2002-03, 2003-04, 2005-06, and 2010-11, where the Assessing Officer issued a penalty notice that failed to specify which limb of Section 271(1)(c) was being invoked—whether for concealment of income or furnishing inaccurate particulars of income. This vagueness rendered the notice invalid.

The Division Bench of Justice V. Kameswar Rao and Justice Anish Dayal observed that this position is supported by binding precedents, including the judgment in Principal Commissioner of Income Tax v. Sahara India Life Insurance Co. Ltd. The Court held that a penalty notice must clearly state the specific grounds under Section 271(1)(c) to be valid. In absence of such clear indication, the penalty could not be sustained. Consequently, the appeals were dismissed, affirming the ITAT’s decision in favor of the assessee.

Bombay HC admits Revenue Appeal on Income Tax TDS Applicability and Profit Taxability for Joint Ventures u/s 194C

Pr Commissioner Of Income Tax 3Pune vs Subhash And B T Patil And Sons And N V Kharote Construction Pvt Ltd Jv CITATION : 2025 TAXSCAN (HC) 1982

The Bombay High Court has admitted an appeal filed by the Principal Commissioner of Income Tax-3, Pune, challenging the decision of the Income Tax Appellate Tribunal (ITAT), Pune, in favor of the joint venture comprising Subhash and B.T. Patil and Sons and N.V. Kharote Construction Pvt. Ltd. This appeal raises substantial questions of law relating to the applicability of Tax Deducted at Source (TDS) under Section 194C of the Income Tax Act, profit taxability in the hands of joint ventures, and disallowance under Section 40(a)(ia) of the Act. The Revenue contends that internal work allocation within the joint venture amounts to subcontracting triggering TDS obligations, and that profits should be taxed at the joint venture level regardless of individual member taxation. On the other hand, the ITAT had ruled that absent a formal subcontract, Section 194C does not apply and disallowed disallowance under Section 40(a)(ia).

The Division Bench of Justice M.S. Sonak and Justice Advait M. Sethna admitted the appeal and tagged it with related matters for final hearing scheduled on 12 November 2025. Both sides consented to file a synopsis and list of authorities in advance of the hearing. This ruling is significant as it addresses the nuanced tax treatment of joint ventures, the scope of TDS applicability under Section 194C, and the extent of expenditure disallowance under Section 40(a)(ia), which has important implications for taxation of profits and compliance obligations in joint venture arrangements.

Bombay HC admits Revenue Appeal against ITAT Order Deleting Cash Expense Disallowance u/s 40A(3)

Pr Commissioner Of Income Tax 4Pune vs Laukik Paper Industries Pvt. Ltd. CITATION : 2025 TAXSCAN (HC) 1983

The Bombay High Court has admitted an appeal filed by the Principal Commissioner of Income Tax-4, Pune, challenging the Income Tax Appellate Tribunal (ITAT), Pune’s decision deleting disallowance under Section 40A(3) of the Income Tax Act, 1961, in the case of Laukik Paper Industries Pvt. Ltd. for Assessment Year 2006-07. The Revenue contends that the ITAT erred in deleting the disallowance relating to cash payments exceeding ₹20,000 made to creditors, which violated the statutory bar under Section 40A(3) that disallows expenditure if cash payments exceed the prescribed limit without using account payee instruments. The Revenue argues that the disallowance was supported by direct evidence including bank statements and statements of key personnel, and that the ITAT wrongly relied on a precedent with different factual circumstances.

The Division Bench of Justice M.S. Sonak and Justice Advait M. Sethna admitted the appeal on two substantial questions of law: whether deletion of disallowance under Section 40A(3) was justified given the factual matrix, and whether the assessee’s admitted cash payments contravened the law. The Court directed the Revenue to serve the respondent and file an affidavit of service. The appeal will now proceed to decide if the assessee is entitled to relief from disallowance or if the Revenue’s stand will be upheld. Section 40A(3) aims to curb cash transactions above prescribed limits for financial transparency and anti-black money purposes, with exceptions provided under specific circumstances.

Failure to Detect Commercial Goods Disguised as Gifts: Delhi HC Upholds Rs. 50,000 Penalty under Courier Imports & Exports Regulations for Dart Air Services

M/S DART AIR SERVICES PVT. LTDvs COMMISSIONER OF CUSTOMS CITATION : 2025 TAXSCAN (HC) 1984

The Delhi High Court upheld a penalty of Rs. 50,000 imposed on M/s Dart Air Services Pvt. Ltd. under the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010, for failing to detect commercial goods disguised as gifts in courier shipments. The case arose from parcels sent from London containing cut cloth pieces that were stitched in India and re-exported, thus constituting commercial goods disguised as gifts. The Special Intelligence & Investigation Branch (SIIB) investigation revealed the petitioner failed to exercise due diligence in identifying these shipments as commercial goods, violating Regulation 12(1)(v).

