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 November 2, 2025 to November 8, 2025.

SUPREME COURT

₹792 Cr Falcon Invoice Discounting Scam: Supreme Court Issues Notice on CA’s Plea to Consolidate FIRs, Denies Interim Protection

SHARAD CHANDRA TOSHNIWAL vs THESTATE OF TELENGANA AND ORS CITATION : 2025 TAXSCAN (SC) 327

The Supreme Court has issued notice in a writ petition concerning the consolidation of multiple First Information Reports (FIRs) registered across various States against CA Sharad Chandra Toshniwal, who has been implicated in the ₹792 crore Falcon Invoice Discounting scam. The legal issue before the Court pertains to the petitioner’s plea for clubbing the FIRs under its jurisdiction, with the underlying allegations involving offences under the Prevention of Money Laundering Act, 2002 (PMLA). Toshniwal, who was arrested by the Enforcement Directorate (ED) in August 2025 for allegedly facilitating the laundering of proceeds of crime linked to a fraudulent invoice discounting scheme, contends that he had resigned from the principal accused company well before the purported misconduct and has not been named as an accused in any registered FIR.

The bench comprising Chief Justice B.R. Gavai and Justices K. Vinod Chandran and N.V. Anjaria, which while agreeing to issue notice on the plea, refused to grant interim protection from coercive action at this stage. The Court has sought responses from the concerned States including Telangana, Maharashtra, Delhi, Rajasthan, Andhra Pradesh, and West Bengal and additionally issued notice on Toshniwal’s application seeking protective relief, listing the case for further hearing after four weeks.

Supreme Court seeks Centre’s Response on GST, Income Tax Recovery from Offshore Online Gaming/Gambling Companies

CENTRE FOR ACCOUNTABILITYSYSTEMIC CHANGE (CASC) & ANR vs UNION OF INDIA & ORS. CITATION : 2025 TAXSCAN (SC) 328

The Supreme Court has sought responses from the Union Government and Revenue authorities on a writ petition questioning the legality and regulatory oversight of offshore online gaming and gambling platforms operating without compliance under Indian laws. The core issue before the Court concerns whether these platforms should be subjected to Goods and Services Tax (GST) and Income Tax within India, while also addressing enforcement actions under Section 69A of the Information Technology Act, 2000 to block unlawful online betting websites. The plea, filed by the Centre for Accountability and Systemic Change (CASC), also presses for harmonised implementation of the Promotion and Regulation of Online Gaming Act, 2025 along with relevant State laws to safeguard users particularly minors from illicit online gambling activities.

The Division Bench comprising Justice J.B. Pardiwala and Justice K.V. Viswanathan directed the petitioner to furnish complete case records to the counsel representing the Revenue and fixed the matter for further consideration after two weeks. The petition seeks directions to ensure tax recovery from offshore betting platforms with the support of enforcement agencies including the ED, CBI and Interpol, while also demanding stringent measures akin to those under the Tamil Nadu Prohibition of Online Gaming Act, 2022.

Adani’s Circular Trading of Gold Jewellery allegations: Supreme Court takes up Matter

COMMISSIONER OF CUSTOMS vs ADANIEXPORTS LTD CITATION : 2025 TAXSCAN (SC) 329

The Supreme Court has admitted the Customs Department’s appeal challenging the order of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), which granted relief to Adani Exports in a case concerning alleged circular trading of gold jewellery. The primary legal issue relates to accusations of misuse of export incentives under the Target Plus Scheme and duty-free import benefits under the Advance Licence Scheme, following a Directorate of Revenue Intelligence (DRI) investigation that claimed the company exported lower-purity jewellery with glued stones to inflate export value and subsequently reimported remelted gold bars, thereby evading customs laws.

The matter, which was previously decided in favour of the assessee by CESTAT, was heard by a two-member bench comprising Judicial Member Ramesh Nair and Technical Member Raju, who held that the facts were identical to the earlier Samir Vora and Adani Enterprises Ltd. rulings upheld by the Supreme Court. The Tribunal found no substantiated evidence of bogus exports or financial repatriation and noted that export obligations were duly fulfilled with payments received through authorised banking channels. Dissatisfied with the findings, the Commissioner of Customs, Ahmedabad, has approached the Supreme Court, which has issued notice in the appeal and listed the matter for further adjudication.

Advocates Protected from Arbitrary Summons by Investigating Agencies for Legal Advice in Criminal Cases: Supreme Court

Summoning Advocates who givelegal opinion or represent parties during investigation of cases and relatedissues CITATION : 2025 TAXSCAN (SC) 330

The Supreme Court ruled that investigating agencies cannot summon advocates solely for legal advice or professional representation in criminal matters. The central issue concerned the interpretation of Section 132 of the Bharatiya Sakshya Adhiniyam, 2023 (BSA), which protects confidential professional communication between lawyers and clients, vis-à-vis powers under Section 179 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS). The matter arose from a Special Leave Petition challenging a police summons issued to an advocate by Ahmedabad Police seeking details related to his client’s case, raising constitutional concerns under Articles 19(1)(g) and 21 over the arbitrary intrusion into an advocate’s protected professional role.

A three judge Bench led by Chief Justice B.R. Gavai, along with Justices K. Vinod Chandran and N.V. Anjaria, set aside the summons as “illegal and unsustainable,” while clarifying that although no new guidelines are required, strict adherence to existing statutory safeguards must be ensured. The Court held that advocates may only be summoned where statutory exceptions under Section 132 apply including communications made to further an unlawful act or when an advocate observes a crime or fraud during representation and directed that any such summons must have prior written approval from a superior police officer, with reasons recorded and subject to judicial review under Section 528 of the BNSS. This judgment reinforces the sanctity of client confidentiality and draws a clear boundary against investigative overreach into professional legal conduct.

Supreme Court to Decide Daimler India’s Appeal on Service Tax Liability for Expat Employees under RCM

M/S. DAIMLER INDIA COMMERCIALVEHICLES PVT. LTD. vsTHE COMMISSIONER OF CGST AND C. EX CITATION : 2025 TAXSCAN (SC) 331

The Supreme Court has issued notice in an appeal filed by Daimler India Commercial Vehicles Pvt. Ltd. challenging the order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), which upheld the levy of service tax on salary reimbursements for expatriate employees seconded from Daimler AG, Germany. The core legal issue relates to whether such secondment arrangements constitute ‘manpower supply services’ taxable under Section 66A of the Finance Act, 1994 and chargeable under the reverse charge mechanism, covering the period from 2008-09 to June 2017.

The two member CESTAT bench comprising Technical Member Vasa Seshagiri Rao and Judicial Member Ajayan T.V. relied on the Supreme Court’s ruling in Northern Operating Systems Pvt. Ltd. v. CCE (2022), concluding that Daimler AG had indeed provided manpower supply services to its Indian subsidiary. While modifying the demand to the normal period of limitation and deleting penalties due to the issue being interpretational, the Tribunal sustained the tax liability with applicable interest. Aggrieved, Daimler India has moved the Supreme Court, which has now sought responses from the tax authorities, with the matter returnable in six weeks.

IGST Refund Denied u/r 96(10) without Considering Additional Evidence: SC Dismisses Revenue's SLP against Maxwell Engineering

MAXWELL ENGINEERING SOLUTIONSPRIVATE LIMITED vs ASSISTANT COMMISSIONER OF CENTRAL GST AND EXCISE CITATION : 2025 TAXSCAN (SC) 332

The Supreme Court has dismissed the Special Leave Petition (SLP) filed by the Revenue challenging the Gujarat High Court’s decision that permitted refund of Integrated Goods and Services Tax (IGST) to Maxwell Engineering Solutions Pvt. Ltd., despite availing benefits under the Export Promotion Capital Goods (EPCG) Scheme. The primary legal issue before the Court revolved around the interpretation of Rule 96(10) of the Central Goods and Services Tax (CGST) Rules, 2017, which restricts IGST refund claims where certain customs duty exemptions are availed, including Notification No. 79/2017-Customs dated 13 October 2017. The assessee, engaged in export of engineering parts, had paid IGST on zero-rated supplies and sought a refund under Rule 96, contending that import of capital goods under the EPCG Scheme is expressly excluded from the ambit of Rule 96(10).

The matter was taken up by a Supreme Court Bench comprising Justice Aravind Kumar and Justice N.V. Anjaria, which found no merit in the Revenue’s challenge and accordingly dismissed the SLP without expressing any opinion on the merits, affirming that the High Court’s order remanding the matter for fresh consideration would stand.

Sexual Harassment Case against IRS Officer: Supreme Court Upholds Madras HC Direction for Fresh ICC Inquiry

S. RAVI SELVAN vs CENTRAL BOARDOF INDIRECT TAXES AND CUSTOMS & ORS. CITATION : 2025 TAXSCAN (SC) 333

The Supreme Court has dismissed the Special Leave Petition (SLP) filed by an IRS officer challenging the Madras High Court’s directive for a fresh Internal Complaints Committee (ICC) inquiry into a sexual harassment complaint lodged against him. The core legal issue concerns compliance with the statutory framework under the Prevention of Sexual Harassment (POSH) Act, 2013 and CCS (CCA) Rules, particularly addressing allegations of procedural irregularities and bias affecting the fairness of the initial ICC proceedings relating to conduct violations under service law.

The Bench comprising Justice Pankaj Mithal and Justice Prasanna B. Varale declined to invoke the Court’s discretionary jurisdiction, noting that since a new ICC had already been ordered to examine the complaint afresh, there was no cause for interference. The Supreme Court upheld the High Court’s order setting aside the earlier ICC report and directed that the reconstituted ICC proceed independently, leaving it open for the petitioner to raise all permissible contentions, including limitation. With this order, the SLP stood dismissed, paving the way for an unbiased and legally compliant investigation into the sexual harassment allegations.

Classification of Crompton Greaves’ Imported MC PCBs as Printed Circuits or Lamp Parts: Supreme Court to Decide

COMMISSIONER OF CUSTOMS vsCROMPTON GREAVES CONSUMER ELECTRICALS LTD. CITATION : 2025 TAXSCAN (SC) 334

The Supreme Court considered an appeal concerning the customs classification of Metal Core Printed Circuit Boards (MC PCBs) imported by Crompton Greaves Consumer Electricals Ltd. The central legal issue revolves around whether these goods should be classified as printed circuits under Heading 8534 00 00 or as parts of lamps under Heading 9405 of the Customs Tariff Act, 1975, which directly impacts the applicable customs duty. The appeal challenges the correctness of the tariff interpretation applied by the Customs Department and affirmed by the appellate tribunal.

The dispute originates from a decision of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) delivered on September 9, 2022, by a two-member bench comprising C.J. Mathew, Technical Member and Ajay Sharma, Judicial Member which ruled in favour of Crompton Greaves. The tribunal held that MC PCBs possess the characteristics of printed circuits, and their classification cannot be altered solely based on end use in LED lamps. The Supreme Court has now granted four weeks to Crompton Greaves to file its counter affidavit, with the matter to be listed thereafter for further adjudication.

Supreme Court to Decide Validity of Customs Duty Exemption Granted to Samsung for LED Display Imports

COMMISSIONER OF CUSTOMS vsSAMSUNG INDIA ELECTRONICS PRIVATE LIMITED CITATION : 2025 TAXSCAN (SC) 335

The Supreme Court considered an appeal filed by the Commissioner of Customs, Chennai-II, challenging the decision of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Chennai, which granted customs duty exemption to Samsung India Electronics Pvt. Ltd. for its imported LED monitor tiles. The core legal issue pertains to the correct classification of LED monitor tiles under the Customs Tariff Act, 1975, and whether the exemption under Notification No. 24/2005-Cus is applicable. Samsung India had classified the goods under CTH 85285200, contending that the monitors were designed for use with Automatic Data Processing (ADP) machines.

A two-member CESTAT bench comprising Sulekha Beevi, Judicial Member and Vasa Seshagiri Rao, Technical Member had delivered divergent views, prompting a reference to Third Member, R. Muralidhar, Judicial Member, who concurred with the Judicial Member to form the majority opinion in favour of Samsung India. The Tribunal allowed the exemption, holding that the LED tiles were eligible monitors designed for ADP systems. Aggrieved, the department appealed before the Supreme Court, granted four weeks to Samsung India to file its counter affidavit and directed the department to make good the deficit ad valorem court fee. The matter is now scheduled to be listed on December 2, 2025, for further consideration.

Supreme Court to Decide Customs Appeal for Dispute of Classification of Fish Oil Ethyl Esters

COMMISSIONER OF CGST AND CENTRALEXCISE vs M/S ARJUNA NATURAL EXTRACTS CITATION : 2025 TAXSCAN (SC) 336

The Supreme Court admitted a Civil Appeal filed by the Commissioner of GST & Central Excise challenging the reclassification of Fish Oil Ethyl Esters under Central Excise Tariff Heading (CETH) 1516. The central legal issue concerns whether the chemically modified product Fish Oil Ethyl Ester (EE) should be classified under CETH 1516 1000 (inter-esterified/trans-esterified fats and oils) as held by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), or under CETH 3824 90 90 (residuary entry), as contended by the Revenue. The dispute arises from the classification adopted by Arjuna Natural Extracts, which further purifies and concentrates fish oil for commercial supply.

The impugned order of the CESTAT Chennai Bench, by Vasa Seshagiri Rao, Technical Member and Ajayan T.V., Judicial Member, favoured classification under CETH 1516 and set aside penalties and extended limitation, leading the Department to escalate the matter. The appeal came up before a Supreme Court Bench comprising Justice J.B. Pardiwala and Justice K.V. Viswanathan, which condoned the delay and formally admitted the case for adjudication. The Supreme Court will now determine the correct tariff classification of Fish Oil Ethyl Esters between CETH 1516 and CETH 3824, a decision that holds significant implications for excise duty assessments in the sector.

Preference Shareholders Not Financial Creditors Under IBC: Supreme Court Upholds NCLAT Verdict in EPC Constructions

EPC Constructions India vs M/sMatix Fertilizers And Chemicals Limited CITATION : 2025 TAXSCAN (SC) 337

The Supreme Court dismissed an appeal filed by EPC Constructions India Limited through its Liquidator, reiterating that holders of Cumulative Redeemable Preference Shares (CRPS) are not “financial creditors” under the Insolvency and Bankruptcy Code, 2016, and therefore cannot invoke Section 7 of the IBC. The Court examined the legal status of CRPS with reference to Sections 43 and 55 of the Companies Act, 2013, holding that preference shares constitute share capital and not debt, and that redemption is contingent upon availability of profits or proceeds of a fresh issue, failing which no “debt due and payable” can arise as required under Section 3(12) of the IBC to establish default.

