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 26, 2025 to November 1, 2025.

SUPREME COURT

Supreme Court Stays GST Assessment Order Treating JDA As ‘Supply’, Issues Notice to Centre

ARHAM INFRA DEVELOPERS AOP vsUNION OF INDIA & ORS CITATION : 2025 TAXSCAN (SC) 320

The Supreme Court dealt with the legal issue of whether a Joint Development Agreement (JDA) executed between a developer and a landowner constitutes a taxable “supply” under the Central Goods and Services Tax Act, 2017, specifically arising under Section 107 relating to the statutory appellate remedy. The matter arose out of a challenge to a CGST assessment order that had treated the JDA as exigible to GST, with the petitioner asserting that no taxable supply took place between the parties to the agreement.

The Bench comprising Justice Aravind Kumar and Justice R. Mahadevan stayed the operation of the Assistant Commissioner’s order dated 27 January 2025 and issued notice to the Union of India, returnable within four weeks. By granting interim relief, the Supreme Court has presently protected the developer, Arham Infra Developers AOP from recovery proceedings while the issue remains under consideration, pending further hearing once the Union files its response.

Customs Dept appeals CESTAT Order in favour of Lulu International Malls in Trampoline Import Case: Supreme Court takes up Matter

COMMISSIONER OF CUSTOMS vs LULUINTERNATIONAL SHOPPLING MALLS PVT. LTD CITATION : 2025 TAXSCAN (SC) 321

The Supreme Court has taken up a civil appeal filed by the Commissioner of Customs, Kochi, challenging the decision of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in a dispute concerning the classification and valuation of imported “trampolines and tag arenas” under the Customs Tariff Act, 1975 and the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. The appeal arises from a detailed order of the Tribunal that rejected the Department’s stand on misclassification under Tariff Item 9506 99 90 and undervaluation through addition of installation charges under Rule 10(1)(e), upholding Lulu International Shopping Malls Pvt. Ltd.’s classification under Tariff Item 9506 91 90 as equipment for general physical exercise and gymnastics.

The Bench of Justice Pankaj Mithal and Justice Prasanna B. Varale with Senior Advocate Arvind P. Datar representing Lulu International and no appearance for the Revenue. The Supreme Court directed that the appeal be listed again on October 31, 2025, for further hearing, thereby keeping the challenge to the CESTAT’s findings on both classification and valuation open for adjudication.

Supreme Court stays Andhra Pradesh HC Ruling Quashing GST SCN & Assessment Order Issued without DIN

ASSISTANT COMMISSIONER, CGST& ANR vs M/S NOVELTY REDDY AND REDDY MOTORS PRIVATE LIMITED CITATION : 2025 TAXSCAN (SC) 322

The Supreme Court considered the legal issue concerning the validity of GST proceedings issued without a Document Identification Number (DIN), specifically relating to a summary show-cause notice in Form GST DRC-01 and a consequential assessment order under the CGST Act, 2017. The case arose from action initiated by the Assistant Commissioner, Eluru CGST Division against M/s Novelty Reddy and Reddy Motors Pvt. Ltd. for the tax period April 2020 to March 2021, where the assessee had successfully challenged the unsigned SCN and assessment order before the Andhra Pradesh High Court on the ground that the absence of DIN rendered the orders invalid.

The Bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan, which issued notice on the special leave petition filed by the Revenue and stayed the operation of the High Court’s order, subject to the condition that no coercive action shall be taken against the assessee. The Supreme Court’s interim relief has kept the issue open on whether omission of DIN renders GST proceedings “non est,” leaving the controversy to be adjudicated in the upcoming hearings.

Supreme Court to Decide if Reliance’s Imported Routers and Wi-Fi Extenders Qualify as Telecom Equipment

COMMISSIONER OF CUSTOMS vsRELIANCE RETAIL LTD CITATION : 2025 TAXSCAN (SC) 323

The Supreme Court has taken up a significant customs classification dispute involving telecom products imported by Reliance Retail Ltd., concerning the applicability of duty exemption under the Customs Tariff Act, 1975. The Department has challenged the CESTAT’s ruling which upheld Reliance Retail’s classification of products such as routers, Wi-Fi mesh extenders, HDMI dongles and Small Form Pluggable (SFP) modules under Tariff Heading 8517, enabling them to claim exemption as telecom equipment.

The Bench comprising Justice Aravind Kumar and Justice N.V. Anjaria issued notice to Reliance Retail Ltd., observing that the matter warranted further examination, and directed listing of the appeal on 10 November 2025. With the Supreme Court now seized of the issue, the final determination will clarify whether the imported networking devices qualify as telecom apparatus eligible for customs duty exemption, or whether the Department’s alternate classification should prevail.

Supreme Court upholds Penalty for Violating EOU Scheme by Removing Duty-Free Capital Goods without Authorization

M/S ELENTEC INDIA PRIVATELIMITED vs COMMISSIONER OF CENTRAL EXCISE CITATION : 2025 TAXSCAN (SC) 324

The Supreme Court has affirmed the legality of penalties imposed under the Export Oriented Unit (EOU) exemption scheme, refusing to interfere with the findings of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The appeal concerned allegations that Elentec India, operating as a 100% EOU under the Electronics Hardware Technology Park scheme, had violated the conditions of the exemption by removing duty-free capital goods from bonded premises to a Domestic Tariff Area unit without authorization, resulting in duty liability under Section 111(j) of the Customs Act, 1962 and Rule 25 of the Central Excise Rules, 2002.

The Bench comprising Justice J.B. Pardiwala and Justice K.V. Viswanathan dismissed the appeal, noting that the delay of 122 days was not satisfactorily explained and that no valid grounds were demonstrated to upset the CESTAT’s order. With the rejection of the appeal, the Supreme Court upheld the penalty of Rs. 50 lakh imposed by the Tribunal along with the confiscation and duty demands, and directed that all pending applications stood disposed of.

Supreme Court to Decide if GLDC’s Activities Like Soil Conservation, Land Reclamation are Liable to Service Tax

COMMISSIONER OF CGST vs M/SGUJARAT STATE LAND DEVELOPMENT CORPORATION LTD CITATION : 2025 TAXSCAN (SC) 325

The Supreme Court has taken up a significant service tax dispute relating to whether the soil conservation and land reclamation activities of the Gujarat State Land Development Corporation Ltd. fall within taxable service categories under the Finance Act, 1994. The Revenue has appealed against the CESTAT’s order which set aside the service tax demand raised under classifications such as Business Auxiliary Service, Supply of Tangible Goods Service, and Rent-a-Cab Service, contending that the corporation received grants from the State Government amounting to consideration for taxable services.

The Bench comprising Justice Sanjay Karol and Justice Nongmeikapam Kotiswar Singh found the Department’s explanation for delay in service of notice satisfactory and directed issuance of a fresh notice to the respondent, returnable on 11 November 2025. The Supreme Court also directed the corporation to file its counter-affidavit before the next date of hearing, keeping the challenge to the Tribunal’s findings on exemption for public welfare activities open for adjudication.

No Double Taxation on Works Contracts: Supreme Court confirms Deduction for Sub-Contractor Payments under KVAT

AUTHORITY FOR CLARIFICATION ANDADVANCE RULINGS vs M/S SKYLINE CONSTRUCTION AND HOUSING PVT. LTD CITATION : 2025 TAXSCAN (SC) 326

The Supreme Court has upheld the legal principle that double taxation cannot be imposed on works contracts under Section 15 of the Karnataka Value Added Tax Act, 2003 (KVAT Act). The decision arose in the case of M/s Skyline Construction and Housing Pvt. Ltd., where the Court confirmed that principal contractors are entitled to deduct the value of work executed by registered sub-contractors from their taxable turnover, as VAT is already paid by sub-contractors on that portion of the contract.

The Bench comprising Justice J.B. Pardiwala and Justice K.V. Viswanathan dismissed the State’s appeal and affirmed the Karnataka High Court’s ruling, holding that taxing both the main contractor and the sub-contractor on the same work would amount to impermissible double taxation. The Court clarified that only the portion of work actually executed by the principal contractor can be included in his taxable turnover, making the deduction of sub-contractor payments a necessary and lawful adjustment under Section 15(1) of the KVAT Act.

HIGH COURT

Vagueness of SCN in Customs Broker Licence Revocation: Delhi HC sets aside CESTAT order

COMMISSIONER OF CUSTOMS vsPRIMUS LOGISTICS PVT. LTD CITATION : 2025 TAXSCAN (HC) 2130

The High Court of Delhi examined the legality of proceedings under the Customs Act, 1962 in a Customs Broker Licence revocation matter involving Primus Logistics Pvt. Ltd. The dispute arose from an appeal filed by the Revenue under Section 130G of the Act, challenging a CESTAT order which had set aside the revocation of licence and penalty imposed under the Customs Brokers Licensing Regulations, 2018. The core legal issue before the High Court concerned whether the Show Cause Notice dated 9 August 2023 issued for alleged violations of Regulations 10(a), 10(d), 10(e) and 10(n) was vague and failed to specify the precise charges against the customs broker.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain found that the CESTAT had set aside the Order-in-Original dated 29 January 2024 without adjudicating the matter on merits. Holding that such an approach was unsustainable, the High Court set aside the Tribunal’s order and remanded the matter to the CESTAT for fresh consideration, directing that the proceedings be concluded by 15 December 2025. The appeal was disposed of along with all pending applications.

Person Accused Of Passing Fake ITC Worth Rs. 199.31 Crores: Gauhati HC grants Anticipatory Bail

Faiz Ahmed vs The State of AP CITATION : 2025 TAXSCAN (HC) 2131

The Gauhati High Court considered the legality of arrest proceedings in a major GST fraud case involving alleged fake Input Tax Credit (ITC) worth ₹199.31 crores. The present petition for anticipatory bail was filed by applicant-assessee Faiz Ahmed in connection with Itanagar P.S. Case No. 182/2024, registered for offences under Sections 120B, 420, 467, 468, 471, 473, and 474 of the Indian Penal Code. The case stems from allegations that a fictitious entity, M/s Siddhi Vinayak Trade Merchants, fraudulently secured a GST registration using forged documents and issued fake invoices amounting to ₹658.88 crores to pass on wrongful ITC benefit.

The Single Bench of Justice Kardak Ete noted that the applicant had fully cooperated with the investigation, had no prior criminal record, and his statement under Section 180 of the Bharatiya Nagarik Suraksha Sanhita, 2023 was corroborated by bank transactions and WhatsApp communications. Observing that custodial interrogation was not required and that interim bail had already been granted, the Court made the interim protection absolute and allowed the anticipatory bail application, while disposing of all pending matters.

No Notice, No Hearing: Patna HC Slams DRI for Illegal Crane Auction, Orders Compensation

Nurul Hasan Khan vs Union ofIndia CITATION : 2025 TAXSCAN (HC) 2132

The Patna High Court adjudicated on the legality of pre-trial disposal and auction of a vehicle seized in connection with a narcotics case, specifically concerning compliance with Section 60(3) of the Narcotic Drugs and Psychotropic Substances (NDPS) Act, 1985, which governs confiscation of conveyances alleged to be used for transporting contraband. The case related to the petitioner’s crane, seized by the Directorate of Revenue Intelligence (DRI) after ganja was recovered from a Bolero pickup van it was towing, despite investigation findings that neither the owner nor his employees had knowledge of the contraband.

The Single Bench of Justice Sandeep Kumar held that the crane was auctioned in complete violation of due process, as no notice or opportunity of hearing was provided to the petitioner before the order for disposal was passed. Noting that the petitioner was not an accused and the DRI itself admitted the absence of his involvement in the offence, the Court declared the Special Court’s order unsustainable. Since the auction could not be reversed, the Court directed compensation of ₹3,00,000 along with 8% interest from the date of seizure and imposed costs of ₹1,00,000 on the authorities for arbitrary action.