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain emphasized that while the inquiry report found no violation of some provisions, the petitioner’s failure to comply with Regulation 12(1)(v) justified the penalty under Regulation 14 of the Regulations, 2010. The Court noted the Commissioner of Customs’ discretion to impose penalties despite internal inquiry reports, highlighting the vital public interest in regulating courier channels to prevent misuse for illicit trade. The courier registration was not revoked, but the penalty was upheld, with a dismissal of the writ petition and a direction to deposit the penalty within four weeks.

Fraudulent GST ITC Claim from Non-Existent Supplier: Delhi HC Dismisses Writ Petition, Upholds Finality of Order and Ledger Blocking

TRECO WIRE INDIA PVT.LTD vs THECOMMISSIONER OF CENTRAL GOODS AND SERVICE TAX CITATION : 2025 TAXSCAN (HC) 1985

The Delhi High Court dismissed the writ petition filed by Treco Wire India Pvt. Ltd., upholding the finality of the Order-in-Original dated 27th January 2025 and the blocking of its electronic cash ledger following a GST demand of Rs. 29.90 lakh related to fraudulent Input Tax Credit (ITC) claimed through a non-existent supplier. The case was based on an investigation by the Directorate General of GST Intelligence (DGGI), which found that the petitioner availed ITC using fake invoices issued by M/s Balaji Sales Corporation, a non-existent entity. Despite submissions by the petitioner, including replies and documents, the Adjudicating Authority confirmed the demand with interest and recovery directions, though penalties on directors were dropped.

The Bench of Justice Prathiba M. Singh and Justice Shail Jain observed that the petitioner did not file an appeal within the statutory period under Section 107 of the CGST Act, which rendered the order final. The Court rejected the petitioner’s claim of natural justice violations, noting that replies and documents were considered despite an erroneous record of non-appearance. The Court held that writ jurisdiction should not intervene where an appellate remedy exists and emphasized the petitioner’s failure to prove the existence of the supplier or cooperation during investigation. The writ petition was dismissed with no order as to costs.

Trader Profiteered from Vaseline Product by Not Passing on GST Rate Reduction Benefit to Consumers: Delhi HC Upholds NAPA’s Order

SHARMA TRADING COMPANY vs UNIONOF INDIA & ORS CITATION : 2025 TAXSCAN (HC) 1986

The Delhi High Court upheld the order of the National Anti-Profiteering Authority (NAPA) against Sharma Trading Company, a distributor of Hindustan Unilever Limited, for profiteering by not passing on the GST rate reduction benefit to consumers for a Vaseline product. The Court ruled that although the GST rate on the product was reduced from 28% to 18%, the petitioner maintained the same maximum retail price (MRP) by increasing the base price and the product quantity, thereby nullifying the tax benefit meant for consumers.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain emphasized that Section 171 of the CGST Act requires traders to pass on the tax reduction benefit through commensurate price reduction. The court held that increasing product size or offering free goods cannot substitute the legal requirement of reducing prices. It stressed that the price must come down to make products more affordable, and failing to do so amounts to deception and curtails consumer choice. The Court upheld NAPA’s order directing the profiteered amount of over Rs. 5.5 lakh to be transferred to the Consumer Welfare Fund, while clarifying no penalty would be imposed following the Reckitt Benckiser ruling. The petition was dismissed.

Bombay HC upholds ITAT Order quashing Revision by PCIT, rules in Favour of Gehna Jewellers despite Non-Furnishing of Carat Wise Details

Principal Commissioner of IncomeTax-12, Mumbai vs Gehna Jewellers Pvt. Ltd. CITATION : 2025 TAXSCAN (HC) 1987

The High Court of Delhi upheld a penalty of Rs. 50,000 imposed on Dart Air Services Pvt. Ltd. under the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010, for failing to detect commercial goods disguised as gifts in courier shipments. The court noted that the Special Intelligence & Investigation Branch revealed the petitioner’s failure to exercise due diligence in monitoring and reporting suspicious consignments, specifically commercial goods falsely declared as gifts, violating Regulation 12(1)(v). Despite an inquiry report finding no violations in certain clauses, the Court affirmed that the penalty was justified and within the Commissioner’s jurisdiction, dismissing the writ petition.

The Division Bench of Justices Prathiba M. Singh and Shail Jain made clear that courier agencies have substantive obligations under the regulations to scrutinize consignments and report suspicious activity and that an inquiry report is not binding on the Commissioner. The Court underscored the regulatory and public interest in preventing misuse of courier channels for illicit trade, emphasizing that penalties serve to reinforce accountability. This decision highlights the critical role of courier services in regulatory compliance and the limits of internal inquiry protections against statutory penalty imposition.

