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 23, 2025 to November 29,

2025.

SUPREME COURT

‘Income Tax Dept has not Trusted even upon its Lawyers’: Supreme Court Slams Revenue for Delay in Filing SLP THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) vs THE HYDERABADCRICKET ASSOCIATION CITATION : 2025 TAXSCAN (SC) 378

The Supreme Court dealt with a controversy concerning charitable expenditure and exemption claims under Section 11 of the Income Tax Act, 1961, as well as disallowances made under Section 40(a)(ia) relating to alleged TDS defaults. The matter arose from assessments of the Hyderabad Cricket Association (HCA), where the assessing officer had disallowed various expenses for want of adequate bills, vouchers, and confirmations, and had also questioned cash payments and donations, including one to the Hyderabad Hockey Association. The central legal issue before the Court was whether the Income Tax Appellate Tribunal (ITAT) was justified in remanding the matter for fresh factual verification after noting that similar issues in earlier years had been accepted upon reassessment. The case reached the Supreme Court after the Revenue challenged the Telangana High Court’s dismissal of its appeal, which held that the ITAT’s order involved only factual examination and raised no substantial question of law.

The Division Bench comprising Justice Pankaj Mithal and Justice Prasanna B. Varale criticised the Income Tax Department for its excessive delay of 524 days in filing the Special Leave Petition, remarking that the authorities appeared to have “not trusted even upon its lawyers.” Although the Bench found the reasons for delay unsatisfactory and noted the Department’s unnecessarily prolonged internal vetting process, it nevertheless condoned the delay in both filing and refiling, primarily because similar matters were already pending before the Court. The Supreme Court therefore directed that the case be tagged with Civil Appeal No. 1294 of 2015 and forwarded a copy of the order to the concerned Commissioner of Income Tax and other senior authorities for necessary corrective action. The SLP will now proceed to be heard on the Revenue’s challenge to the ITAT’s remand directing fresh factual verification of HCA’s expenditure claims.

Writ not Maintainable when Statutory Appeal Ignored: Supreme Court in 29 Year Old Customs Case RIKHAB CHAND JAIN vs UNION OF INDIA CITATION : 2025 TAXSCAN (SC) 379

The Supreme Court examined whether the Rajasthan High Court was right in refusing to exercise its writ jurisdiction under Article 226 of the Constitution in a matter arising under the Customs Act, 1962. The controversy stemmed from a 1996 adjudication order confiscating 294 silver chaurasas weighing 252.177 kg and imposing a penalty of ₹50,000 on Rikhab Chand Jain under the Customs Act. The central legal issue before the Supreme Court was whether a writ petition was maintainable when an alternative statutory remedy before the High Court itself had been allowed to lapse.

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The Bench comprising Justice Dipankar Datta and Justice Aravind Kumar upheld the Rajasthan High Court’s decision, reiterating that when a statute provides a specific alternative remedy such as a reference under Section 130A a writ petition should ordinarily not be entertained, especially after the limitation period for availing that remedy has expired. The Supreme Court noted that the appellant could have sought condonation of delay in the reference proceedings and that his writ petition lacked the essential pleading that the Tribunal had failed to decide the confiscation issue, even though the appeal memo before CEGAT mentioned it. Since this foundational averment was absent, the Supreme Court held that the appellant could not claim adjudicatory error, and therefore the High Court’s refusal to examine the matter on merits was justified. The appeal was accordingly dismissed, affirming the confiscation and the penalty as sustained by the Rajasthan High Court.

Supreme Court Rules CAs' 25‑Year Practice Mandate for ITAT Appointments Invalid and Unconstitutional MADRAS BAR ASSOCIATION vs UNION OF INDIA AND ANOTHER CITATION : 2025 TAXSCAN (SC) 380

The Supreme Court has struck down as unconstitutional the statutory requirement mandating that Chartered Accountants must possess a minimum of 25 years of practice experience to be eligible for appointment as Accountant/Technical Members of the Income Tax Appellate Tribunal (ITAT). This statutory stipulation challenged in a batch of petitions led by the Madras Bar Association with the Institute of Chartered Accountants of India supporting the challenge was held to be arbitrary, exclusionary, and violative of constitutional principles governing judicial independence and fair access to tribunal positions.

The Division Bench comprising Chief Justice B.R. Gavai and Justice Vinod Chandran declared the 25-year experience requirement invalid. The Bench held that allowing such a provision to stand would unjustifiably exclude younger and well-qualified Chartered Accountants from entering tribunal service, mirroring the concerns already addressed in MBA (IV). Affirming parity between advocates and Chartered Accountants for purposes of eligibility, the Court stated that there was “no difficulty in applying the same analogy” and ruled the impugned provision to be unconstitutional. Importantly, the Supreme Court also directed the Union of India to ensure that future legislation respects this ruling and does not attempt to reintroduce or replicate the invalidated 25-year mandate.

Income Tax Dept Proceeds with penalty u/s 272(A) against Dalmia Power despite SC Stay Order: Supreme Court stays Order

M/S DALMIA POWER LIMITED vs THE ASSISTANT COMMISSIONER OF INCOMETAX CITATION : 2025 TAXSCAN (SC) 381

The Supreme Court intervened to stay penalty proceedings initiated under Section 272A of the Income Tax Act, 1961, after finding that the Income Tax Department had proceeded with issuing a penalty notice despite a subsisting stay of the Madras High Court’s order. The proceedings arose from reassessment actions initiated against Dalmia Power Limited, which had earlier succeeded before a Single Judge of the Madras High Court who quashed the reassessment on the ground that the extended-limitation precondition under the Act was not satisfied. Although the Department succeeded before the Division Bench in April 2025, prompting the petitioner to approach the Supreme Court, the Department issued a penalty notice dated 14 November 2025 even though the High Court’s order had been stayed. The central issue before the Supreme Court was whether the continuation of penalty proceedings—particularly those relating to failure to answer questions or furnish information under Section 272A—could survive once the High Court’s order had already been suspended.