Failure to Fulfil Export Obligations Under Advance Authorization: Delhi HC Quashes Customs Demand After DGFT Confirms Fulfilment

M/S ANJANI TECHNOPLAST LTD vsTHE PRINCIPAL COMMISSIONER OF CUSTOMS CITATION : 2025 TAXSCAN (HC) 2133

The Delhi High Court was called upon to decide whether a customs demand for non-fulfilment of export obligations under the Advance Authorization Scheme could survive once the Directorate General of Foreign Trade (DGFT) confirmed compliance through a redemption certificate. The issue arose under the Foreign Trade Policy and the Customs Act, relating to an Order-in-Original dated 10 October 2014 that had confirmed a demand of ₹5.96 crore against Anjani Technoplast Ltd. for alleged failure to fulfil export obligations after importing goods duty-free under Advance Authorization.

The Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain observed that subsequent developments including extension of the export obligation period to 133 months by the Policy Relaxation Committee and DGFT’s certificate dated 9 March 2022 confirming full discharge of obligations rendered the demand unsustainable. The Court set aside the Order-in-Original, noting that the basis for recovery no longer existed, and directed refund of any pre-deposit within two months. Both the appeal (CUSAA 178/2022) and the writ petition (W.P.(C) 4339/2024), along with pending applications, were accordingly disposed of.

Gauhati HC Grants Bail to Businessman Accused of ₹3 Crore GST Credit Misuse After 15 Days in Judicial Custody

UJJAWAL KUMAR AGARWAL vs THE STATE OF ASSAM AND 2 ORS CITATION : 2025 TAXSCAN (HC) 2134

The Gauhati High Court considered the legality and necessity of continued detention under Section 132(5) of the Assam Goods and Services Tax Act, 2017 in a case concerning alleged wrongful availment of Input Tax Credit (ITC) worth approximately ₹3 crore. The primary issue was whether the alleged offence, being below the ₹5 crore threshold and largely documentary in nature, required further custodial interrogation of the accused, Ujjawal Kumar Agarwal, proprietor of BKS Enterprises.

The single judge bench of Justice N. Unni Krishnan Nair granted regular bail, noting that the petitioner had already been in custody since 8 October 2025 and that no substantial justification was provided for his continued detention. Finding that the allegations were document-based and custodial interrogation was not necessary, the Court ordered release on a bail bond of ₹25,000 with conditions to cooperate with the investigation, refrain from influencing witnesses, and not leave the jurisdiction without permission. The bail application was accordingly disposed of.

Writ Becomes Infructuous If Final Assessment Already Passed: Calcutta HC Directs Petitioner to Avail Alternative Remedy

M/S Rupam Jewellery rep. byBikash Ranjan Kamilya vs The Union of India and Others CITATION : 2025 TAXSCAN (HC) 2135

The Calcutta High Court examined the maintainability of a writ petition filed against reassessment proceedings initiated under Sections 147 and 148 of the Income Tax Act, 1961 for the assessment year 2005-06. The key legal issue was whether a writ petition challenging a reassessment notice could survive once a final assessment order had already been passed, especially when questions of fact existed and an alternative statutory remedy was available under the Act.

The single judge bench of Justice Ajay Kumar Gupta held that the writ petition had become infructuous as the Department had already passed the final assessment order dated 31 December 2009 assessing taxable income at ₹38,46,690. The Court refused to interfere under its writ jurisdiction, emphasizing that disputed factual issues and availability of appellate remedies precluded such intervention. While dismissing the writ petition, the Court clarified that the petitioner remained free to challenge the final assessment order before the appropriate appellate authority, which must decide the matter independently and in accordance with law.

NCLT President Cannot Alter/Extend Territorial Jurisdiction of Any Bench: Gujarat HC Quashes Transfer of Arcelor Mittal Case

ARCELORMITTAL NIPPON STEEL INDIALIMITED vs NATIONAL COMPANY LAW TRIBUNAL CITATION : 2025 TAXSCAN (HC) 2136

The Gujarat High Court examined the legal issue concerning the scope of administrative powers vested in the President of the National Company Law Tribunal (NCLT) under the NCLT Rules, 2016 specifically Rules 16 and 62. The primary question before the Court was whether the President of the NCLT could alter or extend the territorial jurisdiction of a particular Bench to entertain matters arising from another jurisdiction, particularly in an ongoing insolvency dispute involving ArcelorMittal Nippon Steel India Ltd.

The single judge bench of Justice Niral R. Mehta held that the President’s authority is confined to transfers within the same territorial jurisdiction and does not permit expanding the jurisdictional boundaries of a Bench. The Court found that the recusal orders by the Ahmedabad Bench and subsequent administrative transfer of the matters to the Mumbai Bench were legally unsustainable and influenced by extraneous factors. Consequently, the High Court quashed the recusal and transfer orders and directed that the matters be heard by a duly constituted Ahmedabad NCLT Bench or virtually to ensure prompt adjudication.

'Moisture Content Below 10% Means Roasted Areca Nut': Madras HC directs Release of Seized Goods

M/s.Unik Traders vs TheCommissioner of Customs CITATION : 2025 TAXSCAN (HC) 2137

The Madras High Court dealt with the legal issue concerning the proper classification of imported areca nuts under the Customs Tariff Act, specifically whether consignments with moisture content below 10% should be treated as “roasted areca nuts.” In the writ petition filed under Article 226 of the Constitution of India, the petitioner, M/s. Unik Traders, challenged the detention of 19 consignments by Customs authorities on allegations of mis-declaration. The petitioner relied upon a binding precedent affirmed by the Supreme Court, which held that areca nuts with less than 10% moisture content must be classified as roasted, and argued that the Customs Department had no authority to contradict the certification issued by FSSAI.

The single judge bench comprising Justice N. Anand Venkatesh directed the provisional release of 17 of the 19 consignments after observing that the Central Revenues Control Laboratory (CRCL) report itself reflected moisture levels below 10% in most cases, thereby attracting the earlier binding ruling. The Court rejected the Customs’ reliance on an unenforceable Notification and the CRCL’s fresh categorization, holding that the goods were perishable and similarly situated consignments had already been cleared. The Court ordered release subject to payment of declared duty and execution of a bond for the differential duty of ₹2,24,33,60,198/-, leaving the final adjudication to the Customs authorities.

Consumer Proceedings Not Maintainable after IBC Moratorium Imposition: Bombay HC quashes Consumer Forum Order against SREI Equipment

SREI Equipment Finance Limitedvs Rajesh Bajirao Khandewar CITATION : 2025 TAXSCAN (HC) 2138

The Bombay High Court adjudicated a writ petition concerning the bar on continuation of legal proceedings during Corporate Insolvency Resolution Process (CIRP) under Section 14 of the Insolvency and Bankruptcy Code, 2016. The case arose from the initiation of consumer proceedings and consequential recovery action by the District Consumer Dispute Redressal Commission, Akola, against Srei Equipment Finance Limited despite the imposition of a statutory moratorium after commencement of CIRP. The central legal issue before the Court was whether the Consumer Commission’s order, which directed the return of a JCB machine against payment of dues, along with enforcement steps including bailable warrants, could legally continue in view of the IBC moratorium and the later approval of the resolution plan by the NCLT under Section 31 of the Code.

A Single Bench of Justice M.M. Nerlikar held that the Consumer Commission’s actions were in contravention of Sections 14 and 31 of the IBC, observing that the direction for return of the machine amounted to enforcement of a monetary claim and therefore constituted proceedings against the corporate debtor's property. The Court ruled that such proceedings could not survive the moratorium and declared the actions taken by the Consumer Commission, including the order dated 20.07.2022 and subsequent recovery measures, as “non-est in law.” Accordingly, the High Court quashed the Consumer Commission’s order and all enforcement action including issued bailable warrants, thereby upholding the paramountcy of the insolvency framework during CIRP.

Madras HC Quashes Customs Public Notice, Holds Dept Lacked Jurisdiction to Direct on GST Collection

M/s. National Association ofContainer Freight Stations vs The Joint Commissioner of Customs CITATION : 2025 TAXSCAN (HC) 2139

The Madras High Court examined the legality of a Public Notice issued by the Customs Department that directed Container Freight Stations (CFS) not to levy Goods and Services Tax (GST) on the auction of uncleared cargo under Section 48 of the Customs Act, 1962. The dispute centered on whether the Customs authorities had the jurisdiction to issue directions pertaining to the levy and collection of GST, a tax governed by the Central Goods and Services Tax Act, 2017, including Sections 3, 7(1) and 9(1) relating to the levy of IGST and GST on supply.

The Single Bench of Justice N. Anand Venkatesh held that the Public Notice was issued without jurisdiction, noting that customs-related communications cannot extend to clarifying or regulating tax obligations under the CGST Act. The Court distinguished between IGST payable upon import and GST payable upon subsequent supply through auction, emphasizing that CFSs act as suppliers in such transactions. Finding the Public Notice inconsistent even with the CBIC circular relied upon by the respondents and contrary to provisions of both the Customs Act and the CGST Act, the Court quashed the Public Notice dated 12.02.2021 and the consequential notice dated 22.12.2021, allowing the writ petitions with no order as to costs.

Delhi HC denies Bail to Kenyan National for Smuggling Commercial Quantity of Cocaine

LILIAN NYAMBURA vs AIR CUSTOMS CITATION : 2025 TAXSCAN (HC) 2140

The Delhi High Court refused to grant bail to Lilian Nyambura, a Kenyan national accused of smuggling 789 grams of cocaine, which constitutes a commercial quantity under the Narcotic Drugs and Psychotropic Substances Act, 1985. The petitioner was intercepted at the Indira Gandhi International Airport, where she admitted to having ingested narcotic capsules and later excreted them, leading to her arrest on 06.01.2024 for offences under Sections 8/21/23 of the NDPS Act. The defence argued procedural lapses, including alleged non-compliance with Sections 103 and 50 of the Customs Act, 1962, and Section 52A of the NDPS Act, seeking her release on bail owing to extended custody.

The Single Bench of Justice Amit Mahajan, relying on Section 37 of the NDPS Act, held that bail in cases involving commercial quantities can only be granted where both twin statutory conditions are satisfied that the accused is prima facie not guilty and is unlikely to commit any offence while on bail. The Court observed that the concealment of contraband through ingestion showed conscious possession and that prolonged custody alone could not relax the statutory embargo. Stating that alleged procedural irregularities are triable issues, the Court dismissed the bail application, emphasizing the seriousness of the allegations and the legislative intent to curb narcotics offences, while clarifying that observations made would not prejudice the trial.

“Artificial intelligence driven”: Karnataka HC refuses to Step in as ITAT President already reassigned Matter

BUCKEYE TRUST vs REGISTRARHON’BLE ITAT CITATION : 2025 TAXSCAN (HC) 2141

The High Court of Karnataka at Bengaluru has disposed of a writ petition filed by Buckeye Trust, which had challenged the continuation of proceedings before the Income Tax Appellate Tribunal (ITAT) on grounds of apprehended bias. The Trust alleged that an earlier ITAT order—since recalled—appeared to be “artificial intelligence driven,” and expressed concern that the same Judicial Member, who had recused himself, was inclined to hear the matter again. Arguing through counsel Sri A. Mahesh Chowdhary, the petitioner sought a deferment of proceedings in ITA No. 1051/2024 pending a decision on its transfer application, citing the foundational principle that justice must also appear to be done.

The Single Bench of Justice M. Nagaprasanna noted that, pursuant to the Court’s interim direction dated 19 August 2025, the ITAT President had administratively reassigned the matter to a different Bench. Since the grievance no longer survived, the petitioner submitted that the writ petition be closed while reserving liberty to seek appropriate remedies if required in future. Observing that the relief sought stood satisfied and no further interference under Articles 226 and 227 of the Constitution was warranted, the Court disposed of the writ petition as infructuous, acknowledging the administrative steps taken by the Tribunal.

No Tax Liability arises from Pre-GST Lease Deed: Allahabad HC Stays GST Proceedings

M/S Viable Venture PrivateLimited vs State of U.P. and Another CITATION : 2025 TAXSCAN (HC) 2142

The Allahabad High Court granted interim protection against coercive proceedings under the Uttar Pradesh Goods and Services Tax Act, 2017 (UPGST Act), holding that a lease agreement executed before the GST regime prima facie could not attract GST liability. The issue arose in Writ Tax No. 4870 of 2025 filed by Viable Venture Pvt. Ltd., which challenged a notice dated 04.03.2025 issued by the State GST authorities. The petitioner argued that the lease deed, executed on 07.06.2017, predated the enforcement of the UPGST Act and therefore could not be subjected to retrospective taxation.