Undervaluation & Misclassification of PVC Coated Fabrics: Madras HC Orders DRI to Release after Importer Pays Duty & Executes ₹12.4 Cr Bonds

M/s Exim India Global vs Addl.Commissioner of Customs CITATION : 2025 TAXSCAN (HC) 1988

The Madras High Court ordered the provisional release of PVC Coated Fabrics seized by the Directorate of Revenue Intelligence (DRI), subject to payment of the declared duty, 50% of the differential duty on the re-determined value, and execution of bonds in lieu of a bank guarantee. The goods, imported by Exim India Global and moved to a Special Economic Zone (SEZ) in Chennai, were detained pending investigation and test reports. The Court, led by Justice N. Anand Venkatesh, considered statutory provisions under Section 110A of the Customs Act, 1962, and relevant precedents balancing revenue protection with avoiding undue hardship to the importer.

The Bench of Justice N. Anand Venkatesh modified stringent conditions initially imposed by customs authorities, directing the petitioner to pay the declared duty, remit half of the differential duty on the re-assessed value of ₹9.63 crore, and furnish bonds totaling ₹12.41 crore in lieu of the bank guarantee. Upon compliance, the goods were to be released within seven days.

GST Registration Lasted under Two Years sufficient to Believe that Company was Created to Pass Fraudulent ITC: Delhi HC Directs Firm to Statutory Appeal

MS RS TRADING CO vs PRINCIPALCOMMISSIONER OF CGST CITATION : 2025 TAXSCAN (HC) 1989

The High Court of Delhi dismissed the writ petition filed by R S Trading Co., holding that the company’s short-lived GST registration spanning barely two financial years was sufficient grounds to infer its creation solely for passing on fraudulent Input Tax Credit (ITC). The case arose from investigations by the GST Department which uncovered large-scale fraudulent ITC availment through fake invoices from non-existent suppliers, and found R S Trading Co. to be part of a network of 17 fictitious firms. Despite arguments based on a CBIC circular clarifying penalty applicability, the Court refrained from interfering, emphasizing that such issues are to be adjudicated through statutory appeals under Section 107 of the CGST Act.

The Bench of Justices Prathiba M. Singh and Shail Jain allowed the petitioner to file the appeal by 15 December 2025 with applicable pre-deposit, underscoring that the writ jurisdiction cannot substitute the remedy of appeal. The Court recognized the petitioner’s procedural rights while maintaining the Department’s statutory powers to tackle fraudulent tax evasion through fictitious GST registrations. The petition was disposed of with directions providing an avenue for merits-based scrutiny in the appellate forum.

Jurisdiction of S. 148 Challenged: HP HC Refuses to Interfere as Similar Matters Pending Before SC, Stays proceedings

Navjot Saini vs Union of India CITATION : 2025 TAXSCAN (HC) 1990

The Himachal Pradesh High Court declined to adjudicate a petition challenging the reassessment proceedings initiated under Section 148 of the Income Tax Act, 1961, for Assessment Year 2020-21. The petitioner, Navjot Saini, sought to quash the reassessment order and the preceding notice under Section 148, citing lack of jurisdiction and procedural lapses. However, the Division Bench observed that an identical issue was already pending before the Supreme Court in ACIT & Anr. v. Dr. Reddy Laboratories Ltd.

The Division Bench of Justice Vivek Singh Thakur and Justice Sushil Kukreja. They held that continuing proceedings in parallel before different forums would lead to unnecessary litigation and judicial burden. The High Court's order highlights the importance of respecting the hierarchy of courts and adhering to ongoing appellate processes. This ruling underscores procedural propriety by ensuring that pending decisions at the Supreme Court level are not undermined by concurrent proceedings in High Courts.

Jewellery Trader’s ‘Job-Work’ Defence Rejected as Afterthought: Madras HC upholds AO’s Findings of Purchase and Sales Suppression

The State of Tamil Nadu vsTvl.Alagar Jewellery Mart CITATION : 2025 TAXSCAN (HC) 1991

The Madras High Court dealt with a tax evasion case involving a jewellery trader accused of large-scale suppression of gold purchases and sales. The legal issue revolved around the trader’s belated attempt to attribute these discrepancies to job work or "coolie conversions," claimed only at the appellate stage without any supporting documentation or acknowledgement. This was considered an afterthought defense aimed at escaping tax liability. The Court underscored that the assessing officer’s reliance on seized private notebooks and contemporaneous admissions during inspection justified treating the suppressed turnover as deliberate. The Court also noted that proper maintenance of accounts was lacking and the attempt to adjust records post-inspection revealed the intent to evade taxes.

The Division Bench of Justices P. Velmurugan and K.K. Ramakrishnan upheld the adjudicating officer’s findings, restored the original assessment, and allowed the tax case revision by setting aside the orders of the lower appellate authorities. The judgment emphasized the evidentiary value of admissions made at the time of inspection and the importance of timely, accurate disclosures in tax assessments. This ruling reinforces that after-the-fact explanations without documentary support will be rejected, especially in sectors prone to financial suppression like the jewellery trade.

