Top
Begin typing your search above and press return to search.

Supreme Court & High Courts Weekly Round-Up

A Round-Up of the Supreme Court and High Court Cases Reported at Taxscan Last Week

Supreme Court, High Courts, Weekly Round-Up
X

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 October 05, 2025 to October 11, 2025.

Supreme Court

Personal Hearing in GST Cases: Supreme Court Dismisses SLP, Clarifies Section 75(5) Does Not Mandate Three Adjournments

M/S MHJ METALTECHS PVT. LTD vsCENTRAL GOODS AND SERVICES TAX CITATION: 2025 TAXSCAN (SC) 311

The Supreme Court addressed the legal issue concerning the interpretation of Section 75(5) of the Central Goods and Services Tax Act, 2017 (CGST Act), specifically whether the provision mandates the grant of three personal hearings or adjournments in adjudication proceedings. The case arose from a writ petition filed by M/s MHJ Metaltechs Pvt. Ltd. before the Delhi High Court, challenging an order dated 3rd February 2025 issued by the CGST Delhi South Commissionerate alleging fraudulent availment of Input Tax Credit (ITC) amounting to ₹7.08 crore. The High Court ruled that the provision merely sets an upper limit of three adjournments and does not impose an obligation to provide all three opportunities.

The matter was heard by a Bench comprising Justice Pankaj Mithal and Justice Prasanna B. Varale, which dismissed the Special Leave Petition (SLP) filed by the assessee and upheld the Delhi High Court’s ruling. The Supreme Court observed that there was no violation of the principles of natural justice since the taxpayer had been afforded one effective hearing and had failed to substantiate its claims. The Bench further held that there was no ground to invoke the Court’s discretionary jurisdiction under Article 136 of the Constitution of India, emphasizing that Section 75(5) operates as a ceiling on adjournments rather than a guarantee of multiple hearings. While dismissing the SLP, the Apex Court granted liberty to M/s MHJ Metaltechs Pvt. Ltd. to file an appeal under Section 107 of the CGST Act and extended the time to do so until 15th October 2025.

No Excise Duty on Pipeline Intermixing of for-PDS Kerosene and Petroleum Products: Supreme Court Upholds Relief to Bharat Petroleum

COMMISSIONER OF CGST & ETCvs BHARAT PETROLEUM CORPORATION LTD CITATION: 2025 TAXSCAN (SC) 312

The Supreme Court adjudicated upon the legal issue of excise duty applicability on the intermixing of petroleum products during transportation, specifically concerning the exemption granted to Superior Kerosene Oil (SKO) cleared for Public Distribution System (PDS) use. The case involved the interpretation of exemption notifications issued under the Central Excise Act, 1944, and particularly considered the scope of Section 11A(4), which pertains to the extended period of limitation in cases involving suppression or willful misstatement. The Court upheld the order of the Mumbai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), which ruled in favor of Bharat Petroleum Corporation Ltd. (BPCL), holding that the intermixing of SKO with other fuels such as High-Speed Diesel (HSD) and Motor Spirit (MS) during pipeline transportation is an inevitable technical process and does not revoke the duty exemption originally granted to SKO.

The matter was heard by a Bench comprising Justice Aravind Kumar and Justice N.V. Anjaria affirmed the decision of the Mumbai CESTAT Bench, which was constituted by Dr. Suvendu Kumar Pati (Judicial Member) and Anil G. Shakkarwar (Technical Member). The Tribunal had relied on precedents such as State of Haryana v. Dalmia Dadri Cement Ltd. (2004) and Nizam Sugar Factory v. CCE (2008) to interpret the phrase “for use” in exemption notifications as “intended for use.” It was concluded that the intermixing of petroleum products post-clearance was both unavoidable and beyond the control of BPCL. Consequently, no excise duty liability arose from such intermixing, and there was no evidence of diversion or mala fide intent by the PSU. The Supreme Court endorsed the CESTAT’s findings, holding that there was no ground to interfere with the “detailed and well-reasoned” judgment, thereby granting full excise duty relief to BPCL.

Tax Tussle Over Aircraft Parts: Supreme Court issues Notice to IndiGo on Centre's plea Against IGST Exemption

PRINCIPAL COMMISSIONER OF CUSOMTS ACC (IMPORT) vs INTERGLOBEAVIATION LTD CITATION: 2025 TAXSCAN (SC) 313

The Supreme Court issued notice to InterGlobe Aviation Ltd., the parent company of IndiGo Airlines, in a matter involving the levy of Integrated Goods and Services Tax (IGST) on re-imported aircraft parts sent abroad for repairs. The legal issue arises from the Customs Department's challenge to a Delhi High Court judgment dated March 2024, which struck down the imposition of IGST on such re-imports. The High Court found the levy unconstitutional, holding that taxing repair services abroad and then again taxing the parts upon re-importation amounted to double taxation, in violation of established tax principles. The case also involves the validity of Notification No. 36/2021 issued by the Central Board of Indirect Taxes & Customs (CBIC), which sought to impose IGST and cess on such transactions under the Customs Act, 1962 and IGST Act, 2017.

The matter was heard by a Bench comprising Justice B.V. Nagarathna and Justice R. Mahadevan heard the Customs Department’s special leave petition against the Delhi High Court's ruling and issued notice to InterGlobe Aviation. The Delhi High Court had provided substantial relief to airlines by holding that re-imported parts sent overseas solely for repairs could not be subjected to IGST on components such as repair charges, insurance, and freight. It was concluded that the 2021 CBIC notification was not clarificatory but rather a substantive change aimed at expanding the tax base, which could not override the original exemption.

Recent GST Rulings You Can’t Ignore! Are you updated? - Click Here

Income tax Reopening Notice Issued within Limitation: Supreme Court Refuses to Interfere with Patna HC Order Dismissing Petition

CHANDRA SHEKHAR vs PRINCIPALCOMMISSIONER OF INCOME TAX 1 & ANR. CITATION: 2025 TAXSCAN (SC) 314

The Supreme Court declined to interfere with a Patna High Court judgment that upheld the validity of a reopening notice issued under Section 148 of the Income Tax Act, 1961 for Assessment Year 2020-21, holding that it was issued within the statutory limitation period prescribed under Section 149(1)(a). The petitioner, Chandra Shekhar, had challenged the notice dated 30.04.2024, contending that it was time-barred and without jurisdiction. However, the High Court held that the relevant date for limitation was the earlier notice dated 28.03.2024 issued under Section 148A(b), which was within the permissible three-year window.

The matter was heard by a Bench comprising Justice Aravind Kumar and Justice N.V. Anjaria, which dismissed the Special Leave Petition (SLP) filed by the petitioner against the High Court’s ruling. While condoning the delay in filing, the Supreme Court found no grounds to interfere, stating that the High Court’s reasoning was sound and based on a correct interpretation of the statutory framework. The Court held that the notice under Section 148A(b) was validly issued, and the subsequent reassessment proceedings could lawfully proceed.

No Fund Attachment Once 10% Pre-Deposit Made u/s 107 of GST Act: Supreme Court Upholds Andhra Pradesh HC Order

DEPUTY COMMISSIONER ST &ORS. vs WINGTECH MOBILE COMMUNICATIONS CITATION: 2025 TAXSCAN (SC) 315

The Supreme Court upheld the Andhra Pradesh High Court’s interpretation of Section 107 of the GST Act, ruling that once a taxpayer deposits 10% of the disputed tax while filing an appeal, tax authorities cannot attach or restrain the assessee’s funds. The case arose when Wingtech Mobile Communications challenged a recovery notice under Section 79(1)(c) of the APGST Act, issued by the Deputy Commissioner of State Tax, Tirupati, to recover ₹244.63 crore. Following provisional attachment orders in July 2025, ₹170 crore was debited from the company’s HSBC Bank account.

The Andhra Pradesh High Court Bench of Justice R. Raghunandan Rao and Justice T.C.D. Sekhar held that no provision in Section 107 permits authorities to restrain a taxpayer’s funds once the 10% pre-deposit is made. While directing a refund of the attached amount (except the pre-deposit), the Court required the petitioner to maintain the refunded funds in its account until the appeal’s resolution. The Revenue Department’s challenge to this ruling was dismissed by a Supreme Court Bench of Justice Pamidighantam Sri Narasimha and Justice Atul S. Chandurkar, which recorded the assessee’s undertaking and affirmed that no further attachment could be enforced once the statutory pre-deposit is fulfilled.