The decision of the National Company Law Tribunal (NCLT) and affirming order of the National Company Law Appellate Tribunal (NCLAT) were upheld by a two judge bench comprising Justice K.V. Viswanathan and Justice J.B. Pardiwala. The Court rejected the argument that issuance of CRPS had the “commercial effect of borrowing” under Section 5(8)(f) of the IBC, concluding that the transaction clearly reflected a conversion of debt into equity, extinguishing any prior liability. Observing that accounting treatment does not override the statutory legal character of capital instruments, the Supreme Court dismissed the appeal and confirmed that non-redeemable CRPS holders cannot be treated as financial creditors for initiating insolvency proceedings.

Supreme Court Orders Partial Restoration of PMLA-Attached Properties to Protect Home Buyers in Udaipur Entertainment Case

UDAIPUR ENTERTAINMENT WORLDPRIVATE LIMITED vs UNION OF INDIA CITATION : 2025 TAXSCAN (SC) 338

The Supreme Court has partially set aside Provisional Attachment Order No. 05/2019 issued under the Prevention of Money Laundering Act, 2002 (PMLA) against Udaipur Entertainment World Private Limited, the Corporate Debtor undergoing insolvency proceedings. The Court addressed the interplay between the Insolvency and Bankruptcy Code, 2016 (IBC) and the PMLA, particularly the effect of Section 32A of the IBC, which grants a “clean slate” to a corporate debtor post-resolution. The Court’s order enables the implementation of the NCLT-approved resolution plan for the benefit and protection of genuine and innocent home buyers, restoring certain attached properties to the Successful Resolution Applicant (SRA) while ensuring continued attachment of 11 units identified as being linked to proceeds of crime.

A bench of Justice Sanjay Kumar and Justice Alok Aradhe passed the order under the second proviso to Section 8(8) of the PMLA, noting that the direction was issued based on a mutually agreed settlement between the SRA and the Directorate of Enforcement (DoE). While directing deletion of the Corporate Debtor’s name from the PMLA prosecution complaint, the Court clarified that the benefit under Section 32A is conditional upon the SRA having no nexus with the former directors or alleged beneficiaries of crime, reserving liberty to the DoE to act if such connection emerges. The appeal against the resolution plan was closed, and the prosecution against the erstwhile management will continue. Significantly, the Court emphasized that the order was passed on the peculiar facts of the case and shall not operate as a precedent, leaving larger legal issues between IBC and PMLA open.

Supreme Court Puts NCLAT's Approval on Hold to Decide on Co-op Society's Role Under IBC

M/S. NIRMAL UJJWAL CREDITCO-OPERATIVE SOCIETY LTD vs RAVI SETHIA CITATION : 2025 TAXSCAN (SC) 339

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The Supreme Court has raised a crucial legal question under the Insolvency and Bankruptcy Code, 2016 (IBC) regarding whether a co-operative society qualifies as an eligible applicant to submit a resolution plan for a corporate debtor. The issue arose in the appeal filed by M/s Nirmal Ujjwal Credit Co-operative Society Ltd. against Ravi Sethia & Others, where the Court noted that clarity is required on the applicability of Section 3(7) of the IBC, which defines corporate persons eligible to participate in insolvency resolution. The Court found the involvement of the Central Registrar of Multi State Cooperative Societies essential to determine whether cooperative societies are barred in any manner from submitting resolution plans under the Code.

A bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan directed the appellant to amend the cause title and implead the Central Registrar as a party respondent to the proceedings. While permitting the NCLAT to continue the approval process, the Supreme Court instructed that no final order shall be passed until the core issue is conclusively adjudicated. Notice was issued waived by counsel for the Successful Resolution Applicant, the Resolution Professional, and one respondent and the matter has been listed for further hearing on October 28, 2025, awaiting the Central Registrar’s clarification.

Classification Dispute of 'Engineered Quartz Stone': Supreme Court considers Revenue’s Challenge

COMMISSIONER CUSTOMS(PREVENTIVE) JAIPUR vs M/S PELICAN QUARTZ STONE CITATION : 2025 TAXSCAN (SC) 340

The Supreme Court has admitted a set of Civil Appeals filed by the Commissioner of Customs (Preventive), Jaipur, challenging the legality of the CESTAT’s order on the classification of exported goods, specifically Engineered Quartz Stone. The central legal issue concerns whether the Directorate General of Revenue Intelligence (DRI) was empowered to re-assess the goods for customs classification after export assessment was completed, involving applicability of Sections 28, 28AAA and 114(iii) of the Customs Act, 1962 in the context of reclassification from CTI 68159990 to CTI 68101990.

A bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan condoned the delay in filing the appeals and directed their admission for hearing on merits. The appeals challenge the ruling of the CESTAT, which held that the Show Cause Notice lacked authority for re-assessment once the goods had been exported and assessed at ‘NIL’ duty. The Supreme Court will now adjudicate the correctness of the Tribunal’s conclusions on jurisdiction and reclassification powers of customs authorities post-export.

Supreme Court to Re-examine Income Tax S.12AA Registration Mandate for Section 80G Benefits

THE COMMISSIONER OF INCOME TAXvs SADHUMARGI SHANTKRANTI JAIN CITATION : 2025 TAXSCAN (SC) 341

The Supreme Court is set to examine a key legal issue under the Income Tax Act, 1961, whether registration of a trust under Section 12AA automatically entitles it to tax exemption benefits under Section 80G. The case arises from a judgment of the Chhattisgarh High Court, which held that a valid 12AA registration was sufficient for granting 80G approval, thereby eliminating the need for further scrutiny into the nature of the trust’s activities under the Act.

A Bench comprising Justice J.B. Pardiwala and Justice K.V. Viswanathan issued notice while condoning delay in the Special Leave Petition filed by the Revenue in Commissioner of Income Tax (Exemption), Bhopal v. Sadhumargi Shantkranti Jain. The Court will now reconsider whether 80G approval can be denied despite 12AA registration, particularly in cases where the trust’s activities are asserted to be religious rather than charitable. The matter remains pending, with notice returnable in four weeks.

HIGH COURT

Cash Deposits during Demonetisation: Delhi HC strikes down Income Tax Order u/s 148(A)(d) for lack of prior notice to Assessee

J. G’S DEPARTMENTAL STORE vsINCOME TAX OFFICER WARD CITATION : 2025 TAXSCAN (HC) 2198

The Delhi High Court examined the legality of reassessment proceedings initiated under Section 148A(d) read with Section 148 of the Income Tax Act, 1961, in relation to substantial cash deposits made during the demonetisation period . The key legal issue before the Court was whether the Assessing Officer (AO) could rely on a new ground comparison of cash deposits during 2016-17 with those of the previous year without issuing prior notice under Section 148A(b), thereby depriving the assessee of a fair opportunity to explain the discrepancy in compliance with principles of natural justice.

A Bench comprising Justice Vibhu Bakhru and Justice Tushar Rao Gedela quashed the impugned order issued under Section 148A(d) and the consequential notice under Section 148 for AY 2017-18, holding that the AO had travelled beyond the scope of the material disclosed to the assessee. The Court remanded the matter for fresh consideration in accordance with law and granted liberty to the assessee to submit a reply within two weeks, directing the AO to pass a reasoned order thereafter.

GST Refund Denied: Chhattisgarh HC Refuses to Interfere in ₹11.76 Lakh Reimbursement Dispute

M/s Bharat Builders vs State ofChhattisgarh CITATION : 2025 TAXSCAN (HC) 2199

The Chhattisgarh High Court addressed a contractual dispute concerning the petitioner’s claim for reimbursement of ₹11.76 lakh towards Goods and Services Tax (GST) from the Public Health Engineering Department. The core legal issue involved the maintainability of a writ petition under Article 226 of the Constitution of India, where the petitioner, M/s Bharat Builders, contended that GST should be reimbursed based on departmental instructions and corrigenda issued after the implementation of GST.

A Division Bench comprising Chief Justice Ramesh Sinha and Justice Bibhu Datta Guru dismissed the writ petition, holding that the claim raised disputed questions of fact relating to tender conditions and tax liability, which could not be adjudicated in writ jurisdiction. Relying on Supreme Court precedents including Sukamani Das (1999), S.P.S. Rathore (2005), and Puna Hinda (2021), the Court ruled that the petitioner had an alternative remedy before appropriate civil or arbitral forums, and thus declined to interfere with the impugned rejection order.

Double GST Demand Allegation in Highway Project: Gauhati HC Grants 45 Days to File Appeal without Limitation Bar

M/S ECI ENGINEERING ANDCONSTRUCTION CO LTD vs UNION OF INDIA CITATION : 2025 TAXSCAN (HC) 2200

The Gauhati High Court examined the validity of a GST demand order alleged to have resulted in double taxation on the same transaction, while also addressing whether such disputes can be entertained under Article 226 of the Constitution of India when a statutory alternative remedy exists under the GST Act. The petitioner, M/s ECI Engineering and Construction Co. Ltd., involved in constructing the Dimapur - Kohima National Highway, argued that a separate levy imposed individually despite GST already being charged on the joint venture amounted to dual taxation and questioned the jurisdiction of the adjudicating authority.

A Single Bench of Justice Sanjay Kumar Medhi disposed of the petition, holding that the correctness and jurisdictional challenge to the impugned order dated 23.08.2023 could be adjudicated before the appellate authority under the statute. In the interest of justice, the Court permitted the petitioner to file an appeal within 45 days, clarifying that limitation would not bar such filing, and ordered that the interim protection granted on 18.01.2024 shall continue until the appeal is decided on merits.

GST Hearing u/s 75(4) must be Fixed after Submission of Reply: Uttarakhand HC Remands Matter for Fresh Adjudication

M/s Monolith Resorts PrivateLimited vs The Commissioner, State Tax CITATION : 2025 TAXSCAN (HC) 2201

The Uttarakhand High Court addressed the legal issue concerning the mandatory requirement of offering a personal hearing under Section 75(4) of the Goods and Services Tax Act, 2017, after the assessee submits a reply to a show-cause notice. The petition filed by M/s Monolith Resorts Private Limited challenged an assessment order passed without adherence to the statutory safeguards ensuring a fair opportunity of defense in GST adjudication.

A Single Bench led by Chief Justice G. Narendar applied its earlier ruling in M/s Modine Thermal Systems Pvt. Ltd. v. State of Uttarakhand (2025), reaffirming that scheduling a personal hearing prior to the submission of the reply defeats the statutory intent and violates principles of natural justice. The Court set aside the impugned order and remanded the matter to the authorities to recommence proceedings afresh from the stage of notice issuance.

Delhi HC Dismisses Revenue’s Appeal as Penalty u/s 271E Held Time-Barred: Limitation Starts from AO’s Notice, Not ACIT’s Action

PR. COMMISSIONER OF INCOME TAX-7 vs THAPAR HOMES PVT. LTD. CITATION : 2025 TAXSCAN (HC) 2202

The Delhi High Court examined the legal issue concerning the validity of penalty proceedings under Section 271E of the Income Tax Act, 1961, and specifically the computation of limitation under Section 275(1)(c). The case stemmed from Assessment Year 2009-10, where Thapar Homes Pvt. Ltd. challenged a penalty order imposed for alleged violation of Section 269T relating to repayment of loans or deposits otherwise than by account payee instruments. The core contention involved whether the statutory limitation begins from the Assessing Officer’s initiation of penalty proceedings in the assessment order or the later notice issued by the Additional Commissioner of Income Tax (ACIT).

A Division Bench comprising Justice V. Kameswar Rao and Justice Vinod Kumar reaffirmed its earlier ruling in Pr. CIT (Central-II) v. Thapar Homes Ltd. (2023) and upheld the findings of both the CIT(A) and the ITAT, holding that the penalty order passed on 30 December 2011 was time-barred. The Court ruled that the limitation period commenced from 31 December 2010, the date when the AO recorded satisfaction for initiating penalty proceedings, and not from the ACIT’s subsequent action. Emphasizing that the Revenue cannot artificially extend limitation at its convenience, the appeal filed by the department was dismissed.

Delhi HC Holds DRI Officers as Proper Authorities under Section 28: Restores Microsoft India’s Customs Appeals for Merit Hearing

M/S MICROSOFT CORPORATION(INDIA) PRIVATE LTD vs COMMISSIONER OF CUSTOMS (IMPORT) CITATION : 2025 TAXSCAN (HC) 2203

The Delhi High Court addressed the legal issue concerning whether officers of the Directorate of Revenue Intelligence (DRI) qualify as “proper officers” under Section 28 of the Customs Act, 1962, in connection with customs duty recovery proceedings. The matter arose from appeals filed by Microsoft Corporation (India) Pvt. Ltd. challenging the CESTAT’s remand orders, which had deferred adjudication pending the Supreme Court’s decision in Union of India v. Mangli Impex Ltd. The assessee also sought condonation of delay in filing the appeals under Section 130 of the Customs Act.

A Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain relied on the Supreme Court's rulings in Canon India Pvt. Ltd. v. Commissioner of Customs (2021) to hold that the issue of jurisdiction of DRI officers stands conclusively settled in their favour. The Court set aside the CESTAT’s orders and restored Microsoft India’s appeals to their original numbers for adjudication on the merits, with delay condoned on the condition of depositing ₹10,000 per appeal with the Delhi High Court Bar Association Natural Calamities Relief Fund. The High Court thus reaffirmed that DRI officers are proper officers under Section 28, enabling further proceedings before the Tribunal.

Delhi HC Sets Aside ITAT Order for Lack of Reasoned Findings on Functional Comparability in Transfer Pricing Case

TPG SOFTWARE PVT LTD vs DEPUTYCOMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 2204

The Delhi High Court examined the legal issue of inadequate reasoning in transfer pricing adjudication under the Income Tax Act, 1961, particularly concerning the determination of comparables under the Transactional Net Margin Method (TNMM) for software development service providers. The dispute pertained to Assessment Year 2014-15 in the case of TPG Software Pvt. Ltd., where the Assessing Officer had completed assessment under Section 143(3) read with Section 144C(13) after making a reference to the Transfer Pricing Officer (TPO), resulting in an upward adjustment to the Arm’s Length Price.