The Division Bench of Justice Saumitra Dayal Singh and Justice Indrajeet Shukla noted that a similar question concerning pre-GST leases was already pending consideration in Srigarv Infratech Pvt. Ltd. v. State of UP. Granting time for the State to file its counter affidavit, the Court directed that the present writ be listed along with that matter and stayed further proceedings pursuant to the impugned notice until further orders. By extending interim relief, the High Court safeguarded the petitioner from GST recovery actions in relation to the pre-GST lease transaction, underscoring judicial scrutiny of retrospective implications under the GST regime.

Rs. 2.58 Crore worth Gold Smuggling Case: Madras HC Grants Bail to Two Accused

Riswana Begam vs The SeniorIntelligence Officer CITATION : 2025 TAXSCAN (HC) 2143

The Madurai Bench of the Madras High Court considered a bail application in a gold smuggling case registered under Section 135 of the Customs Act, 1962, relating to the alleged illegal import of gold valued at ₹2.58 crore. The petitioners, Riswana Begam and Mohammed Nabeen, were arrested on 23.09.2025 for allegedly smuggling 2299.920 grams of gold from Singapore to Madurai via Colombo and had been in judicial custody since their arrest. They sought release on the ground of prolonged incarceration and willingness to comply with bail conditions.

The single judge bench of Justice S. Srimathy, considering the duration of custody and the circumstances of the case, granted bail subject to strict conditions. These included execution of a ₹10,000 bond with two sureties, surrendering of passports, daily reporting to DRI at 10:30 a.m. for four weeks, and a prohibition on leaving India without prior approval. The Court also directed verification of sureties and cautioned the petitioners against absconding or tampering with evidence, thereby balancing personal liberty with the interests of investigation

“Complete Breach of Natural Justice”: Bombay HC says results thrown open by AI are not to be Blindly Relied Upon in an Income Tax Case

KMG Wires Private Limited vs TheNational Faceless Assessment Centre CITATION : 2025 TAXSCAN (HC) 2144

The Bombay High Court examined the legality of an income tax assessment passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, in a case highlighting improper reliance on Artificial Intelligence (AI) during tax adjudication. The writ petition filed by KMG Wires Pvt. Ltd. challenged the assessment for AY 2023-24, alleging breach of the principles of natural justice after the National Faceless Assessment Centre ignored crucial evidence and relied on nonexistent judicial precedents, thereby making additions without due opportunity.

The Division Bench of Justice B.P. Colabawalla and Justice Amit S. Jamsandekar found the order to be passed in gross violation of natural justice, criticizing the blind reliance on AI-generated case law and failure to consider the supplier’s reply to a Section 133(6) notice. The Court set aside the assessment order, the consequential demand under Section 156, and the penalty show cause under Section 274 read with Section 271AAC, and remanded the matter to the Assessing Officer for fresh adjudication. The AO was directed to issue a proper show-cause notice, ensure a meaningful opportunity of hearing, and pass a speaking order by 31 December 2025, without being influenced by the earlier decision.

No GSTAT, No Recovery: Delhi HC stays GST Recovery Proceedings subject to Pre-Deposit

M/S WELCUT INDUSTRIES vsCOMMISSIONER CITATION : 2025 TAXSCAN (HC) 2145

The Delhi High Court examined whether recovery proceedings could be initiated against a taxpayer in the absence of a functional Goods and Services Tax Appellate Tribunal (GSTAT), particularly when the taxpayer was willing to comply with the mandatory pre-deposit requirement under Section 112(8) of the Central Goods and Services Tax Act, 2017. The matter arose from a petition filed by M/s Welcut Industries, which challenged an Order-in-Appeal confirming a demand of ₹27,000, arguing that the appellate remedy under Section 112 was not effectively available due to the non-operational status of the GSTAT.

The Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain held that no recovery action can proceed when the statutory appellate forum is unavailable, provided the taxpayer deposits the requisite pre-deposit amount. The Court directed the petitioner to deposit 10% of the disputed demand by 15 November 2025, after which recovery of the remaining demand would remain stayed until the GSTAT becomes functional. It was further clarified that the deposited amount shall be treated as the statutory pre-deposit for the appeal once the Tribunal starts functioning, and the writ petition was accordingly disposed of with the stay continuing subject to compliance.

Closing Individual Debtor Accounts Not Mandatory for Claiming Bad Debt Deduction u/s 36(1)(vii): Kerala HC

GEOFIN COMTRADE LIMITED vsASSTT. CIT CITATION : 2025 TAXSCAN (HC) 2146

The Kerala High Court addressed the issue of whether an assessee is required to close individual debtor accounts in order to claim a deduction for bad debts under Section 36(1)(vii) of the Income Tax Act, 1961. The appeals were filed by Geofin Comtrade Limited challenging the disallowance of bad debt deductions upheld by the Income Tax Appellate Tribunal (ITAT), Cochin Bench, for AYs 2013-14 and 2014-15. The ITAT had taken the view that unless each debtor’s account was individually closed, the write-off could not be regarded as complete for the purpose of Section 36(1)(vii).

The Division Bench comprising Justice A. Muhamed Mustaque and Justice Harisankar V. Menon held that closing individual debtor accounts is not a statutory requirement for claiming bad debt deduction, reaffirming the legal position laid down by the Supreme Court in Vijaya Bank v. CIT (2010). The Court observed that the department’s apprehension of possible double deduction is addressed by Section 41(4), which mandates taxation of any subsequent recovery. Accordingly, the ITAT’s ruling was set aside, and the matter was remanded to the Assessing Officer for fresh examination based on the correct legal principles, thereby allowing the appeals.

DRI Officials Recognized as 'Proper Officers' Under Customs Act: Delhi HC Disposes of Petition Challenging Jurisdiction

M/S. RANI ENTERPRISES vsPRINCIPAL COMMISSIONER OF CUSTOMS CITATION : 2025 TAXSCAN (HC) 2147

The Delhi High Court dealt with a challenge to the jurisdiction of officers of the Directorate of Revenue Intelligence (DRI) to act as “proper officers” under the Customs Act, 1962, in relation to the issuance of a Show Cause Notice under Section 28. The writ petition under Article 226 of the Constitution of India was filed by Rani Enterprises, contesting the seizure of goods and the SCN dated 25 October 2021 issued by the DRI, Lucknow Zonal Unit, on the ground that DRI officials lack jurisdiction as per the initial Supreme Court ruling in Canon India Pvt. Ltd. v. Commissioner of Customs (Canon-I).

The Division Bench comprising Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta observed that the petitioner’s reliance on Canon-I was misplaced because the Supreme Court, in its review decision Commissioner of Customs v. Canon India Pvt. Ltd. (Canon-II), has already clarified that DRI and similarly placed preventive officers are competent “proper officers” to issue notices under Section 28 of the Customs Act. Holding that the jurisdictional objection no longer survives, the Court disposed of the writ petition, permitting the show cause proceedings against the petitioner to continue in accordance with law.

Statutory Variation Clause Applicable: Madras HC Upholds Arbitral Awards Granting Full GST Reimbursement and Sets Aside Conflicting Award

Union of India vs M/s.IndraIndustries CITATION : 2025 TAXSCAN (HC) 2148

The Madras High Court adjudicated multiple petitions filed under Section 34 of the Arbitration and Conciliation Act, 1996, concerning the applicability of the Statutory Variation Clause (SVC) in contracts, in light of the statutory increase in GST rates from 5% to 12% on the final product. The litigation arose between Integral Coach Factory (ICF) and various contractors, including Indira Industries, over whether the contractors were entitled to reimbursement of the increased tax or whether additional Input Tax Credit (ITC) benefits neutralized the tax burden as argued by ICF.

The single bench of Justice Abdul Quddhose upheld the arbitral awards that favored the contractors, holding that the SVC under Clause 3.0 of the Purchase Orders clearly required reimbursement of statutory tax increases, and that the General Conditions of Contract (Clauses 2.8 and 2.9) were not attracted in the absence of proof of additional ITC benefits. The Court dismissed ICF’s petitions and recognized the arbitral view as a legally sustainable one, while setting aside the solitary conflicting award (Arb.O.P. No. 128 of 2024) for misapplication of contractual terms. The contractor in that case was granted liberty to initiate fresh arbitration, thereby resolving the conflict in favour of consistent application of the SVC.

Kerala HC Sets Aside Rectification Rejection Order, Directs to Reconsider DRC-03 Payment for Excess ITC with Alleged Typographical Error in Financial Year

M/S. LOTUS PHARMACEUTICALS vsTHE ASSISTANT STATE TAX OFFICER CITATION : 2025 TAXSCAN (HC) 2149

The Kerala High Court examined the legality of a demand imposed under the Central Goods and Services Tax Act, 2017, focusing on whether a bonafide typographical error in Form DRC-03 could invalidate a voluntary payment made to reverse wrongly availed Input Tax Credit (ITC) for the financial year 2018-19. The matter involved Section 161 of the CGST/SGST Act, which deals with rectification of mistakes apparent on the face of the record, after tax authorities rejected a rectification plea and imposed a liability of over ₹6.88 crore on Lotus Pharmaceuticals.

The single bench of Justice Bechu Kurian Thomas held that the tax department ought not to penalize a taxpayer for a clear inadvertent error, especially when the substantial voluntary payment made had no connection to the financial year mistakenly mentioned. Finding the rejection of rectification contrary to Article 265 of the Constitution, the Court set aside the impugned order and directed the Deputy Commissioner to reconsider the rectification application afresh, after granting an opportunity of hearing, within a period of three months. The writ petition was accordingly allowed.

Businessman accused of ₹9.34 Cr GST Evasion Seeks Bail: Gujarat HC Grants Relief Subject to Deposit and Conditions

VIKAS NARESH CHANDRA KANSAL vsSTATE OF GUJARAT & ANR CITATION : 2025 TAXSCAN (HC) 2150

The Gujarat High Court dealt with a bail application involving alleged GST evasion of ₹9.34 crore, concerning offences under Sections 132(1)(a), (b), and (c) of the Central Goods and Services Tax Act, 2017. The accused, Vikas Naresh Chandra Kansal, a partner of Universal Enterprises, sought regular bail under Section 483 of the Bharatiya Suraksha Sanhita, 2023, after being arrested by the Directorate General of GST Intelligence (DGGI). The prosecution alleged wrongful availment and non-payment of GST by Universal Enterprises and VNG Packaging Pvt. Ltd., triggering searches, seizure of documents, and eventual arrest under Section 69 of the CGST Act.

The single bench of Justice R.T. Vachhani observed that major investigation steps had already been completed, the applicant had no criminal antecedents, and there was no risk of absconding or tampering with evidence. Taking note of the applicant’s cooperation and partial deposit of dues, the Court allowed regular bail, directing his release on execution of a ₹10,000 bond with one surety, subject to conditions including surrender of passport, cooperation in investigation, and restriction on travel outside India without prior permission. The Court clarified that these observations were prima facie and that the trial court would proceed independently, uninfluenced by the bail order.

No Personal Hearing Granted Before GST Order: Allahabad HC Sets Aside order noting Tax Office Memo

M/S JagjitEnterprises Private Ltd vs State Of U.P. CITATION : 2025 TAXSCAN (HC) 2151

The Allahabad High Court examined the legality of an assessment finalized under Section 73 of the Central Goods and Services Tax Act, 2017, and held that it was vitiated due to violation of Section 75(4) of the Act. The case concerned M/s Jagjit Enterprises Private Ltd., which challenged the assessment order dated 31 December 2023 and the appellate order dated 23 September 2025, arguing that no opportunity of personal hearing was granted despite an adverse decision being contemplated.

The single bench of Justice Jaspreet Singh observed that the adjudicating authority failed to provide any date for personal hearing despite the taxpayer filing multiple written replies, rendering the proceedings unsustainable in law. The Court emphasized the mandatory nature of Section 75(4) and referred to the Commissioner’s corrective Office Memo No. 1406 (12 November 2024), discouraging mechanical disposal of cases without proper hearing. Accordingly, both the assessment and the appellate orders were set aside, and the matter was remanded to the assessing authority to issue a fresh, reasoned order only after ensuring a proper opportunity of personal hearing to the petitioner.