Interest u/s 244A of Income Tax Not Automatically Payable on Court-Ordered Refunds Unless Specifically Directed or Demand is Final: Calcutta HC

Danieli India Limited vs TheUnion of India CITATION : 2025 TAXSCAN (HC) 1992

The Calcutta High Court ruled that interest under Section 244A of the Income Tax Act is not automatically payable on refunds ordered by the court unless the court explicitly directs so or the underlying tax demand is finalized. The case involved Danieli India Limited, which sought interest on refunds pursuant to a court order. The Court clarified that the interest accrues only when the refund is ultimately ordered, not from the date of payment or during pendency of appeals. The court emphasized that the entitlement to interest depends on the final outcome of the appeals before the appellate authority, and until then, the question of interest remains premature.

The Bench of Justice Raja Basu Chowdhury disposed of the petitions, stating that the petitioner could claim interest only if it succeeds in its pending appeals. It explained that the interest is a statutory right linked to the right to a refund, which arises upon the final order of refund and not before. The Court also clarified that the interest is taxable in the year of receipt, in accordance with amendments in the law, and that the entitlements are determined at the time the refund becomes due, not when the court issues an order or the payment is made.

Madras HC Orders Release of DRI-Seized Knitted Fabrics: Importer to Pay Declared Duty, 50% Differential Duty & Execute Bonds

Mr.S.U.Sirajdeen vs ThePrincipal Commissioner Of Customs CITATION : 2025 TAXSCAN (HC) 1993

The Madras High Court ordered the provisional release of viscose knitted fabrics seized by the Directorate of Revenue Intelligence (DRI), subject to conditions including payment of the declared duty, 50% of the differential duty on the re-determined value, and execution of bonds in lieu of a bank guarantee. The goods, imported by M/s Gravity Ventures and moved to a Special Economic Zone at Nandiyambakkam, Chennai, were detained pending investigation and test reports. The Court referred to its prior ruling in M/s Shree Sai Impex and balanced revenue protection against avoiding undue hardship to the importer under Section 110A of the Customs Act, 1962.

The Bench of Justice N. Anand Venkatesh modified the customs authorities’ conditions by directing the importer to pay the declared duty, remit half of the differential duty on the re-assessed value of ₹3.15 crore, and furnish bonds totaling over ₹5.95 crore in replacement of the bank guarantee. Upon compliance, the Court mandated release of the goods within seven days while allowing the adjudication process to proceed.

GST Paid on Exempt Residential Rentals: Andhra Pradesh HC allows Refund, sets aside Deficiency Memos

M/S. NSPIRA MANAGEMENT SERVICESPRIVATELIMITED vs ASSISTANT/ DEPUTY COMMISSIONER OF CENTRALTAX CITATION : 2025 TAXSCAN (HC) 1994

The High Court of Andhra Pradesh ruled on a GST refund claim involving tax paid on renting residential dwellings, which are exempt under Entry No. 12 of Notification No. 12/2017 Central Tax (Rate). The petitioner, NSPIRA Management Services Private Limited, had paid GST on invoices for residential rentals despite the exemption and filed refund applications covering periods from July 2017 to June 2022. The authorities rejected the claims as time-barred under Section 54 of the CGST Act, relying on limitation periods even after excluding the COVID-19 period. The legal issue centered on whether refund claims for tax collected without authority of law are subject to the CGST Act’s two-year limitation or governed by the Limitation Act.

The Division Bench of Justice R. Raghunandan Rao and Justice T.C.D. Sekhar set aside the deficiency memos and directed the authorities to consider the refund claims on merits without applying the limitation bar. The Court emphasized Article 265 of the Constitution, asserting that tax cannot be collected without authority of law, and held that tax collected contrary to exemption notifications is effectively collected without legal authority. Following precedents including the Gujarat High Court’s Comsol ruling and previous orders by the bench, the judgment clarified that limitation under Section 54 is not the exclusive bar for restitution claims and the Limitation Act governs claims for taxes collected without lawful authority. The petition was allowed with directions for merits-based adjudication within four weeks.

Email Bounce Does Not Invalidate GST Notices Service if available on Portal: Delhi HC

SEVEN SEAS LIGHTS PVT. LTD vsASSISTANT COMMISSIONER CITATION : 2025 TAXSCAN (HC) 1995

The Delhi High Court held that uploading GST notices on the official government portal constitutes valid service, even if the email sent to the taxpayer bounces back. This ruling came in the case of Seven Seas Lights Pvt. Ltd., where the petitioner challenged a demand order due to alleged non-service of a show cause notice because the company’s email domain had expired, resulting in email bounce. The Court emphasized that the taxpayer has a duty to access the GST portal and check notices, and non-receipt of email does not invalidate service when notices are available online.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain rejected the petitioner’s plea for remand and emphasized that since the show cause notice, hearing notice, and order were all uploaded on the GST portal, the department fulfilled its service obligations. The Court allowed the petitioner to file an appeal before the Appellate Authority by 31 October 2025, directing that the appeal should not be dismissed on the ground of limitation and must be decided on merits. The writ petition was disposed of with these directions, underlining the importance of portal-based communication in GST proceedings.