A Division Bench comprising Justice Vibhu Bakhru and Justice Tejas Karia held that the Income Tax Appellate Tribunal (ITAT) failed to provide cogent reasons while upholding the inclusion of certain entities as comparables, despite the assessee’s objections based on Functional Asset Risk (FAR) differences. Noting that judicial scrutiny requires a reasoned order, the Court set aside the impugned ITAT order and remanded the matter for fresh adjudication on merits in accordance with law.

Gujarat HC Permits Final Disbursement to Unsecured Creditors u/s 530 in Company Liquidation Case

OFFICIAL LIQUIDATOR OFAESCULAPIUS REMEDIES LTD. vs PUNJAB NATIONAL BANK CITATION : 2025 TAXSCAN (HC) 2205

The High Court of Gujarat adjudicated a matter concerning the distribution of funds to unsecured creditors during the liquidation of Aesculapius Remedies Limited, addressing compliance with Section 530 of the Companies Act, 1956. The issue before the Court related to whether the Official Liquidator could undertake final settlement of admitted unsecured creditor dues from the available funds, following verification of claims submitted pursuant to the winding-up order.

A Single Bench of Justice Mauna M. Bhatt permitted the Official Liquidator to disburse ₹90,00,000 among unsecured creditors Punjab National Bank and Gujarat Industrial Investment Corporation Limited in proportion to their admitted claims, subject to undertakings for refund if required upon future reconciliation. The Court further authorized the encashment of fixed deposits to facilitate the settlement and disposed of the liquidation report accordingly.

TDS u/s 194LA Not Applicable on Issuance of TDR in Lieu of Compensation: Bombay HC Stays Demand and Penalty Orders

Pimpri Chinchwad Municipal Corporation vs The Income Tax Officer CITATION : 2025 TAXSCAN (HC) 2206

The Bombay High Court dealt with the issue of applicability of Tax Deducted at Source (TDS) under Section 194LA of the Income Tax Act, 1961, in cases where compensation for land acquisition is granted in the form of Transferable Development Rights (TDR) instead of monetary payment. The writ petition was filed by Pimpri Chinchwad Municipal Corporation challenging the orders passed under Sections 201 and 201(1A), along with the related demand notice under Section 156 and penalty proceedings under Section 274 read with Section 271C, contending that Section 194LA applies only to monetary consideration and not to compensation issued in kind.

The Division Bench comprising Justice Amit S. Jamsandekar and Justice B.P. Colabawalla observed that the interpretation of the phrase “or by any other mode” in Section 194LA raised an arguable legal issue and held, prima facie, that issuance of TDRs in lieu of compensation did not attract TDS under the said provision. Accordingly, the Court stayed the impugned demand and penalty orders, issued Rule, and granted time to the Income Tax Department to file its reply, thereby remanding the matter for further adjudication.

Calcutta HC finds Penny-Stock Trading Loss as Bogus, sets aside ITAT disallowance Order

PRINCIPAL COMMISSIONER OF INCOMETAX vs M/S. ZULU MERCHANDISE PRIVATE LIMITED CITATION : 2025 TAXSCAN (HC) 2207

The Calcutta High Court addressed the legality of set-off of losses arising from alleged penny-stock share trading transactions under the Income Tax Act, 1961. The issue pertained to whether the assessee, M/s Zulu Merchandise Private Limited, could legitimately set off a loss of ₹51,33,870 incurred in trading shares of Radford Global Limited and Shreenath Commercial against other income, despite the Assessing Officer having found such transactions to be sham and part of a circular trading scheme to generate bogus losses. The matter involved scrutiny proceedings under Sections 143(2) and 142(1) of the Act and the consequent disallowance upheld by the National Faceless Appeal Centre, Delhi.

The Division Bench comprising Chief Justice T.S. Sivaganam and Justice Chaitali Chatterjee held that the Income Tax Appellate Tribunal (ITAT), Kolkata committed a legal error by allowing the assessee’s claim without independently evaluating the factual findings recorded by the AO and appellate authority. Observing that the Tribunal merely relied on another case without establishing factual similarity or addressing the detailed reasoning on sham transactions, the Court set aside the ITAT’s order and restored the assessment. The Bench also rejected the assessee’s objection regarding low tax effect, holding that the case fell within the CBDT circular exception applicable to organised tax evasion.

Delhi HC sets aside Income Tax Order Denying Exemption to Charity Over 16-Day Audit Delay

DELHI MAHARASHTRIYA EDUCATIONALvs COMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 2208

The Delhi High Court dealt with the issue of whether a charitable trust could be denied exemption under Sections 11 and 12 of the Income Tax Act, 1961 merely due to a minor delay in filing the mandatory audit report in Form 10B. The dispute arose when Delhi Maharashtriya Educational and Cultural Society, despite filing its return on time for Assessment Year 2018-19, was denied the benefit of exemption because its auditor submitted the Form 10B report 16 days late, leading to an adverse intimation under Section 143(1) and subsequent tax demand. The Commissioner of Income Tax (Exemptions) rejected the trust’s application for condonation under Section 119(2)(b), holding that the delay could not be justified.

A Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar held that a short, bona fide delay caused by an inadvertent mistake of a professional advisor could not deprive a charitable trust of substantive tax benefits intended under the Act. Emphasizing that Section 119(2)(b) exists to prevent genuine hardship, the Court found the Commissioner’s refusal to condone the delay unjustifiable and set aside the impugned order dated June 14, 2024. The High Court directed the Commissioner to reconsider and pass a fresh order on the condonation application within eight weeks, ensuring that the trust’s exemption claim is adjudicated in accordance with law.

Delhi HC sets aside Time-Barred Income Tax Order against Hyundai Rotem

COMMISSIONER OF INCOME TAXINTERNATIONAL TAXATION vs HYUNDAI ROTEM COMPANY CITATION : 2025 TAXSCAN (HC) 2209

The Delhi High Court adjudicated a limitation issue under Section 144C(13) of the Income Tax Act, 1961, concerning the validity of a final assessment order passed against Hyundai Rotem Company for Assessment Year 2018-19. The central question was whether the limitation period for passing the final assessment order should commence from the date the Dispute Resolution Panel (DRP) directions were uploaded on the ITBA portal, or from the date the Assessing Officer claimed to have physically received them. The Commissioner of Income Tax (International Taxation) challenged the Income Tax Appellate Tribunal’s finding that the order was time-barred.

A Division Bench comprising Justice V. Kameswar Rao and Justice Vinod Kumar upheld the ITAT’s ruling, holding that once DRP directions are uploaded on the portal with a valid Document Identification Number (DIN), they are deemed to be received for the purpose of computing limitation under Section 144C(13). Relying on its earlier decision in Louis Dreyfus Company India Pvt. Ltd., the Court concluded that the assessment order passed on July 1, 2022, was beyond the statutory deadline of June 30, 2022, making it invalid. Consequently, the Revenue’s appeal was dismissed as no substantial question of law arose for consideration.

Possession of Rs. 2.31 Crore Not 'Official Duty': Rajasthan HC Rejects Public Servant's Plea against ED Prosecution in PMLA Case

Ved Prakash Yadav vs DirectorateOf Enforcement CITATION : 2025 TAXSCAN (HC) 2210

The Rajasthan High Court addressed the legal issue of whether prior sanction under Section 218 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), is necessary before prosecuting a public servant for offenses under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 (PMLA). The petitioner, Ved Prakash Yadav, challenged the cognizance order of the Special Judge (PMLA) on the ground that the alleged possession of ₹2.31 crore in unaccounted cash and a gold bar worth ₹61 lakh fell within his capacity as a public servant and thus required mandatory sanction before prosecution.

A Single Bench of Justice Anoop Kumar Dhand rejected the plea, holding that the alleged act of hoarding unaccounted wealth could not be considered an act performed in the discharge of official duties. Accordingly, the Court ruled that the protection under Section 218 of the BNSS did not apply and no prior sanction was required for initiating PMLA prosecution. Finding no merit in the petition, the Court dismissed it and clarified that its observations were limited to adjudicating the present petition, leaving all legal defenses open to be raised during trial.

Property Attachment Cannot Continue Once ITAT Order Attains Finality and Dues Are Cleared: Madras HC

M/s.JSR Infra Projects Pvt.Ltdvs The Tax Recovery Officer CITATION : 2025 TAXSCAN (HC) 2211

The Madras High Court dealt with the legal issue concerning the continuance of property attachment under the Income Tax Act, 1961, after the assessee has succeeded before appellate authorities and no tax dues remain outstanding. The dispute arose under proceedings initiated pursuant to a search under Section 153A, followed by an attachment order dated 15.07.2022. The petitioner-assessee, JSR Infra Projects Pvt. Ltd., argued that once the Income Tax Appellate Tribunal (ITAT) confirmed the order of the Commissioner of Income Tax (Appeals) deleting the additions, and all demands stood paid, the attachment could not legally subsist.

A Single Bench of Justice Krishnan Ramasamy held that once the ITAT’s order being the final fact-finding authority attains finality in respect of factual determinations and tax liability stands wiped out, the Department is bound to lift the attachment. The Court reiterated that no further recovery could continue in such circumstances. Accordingly, the Court directed the Tax Recovery Officer to release the attached property within four weeks, allowing the writ petition without costs.

CBI, SFIO Probe in ₹100 cr Westland Trade Franchise Scam Refused: Delhi HC Says Jurisdiction Lies with Allahabad HC, Declines Petitions

VIKAS KUMAR SIKARIA vs UNION OFINDIA CITATION : 2025 TAXSCAN (HC) 2212

The Delhi High Court addressed writ petitions filed under Article 226 of the Constitution seeking transfer of investigation into an alleged franchise scam involving Westland Trade Pvt. Ltd. to the Central Bureau of Investigation (CBI), the Enforcement Directorate (ED) under the Prevention of Money Laundering Act, 2002, and the Serious Fraud Investigation Office (SFIO) under Sections 210-213 of the Companies Act, 2013. The petitioners alleged large-scale diversion of investor funds and regulatory collusion, arguing that central agencies must intervene for a fair and comprehensive probe into the fraud spanning multiple states.

The Single Bench of Justice Neena Bansal Krishna dismissed the petitions, holding that no part of the cause of action arose in Delhi and that the Allahabad High Court was the appropriate jurisdictional forum. Taking note of the ongoing coordinated investigation by the Noida Police SIT and the ED, along with arrests, recoveries, and filing of charge sheets, the Court applied the principles laid down in Sakiri Vasu v. State of U.P. (2008) and CPDR v. State of West Bengal (2010), reiterating that transfer of investigation to the CBI is warranted only in rare and exceptional cases. As no investigative lapse or extraordinary circumstance was demonstrated, the Court declined to issue directions to the CBI, SFIO, or ED and disposed of all pending applications accordingly.

Personal Jewellery Not Prohibited under Baggage Rules: Delhi HC Orders Release of Bangles

SHAMINA vs COMMISSIONER OFCUSTOMS CITATION : 2025 TAXSCAN (HC) 2213

The Delhi High Court has quashed an order of absolute confiscation issued by Customs authorities under Sections 111(d), (i), (j), and (m) of the Customs Act, 1962, against petitioner Shamina, holding that personal jewellery worn by passengers cannot be treated as prohibited goods under the Baggage Rules, 2016. The case concerned four gold bangles weighing 100 grams that Shamina, an Indian citizen, wore as personal effects upon arrival at the Indira Gandhi International Airport, New Delhi, after travelling from Riyadh.

The Division Bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta found the confiscation order illegal for denying the petitioner a personal hearing and for improperly classifying the jewellery as non-personal items merely due to high purity. The Court directed the Customs Department to release the gold bangles within four weeks, subject to payment of applicable warehousing charges.

Delhi HC Dismisses Exporter’s Plea for IGST Refund, Holds Petition Not Maintainable Due to Concealment of Cancelled GST Registration

SHREE RADHE VALLABH TRADERS VsCOMMISSIONER CENTRAL GOODS AND SERVICE TAX, DELHI EAST COMMISSIONERATE" CITATION : 2025 TAXSCAN (HC) 2214

The Delhi High Court adjudicated a writ petition concerning the denial of refund of Integrated Goods and Services Tax (IGST) under the provisions of the Central Goods and Services Tax Act, 2017. The petitioner-assessee, Shree Radhe Vallabh Traders, claimed refund entitlement of ₹1.19 crore on export transactions but failed to disclose the material fact that its GST registration had been cancelled with retrospective effect from 13 July 2018. The matter revolved around whether refund could be granted when the assessee’s GST registration itself had been annulled, and whether suppression of such crucial information impacted the maintainability of the petition.

A Division Bench of Justice Prathiba M. Singh and Justice Shail Jain dismissed the writ petition, holding that the concealment of registration cancellation rendered the petition not maintainable. The Court observed that since the petitioner stood classified as a risky exporter and was found non-existent upon physical verification, no IGST refund could be processed. The petition was rejected with costs of ₹25,000 payable to the Delhi High Court Bar Association, while granting liberty to the petitioner to seek restoration of GST registration before pursuing any refund claim.

Delhi HC Upholds Validity of Notification Prescribing 15% Interest for Unfulfilled Export Obligations

KBS INDUSTRIES LTD & ANR. vsTHE CUSTOMS CENTRAL EXCISE AND SERVICE TAX SETTLEMENT COMMISSION PRINCIPALBENCH NEW DELHI & ORS. CITATION : 2025 TAXSCAN (HC) 2215

The Delhi High Court examined the legality of Notification No. 18/2015-Cus dated April 1, 2015, issued under Section 25(1) of the Customs Act, 1962, prescribing a 15% interest liability on customs duties where exporters fail to fulfil their export obligations under the Advance Authorisation Scheme (AAS). The issue emerged from imports made by KBS Industries Ltd., which had availed duty-free imports of copper and copper alloy products against Advance Authorisations but did not meet the requisite export obligations, triggering proceedings for recovery of customs duty along with interest and penalty. A key question before the Court was whether the imposition of such interest applied even to components like CVD and SAD under the Customs Tariff Act was legally sustainable and within the power conferred upon the Central Government under Section 25(1).