High Court

Relief for Charles River Laboratories Inc: Karnataka HC Rejects Revenue’s Appeal on FTS Taxability Under India-USA DTAA Citing Tax Effect Below ₹2 Crore

PR. COMMISSIONER OF INCOME TAXINTERNATIONAL TAXATION vs M/S. CHARLES RIVER LABORATORIES INC CITATION: 2025 TAXSCAN (HC) 2012

The High Court of Karnataka granted relief to Charles River Laboratories Inc. by dismissing the Revenue’s appeal on the ground that the tax effect was below ₹2 crore, the threshold prescribed under CBDT Circular No. 9/2024 dated 17.09.2024. The case involved the question of whether payments received by the U.S.-based company qualified as Fees for Technical Services (FTS) under Section 9(1)(vii) of the Income Tax Act, 1961 and Article 12 of the India-USA DTAA. The Revenue had challenged an Income Tax Appellate Tribunal (ITAT), Bengaluru Bench order dated 01.06.2023, which held that the services did not satisfy the “make available” condition under the DTAA and therefore did not constitute FTS according to the CBDT Circular No. 5/2024 dated 15.03.2024.

The matter was heard by a Division Bench of Justice S.G. Pandit and Justice K.V. Aravind, who noted that the tax effect of ₹1.02 crore was below the revised monetary threshold for filing appeals before High Courts. The Court held that the present appeal did not raise a direct issue regarding the applicability of the DTAA itself, but only on whether the Tribunal correctly interpreted it. Therefore, that no exception to the monetary threshold applied, the High Court dismissed the appeal as not maintainable.

Duplicate GST Notices: Delhi HC Sets Aside Orders, Remands Matter to Adjudicating Authority for Fresh Order

M/S POORVI CARDS vsCOMMISSIONER, DELHI GOODS AND SERVICES TAX AND ORS. CITATION: 2025 TAXSCAN (HC) 2013

The High Court of Delhi set aside two separate orders issued under Section 73 of the CGST Act, 2017 against Poorvi Cards, holding that issuing duplicate Show Cause Notices (SCNs) for the same tax period (July 2017 to March 2018) and amount was unsustainable. The petitioner had applied for GST registration cancellation on 7th October 2022, but received two SCNs, one dated 22nd September 2023 demanding ₹5,26,558 and another dated 26th December 2023 demanding ₹39,31,392 for the same period. The petitioner challenged this duplication and argued that the issuance of two parallel proceedings for the same matter was procedurally flawed.

The matter was heard by a Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain held that the petitioner was not afforded a proper opportunity of hearing, as no reply was filed and no effective personal hearing was granted. The Court remanded the matter to the Adjudicating Authority for fresh adjudication and granted time until 15th November 2025 for the petitioner to submit a consolidated reply to the SCNs. The Adjudicating Authority was directed to issue a hearing notice through email and mobile communication, consider the reply, and pass a fresh order. The Court clarified that any new order would be subject to the outcome of S.L.P. No. 4240/2025 pending before the Supreme Court regarding Notification No. 09/2023-Central Tax. The writ petition was disposed of without addressing the case’s merits, leaving all rights and remedies open to both parties.

GST Portal Glitch Generates Personal Hearing Notice after Appeal Decision: Delhi HC Sets Aside Order-in-Appeal

M/S A. L. EXPORTS THROUGH ITS vs UNION OFINDIA A ND ORS & ORS. CITATION: 2025 TAXSCAN (HC) 2014

The High Court of Delhi set aside the Order-in-Appeal dated 30th June 2025 in the case of A.L. Exports, after finding that a technical glitch on the GST portal had resulted in a personal hearing notice being generated after the appeal was already decided. The petitioner had claimed a refund of ₹36,61,166 towards Input Tax Credit (ITC) on exports made without payment of integrated tax, but the claim was rejected by the Assistant Commissioner, CGST on 24th January 2025 for non-submission of supporting documents. Upon appeal, hearing notices were sent by speed-post, which the petitioner did not attend. However, on 1st July 2025, the petitioner received a GST portal notice for a hearing scheduled on 2nd July 2025, only to be informed that the appeal had already been disposed of a day earlier.

The matter was heard by a Division Bench of Justice Prathiba M. Singh and Justice Shail Jain observed that the petitioner was denied an opportunity to be heard, as the hearing notices had not been uploaded on the GST portal, and there was no clarity on whether they were received by email. The Court noted that when the petitioner appeared in response to the first portal notice on 2nd July 2025, the Order-in-Appeal had already been passed, and the notice appeared to be system-generated after disposal. Thus, the Court set aside the impugned Order-in-Appeal and directed that the appeal be reheard on merits. The Appellate Authority was instructed to issue a hearing notice via the petitioner’s email and mobile, and to pass a reasoned order after granting an opportunity of hearing.

Recent GST Rulings You Can’t Ignore! Are you updated? - Click Here

Delay Beyond GST Act Limitation Can Still Be Condoned by Constitutional Courts: J&K HC Quashes Order Dismissing Appeal as Time-Barred

M/s Parshotam Electronics vs UT of J&K and Ors CITATION: 2025 TAXSCAN (HC) 2015

The Jammu & Kashmir High Court held that while the J&K GST Act, 2017 prescribes a strict limitation under Section 107 for filing appeals, constitutional courts are empowered to condone delay in exceptional circumstances to ensure complete justice. The ruling came in response to a writ petition filed by M/s Parshotam Electronics, challenging an order dated 05.07.2024, by which the State Taxes Appellate Authority dismissed its appeal as time-barred.

The matter was heard by a Division Bench comprising Justices Rajesh Sekhri and Rajnesh Oswal observed that while appellate authorities under the GST Act cannot condone delay beyond the statutory period, constitutional courts are not so restricted. The Court held that the petitioner’s medical condition constituted a bona fide ground for condonation and quashed the appellate authority’s order dismissing the appeal. The Court further clarified that it had not expressed any opinion on the validity of the underlying tax demand, thereby keeping all issues open for the appellate authority to decide.

Misclassification of PVC Coated Fabrics: Madras HC modifies directs to Execute Rs. 11L Bond instead of Bank Guarantee

M/s.K.P.Impex vs The PrincipalCommissioner of Customs (Preventive) CITATION: 2025 TAXSCAN (HC) 2016

The Madras High Court modified the conditions imposed in a provisional release order under Section 110 of the Customs Act, 1962, concerning a consignment of PVC coated fabrics imported by K P Impex from China through Chennai Port. The Directorate of Revenue Intelligence (DRI) had initiated proceedings for alleged misclassification and undervaluation, leading to seizure of the goods. The Additional Commissioner of Customs had permitted provisional release on the condition of (i) remittance of re-determined duty, (ii) execution of a bond for ₹39 lakh, and (iii) furnishing a bank guarantee of ₹11 lakh. The petitioner challenged the requirement of a bank guarantee, arguing it was unduly harsh and relied on precedents like Green Line v. Commissioner of Customs (2016) and Sri Venkateshwara Paper Boards (2022).

The matter was heard by the bench of Justice N. Anand Venkatesh , held that while protecting revenue is necessary, unnecessary hardship to the importer should be avoided when adjudication is pending. The Court noted that the department’s interest could be safeguarded through execution of bonds instead of a bank guarantee. Accordingly, it modified the order to require (i) remittance of declared duty, (ii) payment of 50% of the differential duty, (iii) execution of a bond for ₹39 lakh, and (iv) execution of an additional bond of ₹11 lakh in place of the bank guarantee. Customs authorities were directed to release the goods within seven days of compliance, and both parties were instructed to cooperate to ensure timely conclusion of adjudication proceedings.

Retention of Goods Not Required Pending Adjudication; Madras HC Permits Re-Export of Seized Consignment Subject to Bond and Bank Guarantee

M/s.Aashi Creations vs The Principal Commissioner of Customs CITATION: 2025 TAXSCAN (HC) 2017

The Madras High Court ruled that continued retention of seized goods during pending adjudication is not always necessary, especially where the outcome may only involve imposition of duty, fine, or penalty. The ruling came in a writ petition filed by M/s Aashi Creations, an importer of textile fabric coated with plastics from China. The goods were seized under Section 110 of the Customs Act, 1962 by the Directorate of Revenue Intelligence (DRI) on grounds of misclassification and undervaluation, following CRCL laboratory testing. The petitioner requested re-export of the consignment, which the supplier had agreed to take back, but the Customs Department refused permission citing pending adjudication.

The matter was heard by the bench of Justice N. Anand Venkatesh, held that where the likely consequences under Section 111 and Section 125 of the Customs Act are limited to confiscation with an option for redemption on payment of fine, detention of goods was not justified. The Court noted the need to balance Revenue protection with avoidance of undue hardship to the importer. Accordingly, it allowed re-export of the seized consignment, subject to the petitioner (i) executing a bond for the entire differential duty and (ii) furnishing a bank guarantee equal to 20% of the re-determined value of the goods. The Customs authorities were directed to permit re-export within twelve days of compliance.