The Bench comprising Justice Vikram Nath and Justice Sandeep Mehta stayed all further proceedings arising from the penalty notice, holding that once the Supreme Court had stayed the High Court’s judgment, the Revenue could not proceed with consequential steps. Observing that the penalty proceedings flowed directly from the High Court’s order that had already been stayed, the Bench ordered that “all further proceedings as a consequence of the notice dated 14.11.2025 shall also remain stayed,” and disposed of the interlocutory application accordingly. This ensures that no coercive action under Section 272A will proceed while the main appeal remains pending before the Supreme Court.

Supreme Court bars Income Tax Dept from Coercive Steps While Examining Faceless vs Jurisdictional AO Authority

MANGALAM EDU GATE vs ASSISTANT COMMISSIONER OF INCOME TAXCENTRAL CIRCLE 2 CITATION : 2025 TAXSCAN (SC) 382

The Supreme Court examined the challenge to reassessment proceedings under Section 148A of the Income Tax Act, 1961, raising the focused legal question whether reassessment notices must be issued by the Faceless Assessing Officer under the CBDT’s faceless scheme or may lawfully be issued by the jurisdictional Assessing Officer. The petitions arise from multiple writ petitions dismissed by the Delhi High Court, which had held that faceless and jurisdictional assessing officers exercise concurrent jurisdiction in Delhi. The petitioners (including Mangalam Edu Gate) contend the notices were invalid because they originated from the jurisdictional AO rather than the designated Faceless AO; the Revenue contends there is concurrent jurisdiction and the notices are therefore valid.

The Bench of Justice B.V. Nagarathna and Justice R. Mahadevan have issued notice and permitted service on the Central Agency, while granting limited interim relief: assessment proceedings may continue, but no coercive action (such as recovery, penalties or enforcement) shall be taken against the petitioners until further orders. The matter has been tagged with Sunrender Kumar Wadhwa v. Principal Commissioner of Income Tax & Anr., and will therefore be considered along with that matter to enable a comprehensive decision on whether the faceless scheme ousts or coexists with jurisdictional assessing officers for issuing reassessment notices.

Customs’ Detention of 198gm Gold Chains: Supreme Court directs to take Statutory Remedy within 30 days CHADCHAPORN THIANKRATHOK vs THE COMMISSIONER OF CUSTOMS CITATION : 2025 TAXSCAN (SC) 383

The Supreme Court examined a challenge arising under the Customs Act, 1962, involving the confiscation of two gold chains weighing 198 grams seized from a Thai national, Chadchaporn Thiankrathok, at IGI Airport. The petitioner had approached the Delhi High Court through a writ petition assailing the Order-in-Original, claiming she had no knowledge of the order and had not been served any show-cause notice. The High Court, however, after verifying her identity and examining the record, noted that she had already given a statement under Section 108 of the Customs Act admitting that the gold had been handed over to her by an unknown individual and did not belong to her. Observing that the confiscation related to events predating her marriage and that she appeared aware of her obligation to declare dutiable goods, the High Court declined to set aside the order and instead directed her to pursue the statutory appellate remedy, treating the order as served as of the date of the High Court’s decision.

The Bench of Justice Pankaj Mithal and Justice Prasanna B. Varale found no error in the Delhi High Court’s reasoning and refused to interfere with its decision. The Supreme Court recorded that the petitioner’s rights had been adequately protected by the High Court through its direction that an appeal filed within the recalculated limitation period would be heard on merits without being dismissed for delay. Accordingly, the Court dismissed the Special Leave Petition while granting liberty to the petitioner to avail the statutory appellate remedy within 30 days, further directing that any such appeal must be adjudicated on its merits. With these observations, the matter was disposed of.

Supreme Court to Examine Whether DTAA Overrides Section 206AA in Wipro, Vodafone, Mphasis Appeals Today THE COMMISSIONER OF INCOME TAX vs M/S MANTHAN SOFTWARE SERVICESPVT. LTD CITATION : 2025 TAXSCAN (SC) 384

The Supreme Court is set to examine a significant question concerning the interplay between treaty law and domestic tax provisions specifically, whether the Double Taxation Avoidance Agreement (DTAA) prevails over Section 206AA of the IncomeTax Act, 1961 in determining the applicable tax-deduction-at-source (TDS) rate on payments made to non-residents who do not furnish a Permanent Account Number (PAN). The issue arises from a series of appeals involving Wipro Ltd., Vodafone Idea Ltd., Mphasis Ltd., and others, where the Income Tax Department applied the higher statutory TDS rate of 20% under Section 206AA, while the assessees applied the reduced 10% rate prescribed under the relevant DTAAs. The Karnataka High Court, in Wipro’s case concerning assessment year 2011-12, upheld the Income Tax Appellate Tribunal’s view that treaty rates override Section 206AA and that no TDS may be deducted at a rate exceeding that provided under the DTAA when treaty benefits are available.

The matter is presently before the Supreme Court in a batch of tagged appeals, including those arising from Wipro, Vodafone Idea, Mphasis, and Manthan Software Services Pvt. Ltd., all raising the common issue of whether Section 206AA can impose a higher TDS rate despite the DTAA. While noting earlier High Court observations particularly reliance on Danisco that Section 206AA cannot override treaty provisions the Supreme Court has directed that all connected petitions be listed together, with the Bench scheduling for hearing. By grouping these matters, the Court aims to settle the larger legal question on the precedence of treaty rates over domestic withholding-tax provisions, a ruling that will have major implications for cross-border payments and TDS compliance.