CESTAT’s Remand Order Not a Final Decision: Delhi HC Rules Taxpayer Eligible for SVLDRS Relief

LOKESH PATHAK vs DESIGNATEDCOMMITTEE CITATION : 2025 TAXSCAN (HC) 1996

The Delhi High Court held that a remand order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) does not constitute a final decision, thereby allowing taxpayers to remain eligible for benefits under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS). The case involved petitioners, including Lokesh Pathak, who sought directions to the Designated Committee for issuance of discharge certificates relating to a show cause notice dated 28 April 2005. The dispute initially arose from searches by the Directorate General of Central Excise Intelligence, leading to seizures and demand for excise duty along with proposals for penalties and confiscation. CESTAT had set aside the original adjudicating authority’s order and remanded the matter for fresh adjudication without deciding the merits.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain observed that since the CESTAT order was a remand and not a final decision, the petitioners were not barred from filing declarations under the SVLDRS. The court also clarified that redemption fine is a consequence of non-payment of duty and is eligible for waiver under SVLDRS, citing CBIC circulars and various High Court decisions. Holding that excluding redemption fines would defeat the scheme’s objective, the Court directed the department to issue discharge certificates within two months and allowed the writ petitions.

Adjudicating and Appellate Authorities Issued Contradictory Findings on GST Refund Claims: Delhi HC Remands Matter

CHEGG INDIA PRIVATE LIMITED vsASSISTANT COMMISSIONER CGST MOHAN COOPERATIVE INDUSTRIAL ESTATE (MCIE) CITATION : 2025 TAXSCAN (HC) 1997

The Delhi High Court ruled on the issue of inconsistent findings by the adjudicating and appellate authorities regarding GST refund claims. In the case of Chegg India Private Limited, the petitioner challenged several orders that either rejected or partially allowed its refund claims of unutilized Input Tax Credit (ITC) on exports. The Court observed that contradictory orders on identical services for different periods create confusion and are unsustainable, emphasizing that the appellate authority has the power under Section 107(11) of the CGST Act, 2017 to confirm, modify, or annul the adjudicating authority's decision but cannot remand the matter. The purpose of appeal is to ensure comprehensive and consistent adjudication.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain set aside the impugned Orders-in-Appeal and remanded the matter to the appellate authority for fresh consideration. The petitioner was permitted to file additional documents within two months, and the court directed that a personal hearing be granted before passing a reasoned order. The writ petitions were disposed of with these directions, reaffirming the principle that tax adjudications must be consistent and decided on merits without contradictory conclusions.

AO freezes 13 Bank Accounts of Company blocking its Operations: Delhi HC orders Dezfreeze on Payment of 20%

BOANG TECHNOLOGY PVT LTD vsASSISTANT COMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 1998

The Delhi High Court ordered the de-freezing of 13 bank accounts of Boang Technology Private Limited, which were attached under Section 226(3) of the Income Tax Act, 1961, following the company’s agreement to deposit 20% of the disputed demand amounting to approximately ₹1.65 crores. The petitioner contended that the freezing of all accounts was arbitrary and disproportionate, severely disrupting its operations, including payment of employee salaries and statutory dues. The court acknowledged the hardship caused and directed the Assessing Officer (AO) to issue immediate instructions to the bank for de-freezing upon receipt of the payment.

The Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar granted the petitioner liberty to challenge the balance 80% of the disputed demand by filing an appeal before the Commissioner of Income Tax within one week. The court emphasized that failure to deposit the stipulated 20% by October 3, 2025, would attract serious consequences, while the CIT must consider any such appeal on merits.

Corporate Debtor’s Past Offences cannot Haunt Successful Resolution Applicant: Delhi HC directs NTPC to Apprise Trial Court of Orders and Immunities

NTPC LTD vs DIRECTORATE OFENFORCEMENT CITATION : 2025 TAXSCAN (HC) 1999

The Delhi High Court reaffirmed the "clean slate" doctrine under the Insolvency and Bankruptcy Code (IBC), holding that a successful resolution applicant cannot be burdened with criminal liabilities of the corporate debtor's past management. The case involved NTPC Ltd., which acquired 50% shareholding in Jhabua Power Ltd. (JPL) under a resolution plan approved by the NCLT Kolkata Bench. Despite this, criminal proceedings were sought to be continued against NTPC in an Enforcement Directorate case related to JPL. The court emphasized that Section 32A IBC bars such continuation of criminal proceedings against the new management post-approval of the resolution plan, which shields the resolution applicant from past liabilities and promotes business revival free from past encumbrances.