Uploading SCN on GST Portal Not Always Sufficient where Registration Stands Cancelled, Notice Must be Served by Registered Post: Madras HC

K.Chandra vs The State TaxOfficer CITATION: 2025 TAXSCAN (HC) 2018

The Madurai Bench of the Madras High Court held that mere uploading of a Show Cause Notice (SCN) on the GST portal is insufficient where a taxpayer's GST registration stands cancelled, emphasizing the need for service through registered post to uphold principles of natural justice. The case arose from a writ petition filed by K. Chandra, a government works contractor, challenging an assessment order dated 23 January 2025 passed under Section 73 of the Tamil Nadu GST Act, 2017, demanding ₹8.62 lakh in tax, interest, and penalty. Though the petitioner’s GST registration was cancelled in October 2020, the SCN was uploaded on the portal in November 2024, which the petitioner could not access, leading to an ex parte assessment.

The matter was heard by the bench of Justice G.R. Swaminathan, cited the precedent in Tvl. Apollo Medicals v. State Tax Officer (2025) setting aside the assessment order for violating natural justice, but treated it as a valid show cause notice, granting the petitioner three weeks to file a reply. The Assessing Officer was directed to conduct a fresh hearing and issue a speaking order within eight months. Considering that over 90% of the disputed tax had already been recovered, the Court also ordered the immediate lifting of the bank account attachment, ensuring procedural fairness while balancing Revenue interests.

GST Summary Order Must Bear Signature and Notice u/r 142(1A) is Mandatory Before Passing Assessment Order: AP HC

M/S ABRARS TODAY FASHION MALL vs THE ASSISTANT COMMISSIONER CITATION: 2025 TAXSCAN (HC) 2019

The Andhra Pradesh High Court has ruled that summary assessment orders (Form DRC-07) under the GST regime must be duly signed by the assessing authority, and that prior issuance of an intimation notice under Rule 142(1A) of the CGST Rules, 2017 is mandatory, especially for tax periods before its amendment in October 2020. The case arose from a writ petition by Abrars Today Fashion Mall, a registered GST dealer, challenging an assessment order dated 29.03.2023 imposing a penalty under Section 122(1)(ii) of the CGST Act for the period July 2017 to December 2021.

The matter was heard by a Division Bench of Justice R. Raghunandan Rao and Justice T.C.D. Sekhar held that unsigned orders cannot be treated as curable defects under Sections 160 and 169 of the GST Act. The Court relied on its own past judgments where unsigned orders were struck down. On the second issue, it reiterated its position from W.P. No. 12850/2022 that issuance of notice under Rule 142(1A) was compulsory for pre-amendment tax periods. Since no such notice was issued a fact conceded by the Revenue the Court found procedural violation, and accordingly set aside both the assessment and appellate orders. The matter was remanded to the Assessing Officer to follow proper procedure and issue a fresh order. The Court also directed that the limitation period be computed by excluding the duration between the original and remanded orders.

Punjab & Haryana HC Warns Lawyers Against Using AI/Google on Phones to Answer Court Queries, Says Come Prepared

RXXXXXX V/S STATE OF HARYANA CITATION: 2025 TAXSCAN (HC) 2020

The Punjab and Haryana High Court addressed the issue of advocates using mobile phones during court proceedings to search answers via AI tools or Google. The legal issue centered on courtroom decorum and professional conduct, as the petitioner’s counsel attempted to look up information on his phone while responding to queries from the bench.

The matter was heard by the Bench of Justice Sanjay Vashisth, ruled that advocates are expected to be fully prepared before appearing and should not rely on real-time searches during hearings. The Court cited a similar incident in Ravneet Singh Sandhu @ Manveer Singh v. UT of Chandigarh (2025), where a mobile phone was seized for the same reason. To deter such practices, the Court directed that a copy of the order be sent to the President and Secretary of the Bar Association, urging them to inform members. The Court warned that repeated violations may attract stricter action and listed the matter for further hearing on 20 November 2025.

Delhi HC Rejects Customs’ Plea to Enhance Penalty in Red Sandalwood Export Case, Cites Limited Role of Freight Forwarder

COMMISSIONER OF CUSTOMS EXPORT vs MAYANK GUPTA CITATION: 2025 TAXSCAN (HC) 2021

The Delhi High Court addressed the concern of an imposition of an enhanced penalty under Section 114AA of the Customs Act, 1962, on a freight forwarder involved in the illegal export of red sandalwood. The issue centered on whether an additional penalty could be imposed on the respondent, who facilitated the shipment without verifying the exporter’s credentials, despite already having been penalized under Section 114 for aiding the export of prohibited goods without valid CITES authorization.

The matter was heard by a Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain dismissed the Customs Department’s appeal for an enhanced penalty, holding that the existing penalty of ₹10 lakh was adequate given the respondent’s limited and intermediary role. The Bench observed that imposing an additional penalty under Section 114AA, which could be five times the value of the goods, would be disproportionate. The Court left the broader legal question regarding the application of Section 114AA open for consideration in an appropriate future proceeding.

Recent GST Rulings You Can’t Ignore! Are you updated? - Click Here

Court’s Orders Continue to Apply In areas not Legislatively Addressed: Delhi HC Affirms 180-Day PMLA Attachment Limit in ED Case

DIRECTORATE OF ENFORCEMENT &ANR vs M/S VIKAS WSP LTD & ORS CITATION: 2025 TAXSCAN (HC) 2022

The Delhi High Court addressed the issue of limitation periods under the Prevention of Money Laundering Act, 2002 (PMLA) in the context of the COVID-19 pandemic. The key legal question was whether the suo motu extension of limitation periods by the Supreme Court during the pandemic applied to the 180-day statutory period for confirmation of provisional attachment orders under Section 5(3) of the PMLA. The matter arose from provisional attachment orders issued by the Enforcement Directorate against Vikas WSP Ltd and its directors, which were challenged as having lapsed due to expiration of the limitation period.

The matter was heard by a Division Bench of Justice Anil Kshetarpal and Justice Harish Vaidyanathan Shankar held that in the absence of specific legislative provisions extending the limitation under the PMLA, the Supreme Court’s suo motu directions during the COVID-19 pandemic continued to apply. The Court observed that these directions, issued under Articles 141 and 142 of the Constitution, have binding and overriding force unless explicitly excluded by law. The Bench set aside the earlier Single Judge’s order that had declared the attachments lapsed, ruling that the 180-day limitation period was validly extended for the pandemic period, and accordingly dismissed the writ petitions challenging the provisional attachment orders.

GST SCN Sent to Old Address After Cancellation of Registration Invalid: Bombay HC Quashes Revisional Order

M/s. Dipak Metal Industries vs Deputy Commissioner of State Tax, Vasai CITATION: 2025 TAXSCAN (HC) 2023

The Bombay High Court addressed the validity of service of a GST show cause notice (SCN) in a case concerning retrospective cancellation of GST registration. The legal issue centered on whether sending the SCN to an outdated address after the petitioner’s registration was cancelled amounted to valid service under Section 108 of the CGST/MGST Act, 2017, and whether passing a revisional order without proper notice violated the principles of natural justice.

The matter was heard by a Division Bench of Justice M.S. Sonak and Justice Advait M. Sethna held that the SCN sent to the petitioner’s old address was invalid as the department had previously communicated with the petitioner at the updated Ahmedabad address. The Court ruled that there was no effective service of the notice dated 1 July 2024, and consequently, the revisional order dated 22 July 2024 was set aside for breach of natural justice. The Bench directed the department to re-serve the SCN at the correct address or through the petitioner’s counsel, allow the petitioner to file a reply, and pass a fresh reasoned order after hearing. The earlier cancellation order from June 2022 was revived and the writ petition was allowed with no order as to costs.

GST Registration to Be Restored if Dues Fully Paid and Delay is Bona Fide: Bombay HC Imposes CSR Cost

Azaria corp LLP vs The Deputy Commissioner of State Tax CITATION: 2025 TAXSCAN (HC) 2024

The Bombay High Court addressed the issue of restoration of GST registration where a taxpayer had fully paid all outstanding dues, including interest and late fees, and the delay in filing returns was found to be bona fide. The court examined whether cancellation of registration under such circumstances was justified and considered the principle of proportionality in relief.