Educational Trust’s Earnings Applied to Education Entitles Registration u/s 12AA: SC Refuses to Interfere with P&H HC Ruling THE COMMISSIONER OF INCOME TAX vs YADVINDRA PUBLIC SCHOOLASSOCIATION CITATION : 2025 TAXSCAN (SC) 385

The Supreme Court has declined to interfere with the Punjab & Haryana High Court’s judgment upholding the grant of registration under Section 12AA of the Income Tax Act, 1961 to Yadvindra Public School Association, an educational society. The core legal issue concerned whether an institution imparting education without providing subsidised or free education to the poor could still qualify as a charitable organisation under Section 2(15) for the purpose of obtaining registration under Section 12AA. The dispute began in 2009 when the Commissioner of Income Tax rejected the registration application on the ground that the society was not engaged in charitable activity. However, both the ITAT and the High Court found that educational institutions recognised under Section 10(23C)(vi) are permitted to retain surplus up to 15%, and the mere existence of surplus does not negate charitable character so long as funds are applied towards educational purposes.

The Bench comprising Justice Aravind Kumar and Justice N.V. Anjaria dismissed the Revenue’s Special Leave Petition, concurring with the High Court’s conclusion that the society satisfied the statutory requirements for registration under Section 12AA. While the Supreme Court condoned the delay in filing, it made clear that it was “not inclined to interfere with the impugned order,” thereby affirming the High Court’s reliance on precedents such as Ananda Social and Educational Trust v. CIT (2020), which held that even proposed activities must be considered at the registration stage. With the dismissal of the SLP, the ITAT’s directive granting Section 12AA registration to the educational society now stands confirmed, bringing the matter to a close.

GST SCN issued u/s 74 appears to be Bereft of Material Particulars: Supreme Court takes Contrary View to MP HC, Halts ProceedingsGR INFRA PROJECTS LIMITED RATLAM vs STATE OF MADHYA PRADESH& ORS. CITATION : 2025 TAXSCAN (SC) 386

The Supreme Court examined whether a Show Cause Notice (SCN) issued under Section 74 of the Goods and Services Tax (GST) Act can be sustained when it does not contain material particulars indicating fraud, wilful misstatement, or intention to evade tax. The case arises from a challenge by G R Infra Projects Limited, which argued that the Department invoked Section 74 without any factual basis, even though such invocation requires clear evidence of fraudulent conduct. The core legal question before the Court is whether a vague and unsupported SCN can lawfully trigger proceedings under the stringent provisions of Section 74, instead of Section 73, which applies in the absence of fraud.

The Bench comprising Justice J.B. Pardiwala and Justice K.V. Viswanathan observed that the impugned SCN appeared “bereft of material particulars”, noting that apart from numerical figures, the notice disclosed no facts explaining why the Department alleged fraud or wilful suppression. Diverging from the view taken by the Madhya Pradesh High Court, which had upheld the SCN and dismissed the writ petition, the Supreme Court found serious deficiencies in the notice and accordingly entertained the Special Leave Petition, signalling that invocation of Section 74 requires a factually supported foundation and cannot rest on bare allegations.

Supreme Court allows Revival of Flipkart’s GST Appeal Rejected due to Non-payment of Pre-deposit from Cash Ledger M/S FLIPKART INTERNET PVT. LTD vs THE STATE OF BIHAR & ORS CITATION : 2025 TAXSCAN (SC) 387

The Supreme Court examined whether the mandatory 10% pre-deposit under Section 107(6) of the Central Goods and Services Tax (CGST) Act can be paid through the Electronic Credit Ledger (ECRL) instead of the Electronic Cash Ledger (ECL). The matter arose after the GST appellate authority rejected Flipkart’s appeals as “defective” on the ground that utilisation of Input Tax Credit (ITC) for the statutory pre-deposit violated Section 49(3) of the CGST Act and Rule 85(4) of the CGST Rules. Challenging this interpretation and the Patna High Court’s view that the pre-deposit constitutes “any other amount” payable only in cash, Flipkart approached the Supreme Court seeking revival of its GST appeals linked to assessments under Section 73 relating to alleged ITC mismatches.

The Bench of Justice B.V. Nagarathna and Justice R. Mahadevan allowed the revival of Flipkart’s GST appeals and directed the Department to file an affidavit clarifying the interpretation of Sections 49 and 107, read with CBIC Circulars dated 06.07.2022 and 28.10.2022, and Notification No. 53/2023 – Central Tax. The Supreme Court permitted Flipkart to move restoration applications before the appellate authority and ordered that no objections regarding delay or manner of pre-deposit shall be raised. By keeping the appeals alive and granting full interim protection, the Bench signalled its readiness to reconsider the restrictive interpretation adopted by the lower forums and to examine, on merits, whether statutory pre-deposit can lawfully be discharged through the Electronic Credit Ledger.

GST Seizure for Alleged Reuse of E-Way Bill Unsustainable Without Enquiry: Allahabad HC Quashes Proceedings M/S Deepam Packaging And Food Private Ltd vs AdditionalCommissioner CITATION : 2025 TAXSCAN (HC) 2391

The Allahabad High Court examined the legality of a seizure carried out under Section 129(3) of the Central Goods and Services Tax (CGST) Act, 2017, specifically addressing whether goods can be detained on the allegation of reuse of an e-way bill without conducting any factual enquiry. The issue arose when M/s Deepam Packaging and Food Private Ltd. challenged the seizure and consequential appellate order, contending that the authorities failed to verify the alleged misuse of documents and ignored the driver’s explanation regarding a vehicle breakdown. The Court scrutinised the statutory mandate under Section 129, which governs detention, seizure, notice, and penalty for goods transported in contravention of GST law.