GST ITC Denial Due to Supplier Default: Kerala HC Grants Dealers One-Month Window to Claim Relief under CBIC Circulars

NALLEPILLI ARUMUGHANJYOTHIKUMARI vs DEPUTY COMMISSIONER OF STATE TAX CITATION : 2025 TAXSCAN (HC) 2152

The Kerala High Court dealt with the denial of Input Tax Credit (ITC) claims under the Central Goods and Services Tax Act, 2017, arising from supplier-side defaults and technical glitches in the initial years of GST rollout. The petitions were filed by several registered dealers, including Nallepilli Arumughan Jyothikumari, M/s Thomson Bakers, and M/s Neerakkal Latex (P) Ltd., who argued that despite possessing valid tax invoices and proof of payment, ITC was denied due to non-reflection of supplier tax payments in GSTR-2A and delays in GST return filing. The issue also pertained to the applicability of Section 39 of the CGST Act, and the eligibility framework laid down through CBIC Circular Nos. 183/15/2022-GST and 193/05/2023-GST.

The single bench of Justice Dinesh Kumar Singh held that genuine taxpayers should not lose legitimate ITC due to procedural lapses beyond their control, particularly when the return-matching system was not fully operational during 2017-2019. The Court granted a one-month window to the petitioners to approach the GST authorities with requisite documentary evidence for relief under the above circulars and directed the authorities to verify and process such claims expeditiously. The Court also clarified that the amendment extending the September return due date to 30 November is retrospective from 1 July 2017, thereby widening ITC eligibility. At the same time, it upheld the constitutional validity of Sections 16(2)(c) and 16(4) of the CGST Act, and disposed of the batch of petitions along with all pending applications.

Trader Seeks Protection from Coercive Action in Fake GST ITC Probe: Chhattisgarh HC Directs to appear Before DGGI, Bars Coercive Steps

Harsh Wadhwani Proprietor VijayLaxmi Trade Company vs Additional Director General Directorate General Of GstIntelligence CITATION : 2025 TAXSCAN (HC) 2153

The Chhattisgarh High Court considered a writ petition concerning allegations of fraudulent Input Tax Credit (ITC) claims under the Central Goods and Services Tax Act, 2017, arising from transactions with M/s Taj Enterprises and M/s Agastya Enterprises. The petitioners, including Harsh Wadhwani, proprietor of Vijay Laxmi Trade Company, challenged repeated summons issued under Section 70 of the CGST Act, claiming harassment and asserting that their ITC claims filed through GSTR-3B for FY 2024-25 were legitimate. They sought interim protection from coercive action by the Directorate General of GST Intelligence (DGGI) during the ongoing investigation into alleged fake invoice-based credit.

The single judge bench of Justice Naresh Kumar Chandravanshi granted interim protection, directing that no coercive steps be taken against the petitioners so long as they cooperate with the investigation. The Court instructed the petitioners to appear before the DGGI Raipur officers on 28 October 2025 and subsequent dates as required, and also mandated that the authorities decide upon their objections by passing a reasoned speaking order in accordance with law. With these directions, the writ petition was disposed of.

GST Appeal Rejected on Ground of Non-Receipt of Certified Copies: Jharkhand HC Terms It ‘Hyper-Technical’, Restores Appeal

Deepak Kumar Bhagat vsCommissioner of State Tax, State of Jharkhand CITATION : 2025 TAXSCAN (HC) 2154

The Jharkhand High Court addressed a challenge involving the rejection of a statutory GST appeal filed under Section 73 of the Jharkhand Goods and Services Tax Act, 2017, for the tax period April 2018 to March 2019. The petitioner, Deepak Kumar Bhagat, questioned the legality of the assessment order and the appellate rejection solely on the ground of “non-receipt of certified copies” as required under Form GST APL-02, arguing that such dismissal violated the principles of natural justice and adversely impacted the taxpayer’s financial rights.

The Division Bench comprising Chief Justice Tarlok Singh Chauhan and Justice Rajesh Shankar held that the appellate authority had taken a “hyper-technical” approach in refusing to entertain the appeal despite its being filed within the limitation period. The High Court quashed the order of dismissal, restored the appeal, and directed the parties to appear before the Appellate Authority on or before 10 November 2025, further directing that the appeal be decided on merits expeditiously and not later than 31 December 2025, after affording a proper opportunity of hearing.

GST Refund Rejection and Recovery Orders Challenged: Patna HC Directs to avail Statutory Appeal Remedy

M/S. GREENTECH AUTO LLP vs TheState of Bihar CITATION : 2025 TAXSCAN (HC) 2155

The Patna High Court dealt with a writ petition filed by M/s Greentech Auto LLP, challenging the rejection of refund claims and subsequent recovery proceedings initiated under the Goods and Services Tax Act, 2017, specifically in relation to refund orders passed under Section 73(9) of the BGST Act and appeals governed under Sections 107 and 112. The dealership sought quashing of the orders reversing sanctioned refunds of accumulated Input Tax Credit (ITC) under the inverted duty structure for the FYs 2022-23 and 2023-24, alleging procedural illegality and violation of natural justice principles.

The Division Bench comprising Justice Rajeev Ranjan Prasad and Justice Sourendra Pandey held that the petitioner could not bypass the statutory appellate remedy available under the GST framework by invoking writ jurisdiction under Article 226 of the Constitution. While disposing of the writ petition, the Court directed the petitioner to pursue the appropriate statutory remedies a second appeal under Section 112 against the appellate order dated 21.05.2025 and an appeal under Section 107 challenging the recovery orders dated 03.08.2024 and 05.09.2024 within 30 days, permitting the authority to consider a stay of recovery upon deposit of 10% of the disputed tax.

Rs. 2.58 Cr Gold Smuggling Case: Madras HC Grants Bail to Accused Arrested under Customs Act

Sheik Mohideen vs The SeniorIntelligence Officer CITATION : 2025 TAXSCAN (HC) 2156

The Madurai Bench of the Madras High Court examined the plea for release of an accused arrested under Section 135 of the Customs Act, 1962, relating to the alleged smuggling of gold valued at approximately ₹2.58 crore. The petitioner, Sheik Mohideen, was taken into custody by the Directorate of Revenue Intelligence (DRI) for allegedly smuggling 2299.920 grams of gold from Singapore to Madurai via Colombo and sought regular bail on the ground that he had been in judicial custody since 23.09.2025 and was willing to comply with all conditions imposed by the Court.

The single judge bench of Justice S. Srimathy granted bail after considering the period of incarceration and the petitioner’s assurance to cooperate with investigation. The Court directed release on execution of a ₹10,000 bond with two sureties, surrender of passport, daily reporting before the DRI at 10:30 a.m. for four weeks, and thereafter as required, along with restrictions on leaving India without prior permission. The Court further cautioned that breach of any condition would entitle the trial court to take necessary action as per law, in line with the principles laid down in P.K. Shaji v. State of Kerala.

Levy of Ocean Freight: Madras HC rules S. 68(2) Notifications Lacks Framework to Shift Service Tax Liability, quashes SCNs

M/s.TVS Srichakra Limited vsUnion of India CITATION : 2025 TAXSCAN (HC) 2157

The High Court of Madras dealt with the legality of service tax levied on ocean freight under Section 68(2) of the Finance Act, 1994, specifically addressing the validity of Notifications Nos. 14/2017-ST, 15/2017-ST, and 16/2017-ST dated 13.04.2017 issued by the Ministry of Finance. The petitioner, TVS Srichakra Limited, challenged the levy on the ground that the notifications lacked a lawful mechanism to shift the tax burden onto importers who were not recipients of the taxable service of ocean freight, and also raised constitutional objections under Articles 14, 19(1)(g), 245, and 269A of the Constitution of India.

The Division Bench comprising Justice Dr. Anita Sumanth and Justice C. Kumarappan allowed the writ petitions, holding that the impugned notifications were unsustainable since no statutory framework existed to fasten service tax liability on the petitioner for transport of goods by vessel from outside India to Indian customs stations. The Court quashed both the notifications and the related show-cause notices issued for the period April-June 2017. The petitions were allowed without costs, with connected miscellaneous petitions closed.

Madras HC Directs GST Authorities to Reconsider Blocked ITC Claim and Pass Orders Within Four Weeks

V V Steels vs The AssistantCommissioner Of Gst CITATION : 2025 TAXSCAN (HC) 2158

The High Court of Madras examined the legality of blocking Input Tax Credit (ITC) under Rule 86A of the Central Goods and Services Tax Rules, 2017, arising from transactions between the petitioner-assessee, V V Steels, and PSN Traders, whose GST registration had been cancelled for being non-existent at its declared place of business. The petitioner challenged the continued blocking of ITC imposed on 12.12.2024, contending that all supporting documents such as invoices, e-way bills, bank details, and proof of payment had been duly furnished, and that under Rule 86A(2) and CBIC guidelines dated 02.11.2021, credit should be restored if later found valid, with restrictions ceasing automatically after one year.

The Single Bench of Justice C. Saravanan directed the GST authorities to reconsider the petitioner’s ITC claim, observing that the first respondent had already acknowledged compliance and supporting documentation through communication dated 28.05.2025. The Court instructed the authority to obtain necessary inputs from the second respondent and issue a reasoned order within four weeks, after providing the petitioner an opportunity of hearing. The writ petition was accordingly disposed of without costs, with the connected miscellaneous petition closed.

Madras HC quashes Customs Order for Violating 90-Day Limitation Under CBLR

M/s.ACS Shipping & Logisticsvs The Commissioner of Customs CITATION : 2025 TAXSCAN (HC) 2159

The Madras High Court addressed the issue of delayed initiation of disciplinary action under the Customs Brokers Licensing Regulations, 2018 (CBLR), specifically Regulation 17(1), which mandates that proceedings for license revocation must be commenced within 90 days from the date of receipt of an “offence report.” The case involved M/s ACS Shipping & Logistics, whose customs broker license had been revoked by the Commissioner of Customs, Tuticorin, along with an order forfeiting the security deposit and imposing a penalty of ₹50,000, due to alleged lapses related to fraudulent IGST refund claims by an exporter, M/s J.Tex India.

The Single Bench of Justice G.R. Swaminathan, who held that the prohibitory order constituted a valid “offence report” and that the respondent bore the burden of proving the exact date of its receipt. As no proof was furnished to show a later receipt date, the Court concluded that the show cause notice issued on 14.09.2021 and the final order dated 25.02.2022 were clearly beyond the 90-day limitation. Consequently, the Court quashed the impugned order, set aside the revocation of the customs broker license, and allowed the writ petition without costs.

Crypto Currency is 'Property' Capable of Trust, Madras HC Orders ₹9.56 Lakh Security

Rhutikumari vs Zanmai Labs Pvt.Ltd., rep CITATION : 2025 TAXSCAN (HC) 2160

The Madras High Court dealt with the legal issue of whether cryptocurrency qualifies as a form of property capable of being held in trust, and whether interim protection could be granted to safeguard a user’s digital assets under Section 9 of the Arbitration and Conciliation Act, 1996. The dispute arose after the applicant’s XRP holdings were frozen following a cyber attack on the WazirX platform, raising concerns regarding ownership rights and protection of crypto assets in India.

The Single Bench of Justice N. Anand Venkatesh held that cryptocurrency is a species of intangible property capable of possession, enjoyment, and being held in trust, and therefore warrants judicial protection. Allowing the petition, the Court directed Zanmai Labs Pvt. Ltd. to either furnish a bank guarantee or deposit ₹9,56,000 (representing the applicant’s frozen XRP value) in an escrow account to ensure preservation of the subject matter until arbitration proceedings are concluded.

Reassessment Initiated on New Grounds Not in Notice u/s 148A(b) for AY 2018-19: Delhi HC Quashes Order against E&Y Emeia Ltd

ERNST AND YOUNG EMEIA SERVICESLIMITED vs ASSISTANT COMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 2162

The Delhi High Court examined the legality of reassessment proceedings initiated under Section 148 of the Income Tax Act, 1961, specifically addressing whether the Revenue could rely on new grounds that were not stated in the original notice issued under Section 148A(b). The petitioner, Ernst & Young EMEIA Services Limited, had filed its return for AY 2018-19 claiming exemption under the India-UK DTAA on the basis that it had no Permanent Establishment (PE) in India, and its income did not qualify as royalty or fees for technical services. The reassessment was triggered on the basis of high-risk case classification and remittance disclosures, despite the assessee having fully disclosed its income.