A Division Bench of Justice Vibhu Bakhru and Justice Swarana Kanta Sharma upheld the validity of the notification and the order passed by the Settlement Commission under Section 127C(5), holding that the interest condition was an intrinsic component of the conditional exemption and not an arbitrary levy. The Court distinguished the Bombay High Court ruling in Mahindra & Mahindra Ltd., noting that the present case concerned the breach of a statutory condition attached to the exemption, whereas the cited precedent dealt with misdeclaration of value. Concluding that the petitioner, having voluntarily availed the benefit of duty-free imports, was bound by the condition to pay duty with interest upon default, the Court dismissed the writ petition and sustained the 15% interest liability.

Reassessment Held Time-Barred: Delhi HC Says No Judicial Direction to Extend Limitation u/s 153(6), Terminates Reassessment

AMEETA GOYAL vs THE ASSESSMENTUNIT OF INCOME TAX & ORS CITATION : 2025 TAXSCAN (HC) 2216

The Delhi High Court has terminated the reassessment proceedings for Assessment Year (AY) 2013–14, ruling them to be barred by limitation under Section 153(2) of the Income Tax Act, 1961. The matter arose from a challenge filed by the petitioner, Ameeta Goyal, against the show-cause notice and the continuation of reassessment proceedings despite a prolonged judicial stay.

A Division Bench of Justice Vibhu Bakhru and Justice Tejas Karia held that the Revenue could not invoke Section 153(6) in the absence of any judicial directive mandating reassessment. Referring to the proviso to Explanation 1 under Section 153, the Court noted that since the interim stay on reassessment proceedings had ceased on 13 December 2023, the Assessing Officer was required to complete the proceedings within the remaining 60 days i.e., by 11 February 2024. As no reassessment order was passed within this time frame, the proceedings stood time-barred. While allowing the petition, the Court also clarified that the petitioner was entitled to seek a refund of excess tax paid for consideration by the authorities in accordance with law.

Refund Order Based on Omitted Rule 96(10) of CGST Rules Prima Facie Invalid: Calcutta HC Stays ₹1.96 Cr GST Demand

M/s. Glen Industries PrivateLimited & Anr vs The Deputy Director Directorate General of GSTIntelligence & Ors. CITATION : 2025 TAXSCAN (HC) 2217

The Calcutta High Court has stayed a refund recovery order of ₹1.96 crore issued under Rule 96(10) of the CGST Rules, 2017, after noting that the provision had been omitted from the statute book with effect from 8 October 2024, without any saving clause. The writ petition was filed by Glen Industries Private Limited, a manufacturer and trader of plastic containers, challenging the confirmation of alleged wrongful IGST refund recovery under Section 74 of the CGST Act.

A single bench of Justice Raja Basu Chowdhury accepted the petitioner’s prima facie case, observing that Rule 96(10) no longer existed in law at the time the final demand order dated 30 January 2025 was passed, thereby depriving the authority of jurisdiction. The Court rejected the Revenue’s contention that the proceedings were valid merely because they were initiated before the omission. Relying on judicial precedent, the Court held that all actions under the omitted rule must cease as of the omission date. Consequently, the operation of the impugned demand order was stayed, with directions for filing affidavits within set timelines before listing the matter for further hearing.

Custody Unwarranted Once Complaint Filed: Delhi HC Grants Bail for Offence u/s 132 in ₹11.5Cr Fake ITC Case

NARENDER KUMAR vs DIRECTORATEGENERAL OF GST INTELLIGENCE CITATION : 2025 TAXSCAN (HC) 2218

The Delhi High Court dealt with the issue of continued judicial custody in an alleged ₹11.5 crore fake Input Tax Credit (ITC) fraud registered under Section 132(1)(b) and (c) of the CGST Act, 2017, which criminalises fraudulent availment or utilisation of ITC involving more than ₹5 crore. The accused, Nrendra Kumar, had been arrested on allegations of issuing invoices without actual supply of goods and causing loss to the revenue. He sought regular bail under Section 483 of the BNSS read with Section 439 CrPC.

A single bench of Justice Neena Bansal Krishna granted bail, holding that once the complaint is filed and investigation concludes, custodial interrogation serves no further purpose in offences predominantly supported by documentary records. The Court reiterated that bail is the rule and jail the exception, especially in economic offences tried by a Magistrate where the accused has cooperated, has no criminal antecedents, and poses no flight risk. The Court therefore directed release of the applicant on personal bond and surety, subject to conditions ensuring cooperation with trial and non-tampering of evidence.

Absence of SCN and Personal Hearing: Delhi HC Sets Aside Customs Detention of Passenger’s Gold

NITISH KHARBANDA vs COMMISSIONEROF CUSTOMS CITATION : 2025 TAXSCAN (HC) 2219

The Delhi High Court examined the legality of detention of a passenger’s gold jewellery seized by Customs authorities at the Indira Gandhi International Airport, New Delhi, under Section 124 of the Customs Act, 1962, holding that the absence of a Show Cause Notice and denial of a personal hearing rendered the continued detention violative of principles of natural justice. The petitioner, Nitish Kharbanda, had arrived from abroad on 19 March 2024 carrying a gold kada (100 grams) and gold chain (75 grams), which were intercepted and detained by Customs without initiation of any due adjudicatory process.

A Division Bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta set aside the detention after finding that no SCN had been issued, no personal hearing afforded, and no Order-in-Original passed even after several months of seizure, despite the Court’s earlier rulings in Amit Kumar and Qamar Jahan mandating adherence to procedural safeguards. Holding the prolonged detention as unsustainable, the Court directed Customs to release the seized jewellery within four weeks, subject to applicable warehousing charges.

Notional Interest Cannot Be Added to Fair Rent u/s 23: Bombay HC Upholds AO’s ₹22 Lakh Market Valuation Using Comparable Instances

Tivoli Investment & TradingCo. Pvt. Ltd. vs The Assistant Commissioner of Income-tax CITATION : 2025 TAXSCAN (HC) 2220

The Bombay High Court, while adjudicating the issue of determining Annual Letting Value (ALV) under Section 23(1)(a) of the Income Tax Act, 1961, has clarified that notional interest on interest-free security deposits cannot be included while computing rental income for taxation. The dispute arose from the assessment of Tivoli Investment & Trading Co. Pvt. Ltd., wherein the Assessing Officer had enhanced the ALV based on market rent comparables for commercial property located at Nariman Point, Mumbai, despite the assessee declaring a significantly lower rental value supported by a large security deposit.

A Division Bench comprising Justice Alok Aradhe and Justice Sandeep V. Marne upheld the ALV determined by the tax authorities at ₹22 lakh and dismissed the appeals filed by the assessee. The Court affirmed that the Assessing Officer was justified in adopting comparable market rents where the municipal valuation was outdated and did not reflect prevailing rental conditions, while simultaneously reiterating that notional interest on security deposits cannot form part of ALV. The substantial question of law was thus answered in favour of the Revenue.

GST Deficiency Memo must be Issued within 15 Days from Date of Refund Application: Delhi HC in Gameloft Software Case

GAMELOFT SOFTWARE PRIVATELIMITED vs ASSISTANT COMMISSIONER OF CENTRAL TAX CITATION : 2025 TAXSCAN (HC) 2221

The Delhi High Court adjudicated a dispute concerning delayed IGST refund claims, specifically examining the statutory requirement under Rule 90(2) of the CGST Rules, 2017 that a deficiency memo must be issued within 15 days of filing a refund application. The case involved Gameloft Software Pvt. Ltd., which sought a refund of ₹1.87 crore for excess IGST paid, and challenged the belated deficiency memo and resultant delay in processing the refund, also invoking Section 56 of the CGST Act, 2017 relating to interest on delayed refunds.

A Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain held that a deficiency memo issued beyond the 15 day limit is invalid, and the refund application must be treated as duly filed on its original date. Emphasizing that undue delays impact taxpayers’ liquidity, the Court directed the Department to grant a hearing on 10 November 2025 and decide the refund claims within one month thereafter, in accordance with law.

Partners Accused of Creating 41 Fake Firms GST Scam: Punjab & Haryana HC Orders Release on Bail with Strict Conditions

Raman Kumar Chaurasia vsDirectorate General of GST Intelligence CITATION : 2025 TAXSCAN (HC) 2222

The Punjab and Haryana High Court has addressed the legal issue pertaining to grant of bail in cases involving alleged GST fraud under the Central Goods and Services Tax (CGST) Act, 2017. The case concerned offences registered under Section 132(1) of the CGST Act relating to generation of fake invoices and fraudulent Input Tax Credit (ITC) claims amounting to over ₹12 crore through the creation of 41 fictitious entities. The petitioners, who had been arrested on 15 May 2025 by the Directorate General of GST Intelligence (DGGI), Ludhiana, sought relief on the grounds that the alleged offences were documentary in nature and their continued detention was unwarranted.

The bench of Justice Manisha Batra, who granted the petitioners regular bail after noting that they had spent over five months in custody and the investigation was already complete. The Court reiterated that “bail is the rule and jail is the exception,” particularly when there is minimal risk of evidence tampering. The Bench imposed strict conditions for release submission of passports, non-disposal of assets, non-interference with prosecution witnesses, and continued cooperation with the trial while cautioning that violation of any term will result in immediate cancellation of bail.

Gauhati HC sets aside GST Order Passed without Issuing Proper SCN with DRC-01 u/s 73(1)

PROLAY DEY SARKAR vs THE STATEOF ASSAM CITATION : 2025 TAXSCAN (HC) 2223

The Gauhati High Court examined the legality of an adjudication order issued under Section 73(1) of the Assam Goods and Services Tax Act, 2017, specifically addressing the requirement of a valid show cause notice (SCN) before initiating proceedings for determination of short-paid tax. The petitioner, Prolay Dey Sarkar, a small trader running M/s Maa Laxmi Enterprise in Goalpara, Assam, argued that while he received a summary of show cause notice in Form GST DRC-01, no detailed SCN stating the factual or legal grounds of tax demand was ever served upon him, violating Section 73 read with Rule 142(1)(a) of the AGST Rules and the principles of natural justice.

The bench of Justice Manish Choudhury, relying on an earlier coordinate bench ruling dated 26 September 2024, held that Form DRC-01 cannot substitute a proper SCN, rendering the impugned order dated 18 April 2024 unsustainable in law. The Court set aside the adjudication order passed by the Assistant Commissioner of State Tax, Goalpara, and permitted the authorities to initiate de novo proceedings in strict compliance with Section 73 requirements including issuance of a detailed SCN and opportunity of hearing under Section 75(4). The Bench also directed that the limitation period be computed by excluding the duration between the earlier summary notice and this judgment.

Sale Advance Refunded Taxed as Unexplained Income: Madras HC stays Recovery for 90 Days, allows time to File Income tax Appeal

Faiz Wahab vs The Income Tax Officer CITATION : 2025 TAXSCAN (HC) 2224

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The Madras High Court dealt with the issue of coercive recovery of income tax demand arising from an assessment made under Section 147 read with Section 144 of the Income Tax Act, 1961, where the refund of property advance was treated as unexplained income. The petitioner, Faiz Wahab, challenged the assessment order dated 26 February 2024 and the consequential penalty proceedings initiated under Sections 271AAC(1) and 272(1)(d), contending that the refunded amount could not be classified as unexplained income since it originated from a failed real estate transaction backed by a favourable RERA order.

The Bench of Justice C. Saravanan granted interim relief by staying recovery proceedings for a period of 90 days to allow the petitioner to pursue the statutory appellate remedy effectively. The Court directed that the stay would remain operative subject to the petitioner filing an application under Section 220(6) seeking suspension of demand before the Commissioner (Appeals), and clarified that any failure to do so would permit the Revenue to resume recovery action in accordance with law.

Service Tax Demand u/s 73(1) of Finance Act: Calcutta HC allows Payment in 8 Instalments, Lifts Account Attachment Subject to Conditions

Subrata Mondal vs Union of India & Ors. CITATION : 2025 TAXSCAN (HC) 2225

The Calcutta High Court examined the legality of a bank account attachment imposed during recovery of service tax dues assessed under Section 73(1) of the Finance Act, 1994, read with Section 174(2)(e) of the CGST Act, 2017. The petitioner, Subrata Mondal, had challenged the order-in-original dated 28 February 2024 and sought relief from the attachment on his Punjab National Bank account, while expressing willingness to clear the adjudicated liability in installments.

Justice Raja Basu Chowdhury permitted conditional installment payments by directing an upfront deposit of ₹10 lakh within three weeks and allowing the remaining dues to be discharged in eight equal monthly installments. Subject to verification of the initial deposit, the bank account attachment was ordered to be lifted, with ₹10 lakh retained as security, and the appellate authority was instructed to decide the pending appeal on merits. The writ petition was accordingly disposed of.

Non-Service of SCN: Gauhati HC Sets Aside ₹16.37 Lakh Service Tax Demand, Orders Fresh Adjudication

DHANJIT KUMAR PATHAK vs THE UNION OF INDIA CITATION : 2025 TAXSCAN (HC) 2226

The Gauhati High Court addressed the issue of violation of natural justice in a service tax proceeding initiated under Section 73(2) of the Finance Act, 1994. The petitioner, Dhanjit Kumar Pathak, challenged the levy of demand, interest, and penalties under Sections 77(1)(c) and 78(1) on the ground that the Order-in-Original confirming a demand of ₹16,37,501 for FY 2016-17 was passed without proper service of a show-cause notice, depriving him of an opportunity to respond.

A single judge Bench of Justice N. Unni Krishnan Nair set aside the Order-in-Original after finding that the department failed to produce any material proof of service of the alleged notice dated 22 October 2021. The matter was remanded to the adjudicating authority with a direction to serve the show-cause notice with due acknowledgment, allow 15 days’ time for filing a reply, and thereafter pass a fresh order in accordance with law.

Identical Gold Chains Not Personal Effects: Delhi HC says Travellers Liable to Declare and Pay Duty

AARTI MANGLA AGGARWAL vs COMMISSIONER OF CUSTOMS NEW DELHI CITATION : 2025 TAXSCAN (HC) 2227

The Delhi High Court examined whether gold chains carried by passengers returning from abroad qualify as “personal effects” under the Customs Act, 1962, so as to be exempt from declaration and customs duty. The case arose under Section 110 of the Customs Act after seven gold chains weighing 455 grams were seized from five Indian nationals returning from Dubai at IGI Airport, New Delhi. The Petitioners contended that the ornaments were part of their personal belongings and that the Show Cause Notices were time-barred; however, the Court noted that passengers are obligated to declare dutiable goods upon arrival, particularly when such gold items are purchased abroad and not meant for regular daily use.

A Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain upheld the validity of the seizure and confirmed that the SCNs had been issued within the permissible limitation period, as evidenced from the dispatch register. Holding that identical gold chains purchased in Dubai cannot be treated as exempt personal effects, the Court ruled that the Petitioners were liable to pay applicable customs duty. The petitions were disposed of with directions to the Customs Department to provide a hearing and complete adjudication after considering the Petitioners’ willingness to pay duty in accordance with law.

Non-Consideration of Sundry Creditors Ledgers: Delhi HC Sets Aside ₹80.9 Cr GST Demand, Remands Case for Reconsideration

JMD LIGHTENING AND CABLE CO vsTHE ADDITIONAL COMMISSIONER DELHI CITATION : 2025 TAXSCAN (HC) 2228

The Delhi High Court adjudicated upon the legality of a GST demand order issued under the Central Goods and Services Tax Act, 2017, wherein a tax and penalty liability of ₹80.92 crore was imposed on JMD Lightening & Cable Co. The primary issue before the Court concerned the disallowance of Input Tax Credit (ITC) for alleged non-payment to suppliers within 180 days, as provided under GST law, and whether the adjudicating authority failed to consider crucial financial records, including credit ledgers and ITC deposits, already furnished by the taxpayer prior to the issuance of the show cause notice.

A Division Bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta observed that the adjudicating authority’s failure to consider ledgers submitted for FY 2018-19 to FY 2022-23 and the petitioner’s claim of ₹32 lakh already deposited as ITC vitiated the basis of the demand determination. Holding that such non-consideration of relevant material violated principles of natural justice, the Court set aside the Order-in-Original and remanded the matter for fresh adjudication. The petitioner was directed to file a comprehensive reply within 30 days, and the authority was instructed to grant a personal hearing before passing a fresh order in accordance with law.

Attendance Shortage Can’t Bar Law Students From Exams: Delhi HC Orders UGC Regulations Review

COURTS ON ITS OWN MOTION IN CITATION : 2025 TAXSCAN (HC) 2229

The Delhi High Court addressed the legal issue of debarring law students from examinations solely on grounds of attendance shortage, particularly in institutions regulated by the University Grants Commission (UGC) and Bar Council of India (BCI). The Court emphasised the need for a reassessment of attendance-related regulations to ensure they do not adversely impact students’ mental well-being or educational access, especially in cases involving genuine personal or medical difficulties.

The Bench of Justice Prathiba M. Singh, which held that rigid attendance enforcement without considering individual circumstances can be harsh and inconsistent with the fundamental objectives of education. The Court directed the UGC to conduct a comprehensive review of its mandatory attendance requirements and similarly instructed the BCI to examine its regulations for law colleges. It also underscored the necessity for effective student grievance redressal mechanisms and mental-health support systems within educational institutions.

GST Recovery Misapplied: Andhra Pradesh HC Orders Re-credit of ₹16.48 Lakh to Petitioners Mistakenly Linked to Defaulting Company

G.D.R Cylinders Private Limitedvs Borra Bhanu Vardhan Reddy CITATION : 2025 TAXSCAN (HC) 2230

The Andhra Pradesh High Court examined the legality of GST recovery proceedings initiated under Section 79(c) of the CGST Act, where tax dues of MM Cylinders Pvt. Ltd. were wrongly recovered from individuals and entities associated with GDR Cylinders Pvt. Ltd. The petitioners argued that they had no connection with the defaulting company and challenged the unlawful adjustment of Input Tax Credit (ITC) and freezing of personal bank accounts, which resulted in severe hardship, including disruption to the second petitioner’s overseas academic plans.

The Division Bench comprising Justice Harinath N and Dr. Justice Y. Lakshmana Rao, which noted that the petitioners were unrelated to the taxable entity named in the recovery order. Observing that such coercive recovery was unauthorised, the Court granted interim relief, staying the bank recovery notice and directing the re-credit of Rs. 12.55 lakh to the second petitioner and Rs. 3.92 lakh to the ex-director within seven working days. The Bench further required the respondents to file a counter before proceeding with the ITC recovery of Rs. 14.57 lakh, highlighting that GST enforcement must correctly identify the liable entity to avoid undue prejudice.

Funds Declared in Settlement Proceedings Cannot Be Treated as Unexplained Loans: Delhi HC rejects Revenue Appeal in Income Tax Case

PR. COMMISSIONER OF INCOME TAX(CENTRAL)-2 vs R B FARMS AND ESTATES PVT. LTD CITATION : 2025 TAXSCAN (HC) 2231

The Delhi High Court examined the issue of whether unsecured loans already disclosed and taxed in proceedings before the Income Tax Settlement Commission could again be assessed as unexplained cash credits under Section 68 of the Income Tax Act, 1961. The case arose from additions made during the assessment of R B Farms and Estates Private Limited for AY 2015-16, where the Assessing Officer treated ₹10.96 crores introduced through group entities as bogus loan entries, despite the underlying funds having been declared as undisclosed income and taxed during settlement proceedings.

A Division Bench of Justice Vibhu Bakhru and Justice Tejas Karia upheld the concurrent findings of the CIT(A) and the ITAT that the same income cannot be subjected to tax twice. The Bench held that the Settlement Commission’s order, which verified the source of funds as application of undisclosed income already brought to tax in the hands of a group company, could not be disregarded. Accordingly, the Court dismissed the Revenue’s appeal, affirming the deletion of the addition under Section 68.

GST Registration Restoration Dependent on Verification of New Business Premises and Documents: Delhi HC Directs Fresh Inspection

M/S SAKSHI TRADING COMPANY vsADDITIONAL COMMISSIONER, APPEAL-I CENTRAL TAX, EAST AND ANR CITATION : 2025 TAXSCAN (HC) 2232

The Delhi High Court addressed the issue of cancellation of GST registration due to the assessee not being found at the registered premises, examining compliance obligations under Section 28 of the Central Goods and Services Tax (CGST) Act, 2017 read with Rule 19 of the CGST Rules, 2017 relating to amendment of registration details. The Court dealt with whether the petitioner, Sakshi Trading Company, could seek restoration of its cancelled GST registration after shifting business premises and subsequently furnishing the requisite supporting documents including the rent agreement and proof of existence at the new location.

The Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain, which directed the concerned authorities to conduct a fresh inspection of the petitioner’s new business premises and thereafter take a decision on restoration of registration within one month of such inspection. The High Court disposed of the petition with the observation that reinstatement of GST registration would depend on verification of documents and confirmation of the petitioner’s operations at the changed address.

Conduit Companies Cannot be Taxed without Proof of Income: Delhi HC Deletes Commission Income Additions on Alleged Accommodation Entry

PR. COMMISSIONER OF INCOME TAXvs THIRD GENERATION TRADERS PVT. LTD CITATION : 2025 TAXSCAN (HC) 2233

The Delhi High Court examined whether additions toward unexplained cash credits under Section 68 of the Income Tax Act, 1961 and presumed commission income could be sustained against an assessee alleged to be a mere conduit in accommodation entry transactions. The issue revolved around assessments framed under Section 153C for multiple years, where the Revenue claimed that the assessee facilitated routing of funds to ultimate beneficiaries and should be taxed on presumed commission.

A Division Bench of Justice Vibhu Bakhru and Justice Tejas Karia upheld the findings of the CIT(A) and the ITAT that no real taxable income accrued to the assessee, as it functioned solely as a pass-through entity and substantive additions had already been made in the hands of the actual beneficiaries. Holding that protective additions could not survive without evidence of genuine commission earnings, the Court dismissed the Revenue’s appeals in entirety.

Gujarat HC Upholds NCLT’s Power to Direct Lessee to Vacate Corporate Debtor’s Property

FIVEBRO WATER SERVICES PVT LTDvs BIJAY MURMURIA CITATION : 2025 TAXSCAN (HC) 2234

The Gujarat High Court dealt with the issue of whether the National Company Law Tribunal (NCLT) has jurisdiction under Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 to direct a lessee to vacate a property forming part of the liquidation estate of a corporate debtor. The petitioners challenged the NCLT’s order directing them to vacate the corporate debtor’s premises, arguing that disputes concerning possession and rent fall within civil or arbitral jurisdiction and not within the powers of the NCLT under the IBC.

A Single Bench of Justice Niral R. Mehta upheld the NCLT’s jurisdiction and dismissed the writ petition, holding that the dispute clearly arose in relation to liquidation proceedings and that writ jurisdiction under Article 226 of the Constitution of India would not be exercised in favour of parties who engaged in conduct amounting to a fraudulent attempt to defeat insolvency proceedings. Affirming the Liquidator’s authority to recover assets for the liquidation estate, the Court vacated all interim relief and directed the petitioners to pursue the statutory appellate remedy under Section 61 of the IBC before the NCLAT, if so advised.

Duplicate Assessment for Same Defect and Year Invalid under GST: Madras HC Quashes Order

Tvl. DHANALAKSHMI SRINIVASANSUGARS (P) LTD vs The State Tax Officer CITATION : 2025 TAXSCAN (HC) 2235

The Madurai Bench of the Madras High Court examined the legal issue of whether a second assessment order could be issued under the Goods and Services Tax (GST) Act for the same defect and assessment year. The petitioner, Tvl. Dhanalakshmi Srinivasan Sugars (P) Ltd., challenged the assessment order dated 16 May 2025, arguing that an earlier order dated 2 February 2024 for Assessment Year 2021–2022, issued on the ground of delayed filing of GSTR-3B returns, had already addressed and rectified the alleged defect. It was therefore contended that the second order was arbitrary and without jurisdiction.

A Single Bench of Justice G. R. Swaminathan allowed the writ petition and quashed the impugned assessment order, holding that two assessments cannot be passed for the same cause and same assessment year. The Court clarified that once an assessment is completed for a particular defect, any subsequent order for the same reason would amount to duplication and is unsustainable in law.

GST Reg. Cancelled Over Miscommunication b/w CA and DC of State Tax on Dues: Telangana HC Allows Revocation Plea

MOHAMAD JAFAR vs The Deputy Commissioner of State Tax CITATION : 2025 TAXSCAN (HC) 2236

The Telangana High Court dealt with the legal issue of revocation of cancellation of GST registration under Section 29(2)(c) of the Central Goods and Services Tax Act, 2017, concerning non-filing of GST returns. The petitioner, Mohamad Jafar, challenged the cancellation order dated 5 February 2024, submitting that the alleged non-compliance resulted from a miscommunication between his Chartered Accountant and the State Tax Department, and that the entire tax liability had already been discharged. He sought permission to invoke Rule 23(1) of the CGST Rules, 2017 to apply for revocation of the cancellation.

A Division Bench of Chief Justice Aparesh Kumar Singh and Justice G.M. Mohiuddin allowed the writ petition, granting two weeks’ time to file a detailed revocation application and directing the competent authority to consider and decide it in accordance with law. While the Court refrained from expressing any view on the merits, it noted that the cancellation appeared to stem from inadvertent procedural issues rather than wilful default, and therefore permitted the assessee to pursue revocation of GST registration.

Delhi HC Sets Aside ITAT Order, Holds "Fit Case" Statement Sufficient for Valid Approval u/s 151 of Income Tax Act

PR. COMMISSIONER OF INCOME TAXvs M/S AGROHA FINCAP LTD CITATION : 2025 TAXSCAN (HC) 2237

The Delhi High Court adjudicated on the legal issue concerning the validity of approval granted under Section 151 of the Income Tax Act, 1961, in the context of reopening assessments under Section 147. The dispute arose from reassessment proceedings initiated against M/s Agroha FinCap Ltd. for Assessment Year 2009-10, wherein the Assessing Officer treated alleged accommodation entries amounting to ₹25,00,000 as unexplained credits under Section 68. The ITAT had previously quashed the reassessment on the ground that the sanction granted by the Principal Commissioner under Section 151 was merely mechanical and thus insufficient in law.

A Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar set aside the ITAT’s order, holding that the approval stating “Yes, I am convinced it is a fit case for re-opening of the assessment” fulfilled the satisfaction requirement prescribed under Section 151. the Court emphasized that the present case reflected a clear application of mind by the competent authority and aligned with the principle laid down in PCIT v. Meenakshi Overseas Pvt. Ltd.. The appeal of the Revenue was accordingly allowed, and the substantial question of law was answered in its favour.

Setback to Vedanta Ltd: Bombay HC Denies Form-C on HSD as Usage Extended Beyond Mining Operations

Vedanta Limited vs Union of India CITATION : 2025 TAXSCAN (HC) 2238

The Bombay High Court (Goa Bench) adjudicated upon the legal issue concerning eligibility for concessional purchase of High Speed Diesel (HSD) against Form-C under Section 8(3)(b) of the Central Sales Tax Act, 1956, post-implementation of the GST regime. The petitions were filed by Vedanta Ltd. and Sesa Mining Corporation Ltd., challenging denial of Form-C for procurement of HSD required for mining activities. Vedanta contended that since HSD remained outside GST’s scope, CST provisions continued to apply, and that the fuel was used for iron ore extraction, processing, and movement, thereby qualifying as “use in mining.”

A Division Bench of Justices Bharati Dangre and Nivedita P. Mehta dismissed the writ petitions and upheld the tax authorities’ decision denying Form-C issuance. The Court held that concessional rate benefits were available only where HSD was used directly in mining and processing operations, and not where substantial quantities were resold to private transporters, falling outside the statutory purpose. Distinguishing Supreme Court precedents cited by Vedanta, the Bench concluded that the company had failed to demonstrate exclusive consumption of HSD for mining machinery and thus was not entitled to the claimed concession.

Educational Consultancy Services Not Considered Intermediary Services: Delhi HC Upholds GST Refund Orders to Global Opportunities Private Limited

COMMISSIONER OF DELHI GOODS ANDSERVICE TAX DGST DELHI vs GLOBAL OPPORTUNITIES PRIVATE LIMITED CITATION : 2025 TAXSCAN (HC) 2239

The Delhi High Court dealt with the classification of educational consultancy services under the Integrated Goods and Services Tax Act, 2017, specifically concerning whether such services fall within the scope of “intermediary services’’ under Section 2(13) of the IGST Act or qualify as “export of services’’ eligible for GST refund. The issue arose in petitions filed by the Commissioner of DGST challenging the refund granted to Global Opportunities Pvt. Ltd. for the periods between FY 2018-19 and 2021-22, wherein the Department alleged that the consultancy entity acted as an intermediary facilitating admissions for foreign universities and was therefore not entitled to export benefits.

A Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain upheld the Appellate Authority’s decision and ruled that the respondent was not an intermediary, as it directly provided marketing and consultancy services to foreign universities, who were the actual recipients and payors of consideration. The Court confirmed that such services constitute export of services, making the respondent eligible for GST refunds. Accordingly, the petitions were dismissed, and the tax authorities were directed to process and disburse the refund along with statutory interest within two months.

No Gross Negligence or Lack of Bona Fides by Importer: Delhi HC Condones Delay in Filing Appeal Before CESTAT

M/S SIDDHI VINAYAK IMPORTERS vs COMMISSIONER OF CUSTOMS CITATION : 2025 TAXSCAN (HC) 2240

The Delhi High Court examined the issue of condonation of delay in filing an appeal before the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) under the Customs Act, 1962, specifically the interpretation of Section 129A(5) which empowers the Tribunal to condone delay upon sufficient cause being shown. The matter arose from a challenge by Siddhi Vinayak Importers, whose request for amendment of Bills of Entry under Section 149 of the Act was rejected, and whose subsequent appeal before the CESTAT was dismissed solely on the ground of a 273 day delay in filing.

A Division Bench comprising Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta observed that there was no gross negligence, deliberate inaction, or lack of bona fides on the part of the appellant, noting the delay resulted from procedural circumstances including a change of counsel.The Court adopted a justice-oriented approach and condoned the delay, subject to payment of ₹50,000 as costs to the Department. The impugned order was set aside, and the appeal was restored before the CESTAT for adjudication on merits.

Ad-Interim Relief to Shemaroo Directors: Bombay HC stays Rs. 133 Cr GST Penalty over Retrospective Application

Mr.Amit Manilal Haria vs The Joint Commissioner of CGST CITATION : 2025 TAXSCAN (HC) 2241

The Bombay High Court dealt with a crucial issue concerning the retrospective applicability of penalties under Section 122(1A) of the Central Goods and Services Tax Act, 2017, in relation to GST liability for periods beginning July 2017. The writ petition, filed by top executives of Shemaroo Entertainment Limited, challenged an Order-in-Original imposing a penalty of approximately ₹133 Crores, alleging wrongful availment of Input Tax Credit and GST short payment. The Petitioners argued that Section 122(1A), which came into effect only from 1 January 2021, could not be retroactively used to penalise actions prior to its enactment and that they were not “taxable persons” capable of retaining benefits contemplated under the statute.

A Division Bench comprising Justice B.P. Colabawalla and Justice Firdosh P. Pooniwalla granted complete ad-interim relief, observing that one of the issues was already covered by the decision in Shantanu Sanjay Hundekari v. Union of India. The Court stayed the ₹133 Crore penalty, quashed its retrospective application for earlier tax periods, and restrained the GST authorities from taking any coercive action against the Shemaroo Directors pending final adjudication. The matter has been posted for further hearing on 10 June 2025, with directions for filing affidavits within specified timelines.

Customs Dept Cannot Retain Excess Duty for 14 Years and Evade Interest by Technicalities: Orissa HC Directs Payment of 6% Interest to Vedanta Ltd

Commissioner of Customs vs M/s.Vedanta Ltd CITATION : 2025 TAXSCAN (HC) 2242

The Orissa High Court examined the legality of withholding interest on excess customs duty retained by the Department for an excessively prolonged period, arising under Section 18 and Section 27A of the Customs Act, 1962. The issue stemmed from a provisional assessment of imported goods, wherein Vedanta Ltd. had deposited duty that was later found to be in excess, but the refund was issued only after 14 years, without any interest. The primary legal question before the Court was whether the Customs Department could deny compensatory interest by relying on statutory technicalities when it had failed to finalize assessment within the mandated time.

A Division Bench of Chief Justice Harish Tandon and Justice Murahari Sri Raman upheld the CESTAT’s order granting interest to Vedanta, holding that the Department’s unexplained delay violated procedural fairness and the Customs Manual’s timelines. The Court ruled that authorities cannot unjustly retain taxpayers’ money for years and then evade liability for compensation. However, modifying the rate awarded by the Tribunal, the Bench directed payment of interest at 6% per annum, as prescribed under Notification No. 75/2003-Customs (N.T.), and dismissed the Department’s appeal.

Interest under Income Tax payable if unpaid within Period Specified in Demand Notice, While GST, Excise & Customs Impose Immediate Liability: P&H HC

THE KARNAL COOP. SUGAR MILLS LTDvs COMMISSIONER OF INCOME TAX AND ANR CITATION : 2025 TAXSCAN (HC) 2243

The Punjab and Haryana High Court examined the legal issue concerning the levy of interest on delayed payment of tax under Section 220(2) of the Income Tax Act, 1961, specifically whether such interest accrues automatically from the date on which tax becomes due or only upon expiry of the time limit mentioned in the demand notice issued under Section 156. The dispute arose out of a demand raised against The Karnal Cooperative Sugar Mills Ltd., which challenged the imposition of ₹74.68 lakh as interest on the ground that the earlier demand notice had ceased to exist once the assessment order was set aside and tax was refunded pursuant to the first appellate decision.

The Division Bench comprising Justice Jagmohan Bansal and Justice Harpreet Kaur Jeewan, which ruled that the liability to pay interest under Section 220(2) arises only when the assessee defaults in paying the amount specified in a valid and operative demand notice issued under Section 156, and not automatically from the original date of assessment. Rejecting the Revenue’s reliance on a 1982 CBDT circular, the Court held that administrative circulars cannot override statutory provisions or judicial interpretation. Allowing the writ petition, the Bench directed the department to recalculate interest from 30 days after the fresh demand notice dated 7 September 1998, thereby setting aside the earlier computation linked to the quashed assessment.

GST SCN Issuance before reply by assessee to Pre-Notice is Invalid: Delhi HC

VARIAN MEDICAL SYSTEMSINTERNATIONAL INDIA PVT. LTD vs UNION OF INDIA CITATION : 2025 TAXSCAN (HC) 2244

The Delhi High Court examined the legality of the issuance of a Show Cause Notice (SCN) under the Central Goods and Services Tax Act, 2017, particularly with respect to Section 65 dealing with audit proceedings and adherence to the principles of natural justice. The case concerned Varian Medical Systems International India Pvt. Ltd., which challenged the issuance of the SCN dated 27 November 2024 on the ground that the department had denied reasonable opportunity to respond to the pre-SCN dated 25 November 2024, wherein time was granted to file submissions until 28 November 2024.

A Division Bench of Justice Prathiba M. Singh and Justice Shail Jain held that although the audit report was communicated within the statutory period prescribed under Section 65 of the CGST Act, the issuance of the SCN a day prior to the expiry of the time granted for response amounted to a “complete violation of the principles of natural justice.” Consequently, the Court set aside the impugned SCN and restored the proceedings to the pre-SCN stage, allowing the petitioner to file its reply and directing the department to re-evaluate the matter in accordance with law.

Violation of mandatory Three-Month Limitation u/s 73: Delhi HC Quashes GST Notice

C.H. ROBINSON WORLDWIDE FREIGHTINDIA PRIVATE LIMITED vs ADDITIONAL COMMISSIONER, CGST-DELHI-SOUTH & ORS CITATION : 2025 TAXSCAN (HC) 2245

The Delhi High Court has set aside a Show Cause Notice (SCN) issued to C.H. Robinson Worldwide Freight India Private Limited, holding that it was barred by limitation under Section 73(2) of the Central Goods and Services Tax (CGST) Act, 2017. The Revenue attempted to justify the delayed issuance and service of the SCN dated 31st May 2024 by citing a “technical glitch” that allegedly prevented timely generation of the DRC-01 form. Rejecting this contention, the Court reiterated that the statutory three-month period for providing notice to the assessee before finalising demand is mandatory and not merely procedural.

A Division Bench of Justice Prathiba M. Singh and Justice Shail Jain, relying on the Court’s own ruling in Tata Play Limited, held that administrative or technical issues cannot override legislative intent designed to safeguard the assessee’s right to respond effectively. The Court noted that not only was the SCN served well beyond the permissible timeline on 12th August 2024 but it was also sent to an outdated address. Concluding that the notice was issued and served in violation of statutory limitation, the Bench quashed the SCN and all consequential proceedings.

Jharkhand HC grants Anticipatory Bail to Scrap Dealer with GST reg, Citing Lack of Criminal Antecedents

Dineshwar Saw vs The State of Jharkhand CITATION : 2025 TAXSCAN (HC) 2246

The Jharkhand High Court examined the legality of arrest proceedings initiated against a GST-registered scrap dealer in a case involving the alleged unlawful possession and sale of iron scrap. The matter arose under Sections 303(2), 317(2), and 317(5) of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023, wherein the petitioner, a legitimate scrap trader holding a valid GST registration, contended that the seized iron scrap was lawfully owned and sold to a registered buyer, thus negating any criminal intent or offence.

A Single Bench of Justice Sanjay Kumar Dwivedi, noting that the petitioner had no criminal antecedents and operated a genuine business, held that custodial interrogation was unnecessary. The Court therefore allowed the application for anticipatory bail, directing the petitioner to surrender before the competent court within three weeks, whereupon he shall be released on bail on furnishing a bond of ₹25,000/- with two sureties of like amount, in compliance with conditions stipulated under Section 482(2) BNSS, 2023.

‘GSTAT Now Functional’: Telangana HC Directs to File Appeal Before Tribunal, Denies Adjustment of Tax Paid as Pre-Deposit

S. Ashok Kuma vs The Commissioner of Customs and Central Tax CITATION : 2025 TAXSCAN (HC) 2247

The Telangana High Court dealt with the issue of maintainability of a writ petition in light of the operational status of the Goods and Services Tax Appellate Tribunal (GSTAT), and addressed the legal question concerning pre-deposit requirements under Section 112(8) of the CGST Act, 2017, as amended by the Finance Act, 2025. The petitioner, aggrieved by the penalty confirmed under the CGST Act, sought adjustment of tax paid during investigation (via Form GST DRC-03) toward the mandatory pre-deposit of 10% of the penalty, applicable when an appeal concerns penalty alone without any tax demand.

A Division Bench comprising Chief Justice Aparesh Kumar Singh and Justice G.M. Mohiuddin disposed of the writ petition, directing the petitioner to avail the statutory appellate remedy before the GSTAT, now functional and governed by the notified timelines under Rule 123 of the GST Appellate Tribunal (Procedure) Rules, 2025. The Court rejected the request to adjust DRC-03 payments against the penalty pre-deposit, agreeing with the Revenue that tax paid during investigation cannot be offset toward penalty liability. The petitioner was granted eight weeks to comply with the pre-deposit requirement, with protection from coercive action during this period and until the GSTAT adjudicates the appeal, subject to timely compliance.

Fake GST ID Created Using Forged Judicial Seal and Rent Deed by CA’s Employee: Gauhati HC Grants Pre-Arrest Bail to Businessman after Finding No Direct Role

Faiz Ahmed vs The State of AP CITATION : 2025 TAXSCAN (HC) 2248

The Gauhati High Court addressed a case concerning alleged large-scale GST fraud involving fake GST registrations, forged judicial seals, and fraudulent documents, leading to wrongful availment of Input Tax Credit (ITC) under the GST regime. The matter related to offences registered under Sections 120B, 420, 467, 468, 471, 473 and 474 of the Indian Penal Code, involving fake invoices of over ₹658 crores and potential ITC fraud of ₹99.31 crores. The petitioner, Faiz Ahmed, a small businessman, sought anticipatory bail asserting that he had no direct role in the creation or operation of the fictitious firm involved in the scam.

A Single Bench of Justice Kardak Ete, after noting that the principal accused had already been granted bail and finding no evidence establishing Ahmed’s direct involvement in the forgery or fraudulent GST activities, made the earlier interim bail order absolute. The Court observed that the applicant had cooperated with the investigation and that his interactions with the main accused were limited to repayment of a personal loan. Concluding that custodial interrogation was unnecessary and his role appeared only peripheral, the High Court granted pre-arrest bail to the applicant.

‘Issue Already Settled’: Orissa HC Rejects Customs Appeal on Iron Ore Fe Content Dispute, confirms WMT Basis for Duty Assessment

Commissioner of Customs (Preventive), Bhubaneswar vs M/s. S.M. Niriyat Pvt. Ltd. CITATION : 2025 TAXSCAN (HC) 2249

The Orissa High Court adjudicated upon the legal issue of whether the iron (Fe) content in iron ore fines (IOF) for the purpose of customs duty assessment under the Customs Act, 1962 should be computed on the basis of Wet Metric Ton (WMT) or Dry Metric Ton (DMT). The Customs Department alleged evasion of duty by exporters through misdeclaration of Fe content and classification of cargo into different categories below and above 58% iron content. However, the High Court confirmed that Fe content for duty purposes must be determined based on WMT, which aligns with prevailing industry practice and earlier legal precedents.

A Division Bench of Chief Justice Harish Tandon and Justice Murahari Sri Raman upheld the findings of the CESTAT, Kolkata, which had set aside the penalties imposed on M/s S.M. Niriyat Pvt. Ltd. and its directors. Relying on its previous decision in Commissioner of Customs (Preventive) v. Chamong Tee Exports Pvt. Ltd. (2025), the Court held that the department failed to produce any new evidence or substantial question of law to warrant interference under Section 130 of the Act. Accordingly, the High Court dismissed the department’s appeal and affirmed the Tribunal’s ruling favouring the exporter.

‘Hopelessly Timebarred’: Allahabad HC Strikes Down 2021 Excise SCN for Reopening Settled MODVAT Issue Concluded 16 years ago

Modi Rubber Limited vs Union Of India CITATION : 2025 TAXSCAN (HC) 2250

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The Allahabad High Court dealt with the legal issue concerning the validity and limitation of a show cause notice issued under Section 11A of the Central Excise Act, 1944, seeking to reopen a dispute regarding the utilisation of Additional Excise Duty (AED) credit for payment of Basic Excise Duty (BED) under the MODVAT scheme. The Court examined whether the 2021 notice, issued decades after the original dispute (1993-1998 transactions), could lawfully revive a matter already adjudicated and finalized under the earlier Rule 57F(12) of the Central Excise Rules governing MODVAT.