The Single Judge Bench of Justice Piyush Agarwal held that the seizure was unsustainable, noting that the department had proceeded entirely on presumptions without conducting even a basic enquiry to verify how the vehicle allegedly returned to Kanpur, reloaded goods, and reused the same e-way bill. The Court ruled that allegations of document misuse require clear factual verification and cannot rest on unsubstantiated assumptions. Consequently, the High Court quashed both the seizure order and the appellate order, allowing the writ petition in favour of the petitioner.

Date of GST Notice and Personal Hearing alleged to be Same: Allahabad confirms Such Practice should Discontinued M/S Hitachi Systems India Pvt. Ltd vs State Of U.P CITATION : 2025 TAXSCAN (HC) 2392

he Allahabad High Court examined a significant procedural lapse in GST adjudication concerning the issuance of a show-cause notice under Section 73 of the U.P. GST Act, 2017, where the date for filing a reply and the date for personal hearing were fixed on the same day. The petitioner challenged both the assessment order and the appellate order dismissed on limitation arguing that the authorities had failed to provide a meaningful opportunity of hearing, thereby violating Section 75(4) and the basic principles of natural justice.

The Single Judge Bench of Justice Jaspreet Singh held that scheduling the reply deadline and the personal hearing on the same date renders the proceedings legally defective. Noting the Commissioner’s Office Memorandum acknowledging widespread procedural errors, the Court found that the mandatory safeguard of personal hearing had been undermined. The High Court therefore quashed the assessment order and the appellate order, and remanded the matter to the assessing authority to pass a fresh order after granting proper and adequate opportunity of hearing.

Tax, Interest & Penalty in GST Demand cannot Exceed Amount determined by Proper Officer: Allahabad HC Quashes Order M/S Chaurasiya Zarda Bhandar vs State Of U.P CITATION : 2025 TAXSCAN (HC) 2393

The Allahabad High Court examined the legality of a Goods and Services Tax (GST) assessment order passed under the Central Goods and Services Tax (CGST) Act, 2017, specifically addressing a violation of Section 75(7), which prohibits confirmation of any tax, interest or penalty beyond what is proposed in the Show Cause Notice (SCN). The assessee challenged an assessment order and the consequential attachment, arguing that while the SCN for F.Y. 2019-20 proposed a tax demand of ₹29,07,002, it contained no proposal for interest or penalty; yet the final order imposed substantial interest and penalty, inflating the total demand to ₹55,71,191.

The Single Judge Bench of Justice Manish Kumar held that the assessment order was arbitrary and directly contrary to Section 75(7), noting that the Revenue itself could not dispute that the SCN lacked any proposal for interest or penalty. Since the adjudicating authority cannot impose any demand exceeding or differing from what is stated in the SCN, the Court ruled that the impugned order along with the consequential attachment was legally unsustainable. The High Court accordingly, quashed both orders and remanded the matter to the adjudicating authority to pass a fresh order strictly in accordance with law.

Tyres & Tubes were ‘Spare Parts’ in CST Regn. Certificate for Road Construction: Allahabad HC scraps Penalty for Invalid Purchase The Commissioner, Commericial Tax vs M/S K M C Construction CITATION : 2025 TAXSCAN (HC) 2394

The Allahabad High Court examined the scope of a dealer’s eligibility to purchase goods under the Central Sales Tax Act, 1956, specifically addressing whether tyres and tubes used in road construction machinery fall within the expression “spare parts and machinery” as mentioned in the assessee’s CST registration certificate. The core legal issue centred on the validity of a penalty imposed under Section 10-A, which is attracted when a registered dealer is alleged to have falsely represented, under Section 10(b), that certain goods are covered by its registration.

The Single Judge Bench of Justice Piyush Agrawal upheld the view taken by the Commercial Tax Tribunal and held that the purchase of tyres and tubes was duly authorised under the entry “spare parts and machinery” in the CST registration certificate. The Court observed that tyres and tubes form essential components of heavy construction equipment and therefore cannot be treated as unauthorised goods. Since the assessee’s purchases were validly covered, the foundational allegation of false representation under Section 10(b) collapsed, rendering the penalty under Section 10-A unsustainable. Reasoning that the Tribunal had committed no error in deleting the penalty, the High Court dismissed the Revenue’s revision and affirmed the Tribunal’s order.

₹17.7 Crore Penalty on Customs broker Challenge Rejected: Allahabad HC Directs Broker to Avail Appeal Shri Rajesh Tripathi vs Union Of India And 2 Others CITATION : 2025 TAXSCAN (HC) 2395

The Allahabad High Court examined whether a writ petition under Article 226 of the Constitution could be maintained against a penalty of ₹17,71,27,830 imposed on a Customs Broker under Section 114(iii) of the Customs Act, 1962, along with Sections 147 and 114(AA). The central legal issue before the Court was whether the petitioner penalised for alleged involvement in mis-declaration of export goods could bypass the statutory appellate remedy and seek relief directly under writ jurisdiction.

The Division Bench comprising Justice Saumitra Dayal Singh and Justice Kunal Ravi Singh, upheld the Revenue’s preliminary objection on maintainability. The Bench held that the petitioner had an effective statutory appellate remedy, and that disputed factual issues such as the extent of the Customs Broker’s role must be adjudicated by the appellate authority rather than in writ jurisdiction. Finding no exceptional circumstances warranting interference, the Court dismissed the writ petition, while granting liberty to the petitioner to file a statutory appeal within two weeks, with a direction that such appeal be entertained on merits without objection on limitation.

Allahabad HC Permits Shifting of SEZ Goods to Bonded Warehouse Amid DRI Adjudication Margo Impex Private Limited vs Union Of India CITATION : 2025 TAXSCAN (HC) 2396

The Allahabad High Court dealt with a petition seeking permission to shift warehoused goods from a SEZ facility to a bonded warehouse during the pendency of adjudication proceedings initiated under the Customs Act by the Directorate of Revenue Intelligence (DRI). The petitioners, Margo Impex Private Limited and another, approached the Court under writ jurisdiction, requesting clearance of goods stored at the Arshiya Northern Free Trade Warehousing Zone (ANFTWZ), ICD Khurja, Bulandshahr, which had been withheld pursuant to a show-cause notice. The core issue was whether the petitioners could move the goods under customs supervision while the DRI’s adjudication, including potential confiscation, was still pending, without prejudicing the Revenue’s interests.