The Division Bench comprising Justice Vibhu Bakhru and Justice Tejas Karia held that the reassessment decision was unlawful since the order under Section 148A(d) relied on a new allegation regarding PE, which was never mentioned in the notice under Section 148A(b). Reiterating the principle that reassessment cannot be founded on grounds outside the initial notice, the Court set aside the notice under Section 148A(b), the order under Section 148A(d), and the consequent notice under Section 148. However, liberty was granted to the Revenue to initiate fresh proceedings, if permissible under law.

GST, Interest, and Penalty in Final Order cannot Exceed that in Notice: Chhattisgarh HC Sets Aside ₹5 Crore Order

Golden Cargo Movers vs State OfChhattisgarh CITATION : 2025 TAXSCAN (HC) 2163

The Chhattisgarh High Court examined the legality of a final demand issued under Section 73 of the CGST Act, 2017, with emphasis on compliance with Section 75(7) of the Act, which restricts the tax, interest and penalty in the final order to the amount specified in the original show-cause notice. The petitioner, Golden Cargo Movers, was initially issued a show-cause notice proposing a demand of ₹1.32 crore for FY 2018-19. However, the tax authorities subsequently issued a final assessment order raising the demand to ₹5,00,11,112, far exceeding what was proposed in the notice, and initiated coercive recovery actions including bank and property attachment.

The Bench of Justice Naresh Kumar Chandravanshi, ruled that the escalation of demand in the final order was contrary to Section 75(7) since the department introduced new grounds and enhanced liability without issuing a fresh notice or affording an opportunity of representation. Holding that the revenue cannot travel beyond what is stated in the show-cause notice, the Court set aside the demand order and related recovery actions, thereby upholding principles of natural justice and statutory compliance.

GST Assessment Deemed withdrawn Once Returns Filed: AP HC Quashes Orders u/s 62, Maintains Interest on Delay

PUSHPA DECORS vs THE ASSISTANTCOMMISSIONER CITATION : 2025 TAXSCAN (HC) 2164

The Andhra Pradesh High Court addressed the legal effect of filing pending GST returns after a best judgment assessment passed under Section 62(1) of the CGST Act, 2017, specifically interpreting Section 62(2), which provides that upon filing returns within the stipulated period, such assessments are deemed withdrawn. The petitioner, Pushpa Decors, was subjected to ex parte best judgment assessments for the months of March, April, and May 2023 due to non-filing of returns, but later filed GSTR-3B returns with applicable dues, asserting that the assessment orders could no longer be enforced.

The Division Bench of Justice R. Raghunandan Rao and Justice T.C.D. Sekhar held that once compliance under Section 62(2) is fulfilled, the best judgment assessment automatically stands withdrawn, irrespective of technical difficulties in the GSTN portal. Setting aside the impugned orders dated 12 July 2023 and treating them as deemed withdrawn, the Court, however, clarified that the liability to pay statutory interest for delay in filing returns and tax payment continues in accordance with law.

Appeal Does Not Automatically Stay Tax Recovery: Madras HC Affirms CBDT’s 20% Deposit Requirement Before Granting Recovery Stay in Income Tax Proceedings

M/s. Rasheed Ali and Sons vs TheIncome Tax Officer CITATION : 2025 TAXSCAN (HC) 2165

The Madurai Bench of the Madras High Court dealt with the legal issue of whether the mere filing of an appeal against an assessment order would automatically stay recovery proceedings under the Income Tax Act, 1961. The case concerned tax demands raised under Section 143(1)(a) and Section 147 for Assessment Years 2014-15 and 2019-20, along with a penalty imposed under Section 271AAC(1). The Court examined the applicability of CBDT Instruction No. 1914 dated 21.03.1996, and the Office Memorandum dated 31.07.2017, which mandated a 20% pre-deposit of the disputed tax demand to consider granting a stay on recovery.

The Bench of Justice Vivek Kumar Singh, held that the pendency of an appeal before the Commissioner of Income Tax (Appeals) does not operate as an automatic stay on recovery proceedings. The Court upheld the actions of the Assessing Officer in attaching the petitioner’s bank accounts and affirmed that, without establishing sufficient financial hardship or compliance with the mandatory 20% pre-deposit requirement, the petitioner cannot seek protection from recovery. Consequently, the writ petition was dismissed, affirming the Department’s right to proceed with coercive recovery measures.

Tax Officer's Claim of 'No Documents Submitted' was Factually Incorrect: Madras HC sets aside GST Assessment Order

Tvl SAKTHI SAGO INDUSTRIES vsThe State Tax Officer CITATION : 2025 TAXSCAN (HC) 2166

The Madras High Court addressed the legal issue concerning the validity of a Goods and Services Tax (GST) assessment order passed under the CGST Act for the tax period April 2020 to March 2021. The dispute centered on whether the assessee, Sakthi Sago Industries, had submitted supporting documents along with its reply to the Show Cause Notice issued in Form GST DRC-01 dated 23.11.2024. The tax officer had confirmed the proposed demand, invoking non-submission of invoices, e-way bills, and reconciliation statements, which the assessee challenged as contrary to Rule 142(4) of the GST Rules, arguing that documents were indeed filed on 26.12.2024.

The bench of Justice C. Saravanan examined the electronic records, including the GST DRC-06 acknowledgment, and found that the factual finding of “no documents submitted” was erroneous. Holding that the proceedings violated principles of natural justice, the Court set aside the assessment order dated 12.02.2025 and remanded the matter for fresh consideration, permitting the assessee to submit additional documents. The respondent authority was directed to pass a de novo order after granting an opportunity of hearing within three months.

3621-Day Delay in Impleadment Examined: Delhi HC Condones Delay and Allows Son to Continue Late Father’s FERA Appeal

ABDUL HAMEED REHMANI vs SPECIALDIRECTOR ENFORCEMENT DIRECTORATE CITATION : 2025 TAXSCAN (HC) 2167

The Delhi High Court dealt with the legal issue of whether a legal heir could be permitted to continue proceedings under the Foreign Exchange Regulation Act, 1973 (FERA) after the death of the original appellant, and whether a delay of 3621 days in filing an impleadment application could be condoned. The case arose from proceedings initiated based on alleged contraventions committed during 1993-1997, which remained actionable under Section 49(3) of the Foreign Exchange Management Act, 1999 (FEMA). The Directorate of Enforcement opposed the condonation request by arguing that there was no statutory provision permitting such a delay and that Section 35 of FEMA restricted the power of the Court to condone delays in appellate matters.

The Bench rejected the objections raised by the Directorate of Enforcement and held that the right of legal heirs to step into pending proceedings was expressly preserved under the statutory scheme. The Court observed that the prolonged dormancy of the appeal listed last in 2009 and taken up only after over a decade constituted sufficient cause for the delay, particularly as the legal heir became aware of the case only when it resurfaced in 2022-2023. Relying on the Supreme Court’s principles on fairness in substitution delays, the Court condoned the delay of 3621 days, allowed the application for impleadment, and directed that the appeal be listed along with related applications on 10.11.2025.

Reassessment Cannot Survive Once Recorded Reasons Fail: Delhi HC

VALMIK THAPAR vs PRINCIPALCOMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 2168

The Delhi High Court addressed the legal issue relating to the validity of reassessment proceedings under Section 147 of the Income Tax Act, 1961, particularly when the reasons recorded for reopening a completed assessment fail on merits. The case involved reassessment initiated by issuing a notice under Section 148, alleging excess deduction claims under Section 54 and Section 54EC in respect of long-term capital gains declared by the assessee for Assessment Year 2010-11. The Court examined whether the Assessing Officer could retain jurisdiction to make additions under reassessment despite the original grounds for reopening being unsustainable.

The Division Bench comprising Justice Vibhu Bakhru and Justice Tejas Karia held that once the recorded reasons for initiating reassessment proceedings do not survive, the entire reassessment proceeding becomes void in law. Relying on the ruling in Ranbaxy Laboratories Ltd. v. CIT (2011), the Court concluded that “any other income” under Section 147 can be assessed only if the primary additions based on recorded reasons stand established. Since the Tribunal had rejected all the grounds on which reassessment was initiated, and the Revenue had not challenged those findings, the High Court allowed the appeal and quashed the reassessment order in its entirety.

Sale of Ancestral Property and Reinvestment in More than One Residential Units: Delhi HC says Multiple Investments Eligible for Exemption u/s 54

VALMIK THAPAR vs PRINCIPALCOMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 2168

The Delhi High Court examined the scope of exemption under Section 54 of the Income Tax Act, 1961, particularly whether it is restricted to investment in a single residential unit. The legal issue arose in the context of long-term capital gains reinvested across more than one property and eligible capital gains bonds, along with the corresponding deduction under Section 54EC. The reassessment centered on the claim of exemption for investments in a residential flat in Mumbai, reconstruction of the retained portion of the Delhi property, and investments in REC and NHAI bonds.

The Division Bench comprising Justice Vibhu Bakhru and Justice Tejas Karia upheld that exemption under Section 54 is not confined to a single residential property and can apply to reinvestments in multiple residential units, provided statutory conditions are fulfilled. Noting that the Revenue had not challenged the Tribunal’s findings in favour of the assessee, the Court affirmed the allowability of the deductions under Sections 54 and 54EC and allowed the appeal.

UBS Mark Omission Insufficient to Confiscate Gold: Orissa HC Confirms Lawful Ownership of Gold under Customs Act

Commissioner of Customs(Preventive) vs Satish Kumar Subudhi CITATION : 2025 TAXSCAN (HC) 2169

The Orissa High Court addressed the legality of confiscation of gold biscuits under Sections 111 and 112 of the Customs Act, 1962, examining whether omission of a brand description on invoices could justify presuming smuggling. The core issue involved satisfaction of the statutory burden of proof under Section 123 of the Customs Act, after 20 gold biscuits of foreign origin were seized on the ground that the invoices issued by Visakha Bullion Corporation did not mention the “UBS” brand.

The Division Bench of Chief Justice Harish Tandon and Justice Murahari Sri Raman upheld the Tribunal’s finding that the respondent had adequately proved lawful possession through verified commercial documents corroborated by MMTC Ltd. The Court held that minor invoice discrepancies cannot override established commercial trail and do not constitute a valid basis for confiscation. Finding no substantial question of law under Section 130 of the Customs Act, the High Court dismissed the Revenue’s appeal and affirmed the quashing of confiscation and penalties.

Parallel Reassessment Proceedings Invalid: Delhi High Court quashes Second S.148 Income Tax Notice as Void

PRATISHTHA GARG vs ASSISTANTCOMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 2170

The Delhi High Court adjudicated upon the validity of reassessment proceedings under Section 148 of the Income Tax Act, 1961, specifically examining whether a second notice under Section 148, issued after prior reassessment proceedings had abated under Section 153C, could lawfully survive. The key legal issues involved the prohibition against parallel reassessment proceedings for the same assessment year and the statutory bar of limitation governing the issuance of notices under Section 148.

The Division Bench of Justice Vibhu Bakhru and Justice Tejas Karia held that the second reassessment notice was ex facie illegal, as it was both time-barred and constituted an attempt to revive abated proceedings contrary to law. Relying on its earlier decision in Ram Balram Buildhome Pvt. Ltd. v. ITO, the Court ruled that a notice issued beyond the statutory period of limitation is void ab initio, thereby setting aside all proceedings arising from the second Section 148 notice and allowing the writ petition.

VAT Tribunal must Consider all Grounds Raised By Dealer: Gujarat HC Remands Assessment Matter

VITHLANI EXPORTS vs STATE OFGUJARATCITATION : 2025 TAXSCAN (HC) 2171

The Gujarat High Court examined the legality of an order passed by the Gujarat Value Added Tax Tribunal, holding that the Tribunal’s failure to consider crucial issues raised by the assessee amounted to a violation of the principles of natural justice. The matter involved adjudication under the Gujarat Value Added Tax Act, including the question of non-service of the mandatory statutory notice in Form 6B and the levy of penalty under Section 34(12) of the GVAT Act read with Section 9(2) of the Central Sales Tax Act, which the Tribunal allegedly failed to address.