The matter was heard by a Division Bench of Justice M.S. Sonak and Justice Advait M. Sethna held that since the petitioner, Azaria Corp LLP, had cleared all dues amounting to ₹16,46,186 along with interest and late fees of ₹6,27,935, the permanent cancellation of registration was disproportionate. The court ordered restoration of the GST registration subject to payment of a ₹50,000 CSR contribution to KEM Hospital. The department was directed to notify the petitioner within 15 days if any further dues were payable, failing which the cancellation would stand quashed.

No AIFTA Benefit Without Valid Certificate: Madras HC Sets Aside CESTAT Order

The Commissioner of Customs vs M/s.Olam Enterprses India Pvt. Ltd. CITATION: 2025 TAXSCAN (HC) 2025

The Madurai Bench of the Madras High Court recently addressed the legal issue concerning the validity of claiming customs duty exemption under the ASEAN-India Free Trade Agreement (AIFTA). The Court examined whether exemption can be granted without a valid and genuine Certificate of Origin as required under the customs laws and AIFTA rules. The case involved Olam Enterprises India Pvt. Ltd., which sought a refund of customs duty paid on imported teak round logs, relying on AIFTA Certificates of Origin that were alleged to be flawed.

The matter was heard by a Division Bench of Justice P. Velmurugan and Justice K.K. Ramakrishnan held that a Certificate of Origin under AIFTA must be strictly valid and genuine, and mere circumstantial matches, such as matching vessel names or quantities, cannot substitute for a legally compliant certificate. The Court found critical discrepancies in the certificate, including date mismatches and incorrect party details, which undermined its authenticity. Consequently, the High Court set aside the order of the CESTAT that had allowed the exemption and restored the original orders denying duty exemption to Olam Enterprises, ruling that the burden of proof lies on the importer to produce a flawless certificate to claim exemption.

Relief for Tata Play: Delhi HC sets aside Rs 450 Crore Anti-Profiteering Order, Remands Matter to GSTAT

TATA PLAY LTD. vs UNION OF INDIATHROUGH ITS SECRETARY & ORS. CITATION: 2025 TAXSCAN (HC) 2026

The High Court of Delhi dealt with an issue concerning the imposition of an anti-profiteering order under Section 171 of the CGST Act, 2017, related to the alleged failure of Tata Play Ltd. to pass on Input Tax Credit (ITC) benefits to consumers. The matter arose from claims that Tata Play, a Direct-to-Home (DTH) service provider, engaged in profiteering by not adjusting prices despite changes in GST rates on inputs and services. The case involved interpreting the scope and application of anti-profiteering provisions, including the validity of the order passed by the National Anti Profiteering Authority (NAPA).

The matter was heard by a Division Bench of Justice Prathiba M. Singh and Justice Shail Jain set aside the impugned anti-profiteering order amounting to Rs. 450 crore against Tata Play and remanded the case to the Principal Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) for a fresh examination of whether actual profiteering had occurred. The Court noted that Tata Play had not increased its service prices despite GST rate hikes, absorbing additional tax costs and subsuming input tax credit benefits. The judgment ruled that any erroneous exercise of anti-profiteering powers can be challenged on merits and allowed the petitioner to submit additional evidence before the GSTAT. The Court also disposed of the writ petition challenging the Show Cause Notice (SCN) as infructuous and directed communication of the order to the GST Appellate Tribunal.

Pre-Show Cause Consultation Mandatory for Service Tax Demands Exceeding ₹50 Lakhs under CBEC Circulars: Bombay HC

Rochem Separation Systems vs TheUnion of India CITATION: 2025 TAXSCAN (HC) 2027

The Bombay High Court addressed the legal issue of whether pre-show cause consultation is mandatory before issuing service tax demands exceeding Rs. 50 lakhs under Section 73 of the Finance Act, 1994, as per the CBEC Circulars. The Court examined the binding nature of Circular No. 1053/02/2017-CX dated 10 March 2017 and Circular No. 1076/02/2020-CX dated 19 November 2020, which mandate pre-consultation in such cases except those involving preventive or offence-related matters. The petitioner, Rochem Separation Systems (India) Pvt. Ltd., challenged the validity of a show cause notice issued without adhering to this mandatory consultation process.

The matter was heard by a Division Bench comprising Justice M.S. Sonak and Justice Advait M. Sethna held that the CBEC circulars are binding on departmental officers and that pre-show cause consultation is a mandatory procedural requirement for service tax demands exceeding Rs. 50 lakhs. The Court emphasized that this consultation promotes trade facilitation and voluntary compliance and is not a mere formality. The Bench quashed the impugned show cause notices issued without prior consultation. However, the Court allowed the department to issue fresh pre-consultation notices within four weeks and complete the consultation process within six weeks, after which fresh show cause notices could be issued if necessary.

Recent GST Rulings You Can’t Ignore! Are you updated? - Click Here

Rajasthan HC Slams Revenue for Second Attempt to Transfer Case Despite Earlier Quashing, Calls Action Arbitrary and Unjustified

Murliwala Agrotech Pvt. Ltd vs Union Of India CITATION: 2025 TAXSCAN (HC) 2028

The Rajasthan High Court dealt with the issue of the Revenue’s repeated attempt to transfer a taxpayer’s case under Section 127 of the Income Tax Act, 1961. The petitioner, Murliwala Agrotech Pvt. Ltd., challenged the fresh transfer order dated 19 October 2022 issued by the Principal Commissioner of Income Tax, which sought to transfer the case despite an earlier similar transfer order being quashed by the court for violating natural justice and lack of opportunity to be heard. The core legal question involved the validity and justification of such repeated transfer orders when circumstances remained unchanged.

The matter was heard by a Division Bench comprising Chief Justice K.R. Shriram and Justice Ravi Chirania held that the Revenue’s renewed attempt to transfer the case was arbitrary, rigid, and unjustified, especially given that the factual situation was identical to that previously considered. The court ruled that no substantial change in circumstances existed to warrant the transfer, particularly in light of the faceless assessment system adopted by the Income Tax Department and the completed assessment of the related Brindavan Group. The transfer order dated 19 October 2022 was therefore quashed as contrary to law, and any actions taken during the pendency of the petition were declared invalid. The Court directed the Revenue to continue proceedings from the stage prior to the transfer and granted liberty to take lawful action under applicable provisions without implying endorsement of further transfers.

CESTAT order Passed after 2 Years from Decision Date: Bombay HC quashes Order on Grounds of Order Delivered Belatedly

HIMACHAL FUTURISTIC COMMUNICATION vs UNION OF INDIA CITATION: 2025 TAXSCAN (HC) 2029

The Bombay High Court addressed a procedural issue concerning the belated delivery of an appellate order by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai. The Court examined a writ petition filed by M/s Himachal Futuristic Communication Ltd. challenging an Order-in-Original dated 30 July 2007 by the Commissioner of Customs, Central Excise and Service Tax, Panaji-Goa, and the subsequent appellate order of the CESTAT. The key legal issue was the nearly two-year delay in pronouncing the CESTAT order after the hearing held on 19 December 2022, which raised questions of natural justice and procedural propriety.

The matter was heard by a Division Bench comprising Justice Bharati Dangre and Justice Ashish S. Chavan held that such a substantial delay in delivering the judgment vitiated the CESTAT order itself, justifying its quashing without delving into the substantive merits of the case. The Court rejected the Revenue’s plea that an alternate remedy was available, affirming that the presence of another remedy does not bar judicial intervention where an order suffers from patent procedural flaws such as delay and violation of natural justice. The matter was remanded back to the Tribunal for fresh consideration, with directions to examine all grounds raised by the petitioner and decide the appeal promptly. The impugned order was quashed on grounds of procedural impropriety.

Delhi HC allows Waiver of Pre-Deposit for Suspended Assam Rifles Sepoy in Gold Smuggling Case

BHOLA YADAV vs COMMISSIONER OFCUSTOMS APPEALS NEW CUSTOMS HOUSE NEAR IGI AIRPORT NEW DELHI CITATION: 2025 TAXSCAN (HC) 2030

The Delhi High Court addressed the issue of waiver of the mandatory pre-deposit under Section 129E of the Customs Act, 1962, in the context of a gold smuggling case. The legal question centered on whether a suspended Assam Rifles sepoy, facing a penalty order, could be exempted from the statutory requirement to make a pre-deposit before filing an appeal, especially considering his financial hardship and service status.

The matter was heard by a Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain allowed the waiver of the pre-deposit for the petitioner, Bhola Yadav, who was earning a modest income and under suspension at the time. The Court directed the petitioner to file his appeal by 15 November 2025 before the Appellate Authority without making any pre-deposit. The writ petition and all pending applications were disposed of accordingly.