A Division Bench comprising Justice Saumitra Dayal Singh and Justice Indrajeet Shukla held that the 2021 show cause notice issued by the Commissioner of Central Excise was both jurisdictionally defective and hopelessly time-barred, noting that the issue had attained finality with the CEGAT’s 2000 decision, subsequently affirmed by the High Court in 2016. Accordingly, the Court quashed the notice, ruling that the authorities could not invoke CENVAT provisions to re-agitate a settled MODVAT dispute after an unjustified delay of over 16 years.

Madras HC quashes Levy of Purchase Tax under TNGST Act on Buyer owing to Default of Seller

M/s.Light Roofings Ltd vs The Tamil Nadu Sales Tax Appellate Tribunal CITATION : 2025 TAXSCAN (HC) 2251

The Madras High Court examined the legality of imposing purchase tax under Section 7A of the Tamil Nadu General Sales Tax Act, 1959, on a buyer solely because the selling dealers failed to remit tax on the transactions. The central issue before the Court was whether purchases from registered dealers whose sales were otherwise taxable under Section 3(2) of the Act could be treated as transactions made “in circumstances in which no tax is payable,” thereby triggering Section 7A liability against the purchaser.

A Division Bench of Justice S.M. Subramaniam and Justice Mohammed Shaffiq ruled that Section 7A is a distinct charging provision applicable only in exceptional circumstances where the purchase itself is non-taxable, and not where the seller defaults in paying tax. The Court held that the Revenue must proceed against the defaulting sellers rather than shifting liability to the buyer. Accordingly, the Bench quashed the STAT’s order, granting relief to the petitioner and affirming that non-remittance by a seller cannot justify a purchase tax levy on the buyer.

Financial Gains from Artificially Enhanced Share Price is Proceeds of Crime: Delhi HC upholds ₹122 Cr ED PMLA Attachment

DIRECTORATE OF ENFORCEMENT vs M/S PRAKASH INDUSTRIES LTD CITATION : 2025 TAXSCAN (HC) 2252

The Delhi High Court examined whether profits earned from a seemingly lawful transaction could still constitute “proceeds of crime” under the Prevention of Money Laundering Act, 2002 when their origin stems from an illegal act. The legal issue centred on the scope of Section 2(1)(u) of the PMLA, defining proceeds of crime, and whether gains made through the sale of shares at an inflated market value resulting from fraudulent misrepresentation before the Bombay Stock Exchange could be treated as tainted property even though the sale itself took place through a legitimate market channel.

A Division Bench comprising Justice Anil Kshetarpal and Justice Harish Vaidyanathan Shankar upheld the Enforcement Directorate’s Provisional Attachment Order of ₹122.74 crore against M/s Prakash Industries Ltd. The Court ruled that artificially inflated share gains formed part of a continuing laundering process linked to scheduled offences under the IPC and the Prevention of Corruption Act, thereby qualifying as proceeds of crime. Holding that lawful execution of a transaction cannot remove the taint of its criminal origin, the Bench restored the provisional attachment and dismissed the challenge raised by the company.

Delhi HC Orders Release of 464 Grams of Gold of Uzbek Nationals Despite Delay in Paying Redemption Fine

MUYASSAR YUSUPOVA vs COMMISSIONER OF CUSTOMS CITATION : 2025 TAXSCAN (HC) 2253

The Delhi High Court addressed a matter concerning the release of seized gold under the Customs Act, 1962, specifically Section 125(3), which allows redemption of confiscated goods upon payment of a fine within a stipulated period. The legal issue involved the enforcement of an Order-in-Original dated 31 January 2025, permitting two Uzbek nationals, Muyassar Yusupova and Jasur Parmanov, to redeem and re-export 464 grams of gold jewellery valued at ₹21,21,831, despite their delayed payment due to Yusupova’s deportation prior to the issuance of the order.

A Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain directed the Customs Department to allow the petitioners to pay the redemption fine and complete the necessary formalities, emphasizing their bona fide intention to comply. The Court held that the deportation created genuine difficulty in adhering to the 120 day redemption window, and upon payment of the fine, the seized jewellery must be released and re-exported. The writ petition was accordingly disposed of in these terms, permitting appearance before the Customs Authority either personally or through an authorised representative.

GST Dept cannot Deny ITC to Buyer if Selling Dealer’s Registration Cancelled Post-Transaction: Allahabad HC

M/S Singhal Iron Traders vs Additional Commissioner And Another CITATION : 2025 TAXSCAN (HC) 2254

The Allahabad High Court dealt with a matter concerning the denial of Input Tax Credit (ITC) under the Goods and Services Tax Act, 2017, specifically Section 74, which deals with reversal of ITC in cases of fraudulent or non-existent suppliers. The legal issue arose when M/s Singhal Iron Traders, a registered purchaser of iron scrap, was served a show-cause notice seeking reversal of ITC and imposing a penalty because the supplier, M/s Arvind Metal Suppliers, was later found to have a cancelled GST registration. The Court examined whether ITC can be denied to a purchasing dealer when the supplier was validly registered at the time of the transaction.

A bench comprising Justice Piyush Agrawal observed that the supplier was a registered dealer at the time of sale, had filed the requisite GSTR-1 and GSTR-3B returns, and that payments were made through banking channels. The Court emphasized that the authorities should verify the status of the supplier at the time of the transaction before initiating punitive proceedings. Accordingly, the Court held that the proceedings under Section 74 were unwarranted, quashed the impugned orders, and allowed the writ petition, thereby affirming the petitioner’s entitlement to claim ITC.

Gujarat HC Calls on GST Council to Review 160% Compensation Cess on Merchant Exporter Supplies

M/S. SOPARIWALA EXPORT PVT. LTD.vs JOINT COMMISSIONER, CGST AND CENTRAL EXCISE & ORS. CITATION : 2025 TAXSCAN (HC) 2255

The Ahmedabad Bench of the Gujarat High Court dealt with a petition concerning the levy of Compensation Cess at 160% under the Goods and Services Tax Act, 2017, on supplies made to merchant exporters. The legal issue revolved around whether such supplies, which were manufactured by the petitioner and qualify as zero-rated exports under the IGST Act, 2017, should be subjected to full Compensation Cess when GST and IGST rates on the products were significantly lower. The petitioner, Sopariwala Pvt. Ltd., sought quashing of the levy and argued that the tax regime intended these supplies to be revenue neutral, with input tax credit claimable under Section 54.

A bench comprising Justice Bhargav D. Karia and Justice D.N. Ray held that the supplies to merchant exporters indeed fall under zero-rated exports and highlighted the revenue-neutral nature of the Compensation Cess. While refraining from granting a direct exemption due to the absence of a specific notification, the Court urged the GST Council to review the matter and align the Compensation Cess with applicable GST and IGST rates. The Court directed that no coercive action be taken until the Council examines the issue and recommends suitable relief, effectively putting the 160% Cess levy in abeyance pending resolution.

Bombay HC Grants Interim Relief to Co-operative Credit Society, Restrains Coercive Recovery in Section 80P Deduction Disallowance Dispute

JANASEVA URBAN COOPERATIVE vs INCOME TAX OFFICER WARD CITATION : 2025 TAXSCAN (HC) 2256

The Bombay High Court at Goa addressed a petition filed by Janaseva Urban Cooperative Credit Society Limited challenging the assessment order for Assessment Year 2019–2020 under the Income Tax Act, 1961. The legal issue involved the disallowance of a deduction of ₹32,16,371 under Section 80P and the consequential addition of the same amount as business income. The petitioner contended that the assessment contained serious computational discrepancies, with inconsistencies in income from other sources, and that a substantial portion of the disputed demand ₹23,49,186 had already been recovered, making the demand unsustainable.

A Division Bench comprising Justices M.S. Karnik and Nivedita P. Mehta granted interim relief restraining the Income Tax Department from taking any coercive recovery action against the petitioner pending further consideration. The Court also directed that the petitioner’s request to operate its bank accounts would be considered on the next hearing date. The interim protection ensures that the cooperative credit society will not face enforcement measures while the discrepancies in assessment computations and the entitlement under Section 80P are fully examined.

Proceedings Must Comply with Faceless Reassessment Procedure under Amended IT Act: Bombay HC Stays Old Notices

PRAVIN BHATI vs INCOME TAX OFFICER CITATION : 2025 TAXSCAN (HC) 2257

The Bombay High Court at Goa addressed a batch of writ petitions challenging reassessment notices issued under Section 148 of the Income Tax Act, 1961, pertaining to assessment years prior to AY 2023-2024. The petitioners contended that the notices, issued under the pre-amendment regime, failed to comply with the faceless reassessment procedure introduced by the Finance Act, 2021, which amended Sections 147 to 151 with effect from April 1, 2021.

A Division Bench comprising Justice Nivedita P. Mehta and Justice Bharati Dangre granted interim relief, staying the operation of the impugned Section 148 notices and all consequential reassessment proceedings pending the final disposal of the writ petitions. The Court noted the pendency of similar matters before the Supreme Court, including J.D. Printers Pvt. Ltd. v. Income Tax Officer (2024) and Hexaware Technologies Ltd. v. Asst. CIT (2024), and granted liberty to the parties to seek appropriate directions after the Apex Court’s pronouncements. The High Court reaffirmed that all reassessment proceedings must strictly comply with the faceless reassessment mechanism under the amended Income Tax Act.

Delhi HC Sets aside Income Tax Reassessment Notice against Michael and Susan Dell Foundation

MICHAEL AND SUSAN DELLFOUNDATION vs ASSISTANT/ DEPUTY COMMISSIONER OF INCOME TAX CIRCLE INTERNATIONALTAXATION 2(2)(1) NEW & ANR. CITATION : 2025 TAXSCAN (HC) 2258

The Delhi High Court dealt with an income tax reassessment matter concerning the Michael and Susan Dell Foundation, specifically regarding a foreign remittance of approximately $90,000. The petition challenged a show-cause notice under Section 148A(1), an order under Section 148A(3), and a reassessment notice under Section 148 of the Income Tax Act, 1961 for AY 2019-20.

A Division Bench comprising Justice V. Kameswar Rao and Justice Vinod Kumar set aside the order dated 29.06.2025 and the reassessment notice under Section 148, remanding the matter to the Assessing Officer to pass a fresh, reasoned order after providing the foundation an opportunity of hearing. The Court emphasized the fundamental principle that taxpayers’ representations must be considered before any adverse action, directing that the reassessment process, including the hearing, be completed within six weeks from the date of the order. The petition was accordingly disposed of, upholding the foundation’s right to be heard.

PCIT cannot use Suo Motu Revisional Power u/s 263 if AO has Allowed Deductions after Investigation: Kerala HC grants Relief to Apollo Tyres

M/S. APOLLO TYRES LTD vs THEPRINCIPAL COMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 2259

The Kerala High Court examined the scope of the Principal Commissioner of Income Tax’s (PCIT) revisional powers under Section 263 of the Income Tax Act, 1961, in the context of deductions claimed by an assessee. The matter arose when M/s Apollo Tyres Ltd. claimed depreciation under Section 32AC for assets acquired during F.Y. 2013-14, which were duly examined and allowed by the Assessing Officer (AO) following detailed queries. The PCIT invoked suo motu revisional powers alleging that certain assets pre-dated April 1, 2013, and challenged the AO’s assessment, which was upheld by the Income Tax Appellate Tribunal (ITAT), Cochin Bench, prompting the appeal before the High Court.

A Division Bench comprising Justice A. Muhamed Mustaque and Justice Harisankar V. Menon held that the ITAT erred in confirming the revisional action. Observing that Section 263 empowers the Commissioner to revise orders only if they are both “erroneous” and “prejudicial to the interests of the revenue”, the Court concluded that the AO had properly investigated the claim, and the PCIT could not exercise revisional powers merely to remand the matter. The High Court set aside the ITAT order and remitted the matter to the PCIT for fresh consideration after providing Apollo Tyres an opportunity of being heard, emphasizing that any examination of amendments under Section 32AC(1A) should be conducted in accordance with law.

University’s Affiliation Fees are Statutory levies, exempt from GST: Bombay HC quashes Tax Demand on Educational Activities

GOA UNIVERSITY vs JOINT COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX CITATION : 2025 TAXSCAN (HC) 2260

The Bombay High Court adjudicated on the issue of Goods and Services Tax (GST) applicability to educational activities, specifically affiliation fees collected by Goa University from its affiliated colleges. The petitioner challenged a show-cause notice dated 05.08.2024 issued under Section 74 of the CGST Act, 2017, which demanded ₹4.83 crore along with interest and penalties. The University argued that affiliation fees are statutory levies, collected as part of its regulatory and educational functions under the Goa University Act, 1984, and therefore do not constitute “consideration” for a “supply of services” under Sections 2(17) and 7 of the CGST Act, 2017, as the activities are non-commercial and exempt under Entry No. 66 of Notification No. 12/2017-CT (R) dated 28.06.2017.

The Bench comprising Justice M.S. Karnik and Justice Nivedita P. Mehta upheld the University’s contentions, ruling that its statutory and regulatory functions, including curriculum design, examinations, and degree conferment, are integral to education and not business activities. The High Court held that the affiliation fees do not qualify as taxable consideration and quashed the impugned GST demand. The Court also invalidated the circulars and press note relied upon by the revenue, observing that they could not restrict the scope of statutory exemptions, and emphasized that the University, as an educational institution, is entitled to exemption from GST on such activities.

Madras HC Allows Trust's Petition to Condone 151-Day Delay in Filing Form 10B on Condition of Donation to Blue Cross of India

Sivestar Educational Trust vs Commissioner of Income Tax CITATION : 2025 TAXSCAN (HC) 2261

The Madras High Court addressed a petition filed by Sivestar Educational Trust seeking condonation of a 151 day delay in filing its Income Tax Form 10B for the Assessment Year 2018-2019. The Trust, registered under Section 12A of the Income Tax Act, 1961, had filed its Audit Report along with its income tax return on 31.03.2019, past the extended due date of 31.10.2018. The delay was attributed by the Trust to “extenuating circumstances,” including the impact of the Gaja Cyclone, although the due date preceded the cyclone. The Commissioner of Income Tax (Exemption), under Section 119(2)(b), rejected the condonation request, noting that the reasons were not substantiated and were likely an afterthought.