The Division Bench comprising Justice Saumitra Dayal Singh and Justice Vivek Saran allowed the shifting of goods subject to compliance with five conditions prescribed by the DRI, including filing a Yellow Bill of Entry, approval by SEZ Customs, issuance and submission of a re-warehousing certificate, and duty-recovery measures if the certificate was not timely submitted. Observing that the Revenue itself had no objection to the transfer under these safeguards, the Court disposed of the writ petition, permitting movement of goods to the bonded warehouse. The Bench clarified that it would not comment on the merits of the ongoing confiscation proceedings, ensuring that its order would not prejudice the adjudication process.

Allahabad High Court Grants Bail after 14 Year Absence from Trial Jagesh Rajbhar @ Jagesh Rai vs Union Of India Thru. Gaurav KumarAsst CITATION : 2025 TAXSCAN (HC) 2397

The Allahabad High Court considered a bail application in a long-pending Customs case under Section 135(1)(B) of the Customs Act, 1962, where the applicant, Jagesh Rajbhar, faced prosecution for alleged offences related to customs violations. The legal issue revolved around whether the applicant could be granted bail despite his prolonged absence from the trial for nearly fourteen years, during which no prosecution witnesses had been examined, and the Trial Court had declared him an absconder under Section 82 of the CrPC.

The Bench of Justice Karunesh Singh Pawar granted bail, observing that the applicant’s prior decade-long compliance with bail conditions, absence of criminal antecedents, and the relatively moderate punishment for the offence weighed in his favour. Bail was allowed subject to strict conditions, including furnishing a personal bond and two sureties, mandatory attendance on all trial dates, prohibition on tampering with evidence, and restriction on seeking unnecessary adjournments. The Court clarified that any misuse of this liberty would empower the Trial Court to take stringent action under applicable provisions, including Sections 84 BNSS and 209 BNS, ensuring compliance with the law.

Madras HC Rejects 6-Month Delay Revision Plea, Notes Applicant had Ample time to Contest Gold & Silver Seizure after Surgery Noorul Ayin vs The Commissioner of Customs (Appeals-I) CITATION : 2025 TAXSCAN (HC) 2397

The Madras High Court recently dealt with a writ petition concerning condonation of delay in filing a revision petition under Section 129DD of the Customs Act, 1962. The petitioner, Noorul Ayin, sought relief after filing a revision application nearly six months beyond the prescribed period following a medical surgery, challenging an Order-in-Appeal by the Commissioner of Customs (Appeals-I), Chennai, which had upheld the seizure of imported gold and silver coins intended for re-export. The legal issue revolved around whether the petitioner’s medical condition justified condoning the delay.

The Bench of Justice N. Anand Venkatesh dismissed the writ petition, observing that the petitioner’s surgery had taken place months after the limitation period expired and that the petitioner had been actively contesting the matter before CESTAT in the interim. The Court held that the medical reason did not sufficiently justify the prolonged delay and emphasized that writ jurisdiction cannot be exercised casually, particularly when the petitioner had liberty to file the revision in time. Consequently, the writ petition and connected miscellaneous petitions were dismissed.

Delhi HC Directs CBIC to File Final Draft of Revised Baggage Rules by December: Gold, Alcohol & Electronics Ingress under Review QAMAR JAHAN vs UNION OF INDIA, REPRESENTED BY SECRETARY,MINISTRY OF FINANCE & ORS. CITATION : 2025 TAXSCAN (HC) 2399

The Delhi High Court is currently adjudicating a writ petition concerning the revision of the Baggage Rules, 2016, specifically relating to the import of articles such as gold, alcohol, electronics, and personal effects by inbound passengers. The petitioner, Qamar Jahan, challenged the outdated monetary limits on duty-free gold jewellery, highlighting that the current thresholds under Rule 5: 20 grams for men (₹50,000) and 40 grams for women (₹1,00,000) are misaligned with prevailing market rates. The legal issue concerns the CBIC’s delay in finalising amendments to modernize these rules in line with current travel and market realities.

The Division Bench comprising Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta directed the Central Board of Indirect Taxes and Customs (CBIC) to submit the final draft of the revised Baggage Rules by December 18, 2025. The Bench noted that while the draft rules have been prepared, implementation was pending due to ongoing digital infrastructure upgrades via the Atithi App. The Court further instructed the CBIC to file a status report five days prior to the next hearing and cautioned that continued delays may prompt the High Court to specify interim customs practices for inbound passengers regarding gold, alcohol, electronics, and other personal items.

State GST Officer submits Adverse Report on Bogus Firm before ITC Fraud: Allahabad HC Quashes Suspension Order

Malikhan Singh vs State Of U.P. CITATION : 2025 TAXSCAN (HC) 2400

The Allahabad High Court quashed the suspension of a State Tax Officer accused of delay in submitting a verification report under the Goods and Services Tax (GST) regime. The officer, Malikhan Singh, had conducted a physical verification of a GST applicant firm and submitted an adverse report identifying the firm as bogus. The legal issue centered on whether the officer’s suspension for alleged delay was justified, given that the fraudulent ITC claim by the firm occurred due to inaction by the Assistant Commissioner, not the reporting officer.

The bench of Justice Vikas Budhwar held that the suspension order dated 23.08.2025 could not be sustained, noting that the petitioner had submitted the adverse report on 3.03.2024, which was acted upon by the Assistant Commissioner through a show cause notice. The Court set aside the suspension but allowed a departmental inquiry to proceed, directing it to be concluded within four months, clarifying that no prima facie misconduct was attributable to the officer for the delay.