The Division Bench of Justice Bhargav D. Karia and Justice Pranav Trivedi set aside the Tribunal’s order dated 29 January 2025 and restored the second appeal for fresh consideration, observing that every contention raised by the dealer must be adjudicated to ensure fairness and completeness of the decision-making process. The Court therefore remanded the matter to the Tribunal to decide the appeal afresh after considering all grounds raised, directing that the exercise be completed within twelve weeks, and allowed the writ petition accordingly.

GST on Corporate Guarantee: Madras HC Quashes Order for Non-Consideration of CBIC Circulars, Remands to AO

M/s.Shri Amman Steel and AlliedIndustries Private Limited vs The State Tax Officer – V CITATION : 2025 TAXSCAN (HC) 2172

The Madurai Bench of the Madras High Court examined the legality of a GST levy imposed on corporate guarantees furnished between related parties under the Central Goods and Services Tax Act, 2017 and Rule 28(2) of the CGST Rules, 2017. The petitioner, M/s. Shri Amman Steel and Allied Industries Pvt. Ltd., argued that no consideration was received for issuing the corporate guarantee and that the recipient entity was eligible for full Input Tax Credit (ITC). It was specifically contended that the valuation adopted by the State Tax Officer was contrary to CBIC Circular No. 199/11/2023-GST dated 17.07.2023 and Circular No. 210/4/2024-GST dated 26.06.2024, which clarify that where full ITC is available and transaction value is declared as nil or zero, such declared value shall be deemed to be the open market value for GST purposes.

The Single Bench of Justice G.R. Swaminathan found that the Assessing Officer failed to consider or refer to the relevant CBIC circulars cited by the assessee, resulting in a procedural infirmity and violation of settled principles of administrative law. The Court therefore set aside the assessment order and remanded the matter to the Assessing Officer for reconsideration after granting due opportunity of hearing, clarifying that it had not adjudicated the merits of the levy itself. Accordingly, the writ petition was allowed.

Renting or Leasing of Residential Dwelling for Use as Residence is Exempt from GST: Delhi HC Quashes Stamp Duty Demand

MR. GURDEV RAJ KUMAR vsCOLLECTOR OF STAMPS CITATION : 2025 TAXSCAN (HC) 2173

The High Court of Delhi examined whether Goods and Services Tax (GST) should be included while assessing stamp duty on a residential lease under the Indian Stamp Act, 1899. The dispute arose when the Collector of Stamps, GNCTD, raised a demand treating GST as part of the lease rent for property in New Delhi, leased for residential purposes. The assessee, Gurdev Raj Kumar, asserted that such residential leasing was exempt under Entry No. 12 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, and also relied upon circulars including Circular No. 44/18/2018-CGST and Inspector General of Registration Circular dated 24.05.2019, which clarified that GST where exempt cannot be computed into the rent for stamp duty purposes.

The Single Bench of Justice Sachin Datta held that renting or leasing of a residential dwelling for residential use is not liable to GST, and therefore, the Collector’s inclusion of GST for determining deficit stamp duty was legally untenable. The Court accordingly quashed the order dated 19.10.2020 and directed refund of ₹2,58,700 (deficit stamp duty and penalty) within six weeks. The petition was disposed of in favour of the assessee.

Final Income Tax Order already Passed in 2009: Calcutta HC Dismisses writ against S. 148 Notice as Infructuous after 15 years

M/S Rupam Jewellery vs The Unionof India CITATION : 2025 TAXSCAN (HC) 2174

The Calcutta High Court examined a challenge to a reassessment notice issued under Section 148 of the Income Tax Act, 1961, in relation to alleged escapement of income for A.Y. 2005-06. The petitioner, M/s Rupam Jewellery, contended that the reopening was arbitrary and that its income had already been assessed for a later year, making the notice dated 10 July 2009 unsustainable. However, the Revenue demonstrated that the Section 148 notice was originally issued on 31 March 2008, followed by notices under Sections 143(2) and 142(1), culminating in a final assessment under Section 143(3) determining taxable income at ₹38,46,690.

The Single Bench of Justice Ajay Kumar Gupta held that since the final assessment order had been passed way back on 31 December 2009, and the same had never been challenged through the statutory appellate framework, the writ petition had become infructuous. The Court noted that once reassessment proceedings have attained finality, a challenge to the original notice cannot be entertained in writ jurisdiction particularly where disputed factual issues and availability of alternative remedies exist. The petition was accordingly dismissed.

Alleged ₹31 Crore GST Evasion: Jharkhand HC Grants Bail to Key Accused Considering Period of Detention

Avnish Jaiswal vs Union of India CITATION : 2025 TAXSCAN (HC) 2175

The Jharkhand High Court, while considering a bail plea in a ₹31 crore GST evasion case, granted relief to accused applicant Avnish Jaiswal on the ground of the period of detention already undergone. Jaiswal was arrested in connection with offences under Sections 132(1)(b), 132(1)(c), 132(1)(f), 132(1)(l) and 132(5) of the CGST Act, 2017, along with offences under Sections 61, 316, and 322 of the Bharatiya Nyaya Sanhita, 2023, alleging his role as the mastermind behind a multi-year tax evasion scheme causing a loss of ₹31 crore to the Revenue.

The Bench of Justice Ambuj Nath observed that in light of the period of incarceration and the stage of the proceedings, continued detention was unnecessary. Accordingly, the Court ordered that the applicant be released on bail on furnishing a bond of ₹20,000 with two sureties of like amount, to the satisfaction of the Special Judge (Economic Offences), Jamshedpur.

IGST on Ocean Freight Invalid: Madras HC Applies Mohit Minerals Ratio, Quashes Entries 9 & 10 of 2017 IGST Notifications

M/s.Greenstar FertilizersLimited vs Union of India CITATION : 2025 TAXSCAN (HC) 2176

The Madurai Bench of the Madras High Court struck down Entry 9 of Notification No. 8/2017-Integrated Tax (Rate) and Entry 10 of Notification No. 10/2017-Integrated Tax (Rate), both dated 28 June 2017, which had imposed Integrated GST (IGST) on ocean freight under reverse charge mechanism in cases of CIF imports. The Court held that the levy was contrary to the statutory framework under the IGST Act, 2017 and violative of the principle of taxing composite supplies under Section 8 of the CGST Act. The writ petition was filed by Greenstar Fertilizers Ltd, which challenged the legality of such levy on the freight component of imported goods.

The Division Bench comprising Dr. Justice Anita Sumanth and Justice C. Kumarappan relied on the Supreme Court judgment in Union of India v. Mohit Minerals Pvt. Ltd., (2022) , which had already declared similar levies unconstitutional on the ground of double taxation, since IGST is already paid on the CIF value that subsumes freight and insurance. Accordingly, following the binding precedent, the Court declared the impugned notification entries as ultra vires and invalid, allowed the writ petitions, and did not impose costs.

No ITC of Cess on Electricity Supplied Outside Factory: Chhattisgarh HC Says External or Ancillary Use Not Business-Linked

Bharat Aluminum Company Limitedvs State of Chhattisgarh CITATION : 2025 TAXSCAN (HC) 2177

The Chhattisgarh High Court addressed the legal issue of entitlement to Input Tax Credit (ITC) of Compensation Cess under the Goods and Services Tax (GST) regime, specifically in relation to electricity supplied outside factory premises. The Court examined whether such electricity consumption could be considered as being “in the course or furtherance of business” under Sections 2(17) and 16(1) of the Central Goods and Services Tax (CGST) Act, 2017. The dispute arose from the claim of Bharat Aluminum Company Limited (BALCO) seeking a refund of ITC on Compensation Cess paid on imported coal used for power generation, where part of the generated electricity was supplied to its employee township, triggering ITC reversal under Rule 42 of the CGST Rules.

The Division Bench comprising Chief Justice Ramesh Sinha and Justice Ravindra Kumar Agrawal upheld the denial of ITC on the electricity supplied externally and affirmed the findings of the Single Judge. The Bench held that ITC is admissible only on electricity used for captive consumption within the factory, not for welfare-based external consumption. Declaring that ITC is a concession to be availed strictly within statutory limits, the Court rejected BALCO’s argument on retrospective applicability of the 2022 amendment to Rule 43 and dismissed the appeals, confirming that ITC must be reversed on electricity used for non-business purposes.

Misuse of Third Party’s GST ID and Password: Gauhati HC Denies Bail in GST ITC Fraud

Smti Renu Sunar vs The State ofAP CITATION : 2025 TAXSCAN (HC) 2178

The Gauhati High Court adjudicated a matter involving fraudulent misuse of Goods and Services Tax (GST) credentials, examining whether bail could be granted to an accused charged with availing wrongful Input Tax Credit (ITC) amounting to ₹1.09 crore. The case involved allegations of unauthorized access to another taxpayer’s GST ID and password, leading to issuance of fake invoices and illicit ITC flow across multiple entities. The Court found that the accusations disclosed a cognizable economic offence under Sections 316(4)/3(5) of the Bharatiya Nyaya Sanhita (BNS), 2023, arising from the manipulation of GST login details for large-scale tax evasion.

The Single Bench of Justice Kardak Ete declined to grant bail to the accused, Smti Renu Sunar, wife of Shri Harka Bahadur Sonar, observing that there were prima facie materials indicating her direct involvement in the fraudulent transactions in connivance with others. The Bench held that statutory procedures relating to arrest and remand had been duly complied with and emphasized the need for custodial interrogation due to the multi-layered nature of the GST fraud spanning different states. Concluding that the investigation was at a crucial stage and the accused’s release could hamper further inquiry into the broader network of beneficiaries, the Court rejected the bail application.

Delhi HC directs Commissioner of Customs to Release Seized Gold

ROHIT ARORA vs COMMISSIONER OFCUSTOMS CITATION : 2025 TAXSCAN (HC) 2179

The Delhi High Court dealt with the issue of non-implementation of an Order-in-Appeal concerning the release of seized gold jewellery under the Customs Act, 1962. The case arose from the seizure of 52 grams of gold belonging to petitioner Rohit Arora at IGI Airport, New Delhi, which was initially ordered to be absolutely confiscated with a penalty through an Order-in-Original dated 19 December 2024. However, the Commissioner of Customs (Appeals), through an Order-in-Appeal dated 15 July 2025, set aside the confiscation and directed the release of the jewellery upon payment of revised redemption fine and penalty of ₹35,000 each. Despite the statutory appellate relief, Customs authorities continued to withhold the goods for over three months without justification, prompting the petitioner to approach the High Court under writ jurisdiction seeking enforcement.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain directed the Commissioner of Customs to implement the Order-in-Appeal within two weeks, noting that the absence of any stay or further challenge removed any lawful impediment to compliance. The Court held that the prolonged delay by the authorities was unwarranted and further ordered a 50% reduction in warehouse charges, with the calculation based on rates applicable on the date of detention. To ensure expeditious execution and accountability, the Court also appointed a Nodal Officer to monitor and facilitate the release of the seized gold jewellery.

Kerala HC Affirms S 263 Order citing Assessing Officer's Failure to Adjudicate on 'Slump Sale'

STERLING FARM RESEARCH ANDSERVICES PVT vs THE COMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 2180

The Kerala High Court recently addressed a significant legal issue concerning the scope of revisional jurisdiction under Section 263 of the Income Tax Act, 1961. The dispute stemmed from the sale of the assessee-company’s 'Test House Division,' which Sterling Farm Research and Services Pvt. Ltd. had been treated as a ‘slump sale’ under Section 50B for the Assessment Year 2016-17. Although the assessment was completed under Section 143(3), the Assessing Officer failed to specifically examine whether the transaction qualified as a slump sale or whether Section 50, relating to short-term capital gains, applied an omission that prompted revision proceedings by the Commissioner.