Relief for Huawei: Delhi HC Sets Aside S.148A(3) Order and S.148 Notice, Directs AO to Pass Fresh Reasoned Order

HUAWEI TECHNOLOGIES COOPERATIEFU.A. vs ASSISTANT COMMISSIONER OF INCOME TAX CITATION: 2025 TAXSCAN (HC) 2031

The Delhi High Court adjudicated on the validity of reassessment notices issued under Sections 148A(3) and 148 of the Income Tax Act, 1961, in the case involving Huawei Technologies Cooperatief U.A. The legal issue concerned whether the Assessing Officer (AO) was justified in issuing notices and passing orders for reassessment in the absence of any material indicating escapement of income, particularly when the petitioner was a non-resident entity earning only interest income on loans to its Indian subsidiary, with appropriate tax deducted at source under Section 194LC.

The matter was heard by a Division Bench comprising Justice V. Kameshwar Rao and Justice Vinod Kumar set aside the impugned order dated 28.06.2025 under Section 148A(3) and the notice dated 28.06.2025 under Section 148. The Court directed the AO to pass a fresh and reasoned order within four weeks after considering all relevant documents. It further clarified that the petitioner-assessee could challenge the fresh order through available legal remedies. All pending applications were disposed of as infructuous.

Deposit in GST Electronic Cash Ledger Considered Payment to Government, Bail Terms Satisfied: Gujarat HC

SUPERINTENDENT (AE) THRO ARIHANTKUMAR JAIN S/O LAL CHAND JAIN vs VIRBHADRASINH PRATAPSINH CHAUHAN & ANR CITATION: 2025 TAXSCAN (HC) 2032

The High Court of Gujarat addressed an issue of whether a deposit made in the Goods and Service Tax (GST) Electronic Cash Ledger constitutes payment to the Government under Section 49 of the CGST Act, 2017. The case involved an application by the Superintendent of Central GST & Central Excise, Gandhinagar seeking the cancellation of bail granted to Virbhadrasinh Pratapsinh Chauhan.

The matter was heard by the Bench of Justice Divyesh A. Joshi dismissed the application for cancellation of bail, ruling that the deposit in the GST Electronic Cash Ledger was deemed as payment to the Government under Section 49 of the CGST Act. The Court referred to the precedent set in Arya Cotton Industries vs. Union of India (2024), which clarified that once amounts are credited to the Government account, the tax liability is discharged. The Court noted that the deposit was made within the stipulated time, and the conditions of the bail had been fully complied with. Consequently, the application was rejected, and the notice for cancellation of bail was discharged.

BIS Certificate Exemption for MSMEs: Madras HC Directs Customs to Clear Plywood Imports Without Registration Requirement

M/s.Alankar Shipping and TradingCo. P. Ltd vs The Commissioner of Customs Import Commissionerate CITATION: 2025 TAXSCAN (HC) 2033

The Madras High Court addressed the issue of whether Customs authorities can mandate a Bureau of Indian Standards (BIS) registration certificate for plywood imports made by micro enterprises, where the Quality Control Order itself grants an exemption up to a specified date. The case involved Alankar Shipping and Trading Co. Pvt. Ltd., which had imported plywood from Vietnam and sought clearance from Customs without the mandatory BIS certification.

The matter was heard by the Bench of Justice N. Anand Venkatesh, held that Customs authorities could not insist on a BIS registration certificate for plywood imports made by MSMEs, as the statutory Quality Control Order provided an exemption for MSMEs until 28 August 2025. The Court ruled that executive circulars cannot override the provisions of the parent statute. Customs were directed to assess and clear the consignment without the BIS certificate and ordered the clearance process to be completed within two weeks of receiving the order.

Recent GST Rulings You Can’t Ignore! Are you updated? - Click Here

Failure to Reply to GST SCN: Madras HC Gives Assessee Second Chance, Orders Additional 15% Deposit and Fresh Adjudication

Tvl.Cashewking Nut andCommodites vs State Tax Officer CITATION: 2025 TAXSCAN (HC) 2034

The Madras High Court addressed the issue of an assessee facing a GST demand after failing to respond to a Show Cause Notice (SCN) and subsequently missing the statutory appeal deadline. The case involved Tvl. Cashewking Nut and Commodities, which was issued a GST SCN for the tax period April 2022 to March 2023. Despite not responding to the SCN, the petitioner later filed an appeal, but it was rejected as time-barred. The Court considered whether to grant a second chance for adjudication while imposing conditions on the petitioner’s compliance with a pre-deposit requirement.

The matter was heard by the Bench of Justice C. Saravanan,who quashed both the assessment order and the appellate order, which had rejected the petitioner’s appeal on technical grounds. The Court granted the petitioner a second opportunity for adjudication, directing them to make an additional pre-deposit of 15% of the disputed tax within 30 days and file a detailed response to the SCN with supporting documents. The Court ordered that after the petitioner’s compliance, the assessing officer should pass a fresh order within three months. The bank account attachment was also lifted upon compliance. The Court made it clear that if the petitioner failed to meet these conditions, the Revenue could proceed with recovery actions as if the writ petition had been dismissed.

CCTV Cameras’ Exemption Claim under ASEAN-India FTA: Madras HC quashes Customs Order suffers from Natural Justice Violation

M/s. Compuage Infocom Ltd vs TheDeputy Commissioner of Customs CITATION: 2025 TAXSCAN (HC) 2035

The Madras High Court dealt with a Customs dispute where M/s Compuage Infocom Ltd. sought exemption from customs duty on CCTV cameras and network video recorders imported from Vietnam under Notification No. 46/2011-Cus, claiming benefits under the ASEAN-India Free Trade Agreement (FTA). The Deputy Commissioner of Customs had rejected the exemption claim. The legal issue centered around whether the Customs order violated the principles of natural justice by failing to consider the petitioner’s submission and providing no opportunity for a personal hearing.

The matter was heard by the Bench of Justice N. Anand Venkatesh, observed that the Customs authority failed to properly address the petitioner’s claim and supporting documents, including the certificate of origin from Vietnam, which was crucial for the exemption under the ASEAN-India FTA. The Court held that the authority was obligated to consider all relevant submissions and provide an opportunity for personal hearing, especially in the case of a dispute over exemption claims. The Court quashed the Customs order dated 19.07.2021 and remanded the matter to the Deputy Commissioner of Customs for fresh consideration, directing them to examine the petitioner’s exemption claim and provide a hearing before passing a final decision.

Re-Export of Misclassified Textile Fabric: Madras HC Allows Importer to Ship Back Goods to China on Conditions

M/s.Gayatri Exim vs ThePrincipal Commissioner of Customs CITATION: 2025 TAXSCAN (HC) 2036

The Madras High Court addressed a case where Gayatri Exim, a Mumbai-based importer, sought permission to re-export 798 bales of textile fabric coated with plastics to its supplier in China, following a dispute over misclassification by Customs authorities. The Directorate of Revenue Intelligence (DRI) had seized the goods, holding them liable for confiscation under the Customs Act, 1962, after the samples failed to meet classification standards. The legal issue revolved around whether the goods, pending adjudication, could be re-exported to prevent undue hardship to the importer, with the Customs Act allowing penalties or differential duties to be imposed during adjudication.

The matter was heard by the Bench of Justice N. Anand Venkatesh, considering previous rulings and the nature of the investigation, ruled in favor of Gayatri Exim. The Court observed that while the misclassification issue and potential penalties were pending adjudication, there was no reason to unnecessarily detain the goods, especially when the overseas supplier was willing to take them back. The Court allowed the re-export of the consignment to China, subject to strict conditions, including the execution of a bond for the differential duty and a bank guarantee. The re-export must be completed within twelve days after fulfilling these conditions, thereby balancing the protection of revenue interests with alleviating the financial burden on the importer.

Single Show-Cause Notice Without Proper Digital Signatures and Composite GST Assessment: Andhra Pradesh HC Sets Aside Orders and Remands Matter to Authority

SAHITI AGENCIES vs THE ASSISTANTCOMMISSIONER OF CENTRAL TAX AND CENTRAL EXCISE CITATION: 2025 TAXSCAN (HC) 2037

The High Court of Andhra Pradesh dealt with a writ petition filed by Sahiti Agencies, challenging a GST assessment order and show-cause notice issued under Section 74 of the Goods and Services Tax Act, 2017. The petitioner raised two main grounds: the absence of physical or digital signatures on the notice and the orders, making them invalid, and the issuance of a single show-cause notice and composite assessment order covering six assessment years from 2017-2023, which, according to the petitioner, was not permissible under the GST Act. The Court considered whether the lack of signatures and the improper grouping of multiple assessment years violated procedural requirements.