E-way Bill Lapse for Dealer Attracts Penalty u/s 129(1)(a) and Not 129(1)(b) of UPGST Act: Allahabad HC Directs Fresh Computation M/S Siddhi Vinayak Footwear vs State Of Uttar Pradesh CITATION : 2025 TAXSCAN (HC) 2401

The Allahabad High Court has ruled that a registered dealer’s failure to carry an e‑way bill cannot attract a penalty under Section 129(1)(b) of the U.P. Goods and Services Tax Act, 2017, which applies to unregistered persons. The case arose when the petitioner’s goods were intercepted during transport, accompanied by a valid tax invoice showing full ownership details, yet a penalty under Section 129(1)(b) was erroneously imposed. The legal issue centered on the proper application of statutory provisions distinguishing between registered and unregistered taxpayers.

The Division Bench of Justice Saumitra Dayal Singh and Justice Indrajeet Shukla allowed the petition, holding that the penalty should be levied only under Section 129(1)(a) applicable to registered dealers. The Court quashed the impugned order, directed recomputation of the penalty based on invoice value within three weeks, and ordered release of the goods upon deposit of the revised amount. It further clarified that any remaining disputes may be pursued through statutory remedies under the law.

Penalty Based on Presumption Without Book Verification Violates S.48(5) UP VAT Act: Allahabad HC Quashes ₹4.38 Lakh Penalty Demand M/S Randeep Singh Steel Private Limited vs The CommissionerCommercial Tax UP Lucknow CITATION : 2025 TAXSCAN (HC) 2402

The Allahabad High Court has held that a penalty imposed under Section 48(5) of the UP VAT Act based solely on presumption, without verifying the assessee’s books of account, is unsustainable. The case arose when a consignment of iron ingots was intercepted and seized on the allegation of reuse of the official control (OC) stamp and handwritten invoice numbers under Rule 44(6) of the VAT Rules. The authorities initiated penalty proceedings of ₹5.48 lakh, creating a demand of ₹4.38 lakh, without inspecting the business premises or verifying transaction records, raising the legal question of whether suspicion alone can justify a penalty.

The bench of Justice Piyush Agrawal quashed the penalty, observing that while the OC stamp irregularity and handwritten invoice numbers may justify seizure, they cannot sustain a penalty under Section 48(5) unless corroborated by definite findings of non-recording of transactions in books of account. The Court emphasized that intention to evade tax must be established. The High Court set aside the impugned orders of the Tribunal and lower authorities, allowed all three revisions, and ruled in favor of the assessee against the Revenue.

No Mens Rea, No Section 129: Allahabad HC Holds Revenue Must Prove Intent to Evade Tax Kamla Machines vs State of UP CITATION : 2025 TAXSCAN (HC) 2403

The Allahabad High Court has held that proceedings under Section 129 of the GST Act, 2017 cannot be initiated unless the Revenue establishes mens rea, i.e., an intention to evade tax. The case arose when the petitioner, Kamla Machines, faced a penalty after the expiry of an e-way bill during the transport of machinery parts from Mumbai to Muzaffarnagar, U.P. The goods were part of a recognized bill-to-ship supply, accompanied by a valid tax invoice, goods receipt, and e-way bill, and the delay was caused by the driver’s sudden illness. The key legal question was whether the mere expiry of an e-way bill, without any other adverse material, could justify invoking Section 129 proceedings and imposing a penalty.

The bench of Justice Piyush Agrawal quashed both the penalty and the appellate orders, observing that the transaction was genuine, fully documented, and traceable on the GST portal. The Court emphasized that the burden of proving intention to evade tax lies on the Revenue, and in the absence of any evidence of wrongdoing, the expiry of an e-way bill alone cannot trigger Section 129 action. Relying on precedents such as M/s Trimble Mobility Solutions India Pvt. Ltd. v. State of U.P. (2025) and A.A. Plastics Pvt. Ltd. v. Additional Commissioner (2024), the Court held that the driver’s illness constituted a credible explanation for the delay, and the penalty was therefore unsustainable.

Impugned Communication on Excess SEIS Duty Credit Only Preliminary Letter: Madras HC Disposes Writ Petition

M/s.CorroHealth Infotech Private Limited vs Assistant DirectorGeneral of Foreign Trade for Zonal Additional Director General of Foreign Trade CITATION : 2025 TAXSCAN (HC) 2404

The Madras High Court has clarified that a communication issued by the Directorate General of Foreign Trade (DGFT) regarding alleged excess duty credit under the Service Exports from India Scheme (SEIS) does not constitute a formal show-cause notice. The petitioner, CorroHealth Infotech Private Limited, had contended that the letter challenged SEIS benefits claimed for the years 2015 to 2020, without specifying the statutory provisions, thereby rendering it invalid. The issue before the Court was whether a preliminary communication from DGFT could be treated as a show-cause notice triggering adjudication proceedings.

The bench of Justice M. Dhandapani held that the communication was merely a preliminary letter seeking a reply and was not a formal show-cause notice. The Court directed the petitioner to file its response within two weeks, after which the DGFT may either close the matter or issue a formal show-cause notice specifying the relevant legal provisions. The writ petition was disposed of as premature, and the connected miscellaneous petition was also closed, without costs.

Goods Belong to Consignor and not Transporter: Allahabad HC Sets Aside Seizure u/s 129(3) of GST Act M/S Anish Transport Company vs State of U.P CITATION : 2025 TAXSCAN (HC) 2405

The Allahabad High Court has ruled that a transporter cannot be held liable for discrepancies in goods during transit when ownership rests with the consignor, and there is no evidence of intent to evade tax or trading activity. The matter involved seizure and penalty proceedings under Section 129(3) of the GST Act, initiated against Anish Transport Company following a shortfall in goods declared on the e-way bill. The Court examined whether a carrier could be penalized when the goods’ ownership and any discrepancy are traced to the consignor rather than the transporter.