The Division Bench of Justice A. Muhamed Mustaque and Justice Harisankar V. Menon upheld the Commissioner’s invocation of Section 263, finding support in the principle laid down by the Supreme Court in Malabar Industrial Co. Ltd. v. CIT that revision may be exercised where an assessment order is both erroneous and prejudicial to the interests of the Revenue. The Court held that the Assessing Officer had merely accepted the assessee’s claim without conducting a proper enquiry into the taxability of the transaction, thereby justifying the Commissioner’s intervention. Dismissing the assessee’s appeal, the Court affirmed the Tribunal’s view and clarified that the observations in the revisional order would not restrict the assessee’s submissions during the fresh assessment.

Punjab & Haryana HC Dismisses 23 Years Old Income Tax Appeals Due to Inactive Prosecution & Low Tax Effect

THE COMMISSIONER OF INCOME TAXvs M/S SURJIT & SURINDERA INVESTMENTS PVT. LTD CITATION : 2025 TAXSCAN (HC) 2181

The Punjab and Haryana High Court recently dealt with the legality of continuing long-pending Income Tax appeals where the tax effect was below the monetary limit prescribed by the Central Board of Direct Taxes (CBDT). The case concerned assessment years 1983-84 to 1985-86, in which the Revenue had challenged the allowance of investment allowance under Section 32A of the Income Tax Act, 1961. Referring to CBDT Circular No. 5/2024 dated 15 March 2024, fixing ₹2 crore as the minimum tax effect for filing appeals before the High Court, the Court examined whether the matter warranted further adjudication after over 23 years of pendency.

The Division Bench comprising Justice Jagmohan Bansal and Justice Harpreet Kaur Jeewan dismissed all four appeals, noting that the total tax effect was significantly below the ₹2-crore threshold and the prosecution initiated against the assessee was inactive, with proceedings before the Chief Judicial Magistrate indefinitely adjourned. Observing that the department had also failed to complete service of notice despite multiple opportunities, the Court held that continuing the litigation would serve no useful purpose. However, liberty was granted to the Revenue to move an appropriate application within six months should any valid issue survive.

Transfer of Leasehold Rights Not Taxable under GST: Gujarat HC Quashes SCN Issued to KP Green Engineering Limited

M/S KP GREEN ENGINEERING LIMITED& ANR. vs UNION OF INDIA & ORS. CITATION : 2025 TAXSCAN (HC) 2182

The Gujarat High Court examined whether the assignment of leasehold rights over an industrial plot allotted by the Gujarat Industrial Development Corporation (GIDC) constituted a taxable “supply” under Section 7(1)(a) read with Section 9 of the Goods and Services Tax Act, 2017. The dispute arose when M/s KP Green Engineering Limited transferred its leasehold rights over an industrial plot to another entity and received consideration of ₹2.20 crores, following which the Directorate General of GST Intelligence initiated proceedings and issued a show cause notice under Section 74 of the SGST Act demanding GST of ₹39.60 lakhs. The petitioner contended that the transaction amounted to transfer of immovable property, which is excluded from GST under Schedule III of the Act.

The Division Bench of Justice Bhargav D. Karia and Justice Pranav Trivedi held that once leasehold rights are assigned, it results in an absolute transfer of rights and interests in immovable property, placing such transactions beyond the scope of GST levy. The Court ruled that such transfer cannot be treated as a supply of services under Heading 9972 nor brought within the ambit of Clause 5(b) of Schedule II, and therefore quashed the show cause notice issued under Section 74. The writ petition was accordingly allowed, giving relief to the petitioner.

Anticipatory Bail Maintainable for CGST Offences: Delhi HC Allows Petitioner to Seek Relief u/s 438 of CrPC

SUMIT JAIN & DIRECTORATEGENERAL OF GST INTELLIGENCE CITATION : 2025 TAXSCAN (HC) 2183

The Delhi High Court examined the issue of whether persons summoned in connection with alleged offences under the Central Goods and Services Tax Act, 2017 may seek anticipatory bail under Section 438 of the Code of Criminal Procedure, 1973. The petitioners, Sumit Jain and another, approached the Court alleging coercive action by the Directorate General of GST Intelligence in relation to summons issued during what they described as a “fishing and roving” enquiry, even after a show cause notice had been issued under the CGST Act.

The Single Bench of Justice Sanjeev Narula, relying on the legal position clarified in Radhika Agarwal v. Union of India (2025), held that individuals summoned in matters involving offences under the CGST Act are indeed entitled to invoke the protection of Section 438 CrPC. The Court disposed of the writ petition directing that interim protection from arrest shall continue for two weeks, thereby enabling the petitioners to seek anticipatory bail before the competent court, which shall consider the same independently on merits.

Writ Petition Not Maintainable Against GST Demand When Appeal Remedy Exists: Delhi HC Dismisses Tata Play’s Plea

TATA PLAY LTD vs SALES TAXOFFICER CLASS II/ AVATO CITATION : 2025 TAXSCAN (HC) 2184

The Delhi High Court examined a challenge relating to a GST demand arising from alleged wrongful availment of Input Tax Credit under the Central Goods and Services Tax Act, 2017, and held that a writ petition under Article 226 of the Constitution is not maintainable when a statutory appellate remedy under Section 107 of the CGST Act is available. The petitioner, Tata Play Ltd., had assailed the Show Cause Notice issued under Section 73(2) and the consequent demand order passed under Section 73(10), alleging limitation and violation of the right to personal hearing under Section 75(4) of the Act.

The Division Bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta upheld the validity of the impugned proceedings, ruling that the Show Cause Notice issued on 30.11.2024 was within limitation and that adequate opportunities of hearing had been provided. Finding no exceptional circumstances such as lack of jurisdiction or breach of natural justice, the Court dismissed the writ petition, while granting liberty to Tata Play Ltd. to file a statutory appeal before the competent authority in accordance with law.

Kerala HC Stays Collection of GST on Health Insurance Premiums for Union Bank Retirees

VINOD MUKUNDAN vs UNION OFINDIAREPRESENTED CITATION : 2025 TAXSCAN (HC) 2185

The Kerala High Court recently dealt with the legal issue concerning the applicability of 18% Goods and Services Tax (GST) on the renewal of health insurance policies of Union Bank of India retirees. The petitioners, including individual retirees and the All India Union Bank Pensioners & Retirees Federation, challenged the levy under the CGST Act and sought interim protection from being compelled to pay GST while the matter remained sub judice. The writ petition was filed against the Union of India, the GST Council, and Union Bank of India, seeking not only a stay on GST collection but also an extension of the renewal deadline.

The Single Bench of Justice Ziyad Rahman A.A. granted interim relief by staying the collection of the 18% GST and permitting the petitioners to renew their policies for the policy year 2025-26 by paying only the base premium. The Court clarified that this relaxation is temporary and expressly made it subject to further orders, thereby maintaining status quo until final adjudication. The matter has been posted for further hearing on October 21, 2025.

Ex-Parte Order Raising ₹19.79 Lakh GST Demand Set Aside: Delhi HC Permits ₹10.22 Lakh Tax Deposit and Fresh Adjudication

CHIRAG GARG vs COMMISSIONERSTATE TAX CITATION : 2025 TAXSCAN (HC) 2186

The Delhi High Court recently examined the legal issue arising under the Central Goods and Services Tax Act, 2017 concerning an ex parte tax demand of ₹19.79 lakh imposed through an adjudication order passed without affording the petitioner an adequate opportunity to respond. The writ petition under Article 226 of the Constitution of India was filed by the taxpayer, Chirag Garg, challenging the recovery proceedings initiated on the basis of a Show Cause Notice that was allegedly not properly accessed due to its placement in the “Additional Notices Tab” on the GST portal.

The Division Bench comprising Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta set aside the ex parte order and directed the reopening of adjudication, subject to the petitioner depositing ₹10,22,963/- by 10th July, 2025, including by utilising available ITC. The Court permitted the petitioner to file a detailed reply to the Show Cause Notice and ordered the Adjudicating Authority to reconsider the matter afresh on merits, while clarifying that the Court’s observations would not prejudice the merits of the case. The petition and pending applications were disposed of in these terms.

Reassessment Beyond Four Years Invalid Without New Tangible Material: Bombay HC Quashes Section 148 Notices to BPCL

Bharat Petroleum Corporation Ltdvs Assistant Commissioner of Income Tax CITATION : 2025 TAXSCAN (HC) 2187

The Bombay High Court examined the legality of reassessment proceedings initiated under Section 147 of the Income Tax Act, 1961 against Bharat Petroleum Corporation Ltd. (BPCL) for AYs 2013–14 and 2014-15. The core legal issue concerned the reopening of assessments beyond four years without any failure on the part of the assessee to disclose material facts, in violation of the first proviso to Section 147. The reassessment was triggered by allegations of wrongful claims of exemption under Section 10(34) and deduction under Section 32AC, despite the issues having already been scrutinised and assessed under Section 143(3).

The Division Bench of Justice B.P. Colabawalla and Justice Firdosh P. Pooniwalla held that the reassessment proceedings, particularly for AY 2014-15, were void, being based merely on an audit objection and lacking any new tangible material. The Bench emphasised that such reopening amounted to a change of opinion and suffered from mechanical approval under Section 151. Accordingly, the Court quashed the impugned notices and orders, concluding that the jurisdictional requirements under the first proviso to Section 147 were not satisfied.

GST Portal Access Restored: Calcutta HC Allows Fresh Appeal Against Section 73 Order, Directs Reconsideration of Pending SCN

Aparajita Mukherjee vs Union ofIndia & Ors CITATION : 2025 TAXSCAN (HC) 2188

The Calcutta High Court has reaffirmed the importance of ensuring effective statutory remedies under the GST regime, permitting Aparajita Mukherjee to file a delayed appeal against a demand order issued under Section 73 of the CGST/WBGST Act, 2017. The petitioner was unable to challenge the order owing to technical issues that blocked her access to the GST portal. The Court had earlier summoned the concerned CGST officer to ensure compliance with its direction to restore her portal access, and upon confirmation that the system was now functional, dispensed with the officer’s further appearance.

The bench of Justice Raja Basu Chowdhury held that denial of portal access should not result in prejudice to a taxpayer, as the digital platform is integral to filing appeals and defending proceedings. The Court directed that if the petitioner files the appeal within four weeks, it must be heard on merits. Regarding a separate show-cause-cum-demand notice dated 29th May 2024, the petitioner was granted two weeks to submit an additional response, to be considered after a personal hearing. The adjudicating authority was also instructed to examine whether invocation of Section 74 was justified. The writ petition was disposed of with the Court emphasising that procedural lapses or technical difficulties cannot curtail taxpayers’ statutory rights.

Delhi HC Upholds GST Intelligence's Power to Provisionally Attach Bank Accounts

GMG TRADELINKPVT.LTD vsDIRECTORATE GENERALOFGST INTELLIGENCE HQ CITATION : 2025 TAXSCAN (HC) 2189

The Delhi High Court, while exercising jurisdiction under Article 226 of the Constitution of India, upheld the validity of the Directorate General of GST Intelligence’s (DGGI) power under Section 83 of the Central Goods and Services Tax Act, 2017 to provisionally attach bank accounts. The writ petition was filed by M/s GMG Tradelink Pvt. Ltd. challenging the provisional attachment of two ICICI Bank accounts, contending that only a “Commissioner” could exercise such authority under the CGST Act, and that the officer issuing the order lacked jurisdiction.

The Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain rejected this contention, relying on Notification No. 14/2017 dated 1 July 2017, which confers the powers of a Principal Commissioner upon the Principal Additional Director General, GST Intelligence. Holding that the officer was duly empowered to order provisional attachment, the Court dismissed the challenge but granted the petitioner liberty to file objections. The DGGI was directed to communicate reasons for the attachment within two weeks, and all statutory remedies were kept open for the petitioner.

Rs.41.91 crores Investor Fraud: Telangana HC grants Anticipatory Bail to Accused considering No Direct Financial Dealings

Sri P. Subba Raju vs The Stateof TelanganaCITATION : 2025 TAXSCAN (HC) 2190

The Telangana High Court granted anticipatory bail in a ₹41.91 crore investor fraud case, holding that custodial interrogation of the petitioner was not warranted in the absence of any direct financial transactions or business partnership with the complainant. The allegations included inducement to invest in a textile business, “Sri Sai Ram Enterprises,” by use of forged GST and TDS receipts and fabricated documents, attracting offences under Sections 316(2), 318(4), 336(3), and 340 read with 61(2) of the Bharatiya Nyaya Sanhita, 2023, and Section 5 of the Telangana Protection of Depositors of Financial Establishment Act, 1999.