The matter was heard by the Bench comprising Justice R. Raghunandan Rao and Justice T. C. D. Sekhar, who set aside the impugned show-cause notice and composite assessment order. The Court found that while the failure to include digital signatures on the documents raised valid concerns, the petitioner’s response to the notices indicated that they did not challenge the proceedings on these grounds earlier. Regarding the composite order for multiple years, the Court held that separate notices and orders should have been issued for each tax period. The matter was remanded back to the authority for fresh adjudication, ensuring the petitioner would have an opportunity for a proper hearing.

CENVAT Credit Claim of Rs. 9.34 Crores Rejected for ST-3 Mismatch and Missing Documents: Delhi HC Allows AAI to File Appeal and Submit Additional Evidence

AIRPORTS AUTHORITY OF INDIA vsUNION OF INDIA CITATION: 2025 TAXSCAN (HC) 2038

The High Court of Delhi addressed a dispute concerning the transitional CENVAT credit claim of ₹9.34 crores made by Airports Authority of India (AAI) for the April–June 2017 period, prior to the implementation of the Goods and Services Tax (GST). The claim was disallowed by the Adjudicating Authority on two primary grounds: the credit was not reflected in the ST-3 return filed under the earlier service tax regime, and the supporting documents submitted with Form TRAN-1 were incomplete. The issue fell under Section 140 of the CGST Act, 2017, which governs the carry forward of CENVAT credit into the GST regime.

The matter was heard by a Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain declined to interfere with the order under writ jurisdiction, observing that there was no jurisdictional error or arbitrary exercise of power. However, the Court granted relief by allowing AAI to file an appeal under Section 107 of the CGST Act against the impugned order dated 21 August 2023. The Court extended the deadline for filing the appeal to 15 November 2025 and permitted AAI to submit additional supporting documents to substantiate its transitional credit claim. It was clarified that if the appeal is filed within the extended time, it will not be dismissed as time-barred and will be adjudicated on merits.

ITC in ECRL Blockage Beyond One Year Not Permissible: Punjab & Haryana HC Orders Decision on Unblocking ITC Within One Week

M/s Mahadev Steel Industries vsUnion of India and another CITATION: 2025 TAXSCAN (HC) 2039

The Punjab & Haryana High Court addressed the issue of prolonged blocking of Input Tax Credit (ITC) under Rule 86A(3) of the Central Goods and Services Tax (CGST) Rules, 2017. The petitioner, M/s Mahadev Steel Industries, challenged the continued restriction on ITC amounting to ₹33,80,886/-, which had been blocked since 25.06.2024. 2

The matter was heard by a Division Bench comprising Justice Anupinder Singh Grewal and Justice Deepak Manchanda agreed with the petitioner’s contention, reiterating that the statutory time limit under Rule 86A(3) could not be extended beyond one year. The Court observed that once this period lapsed, the authorities had no legal basis to continue restricting the credit. Accordingly, the High Court directed the tax authorities to consider the petitioner’s request and pass an appropriate order regarding unblocking of ITC within one week.

Karnataka HC quashes Income Tax Reassessment Notices Issued by Jurisdictional Officers Physically, says Faceless Regime Mandatory

RAMACHANDRA REDDY RAVI KUMAR vsTHE DEPUTY COMMISSIONER OF INCOME TAX CITATION: 2025 TAXSCAN (HC) 2040

The Karnataka High Court examined the validity of reassessment notices and orders issued under Sections 147, 148, and 148A of the Income Tax Act, 1961. The core issue was whether jurisdictional Income Tax Officers could issue reassessment notices physically, despite the statutory mandate under the Faceless Reassessment Scheme, 2022, notified by the Central Board of Direct Taxes (CBDT) on 29 March 2022. Petitioners challenged such physical reassessment notices issued for A.Y. 2017-18 and 2019-20, arguing that they violated Section 151A of the Act, which mandates a faceless and automated process for reassessment.

The matter was heard by the Bench of Justice M. Nagaprasanna, who quashed the reassessment notices and consequential orders, holding them to be without jurisdiction and contrary to the law laid down by Parliament. The Court emphasized that once a specific procedure is prescribed such as the faceless reassessment mechanism must be followed strictly, and any reassessment action taken in deviation thereof is invalid. The Court held that the physical issuance of reassessment notices was procedurally defective. While striking down the notices, the Court clarified that the Revenue retains the right to initiate fresh proceedings strictly via the faceless scheme should the Supreme Court uphold the reassessment framework.

Recent GST Rulings You Can’t Ignore! Are you updated? - Click Here

GST Registration Cancellation Set Aside: Madras HC Grants Revival with Six-Month Moratorium on Use of ITC and ECRL for Discharging Liability

NMH Design Build vs The Commercial Tax Officer CITATION: 2025 TAXSCAN (HC) 2041

The Madras High Court addressed the issue of cancellation and revival of GST registration in the case of NMH Design Build, whose registration had been cancelled via an order dated 6 February 2025 for failure to file returns and conduct business. The cancellation was based on a show cause notice to which the petitioner failed to respond. Though the petitioner had not availed the Amnesty Scheme or filed a revocation application under Section 30 of the CGST Act, it sought revival, arguing that there was no fraud or prejudice caused to the Revenue.

The matter was heard by a Bench of Justice C. Saravanan, held that keeping dealers outside the GST system was detrimental to tax administration. The Court set aside the cancellation order and directed revival of the GST registration, while balancing Revenue interests by imposing a six-month moratorium on the use of Input Tax Credit (ITC) and the electronic credit ledger. During this period, tax liabilities must be discharged in cash or through fresh credits. The Court also granted the Department liberty to initiate penalty or recovery proceedings for the non-compliance period.

Voluminous Cash Book Upload Demand by CIT(A): Kerala HC Refers Matter to Local Verification Unit for Physical Verification

POOVACHAL RURAL HOUSINGCO-OPERATIVE SOCIETY vs THE JOINT COMMISSIONER OF INCOME TAX CITATION: 2025 TAXSCAN (HC) 2042

The Kerala High Court addressed a procedural challenge under the Income Tax Act, where Poovachal Rural Housing Co-operative Society Ltd., an assessee, contested a notice under Section 142(1) for the assessment year 2014–15. The notice from the National Faceless Assessment Centre (NFAC) required the online submission of the assessee’s voluminous cash book for F.Y. 2013-14, running into thousands of pages.

The matter was heard by a Bench of Justice Ziyad Rahman A.A. accepted the assessee’s plea and noted the practicality of a physical verification. The Court directed the NFAC to refer the matter to the Local Verification Unit (LVU) under the Principal CIT(VU), Kochi, for an on-site inspection of the cash book. The LVU was instructed to verify the documents at the assessee’s premises and report back for further assessment. The Court ruled that the verification and assessment should be completed expeditiously, thereby ensuring procedural fairness without compromising efficiency.

Afterthought Evidence cannot Override Voluntary Returns: Kerala HC dismisses Income Tax Appeals in Cash Seizure Case

SRAVAN KUMAR NEELA vs ASSISTANTCOMMISSIONER OF INCOME TAX CITATION: 2025 TAXSCAN (HC) 2043

The Kerala High Court dismissed income tax appeals filed by Sravan Kumar Neela and Uma Maheshwara Rao Chinni, upholding an ITAT order that rejected their challenge to assessments under Section 69A of the Income Tax Act for A.Y. 2017-18. The dispute arose after ₹2.39 crore in cash was seized from the appellants during a flight from Hyderabad to Kozhikode in July 2016. The appellants had initially declared the amounts as “income from other sources” in their returns but later, during the appellate stage, attempted to introduce affidavits claiming the money belonged to others.

The matter was heard by a Division Bench of Justice A. Muhammed Mustaque and Justice Harisankar V. Menon held that the additional evidence submitted at the ITAT stage was a clear afterthought. Citing Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963, the Court ruled that the Tribunal is not bound to accept new evidence unless the assessee was prevented by valid reasons from presenting it earlier. Since the appellants had voluntarily filed returns including the seized amounts as their own income, the Court held that allowing revision at this stage would violate statutory provisions. Consequently, the High Court upheld the ITAT’s decision and dismissed both appeals, ruling in favor of the Revenue.