The Division Bench of Justice Neena Bansal Krishna observed that all preconditions for immunity under IBC were fulfilled, including change of management and approval of the resolution plan, which is binding on all stakeholders, including statutory authorities. The court found the Special Judge’s notices to NTPC as futile and oppressive given the statutory immunity. It directed NTPC to appear before the trial court to clarify its status and for the court to pass a reasoned order ensuring no unwarranted criminal liability is imposed on the resolution applicant.

When Statute Prescribes a Manner, it Must Be Followed that Way Alone: Delhi HC quashes Order of AA for Breach of S. 20 of PMLA

DIRECTORATE OF ENFORCEMENT vsRAJESH KUMAR AGARWAL CITATION : 2025 TAXSCAN (HC) 2000

The Delhi High Court ruled that when a statute prescribes a specific method for an action, such as the retention of seized property or records under Section 20 of the Prevention of Money Laundering Act (PMLA), that procedure must be strictly followed without deviation. In the case where the Enforcement Directorate (ED) had seized files, computer devices, and cash in connection with alleged money laundering, the Adjudicating Authority’s order confirming retention without compliance with Section 20 was set aside.

The Division Bench of Justices Subramonium Prasad and Harish Vaidyanathan Shankar underscored the constitutional protection of property under Article 300A, stating that deprivation of property must be lawful and procedural safeguards must be respected. They held that an order void at inception due to breach of Section 20 cannot be validated by subsequent confirmation. The Court clarified that Section 20 involves an independent order recording reasons for continued retention, which must be forwarded to the Adjudicating Authority before confirmation under Section 8.

Delhi HC Grants Bail to 3 Multi-Crore Scam Accused, Holds Prolonged Trial Delay Overrides Rigours of Section 45 of PMLA

VIPIN YADAV vs DIRECTORATE OFENFORCEMENT CITATION : 2025 TAXSCAN (HC) 2001

The Delhi High Court has granted bail to three accused in a ₹641 crore money laundering and cyber fraud scam, overriding the stringent twin conditions prescribed under Section 45 of the Prevention of Money Laundering Act (PMLA), 2002. The Court observed that prolonged incarceration and undue delay in trial completion take precedence over statutory restrictions on bail. The accused, including Vipin Yadav, Ajay, and Rakesh Karwa, were implicated in a scam involving fake job offers, bogus investment schemes, and mule accounts, with funds routed internationally including cryptocurrency transactions.

The Bench of Justice Amit Mahajan emphasized that the constitutional right to life and liberty under Article 21 must override the procedural constraints of the PMLA when trial delays are significant. The investigation remains ongoing with over a thousand documents and numerous witnesses, making swift trial completion unlikely. The Court granted bail with strict conditions while reprimanding the Enforcement Directorate’s arbitrary arrest strategy, underscoring the need for fair and balanced judicial process in serious economic offences.

Gujarat HC Seeks CBDT’s Response For Not Extending ITR Filing Due Date Along With Tax Audit Report Deadline

INCOME TAX BAR ASSOCIATION vsUNION OF INDIA CITATION : 2025 TAXSCAN (HC) 2002

The Gujarat High Court observed that the "specified date" for furnishing a tax audit report under Section 44AB of the Income Tax Act, 1961 and the "due date" for filing the income tax return under Section 139(1) are inherently linked and must be treated together. The court questioned the Central Board of Direct Taxes (CBDT) for extending the audit report deadline from 30 September 2025 to 31 October 2025 without similarly extending the corresponding due date for filing returns, which remained on 31 October 2025.

The Division Bench of Justice Bhargav D. Karia and Justice Pranav Trivedi emphasized that the CBDT cannot unilaterally extend the audit report deadline without extending the return filing due date under its statutory powers. The court issued notice to the CBDT and the Union of India seeking an explanation for this discrepancy and scheduled further hearings, highlighting the need for administrative coherence and legislative compliance in setting these deadlines. This matter is slated for priority listing and continued scrutiny, underscoring the importance of aligned timelines for tax compliance.

GST Audit and Assessment Beyond Statutory Period with Wrong Invocation of S.74: AP HC Allows Filing of Appeal Before Appellate Authority

M/S.SAKTHI FERRO ALLOYS INDIAPVT.LTD vs THE STATE OF ANDHRA PRADESH CITATION : 2025 TAXSCAN (HC) 2003

The Andhra Pradesh High Court addressed the legality of Goods and Service Tax (GST) audit and assessment proceedings brought against Sakthi Ferro Alloys India Pvt. Ltd. The Court examined issues under Section 65 of the Andhra Pradesh GST Act, 2017 and Section 74 of the GST Act, 2017, which deals with the levy of penalties in cases of fraud or willful suppression. The High Court found that the audit for financial years 2017-18 to 2020-21 had exceeded the statutory limit prescribed under the law, and that Section 74 was incorrectly invoked by the authorities. This resulted in the invalidation of the proceedings and related demands, allowing the petitioner to seek redress through the appellate process.