The bench of Justice K. Sujana observed that the petitioner neither received funds nor held any managerial role in the business and that the complainant independently verified the enterprise prior to investing. Accordingly, the Court allowed the anticipatory bail application, directing surrender before the EOW Police Station within two weeks, after which the petitioner will be released on a ₹50,000 personal bond with two sureties, subject to weekly appearance obligations and cooperation in the ongoing investigation.

Pending Adjudication Not a Bar to Revised TRAN Filing: Andhra Pradesh HC allows Transitional Credit

M/S. MAHAVIR AUTO DIAGNOSTICSPRIVATE LIMITED vs ADDITIONAL COMMISSIONER OF CENTRAL TAX CITATION : 2025 TAXSCAN (HC) 2191

The Andhra Pradesh High Court has ruled that GST authorities cannot deny the revised filing of transitional credit forms solely on the ground that earlier proceedings on the same credit were pending. The case concerned Mahavir Auto Diagnostics Private Limited, which was entitled to transition to excise duty-paid credit under Section 140 of the Central Goods and Services Tax Act, 2017 upon migration to the GST regime. Despite filing revised TRAN forms within the special extended window granted by the Supreme Court in Union of India v. Filco Trade Centre Pvt. Ltd. (2022), the department rejected the filing by relying on Guideline 4.7 of Circular No. 180/12/2022-GST dated 09.09.2022.

The Division Bench of Justice R. Raghunandan Rao and Justice Sumathi Jagadam held that the circular did not apply in cases where the dispute was only procedural here, the petitioner’s earlier inability to upload TRAN-3 and not related to eligibility of credit itself. Setting aside the Order-in-Original dated 25.09.2023 and Order-in-Appeal dated 30.11.2023, the Court directed that the transitional credit be allowed to flow into the GST regime and quashed any consequential demands arising from its reversal.

Relief to Balaji Landmark LLP: Bombay HC directs CBDT to Condone Delay, Emphasizing 'Genuine Hardship' Over Technicality

Balaji Landmarks LLP Eartwhilevs Central Board Of Direct Taxes CITATION : 2025 TAXSCAN (HC) 2192

The Bombay High Court has set aside a Central Board of Direct Taxes (CBDT) order rejecting a condonation application under Section 119(2)(b) of the Income Tax Act, 1961, filed by Balaji Landmarks LLP. The petitioner had submitted its return for Assessment Year 2018-19 on 30 March 2019, declaring a substantial loss, but the filing was delayed by five months from the statutory due date. The key question before the Court was whether the taxpayer’s inability to file the return on time, owing to reliance on professional advice concerning the complex tax treatment of Transferable Development Rights (TDR), constituted “genuine hardship” under Section 119(2)(b).

The Division Bench comprising Justice B. P. Colabawalla and Justice Amit S. Jamsandekar held that the delay was due to a bona fide cause and not negligence, noting that multiple professional consultations had been sought on the complex issue. The Court ruled that denying condonation would result in genuine hardship, as the petitioner would lose the right to carry forward losses exceeding ₹4.47 crore. Rejecting the Revenue’s concerns about lack of verification, the Bench observed that Section 153(1B) provides sufficient time for assessment post-condonation. Accordingly, the Court allowed the writ petition, condoned the delay, and directed the Assessing Officer to frame the assessment in accordance with law.

Karnataka HC affirms CA Certificate as Valid Proof to Claim 4% SAD Refund

PRINCIPAL COMMISSIONER OFCUSTOMS & M/S FESTO CONTROLS PRIVATE LIMITED CITATION : 2025 TAXSCAN (HC) 2193

The Karnataka High Court recently adjudicated a dispute concerning the applicability of the doctrine of unjust enrichment under Section 28D of the Customs Act, 1962, in matters involving refund of 4% Special Additional Duty (SAD). The issue arose from the Revenue’s contention that the assessee, M/s Festo Controls Private Limited, had failed to establish that the incidence of duty had not been passed on to customers a necessary condition for refund eligibility. The Court examined the statutory presumption under Section 28D along with CBEC Circulars Nos. 6/2008, 16/2008, and 18/2010, which recognise a Chartered Accountant’s certificate as sufficient evidence to rebut this presumption.

The Division Bench comprising Justice S.G. Pandit and Justice K.V. Aravind upheld the ruling of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), confirming that the production of a valid Chartered Accountant’s certificate satisfied the legal requirement under the doctrine of unjust enrichment. Relying on the precedent set in Commissioner of Customs, Bangalore v. Apple India Pvt. Ltd., the Court held that the CESTAT had correctly applied the law and found no substance in the Revenue’s appeal. Consequently, the High Court dismissed the appeal filed by the Principal Commissioner of Customs and affirmed the assessee’s entitlement to the SAD refund.

Delhi HC dismisses Revenue's appeal over Mechanical Search Assessment Approvals made under Income Tax Act

PR COMMISSIONER OF INCOME TAXCENTRAL vs M/S. BELIEVE CONSTRUCTIONS P. LTD CITATION : 2025 TAXSCAN (HC) 2194

The Delhi High Court adjudicated upon the legality of approval granted under Section 153D of the Income Tax Act, 1961, in relation to search-related assessments. The core legal issue concerned whether the approval granted by the Additional Commissioner of Income Tax was valid when it was issued mechanically and without independent application of mind. The case arose from assessments framed pursuant to a search in the matter of M/s Believe Constructions Pvt. Ltd., where the Revenue challenged the Income Tax Appellate Tribunal’s decision holding such approvals invalid.

The Division Bench comprising Justice V. Kameswar Rao and Justice Vinod Kumar upheld the Tribunal’s order and dismissed the Revenue’s appeal. The Court found that a single, generic approval covering 246 assessment orders reflected no conscious satisfaction as mandated under Section 153D and amounted to mere “rubber-stamping,” contrary to legislative intent. The Court reiterated that approval must demonstrate due consideration of the seized material and draft assessment records. With no substantial question of law arising, the High Court affirmed the setting aside of the assessments, ruling in favour of the assessee.

Income Tax Notice issued u/s 148 Invalid Without Signature: Karnataka HC dismisses Revenue's Appeal

PR. COMMISSIONER OF INCOME TAXvs M/S. YESHODA ELECTRICALS CITATION : 2025 TAXSCAN (HC) 2195

The Karnataka High Court examined the legality of a reassessment proceeding initiated under Section 148 of the Income Tax Act, 1961, wherein the jurisdictional notice issued to M/s Yeshoda Electricals for Assessment Year 2007-08 was found to be unsigned. The principal legal issue before the Court concerned whether an unsigned notice could confer jurisdiction upon the Assessing Officer to reopen an assessment, particularly in light of Section 282A of the Act and the doctrine of curable defects. The Revenue argued that the omission was merely a procedural irregularity, whereas the assessee asserted that the absence of a signature was a fatal defect rendering the notice invalid.

The Division Bench of Justice S.G. Pandit and Justice K.V. Aravind upheld the Income Tax Appellate Tribunal’s decision quashing the reassessment. The Court ruled that a notice under Section 148 is a jurisdictional requirement and must bear the signature of the Assessing Officer to be valid; Section 282A does not eliminate this mandatory compliance. Distinguishing the Revenue’s reliance on Sky Light Hospitality LLP, the Court held that judgments concerning minor clerical errors could not justify a foundational defect of this nature. Concluding that the ITAT was right in declaring the reassessment void ab initio, the High Court dismissed the Revenue’s appeal and answered the substantial questions of law in favour of the assessee.

Circular Restricting Inverted Duty Refund Claims Struck Down as Ultra Vires: Gujarat HC Accepts Plea of Kush Proteins

M/S. KUSH PROTEINS PVT. LTD.& ANR. vs UNION OF INDIA & ORS CITATION : 2025 TAXSCAN (HC) 2196

The Gujarat High Court has held that Circular No. 181/13/2022, which restricts the refund of accumulated Input Tax Credit (ITC) under the inverted duty structure if the refund claim is filed after 18.07.2022, is ultra vires the Central Goods and Services Tax Act, 2017 and therefore unenforceable. The Court ruled that refund claims pertaining to tax periods prior to 18.07.2022 cannot be denied merely on account of being filed after the said date, as such a restriction has no statutory backing. The petitioners, M/s Kush Proteins Pvt. Ltd. and another entity, engaged in manufacturing edible oils taxable at 5%, had filed refund claims under Section 54 for periods up to 17.07.2022 due to higher tax on inputs. However, the claims were rejected by the Assistant Commissioner on 31.03.2023 and the rejection was upheld in appeal on the basis of the disputed circular and Notification No. 9/2022-Central Tax (Rate).

The Division Bench of Justice Bhargav D. Karia and Justice Pranav Trivedi observed that the notification imposing restrictions on refund entitlement clearly provides prospective applicability from 18.07.2022 and cannot be extended to earlier tax periods. The Court further held that the circular creates an arbitrary and unconstitutional distinction between similarly situated taxpayers based solely on the filing date of the refund claim, thereby violating Article 14 and overriding statutory rights under Section 54. Following its view in Patanjali Foods Ltd. v. Union of India (2025), the High Court quashed the rejection order dated 31.03.2023 and upheld the petitioners’ entitlement to refund of accumulated ITC based on the inverted duty structure.

Refund Cannot be Denied for Pre-18.07.2022 Period Merely Due to Later Filing: Gujarat HC Set Aside Rejection of Refund Claim

M/S. KUSH PROTEINS PVT. LTD.& ANR vs UNION OF INDIA & ORS CITATION : 2025 TAXSCAN (HC) 2196

The Gujarat High Court has addressed the issue of refund entitlement under the Goods and Services Tax regime in cases involving inverted duty structure. The Court examined whether refund applications relating to tax periods prior to 18.07.2022 could be rejected on the ground that they were filed after that date, in light of Notification No. 9/2022-Central Tax (Rate). The petitioner, M/s Kush Proteins Pvt. Ltd. and another, engaged in the manufacture of edible oils classifiable under Chapter 15 of the Customs Tariff Act, 1975, had filed refund claims under Section 54(3) of the Central Goods and Services Tax Act, 2017 within the statutory limitation period, seeking refund of accumulated Input Tax Credit due to an inverted tax structure. The authorities rejected the claims, relying upon Circular No. 181/13/2022 dated 10.11.2022, which treated claims filed after 18.07.2022 as ineligible regardless of the period to which they relate.

The Division Bench of Justice Bhargav D. Karia and Justice Pranav Trivedi held that the restriction introduced by Notification No. 9/2022-Central Tax (Rate) is prospective and cannot affect refund eligibility for earlier tax periods. It ruled that the circular cannot curtail or override statutory rights conferred under Section 54 and that denial of refund solely on the basis of the filing date is arbitrary and violative of Article 14 of the Constitution of India. The Court, therefore, quashed the orders dated 31.03.2023 and 29.02.2024, restoring the petitioners’ entitlement to refund of accumulated Input Tax Credit.

Co-Operative Societies liable to deduct TDS on Interest Payments: Kerala HC

VELLANGALLUR PEOPLES WELFARECO-OPERATIVE SOCIETY LTD vs UNION OF INDIA CITATION : 2025 TAXSCAN (HC) 2197

The Kerala High Court dealt with the legal issue of applicability of Tax Deducted at Source (TDS) on interest payments made by Co-operative Societies to their depositors. The question before the Court was whether such societies were exempt from TDS obligations under Section 194A(3)(v) of the Income Tax Act, 1961, which grants exemption to Co-operative Societies other than Co-operative Banks. The petitioners contended that they were not engaged in banking business and therefore were entitled to exemption, whereas the Income Tax Department argued that the nature of their operations was banking in substance, making them liable to deduct TDS under Section 194A.

The Single Bench of Justice Ziyad Rahman held that the determining factor is whether the society is carrying out “banking business” as defined under the Banking Regulation Act, 1949. Upon examining the functional operations of the petitioners, the Court concluded that they operated as banks and thus could not claim exemption under Section 194A(3)(v). Accordingly, the Court dismissed the petitions, upholding the Income Tax Department’s directive that such Co-operative Societies must deduct TDS on interest payments to depositors.

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