Tribunal's Remand must be "Open" and Not Restrict Assessment Provisions: Kerala HC Clarifies ITAT Order in Director's Income Tax Case

DR.K.M.ASHIK vs THE COMMISSIONEROF INCOME TAX CITATION: 2025 TAXSCAN (HC) 2044

The Kerala High Court clarified that a remand by the Income Tax Appellate Tribunal (ITAT) must be treated as an open remit and not a binding direction limiting the scope of reassessment. The ruling came in appeals filed by Dr. K.M. Ashik, Director of M/s. Moidu Medicare Pvt. Ltd., against ITAT’s common order dated 30.01.2018 for A.Y.’s 2007-08, 2011-12, and 2012-13. The assessing officer had earlier taxed sums received from the company as a deemed dividend under Section 2(22)(e) of the Income Tax Act, 1961. The ITAT remitted the case for fresh consideration but observed that additions may instead be made under Section 68, as the appellant’s loan account did not appear in the company’s books.

The matter was heard by a Division Bench of Justice A. Muhammed Mustaque and Justice Harisankar V. Menon held that the ITAT’s reference to Section 68 was not a binding direction and should not restrict the assessing officer’s discretion. The Court ruled that the remand should be open, allowing the Department to re-examine the case afresh, including the assessee’s contentions that Section 2(22)(e) does not apply. It was further held that if Section 68 is invoked, the assessee must be given an opportunity to explain. Since revised assessments had already been completed and appeals were pending, the Court permitted the assessee to raise all arguments before the appellate authority.

Tax Clarifications cannot be Applied Retrospectively: Kerala HC Sets aside Deputy Commissioner's Order in VAT Case

K.G.REJIMON vs STATE OF KERALA CITATION: 2025 TAXSCAN (HC) 2045

The Kerala High Court set aside the Deputy Commissioner’s revisional order under Section 56 of the Kerala Value Added Tax (KVAT) Act, 2003, holding that tax clarifications issued under Section 94 cannot operate retrospectively. The case involved K.G. Rejimon, proprietor of M/s Thermal Tech Engineers, whose VAT assessment for A.Y. 2009-10 was revised after initially being settled in his favour. The petitioner’s product, “thermic fluid heaters,” was initially taxed at 12.5%, later revised to 4% based on appellate directions. However, following a clarificatory order dated 07.04.2016 stating that the item attracted 12.5% tax, the Deputy Commissioner initiated suo motu revision to cancel the revised assessment.

The matter was heard by a Division Bench of Justice A. Muhammed Mustaque and Justice Harisankar V. Menon held that although the Deputy Commissioner was justified in invoking revisional powers and the petitioner failed to prove the correct classification of the product under the HSN Code, the retrospective application of the clarificatory order was impermissible. Citing Section 94(2) of the KVAT Act, the Court ruled that tax clarifications can only operate prospectively to avoid undue prejudice to assessees. As a result, the Deputy Commissioner’s order and the confirmation by the Commissioner of State Tax were quashed.

Recent GST Rulings You Can’t Ignore! Are you updated? - Click Here

Travel Abroad for Attending International Furniture Fair Cannot be Restrained merely due to Pending Customs Prosecution: Bombay HC

Sruti Vijaykumar vs FalgunYogendra Shroff and anr CITATION: 2025 TAXSCAN (HC) 2046

The Bombay High Court held that a pending customs prosecution cannot bar a person from traveling abroad to attend the International Furniture Fair. The case arose when Sruti Vijaykumar challenged the Additional Chief Judicial Magistrate’s order granting Respondent No.1 permission to travel abroad from 4th to 10th September 2025, despite ongoing investigation and bail conditions including passport surrender in a customs offence case registered by the Directorate of Revenue Intelligence (DRI), Mumbai.

The matter was heard by the Bench of Justice S.M. Modak observed that the fundamental right to travel abroad cannot be restrained merely due to an ongoing investigation or prosecution. The Court noted that the accused had surrendered his passport but sought permission for travel to attend a furniture fair in Paris, a fact undisputed by the DRI. The Court observed the concern for potential evidence tampering but balanced it against the short duration of travel and the fundamental right involved. Accordingly, the Court upheld the trial court’s order permitting travel, subject to the condition that the accused shall not contact exporters linked to the case and must return for the bail cancellation hearing. The writ petition was dismissed.

Karnataka HC Upholds ITAT Order, ₹6.61 Crore Cash Sales on Demonetisation Day Accepted as Genuine u/s 68 with Supporting Invoices and Stock Records

PR. COMMISSIONER OF INCOME TAX 2vs AURA JEWELS CITATION: 2025 TAXSCAN (HC) 2047

The High Court of Karnataka recently dealt with an appeal filed by the Revenue challenging the Income Tax Appellate Tribunal’s (ITAT) order regarding the genuineness of cash sales recorded on the demonetisation day, 8th November 2016. The legal issue before the Court was whether ₹6.61 crore cash sales declared by Aura Jewels for the A.Y. 2017-18 could be treated as unexplained cash receipts under Section 68 of the Income Tax Act, 1961. The Assessing Officer had disallowed these sales, questioning their authenticity due to the unusually large amount transacted on a single day and the absence of PAN and full customer details.

The matter was heard by a Division Bench comprising Justice Vibhu Bakhru and Justice C.M. Joshi upheld the decisions of both the Commissioner of Income Tax (Appeals) and the ITAT, which had accepted the assessee’s explanation supported by invoices, stock records, and barcode details linking sales to inventory. The Court observed that the genuineness of cash receipts was a question of fact and found no perversity in the well-reasoned findings of the lower authorities. Consequently, the Karnataka High Court dismissed the Revenue’s appeal, holding that no substantial question of law arose from the matter.

Retrospective Abolition of ITSC: Delhi HC Allows Settlement Applications Filed Between Feb 1 and Mar 31, 2021

MEGHA ENGINEERING ANDINFRASTRUCTURE LTD. vs INCOME TAX SETTLEMENT COMMISSION & ORS. CITATION: 2025 TAXSCAN (HC) 2048

The High Court of Delhi addressed the legal issue concerning the validity of settlement applications filed under Section 245C of the Income Tax Act, 1961, during the period from February 1 to March 31, 2021, despite the retrospective abolition of the Income Tax Settlement Commission (ITSC) by the Finance Act, 2021. The case involved Megha Engineering and Infrastructure Ltd., which filed its settlement application after a search and seizure operation and subsequent notices under Sections 153A and 153C. The key question was whether such applications, submitted after the ITSC’s abolition date of February 1, 2021, retained validity and whether taxpayers had a vested right to have these applications considered under the law.

The matter was heard by a Division Bench comprising Justice V. Kameshwar Rao and Justice Vinod Kumar held that the retrospective abolition of the ITSC could not invalidate settlement applications filed within the stipulated period, recognizing that the statutory right to approach the Settlement Commission created vested rights for taxpayers. The Court invalidated certain CBDT notifications that restricted eligibility, directed the Interim Board for Settlement to consider the pending applications, and stayed the assessment notices under Sections 143(2) and 142(1) until the settlement applications were decided.

Authorities Must Not Adopt Hyper-Technical Approach in Tax Matters: Jharkhand HC Quashes Rejection of GST Appeal for Non-Submission of Certified Copies

Sanjeet Kumar Bhagat vsCommissioner of State Tax CITATION: 2025 TAXSCAN (HC) 2049

The Jharkhand High Court dealt with the legal issue of whether an appeal under the Jharkhand Goods and Services Tax (GST) Act, 2017, can be dismissed solely on the ground of non-submission of certified copies. The case arose under Section 73 of the Act, where the petitioner, Sanjeet Kumar Bhagat, challenged a summary show-cause notice and an order dismissing his statutory GST appeal without hearing or notice, on the technical ground of the absence of certified copies.

The matter was heard by a Division Bench comprising Chief Justice Tarlok Singh Chauhan and Justice Rajesh Shankar held that adopting a hyper-technical approach in tax matters, especially those involving financial liability, is impermissible. The Court ruled that appeals filed within the prescribed time must be adjudicated on merits, and taxpayers should not be deprived of justice due to procedural lapses. Consequently, the Court quashed the appellate authority’s order and allowed the writ petition, directing the parties to appear before the appellate authority for a hearing and mandating the appeal be decided expeditiously, preferably by December 31, 2025.

Recovery of GST Demand from ECRL Valid u/s 79(1)(a) when assessee Fails to Pay Demand Within Time: Chhattisgarh HC

Shivam Metallurgicals PrivateLimited vs Assistant Commissioner Circle-9, Division- I I, State Goods AndServices Tax CITATION: 2025 TAXSCAN (HC) 2050

The Chhattisgarh High Court examined the validity of recovering Goods and Services Tax (GST) dues from an assessee’s Electronic Credit Ledger (ECRL) under Section 79(1)(a) of the Central Goods and Services Tax (CGST) Act, 2017. The petitioner, Shivam Metallurgicals Private Limited, challenged the deduction of ₹2,87,914 from its ECRL, contending that the recovery was unauthorized, illegal, and violated principles of natural justice, especially as it had filed a rectification application and an appeal against the assessment order dated 25.02.2025.