The Division Bench of Justice R. Raghunandan Rao and Justice Challa Gunaranjan disposed of the writ petition by permitting the petitioner-assessee to file an appeal before the appellate authority within three weeks. The Court ruled that the limitation period would not affect the appeal and considered the 10% of disputed tax already paid as valid pre-deposit under Section 107 of the GST Act. The petitioner was allowed to raise all relevant defenses before the appellate forum, and all pending miscellaneous petitions were closed.

Disposing Multiple Income Tax Appeals by Common Order with Single DIN Valid: Kerala HC Directs Rectification of Cause Title Error

KERALA STATE COUNCIL vsASSISTANT COMMISSIONER OF INCOME TAX (EXEMPTION) CITATION : 2025 TAXSCAN (HC) 2004

The Kerala High Court has ruled that disposing of multiple income tax appeals through a common order bearing a single Document Identification Number (DIN) is legally valid. This ruling came in a case where the petitioner, Kerala State Council for Science, Technology and Environment, challenged an appellate order under Section 250 of the Income Tax Act, 1961, which consolidated seven appeals related to assessment years from 2012-13 to 2023-24 involving Section 11 benefits. While the Court upheld the legal validity of the consolidated disposal due to identical legal issues, it acknowledged that the single DIN and a cause title referencing a different case could cause practical difficulties in filing separate appeals before the Income Tax Tribunal.

The single bench led by Justice Ziyad Rahman A.A directed the appellate authority to rectify the cause title error suo motu within two weeks. The Court further ruled that separate appeals filed by the petitioner against the common order must be accepted by the Income Tax Tribunal and not rejected solely because there is only one DIN.

Kerala HC Stays Income Tax Recovery Proceedings Pending Disposal of Stay Petition, Directs Commissioner to Decide Within 2 Months

SHIBU MATHEW vs INCOME TAXOFFICER CITATION : 2025 TAXSCAN (HC) 2005

The Kerala High Court ] stayed income tax recovery proceedings initiated against Shibu Mathew, pending the disposal of his stay petition filed alongside an income tax appeal for the assessment year 2022-23 under the Income Tax Act. Justice Ziyad Rahman A.A directed the Commissioner to decide the stay petition within two months and ordered that recovery proceedings be kept in abeyance until such decision is taken. This ruling emphasizes that filing a valid stay petition under Section 220(6) automatically suspends recovery efforts and protects taxpayers from coercive actions until the petition is adjudicated.

The Bench of Justice Ziyad Rahman A.A reinforced the principle established in CIT vs. M/S. Kalki Investment & Holdings Pvt. Ltd., holding that the tax department cannot bypass the stay petition by initiating immediate recovery. Even if the stay petition is rejected, recovery must await the outcome of any legal challenge, especially where the rejection is capricious or illegal. This judgment safeguards fundamental rights under Article 21 of the Constitution, ensuring fairness and due process in tax recovery.

Natural Justice cannot be Circumvented: Kerala HC restores Income Tax Appeal after AO Denied Hearing Opportunity

SEA CASTLE AN AYURVEDIC ANDLEISURE HOTEL vs THE INCOME TAX OFFICER CITATION : 2025 TAXSCAN (HC) 2006

The Kerala High Court restored income tax appeals filed by Sea Castle An Ayurvedic and Leisure Hotel after finding that the Assessing Officer (AO) violated principles of natural justice by passing orders without granting the appellant a hearing opportunity. The legal issue concerned the disallowance of deductions claimed under Section 43B of the Income Tax Act, 1961, for interest paid to Kerala Financial Corporation. Despite the appellant’s significant delay in pursuing statutory remedies, the AO’s failure to provide a hearing was held to be a fundamental procedural violation warranting restoration of the appeals.

The Division Bench of Justice Amit Rawal and Justice P.V. Balakrishnan acknowledged the appellant’s unjustified 588-day delay and vague excuses but ruled that denial of natural justice could not be compensated by delay alone. The Court set aside the orders of the Commissioner and the Income Tax Appellate Tribunal, imposing costs of ₹3 lakhs payable to the Mediation and Conciliation Centre as a precondition for restoration. The appellant was directed to appear before the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, for fresh adjudication with costs paid, emphasizing the paramountcy of fair hearing in tax proceedings despite procedural delays.