The bench of Justice Piyush Agrawal observed that the shortfall in goods was admitted by the consignor to be due to human error during loading, and no adverse finding was made against the transporter. Since the transporter had produced all required documents and was engaged solely in transportation, the Court held that liability could not be shifted onto it. The seizure and proceedings against the petitioner were thus legally unsustainable, leading the Court to quash the impugned order, allow the writ petition, and direct a refund of the amounts deposited.

Absence of E-Way Bill at Commencement of Transportation Validates Seizure of Goods: Allahabad HC M/s Birds RO System Private Limited vs State of U.P. CITATION : 2025 TAXSCAN (HC) 2406

The Allahabad High Court has upheld the seizure of goods under Section 129(3) of the GST Act, ruling that failure to generate or produce an e-way bill prior to the commencement of movement of goods justifies action by the authorities. The matter involved M/s Birds RO System Private Limited, a trader of RO/water purifier systems, whose transporter moved goods without an e-way bill despite the petitioner’s instructions. The case examined whether the absence of an e-way bill due to alleged technical glitches could exempt a registered dealer from seizure and penalty under the GST provisions.

The bench of Justice Piyush Agrawal observed that no e-way bill was available before the commencement of transport, and production of the e-way bill after interception could not cure the initial non-compliance. Citing precedents such as M/s Aysha Builders & Suppliers v. State of U.P. (2025) and M/s Mohini Traders v. State of U.P. (2025), the Court held that the seizure was lawful. The High Court dismissed the challenge, affirming the appellate authority’s order under Section 129(3), and concluded that transporting goods without a valid e-way bill constitutes a violation warranting seizure irrespective of intent to evade tax.

Once Merits are Examined by GST Appellate Authority, Writ Court’s Intervention Narrow: Orissa HC M/s.Digambar Road Lines vs Commissioner (Appeals) CITATION : 2025 TAXSCAN (HC) 2407

The Orissa High Court has refused to interfere with a GST appellate order under Section 107(6) of the Odisha Goods and Services Tax Act, 2017, which had dismissed an appeal both on technical grounds of non-payment of the mandatory 10% pre-deposit and on merits. The petitioner, M/s Digambar Road Lines, argued that portal issues prevented the online deposit of the pre-deposit, making the appeal invalid. The Court examined whether a writ petition could be entertained when an appeal is rejected for procedural non-compliance alongside substantive findings.

The bench comprising Chief Justice Harish Tandon and Judge M.S. Raman observed that while one ground for dismissal might be questionable, the appellate authority had separately decided the matter on its merits. The High Court held that a writ court should be cautious in interfering with such orders unless findings are illegal, irrational, or perverse. Reasoning that the merits-based decision was reasonable and justified, the Court dismissed the writ petition, affirming that the technical ground, even if debatable, did not invalidate the overall decision.

Three PMLA Provisional Attachments Challenged: Delhi HC refuses to Exercise Writ Jurisdiction MS KRRISH REALTECH PVT LTD vs UNION OF INDIA CITATION : 2025 TAXSCAN (HC) 2408

The Delhi High Court dealt with a batch of petitions challenging Provisional Attachment Orders (PAOs) issued under Section 5 of the Prevention of Money Laundering Act, 2002 (PMLA). The legal issue before the Court was whether writ jurisdiction under Article 226 of the Constitution could be invoked to quash the PAOs, despite the existence of a statutory appellate remedy under the Act. The petitioners, M/s Krrish Realtech Pvt. Ltd. and Amit Katyal, contended that the attachments were invalid, citing quashed FIRs, alleged violation of Supreme Court orders, and questioning the authority of a single-member Adjudicating Authority.

The Division Bench comprising Justice Sachin Datta held that the PMLA provides a complete and efficacious statutory remedy through the Appellate Tribunal and that the High Court ordinarily should not interfere under Article 226 where such remedies exist. The petitions were dismissed, with the Court directing the Tribunal to dispose of the pending appeals preferably within six months. The judgment reaffirmed that matters including validity of the ECIR, effect of quashed FIRs, and composition of the Adjudicating Authority must be adjudicated by the statutory forum and not through writ proceedings.

Bombay HC Dismisses Writ Petitions Challenging Criminal Proceedings in IPO Share Manipulation Case Manoj Gokulchand Seksaria vs The State of Maharashtra CITATION : 2025 TAXSCAN (HC) 2409

The Bombay High Court dealt with writ petitions challenging the continuation of criminal proceedings in Special CBI Case Nos. 47 and 48 of 2007, relating to alleged manipulation of IPO shares through benami accounts. The legal issue before the Court was whether criminal proceedings could continue despite the petitioner having settled the dispute with SEBI under a consent order. The allegations involved opening Demat accounts in fictitious names, making 192 IPO applications in the Yes Bank issue, cornering 14,000 shares, and earning profits of Rs. 1.98 lakh.

The bench of Justice V.G. Bisht, dismissed the writ petitions observing that the dispute was predominantly commercial with minimal criminal overtones, and relied on Supreme Court precedents, including Parbatbhai Aahir v. State of Gujarat, holding that criminal proceedings in such matters may be quashed where disputes are settled. Since the petitioner had paid a settlement amount of Rs. 2,25,70,864 and public interest was secured, the Court held that continuing the proceedings would amount to an abuse of process and dismissed the petitions.