The matter was heard by the Bench of Justice Naresh Kumar Chandravanshi, upheld the recovery, noting that the assessment order demanding ₹10,32,672 was duly served with a 30-day payment period which the assessee failed to comply with. Since no stay was granted on the assessment and the recovery from the ECRL was made before the appeal was filed, the Court held that the department acted within its legal authority under Section 79(1)(a) to recover unpaid tax from any money under its control. Consequently, the writ petition was dismissed at admission, affirming that recovery from the electronic credit ledger is valid when the GST demand remains unpaid within the prescribed time.

Section 80P(4) of Income Tax Act bars S.80P(2)(d) deduction for Co-operative Bank Investments: Karnataka HC

M/S. JUDICIAL EMPLOYEES HOUSEBUILDING vs INCOME TAX OFFICER CITATION: 2025 TAXSCAN (HC) 2051

The Karnataka High Court examined whether interest income earned from investments in a Co-operative Bank qualified for deduction under Section 80P(2)(d) of the Income Tax Act, 1961, in light of the bar imposed by Section 80P(4). The case arose when Judicial Employees House Building Co-operative Society, the appellant-assessee, claimed a deduction of ₹25,19,453 for interest earned from investments in the Mysore and Chamarajanagar District Co-operative Central Bank Ltd. for the Assessment Year 2017-18. The Assessing Officer disallowed the claim, holding that the investment was made in a Co-operative Bank and not a Co-operative Society. The disallowance was subsequently upheld by the Commissioner of Income Tax (Appeals) and later affirmed by the Income Tax Appellate Tribunal.

The matter was heard by a Division Bench comprising Justice S.G. Pandit and Justice K.V. Aravind upheld the Tribunal’s decision, observing that although a Co-operative Bank is registered under the Co-operative Societies Act, it carries on banking operations under an RBI license, thus falling within the exclusion of Section 80P(4). The Court held that interest earned from investments in Co-operative Banks does not qualify for deduction under Section 80P(2)(d), as the legislative intent behind Section 80P(4) was to deny such benefits to Co-operative Banks engaged in banking business.

Karnataka HC Deletes ₹25 Lakh Gross Profit Addition, Ruling Estimate Lacked Basis Despite 95% Sales to Sister Concern

M/S CASA DEL TUBO vs THEASSISTANT COMMISSIONER OF INCOME TAX CITATION: 2025 TAXSCAN (HC) 2052

The Karnataka High Court examined the validity of an estimated addition of ₹25,00,000 made towards gross profit under the Income Tax Act, 1961, in the case of CASA DEL TUBO, a trader in hydraulic hoses, for the Assessment Year 2009-10. During scrutiny under Section 143(2), the Assessing Officer (AO) noted a decline in the assessee’s gross profit ratio—from 21.0% to 11.6% on cost and from 17.4% to 10.4% on sales and attributed it to alleged underreporting of profits, as 95% of sales were made to a sister concern. The Commissioner of Income Tax (Appeals) [CIT(A)] and the Income Tax Appellate Tribunal (ITAT) both upheld the addition, holding that the low profit ratio in related-party transactions warranted the estimation.

The matter was heard by a Division Bench comprising Justice S.G. Pandit and Justice K.V. Aravind found that the AO’s estimation lacked any rational basis or reference to comparative data from previous or subsequent years. The Court observed that the assessee’s purchases and sales were duly recorded in the books of account, which were not rejected at any stage, and that the decline in gross profit was satisfactorily explained by exchange rate fluctuations. It was held that merely because 95% of sales were made to a sister concern could not, by itself, justify an arbitrary addition without supporting evidence. Finding the Tribunal’s order to be perverse and unsustainable, the High Court deleted the ₹25,00,000 addition and allowed the appeal in part, without imposing costs.

Authorities Cannot Skip Mandatory Pre-SCN Procedure: AP HC Rules Violation of GST Rule 142(1A) Makes Proceedings Void

BABA AGRICULTURE EXPORT vs UNIONOF INDIA CITATION: 2025 TAXSCAN (HC) 2053

The Andhra Pradesh High Court examined the legality of assessment proceedings initiated under Section 73 of the Central Goods and Services Tax (CGST) Act, 2017, without adhering to the mandatory pre-show-cause notice (pre-SCN) procedure prescribed under Rule 142(1A) of the CGST Rules, 2017. The case arose from a writ petition filed by Baba Agriculture Export, challenging the Order-in-Original dated 25.02.2025, on the ground that no prior intimation in Form GST DRC-01A was issued before the show cause notice.

The matter was heard by a Division Bench comprising Justice R. Raghunandan Rao and Justice T.C.D. Sekhar allowed the writ petition, holding that non-compliance with the pre-SCN procedure under Rule 142(1A) was a substantive illegality that rendered the entire adjudication void ab initio. The Court reiterated that the requirement of issuing Form GST DRC-01A prior to a formal show cause notice is mandatory in nature.The Bench held that failure to follow Rule 142(1A) vitiates the proceedings under Sections 73 and 74. Consequently, the impugned Order-in-Original was quashed, reaffirming that adherence to pre-SCN consultation is essential to ensure fairness, voluntary compliance, and avoidance of unnecessary litigation.

Recent GST Rulings You Can’t Ignore! Are you updated? - Click Here

Grocery Shop Owner accused of Selling Duplicate Products of Dabur and Reckitt Fails to Produce GST Bills and Invoices: Patna HC denies Pre-arrest Bail

Sunil Kumar Sah vs The State ofBihar CITATION: 2025 TAXSCAN (HC) 2054

The Patna High Court examined a plea for anticipatory bail filed under Section 438 of the Code of Criminal Procedure, 1973, by Sunil Kumar Sah, a grocery shop owner accused of selling counterfeit products under the brand names of Dabur India Ltd. and Reckitt Benckiser India Ltd. The case involved offences under Sections 63 and 65 of the Copyright Act, 1957, pertaining to infringement and dealing in counterfeit goods. The petitioner failed to produce any GST bills or purchase invoices to establish the authenticity of the seized products or to show that the goods were procured from registered dealers.

The matter was heard by the Bench of Justice Purnendu Singh, after hearing both parties, declined to grant anticipatory bail, observing that the petitioner was the owner of the premises from where fake branded items were recovered. The Court noted that the sale of counterfeit goods not only violated intellectual property rights under the Copyright Act but also endangered public health and caused loss to the State exchequer through tax evasion. Therefore, Court dismissed the anticipatory bail application.

Fraudulent Availment and Passing of Fake ITC Undermines Sanctity of GST: Jharkhand HC Denies Bail to Accused in ₹750 Crore GST Scam

Amit Agarwal vs Directorate ofEnforcement CITATION: 2025 TAXSCAN (HC) 2055

The Jharkhand High Court examined a bail plea under the Prevention of Money Laundering Act, 2002 (PMLA), filed by Amit Agarwal, Director of Greentech Steel Pvt. Ltd., accused of being part of a ₹750 crore fake Input Tax Credit (ITC) racket. The Directorate of Enforcement (ED) alleged that the petitioner was a key member of a syndicate led by Shiva Kumar Deora, which floated over 135 shell companies across Jharkhand, West Bengal, Delhi, and other States to fraudulently generate and pass on bogus GST invoices without any actual supply of goods or services. The network allegedly caused a substantial loss to the government exchequer by illegally availing and transferring fake ITC. The ED’s investigation revealed that Agarwal was directly involved in managing the financial layering of the proceeds of crime through several linked entities, including TE Udhyog Pvt. Ltd., Greentech Minerals Pvt. Ltd., and Bizzare Commercial Pvt. Ltd., with transactions worth ₹16.64 crore traced to his personal accounts.

The matter was heard by the Bench of Justice Sujit Narayan Prasad, while dismissing the bail application, held that fraudulent availment and passing of fake ITC constitutes a grave economic offence that undermines the integrity of the GST regime and strikes at the nation’s financial fabric. The Court found that the ED had complied with procedural safeguards under Section 19 of the PMLA and that there was sufficient material evidence connecting the petitioner to the laundering of proceeds of crime. The Court reiterated that the twin conditions under Section 45 of the PMLA are mandatory, requiring the accused to prove that he is not guilty and not likely to commit further offences. Observing that money laundering is a continuing offence and that the magnitude and organized nature of the fraud caused irreparable harm to the economy, the Court declined to grant bail and dismissed the petition.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates


Next Story

Related Stories

All Rights Reserved. Copyright @2019