Gujarat HC Permits Appeal Against Acquittal in ₹6L Cheque Bounce Case, Cites Improper Evidence Appreciation

RANCHHODBHAI NAGARBHAI GAMBHAVAvs STATE OF GUJARAT & ANR CITATION : 2025 TAXSCAN (HC) 2008

The Gujarat High Court granted leave to appeal against an acquittal in a ₹6 lakh cheque bounce case, involving alleged dishonour of a cheque under Section 138 of the Negotiable Instruments Act, 1881. The applicant, Ranchhodbhai N. Gambhava, challenged the trial court’s acquittal of the accused on grounds that the trial court failed to properly appreciate evidence proving the existence of a legally enforceable debt and the dishonoured cheque issued due to insufficient funds. The case pertained to a cheque issued by the accused from his Union Bank of India account, which was returned unpaid, leading to the complaint.

The Division Bench of Justice S.V. Pinto, observed prima facie that the trial court had not evaluated the evidence in its correct perspective and held that the application for leave to appeal deserved consideration. The High Court accordingly granted leave to appeal against the acquittal, allowing the case to be revisited on the merits to ensure proper justice.

Cross-Empowerment of GST Officers allowable in Intelligence-based Enforcement Action, Have Concurrent Powers: J&K HC

R.K.Ispat Ltd. through Ram AvtarAggarwal vs Union of India and others CITATION : 2025 TAXSCAN (HC) 2009

The Jammu & Kashmir and Ladakh High Court upheld the automatic cross-empowerment of Goods and Service Tax (GST) officers under Section 6 of the CGST Act, 2017, dismissing multiple petitions challenging show cause notices issued by the Joint Commissioner, CGST Commissionerate, Jammu. The petitions involved allegations of fraudulent availment of bogus Input Tax Credit (ITC) through paper transactions by companies operating within the Jammu and Kashmir Integrated Textile Park, Kathua. The court held that intelligence-based enforcement actions do not require separate government notification for cross-empowerment, which is inherent by law. It clarified that both Central and State tax authorities have jurisdiction to act across the entire GST value chain when initiating intelligence-led probes, irrespective of the administrative allocation of taxpayers.

The Division Bench of Justice Sanjeev Kumar and Justice Sanjay Parihar emphasized that monetary limits for jurisdiction under departmental circulars are administrative guidelines and do not curtail the authority of senior officers like the Joint Commissioner. While the bench left the issue of bunching under Section 74 of the CGST Act open for adjudication, it rejected all contentions against jurisdiction and authority, affirming the legality of enforcement actions based on intelligence inputs. The court upheld the show cause notices and dismissed the writ petitions, allowing petitioners to raise other grounds before the authorities concerned during further proceedings.

Distinct Legal issues require Separate Adjudication: Kerala HC recalls Judgment for Wrong Clubbing of GST Cases

P.M.SUBAIR vs DEPUTYCOMMISSIONER OF CENTRAL TAX & CENTRAL EXCISE CITATION : 2025 TAXSCAN (HC) 2010

The Kerala High Court recently recalled its previous judgment due to improper clubbing of distinct Goods and Services Tax (GST) cases and restored a writ petition concerning refund claims under the inverted tax structure scheme. The case involved P.M. Subair, Managing Partner of M/s. Ansar Oil Industries, whose original writ petition was wrongly disposed of alongside petitions challenging the constitutional validity of Section 16(2)(c) of the CGST/KSGST Act, 2017. The Court found that the issues in the refund claim petition were fundamentally different and had not been addressed due to improper clubbing.

The Bench of Justice Ziyad Rahman A.A. observed a patent error in the impugned judgment and held that the petitioner's distinct reliefs were not considered in the common judgment. Consequently, the Court recalled the earlier judgment dated 28.06.2024 and restored the original writ petition for fresh adjudication. The Court directed that the restored writ petition be listed for hearing on 26.09.2025, ensuring separate consideration of the petitioner’s specific legal issues related to GST refund claims.

Recovery must await Stay Adjudication: Kerala HC Stays Income Tax Proceedings Pending Tribunal's Decision

EDAKKALATHUR DEVASSY DAIZ vs THEASSISTANT COMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 2011

The Kerala High Court stayed income tax recovery proceedings initiated against Edakkalathur Devassy Daiz, arising from an assessment order for the assessment year 2017-18. The legal issue involved the discretionary stay of recovery pending adjudication of the stay petition filed along with an appeal before the Income Tax Appellate Tribunal, under the Income Tax Act. The Court emphasized that recovery cannot proceed while the stay petition is pending and must await the Tribunal’s decision to ensure procedural fairness.

The Bench of Justice Ziyad Rahman A.A. disposed of the writ petition by directing the Income Tax Appellate Tribunal to take up and decide the stay application after providing the petitioner an opportunity for hearing and to pass appropriate orders within three months from the judgment date. Until such a decision is rendered, all recovery proceedings pursuant to the assessment and appellate orders were stayed, safeguarding the petitioner’s statutory rights during the appellate process.

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