The Bench comprising Justice C. Saravanan allowed the writ petition, emphasizing that procedural delays should not obstruct the Trust from claiming legitimate exemptions or deductions. The Court imposed a conditional order, directing the Trust to donate ₹25,000 to the Blue Cross of India within 30 days. Upon compliance, the impugned rejection order was deemed quashed, and the Assessing Officer was directed to proceed with the assessment in accordance with law. The decision relied on Supreme Court precedents recognizing that procedural requirements are “handmaids of justice and not mistress of law,” ensuring that the Trust’s substantive rights were protected despite the delay.

GST Demand through a Response to Letter to Assessee after Search: Delhi HC directs Dept to Issue Notice First

SHASHI KUMAR CHOUDHARY vs DEPUTYDIRECTOR DIRECTORATE GENERAL OF GST INTELLIGENCE DELHI ZONAL UNIT & ANR CITATION : 2025 TAXSCAN (HC) 2262

The Delhi High Court addressed a writ petition filed by Shashi Kumar Choudhary, Proprietor of SK Enterprises, challenging a communication dated 6th May 2025 issued by the Directorate General of GST Intelligence (DGGI), which computed GST and penalty amounting to Rs. 2,99,23,614 following a post-search letter by the assessee. The issue before the Court was whether such communication could be treated as a formal adjudication order under Sections 73 and 74 of the Central Goods and Services Tax Act, 2017, without issuance of a Show Cause Notice. The petitioner’s goods, comprising 4,97,070 Kgs of areca nuts, had been seized during a search on 1st May 2025, and the petitioner had offered to deposit the tax and penalty in a letter dated 2nd May 2025, seeking provisional release.

The Bench comprising Justice Pratibha M. Singh and Justice Rajneesh Kumar Gupta held that the impugned communication was merely a response to the assessee’s request and did not constitute an adjudication order. The Court clarified that a proper Show Cause Notice must be issued before any demand under Sections 73 or 74 can be legally raised. While the petitioner’s request for provisional release against a bank guarantee was declined in the writ, the Court directed the GST authorities to follow due process and permitted the assessee to approach the concerned authorities for provisional release in accordance with law. The writ petition was disposed of with directions to preserve the regular adjudication process.

Bombay HC Grants Interim Relief to United Spirits: Stays Interest Recovery Under Goa VAT Act Pending Clarity on ENA Taxability

UNITED SPIRITS LTD vs ADDITIONAL COMMISSIONER OF STATE CITATION : 2025 TAXSCAN (HC) 2263

The Bombay High Court at Goa granted interim relief to United Spirits Ltd. in a writ petition challenging the levy of interest under Section 25(4) of the Goa Value Added Tax Act, 2005, amounting to ₹53,58,986, allegedly due to delayed payment of tax on Extra Neutral Alcohol (ENA). The petitioner contended that the levy was unjustified as there was continuing uncertainty regarding whether ENA fell under the VAT regime or the newly implemented GST framework, and the VAT dues had already been deposited on September 30, 2021. The case arose after a communication from the authorities on June 10, 2025, demanding payment of the disputed interest with a threat of coercive recovery, prompting the petitioner to seek protection from such measures.

The Bench comprising Justice Bharati Dangre and Justice Nivedita P. Mehta observed that the question of interest liability for ENA required deeper judicial consideration. The Court granted an interim stay on all coercive recovery actions, including the disputed interest, until the pleadings were complete and the matter was finally adjudicated. Notice was issued to the Union of India, with timelines set for filing replies and rejoinders.

Delhi HC Condemns Customs for Unlawful Disposal of Seized Gold: Orders CBIC and Delhi Police Inquiry, Directs Payment of Market Value to Passengers

MS. PUJA JAYANT & ORS vs COMMISSIONER OF CUSTOMS CITATION : 2025 TAXSCAN (HC) 2265

The Delhi High Court addressed the unlawful disposal of seized gold jewellery by the Customs Department at Indira Gandhi International (IGI) Airport, involving passengers Puja Jayant, Jayant Shastri, and Manisha Shastri. The legal issue centered around the alleged violation of Section 111 and Section 125 of the Customs Act, 1962, whereby the department confiscated gold chains weighing 401 grams and disposed of them without following lawful procedures or allowing redemption within the statutory period. The petitioners had sought redemption, re-export, and refund of disposal proceeds, but the Customs Department refused, citing the expiry of the 120-day redemption period under Section 125.

The Bench, comprising Justice Prathiba M. Singh and Justice Shail Jain, condemned the Customs Department’s conduct and directed both the Central Board of Indirect Taxes and Customs (CBIC) and the Delhi Police (Economic Offences Wing) to conduct inquiries to ensure accountability. The Court ordered the department to file a detailed affidavit on the disposal methodology, realised proceeds, and refund calculation, while also addressing the lack of public access to Customs counters for submitting representations. The matter has been listed for further hearing on 25th November 2025, with the High Court emphasizing that the passengers are entitled to the market value of the disposed jewellery, referencing its earlier judgment in Jasvinder Kaur v. Commissioner of Customs (2025).

GST Evasion Informer has No Right to Claim Reward: Delhi HC notes Grant is at Discretion of CBIC

XY vs UNION OF INDIA CITATION : 2025 TAXSCAN (HC) 2266

The Delhi High Court addressed the legal issue concerning the entitlement of informers to rewards under the Goods and Services Tax (GST) anti-evasion framework, specifically referring to the Notification dated 31st July 2015 issued by the Central Board of Excise and Customs (CBEC), now the Central Board of Indirect Taxes and Customs (CBIC). The petitioner, “XY,” had provided information regarding alleged GST evasion by M/s Shakti Enterprises, which led to the issuance of a show-cause notice and subsequent order-in-original imposing substantial demands and penalties.

The Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain, who observed that the grant of a reward to an informer is a discretionary act of the Revenue and does not constitute a legal entitlement. The Bench highlighted that an informer cannot convert a discretionary reward into a legal claim against the Revenue and that any writ of mandamus in such circumstances would not be maintainable. The Court directed the petitioner to remain present for the next hearing and required a notarised affidavit containing her full particulars to be retained in a sealed cover by the Registry, while the issue of maintainability of the petition is to be addressed.

Relief to Malayalam Movie Artists Association AMMA: Kerala HC rules Income Tax Appellate Authority simply Extracted Findings of Assessing Authority

M/S ASSOCIATION OF MALAYALAMMOVIE ARTISTS vs COMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 2267

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The Kerala High Court addressed a legal issue concerning the requirement of a reasoned order under Section 250(6) of the Income Tax Act, 1961. The case involved the Association of Malayalam Movie Artists (AMMA), a charitable organization registered under Section 12A, which challenged the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), rejecting its appeal against the assessment order for Assessment Year 2014-15. AMMA contended that the appellate authority merely reproduced the findings of the Assessing Officer without offering independent reasoning, thereby violating its statutory duty to pass a speaking order addressing all points in dispute.

The matter was heard by Justice Ziyad Rahman A A, who observed that the impugned order failed to comply with Section 250(6) by not specifying the points for determination, the decision thereon, and the reasons for the decision. Citing precedent in Anandan N. v. Commissioner of Income Tax (Appeals) (2025), the Court held that mechanical reproduction of the Assessing Officer’s findings without independent analysis is unsustainable. Accordingly, the Kerala High Court quashed the impugned order and directed the Commissioner of Income Tax (Appeals), NFAC, to reconsider AMMA’s appeal afresh after providing an opportunity of hearing and to pass a reasoned order in accordance with law.

Hospitals’ Supply of Medicines and Implants to Indoor Patients Not a Taxable Sale: Gujarat HC Holds Charitable Hospitals Outside VAT Levy

BANKERS CARDIOGY PVT LTD &ANR vs COMMISSIONER OF COMMERCIAL TAX & ANR CITATION : 2025 TAXSCAN (HC) 2268

The Gujarat High Court addressed a legal issue concerning the applicability of value-added tax on the supply of medicines and consumables during medical treatment. The Court held that the provision of medicines, stents, implants, and other consumables to indoor patients does not constitute a “sale” under Section 2(23) of the Gujarat Value Added Tax Act, 2003. The petitioners, including Bankers Cardiogy Pvt. Ltd. and other hospitals, challenged assessment orders and show-cause notices treating such supplies as taxable sales. The petitioners argued that the supply of goods during treatment forms part of an indivisible medical service contract and that charitable hospitals registered under Section 12AA of the Income Tax Act, 1961 are exempt from VAT under Section 2(10)(iii) of the Gujarat VAT Act.

The Bench comprising Justice Bhargav D. Karia and Justice D. N. Ray held that the transaction between a hospital and an indoor patient is an indivisible contract for medical treatment, applying the dominant nature test. The Court observed that such supplies cannot be severed and taxed separately and relied on precedents, including Larsen & Toubro Ltd. v. State of Karnataka (2014), the Gannon Dunkerley principle, and the Statement of Objects and Reasons of the Forty-Sixth Constitutional Amendment. Consequently, the High Court quashed the show-cause notices and assessment orders, confirming that charitable hospitals and medical services to indoor patients fall outside the ambit of VAT.

Gujarat HC Prevents Levy of VAT on Hospital Supplies as Unsustainable by Constitutional Limits

BANKERS CARDIOGY PVT LTD &ANR vs COMMISSIONER OF COMMERCIAL TAX & ANR CITATION : 2025 TAXSCAN (HC) 2268

The Gujarat High Court ruled on the legality of levying Value Added Tax (VAT) on the supply of medicines, implants, stents, and consumables provided to indoor patients during medical treatment, addressing constitutional limitations under the Gujarat Value Added Tax Act, 2003. The petitioners, Bankers Cardiogy Pvt. Ltd. and several hospitals, challenged assessment orders and show-cause notices treating the supply of such items as a “sale” under Section 2(23)(g) of the Act. The hospitals contended that the supply of drugs and consumables during treatment is not a severable commercial transaction and falls outside the categories of deemed sale under Article 366(29A) of the Constitution of India.

The Bench comprising Justice Bhargav D. Karia and Justice D. N. Ray held that the supply of medicines and consumables to indoor patients forms part of an indivisible medical treatment contract and cannot be taxed separately. Relying on precedents, including Bharat Sanchar Nigam Ltd. v. Union of India (2006) and the Gannon Dunkerley principle, the Court observed that such supplies do not fall within the specified categories of deemed sale under Article 366(29A). Accordingly, the Gujarat High Court set aside the show-cause notices and assessment actions, confirming that the levy of VAT on these transactions is constitutionally unsustainable.

Blocking of ITC Cannot Exceed Available Balance, Creation of Negative Credit Ledger Entries Unlawful: Punjab & Haryana HC

M/S. SHYAM SUNDER STRIPS vs UNION OF INDIA CITATION : 2025 TAXSCAN (HC) 2269

The Punjab and Haryana High Court ruled on the legality of creating negative balances in a taxpayer’s Electronic Credit Ledger (ECL) under the Central Goods and Services Tax (CGST) Act, 2017. The petitions were filed by Shyam Sunder Strips, Shivam Trading Company, and Kamaldeep Metalics Pvt. Ltd., challenging the blocking of their Input Tax Credit (ITC) and the creation of negative balances in their ECLs under Rule 86A of the CGST Rules, 2017. The petitioners contended that while Rule 86A permits the temporary blocking of credit that is fraudulently availed or ineligible, it does not authorize creating a negative balance beyond the available credit, which also violates Section 49 of the CGST Act governing the use of ECL.

The Division Bench comprising Justice Lisa Gill and Justice Meenakshi I. Mehta held that the creation of negative balances in the ECL exceeds the powers conferred under the statute and is therefore unlawful and without jurisdiction. The court clarified that Rule 86A only allows for blocking existing credit and not for making deductions beyond the available balance. The Bench directed the GST authorities to restore the petitioners’ ledgers to their original state prior to the blocking orders and emphasized that administrative authorities must strictly act within the statutory framework.

VAT Turnover included in GST Assessment: Madras HC Remits Case for Fresh Consideration as Dealer Fails to Substantiate Replies

M/s.Hind Aluminium Company vsThe State Tax Officer CITATION : 2025 TAXSCAN (HC) 2270

The Madras High Court directed the State Tax Department to reconsider assessment orders issued under Section 74 of the Goods and Services Tax (GST) Acts, 2017, observing that the petitioner had failed to adequately substantiate its replies to show-cause notices with documentary evidence. The petitioner, M/s Hind Aluminium Company, challenged two assessment orders dated February 2, 2025, and February 19, 2025, for assessment years 2017-18 and 2018-19, contending that the authorities erroneously included turnover liable to tax under the Tamil Nadu VAT Act, 2006, in the GST demand for the pre-GST period from April 1, 2017, to June 30, 2017.

The Bench comprising Justice C. Saravanan remitted the matter to the assessing officer for fresh consideration, subject to pre-deposit conditions of 20% of the disputed tax for FY 2018-19 and 10% for FY 2017-18, after adjusting amounts already recovered. The petitioner was allowed to submit additional documents and a fresh reply within 30 days, and the assessing officer was directed to pass a reasoned order within three months. The Court clarified that non-compliance with these directions would permit the department to recover the dues as if the writ petitions were dismissed, balancing procedural fairness with protection of revenue.

Legitimate Trade Should Not Be Crippled: Madras HC Allows Revival of GST Reg Following Suguna Cut Piece Centre Ruling

Velu Ramakrishnan Proprietor vsThe Commissioner of Commercial Taxes CITATION : 2025 TAXSCAN (HC) 2271

The Madras High Court allowed the revival of a GST registration that had been cancelled by the tax authorities, emphasizing that procedural lapses should not unduly hinder legitimate trade. The petitioner, Velu Ramakrishnan, proprietor of M/s V.R.K. Equipments, challenged the cancellation dated February 13, 2025, issued by the Commercial Tax Officer, Kundrathur Assessment Circle, arguing that it disrupted his business operations. The Court relied on the precedent set in Tvl. Suguna Cut Piece Centre v. Appellate Deputy Commissioner (ST), Salem & Anr, underscoring that the GST Act aims to collect tax fairly without stifling genuine commerce.

The Bench of Justice C. Saravanan directed that the petitioner be allowed to revive his cancelled GST registration, subject to strict compliance with the conditions in the Suguna Cut Piece Centre ruling. These conditions include filing all pending GST returns prior to cancellation and remitting corresponding tax dues with interest, penalty, and late fees within 45 days, paying post-cancellation dues in cash, and ensuring unutilized input tax credit (ITC) is verified before use. The Court also instructed the GST authorities to adjust the GSTN system within 30 days to facilitate the revival, thereby balancing compliance enforcement with protection of legitimate business interests.

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