Expedite Inquiry Decision: Allahabad HC Tells State in Challenge to Suspension of Tax Officer Ritesh Barnawal vs State Of U.P CITATION : 2025 TAXSCAN (HC) 2410

The Allahabad High Court addressed a disciplinary proceeding against Ritesh Barnawal, Assistant Commissioner of State Tax, concerning allegations of a bogus GST registration issued to Rajdhani Enterprises. The legal issue before the Court was the obligation of the disciplinary authority to examine the petitioner’s detailed reply to the inquiry report and show cause notice, and to pass a reasoned order in accordance with law. The charges related to alleged administrative lapses, including the granting of ineligible ITC, and raised questions of procedural fairness and competence of the Inquiry Officer.

The bench Justice Vikas Budhwar, directed the disciplinary authority to conclude the proceedings within one month of receiving the certified copy of the judgment. The Court emphasized that the authority must examine every contention raised by the petitioner, including objections to the timing and scope of the charges, and pass a reasoned decision strictly in accordance with law. The Court declined to interfere with the suspension itself, noting that it falls within the domain of the competent authority.

Penalty Set Aside: Allahabad HC Says No Action When E-Way Bill Is Issued Before Detention M/S. Om Enterprises vs Additional Commissioner CITATION : 2025 TAXSCAN (HC) 2411

The Allahabad High Court addressed a case concerning M/s Om Enterprises, engaged in trading TMT iron bars, where goods were intercepted during transit. The legal issue involved the validity of seizure and penalty orders under Section 129(3) of the GST Act when the petitioner had already generated an e-way bill prior to detention. The Court examined whether the authorities could draw an adverse inference against the dealer when no intention to evade tax was established and a valid e-way bill existed.

The bench of Justice Piyush Agrawal, held that since the e-way bill was generated at 10:59 AM, prior to the interception at 11:29 AM, and was produced along with the petitioner’s reply, the seizure and penalty were illegal. The Court quashed both the original and appellate orders, emphasizing that the mechanical imposition of penalty without evidence of intent to evade tax cannot be sustained.

Kerala HC Grants Bail to Man arrested with 2.4kg Ganja from Thailand SACHRIA TITUS vs INSPECTOR OF CUSTOMS CITATION : 2025 TAXSCAN (HC) 2412

The Kerala High Court dealt with a bail application concerning Sachria Titus, who was arrested for alleged possession of 2.4 kg of ganja under the Narcotic Drugs and Psychotropic Substances (NDPS) Act. The legal issue centered on whether the petitioner could be granted bail considering the stage of investigation and the period already spent in judicial custody. The Court examined whether continued detention was necessary when the investigation was nearly complete.

The bench of Justice K. Babu granted bail to the petitioner with conditions. The Court observed that the petitioner had no prior criminal antecedents and that the investigation was in its final stages. Bail was allowed on execution of a bond for ₹50,000 with two sureties, along with strict conditions including regular reporting to the investigating officer, restrictions on travel outside the district, surrender of passport, and a prohibition on influencing witnesses or committing similar offences while on bail.

Gujarat HC Quashes Customs SCN in Palm Kernel Oil Duty Exemption Case, End Use Condition Inapplicable VVF INDIA LTD vs UNION OF INDIA CITATION : 2025 TAXSCAN (HC) 2413

The Gujarat High Court dealt with a case concerning customs duty exemptions on imported crude palm kernel oil, examining whether the Directorate of Revenue Intelligence could impose end-use conditions through circulars. The legal issue centered on the interpretation of Customs Notification No. 12/2012, specifically whether “edible grade” oil had to be fit for immediate human consumption to qualify for exemption, or whether quality standards alone sufficed.

The bench comprising Justice Bhargav D. Karia and Justice Pranav Trivedi quashed the show cause notice issued to VVF India Ltd, emphasizing that the oil met the technical definition of “edible grade” under the Food Safety and Standards Regulations. The Court reaffirmed the established principle that revenue authorities cannot add conditions to exemption notifications via circulars when such conditions are not explicitly mentioned. Consequently, the writ petition was allowed, and the notice demanding 100% customs duty was set aside.

Allahabad HC Orders UPPCB to Decide Representation on Alleged Fraud in Brick Kiln Partnership Within Six Weeks

Sanjiv Malik vs State Of U.P. CITATION : 2025 TAXSCAN (HC) 2414

The Allahabad High Court addressed a case concerning the expeditious disposal of a representation filed with the Uttar Pradesh Pollution Control Board (UPPCB) regarding alleged unauthorized operation of a brick kiln. The legal issue involved the petitioner seeking cancellation of the Air Pollution Control clearance obtained by other partners without his knowledge, following an internal partnership dispute and alleged fraudulent GST registration in the District of Shamli.

The Division Bench comprising Justice Mahesh Chandra Tripathi and Justice Kunal Ravi Singh directed that the UPPCB take a final decision on the petitioner’s representation within six weeks, observing that the Regional Officer had already forwarded his recommendation to the Chairman. The Court disposed of the writ petition with a time-bound directive, without expressing any opinion on the merits of the partnership dispute or the alleged fraud.

Blaming Lawyer's Negligence Not Enough: Kerala HC Dismisses 329-gram Gold Confiscation Case ABDUL GAFOOR UDINIKKATTIL MOHAMMED vs THE JOINT COMMISSIONER OFCUSTOMS CITATION : 2025 TAXSCAN (HC) 2416

The Kerala High Court dealt with a writ petition challenging the confiscation of 329.37 grams of gold by the Customs authorities. The petitioner sought to either quash the confiscation order or be permitted to file a delayed appeal, contending that his lawyer had failed to file the appeal within the statutory period. The legal issue centered on whether the petitioner could claim relief despite missing the appeal deadline due to the lawyer’s negligence.

The single judge bench of Justice Ziyad Rahman A.A. dismissed the petition, noting that the petitioner’s own lack of diligence waiting nine months after receiving the demand notice to approach the Court was fatal to his claim. The Court emphasized that appeals must be filed within 90 days, with a maximum 30-day grace period, and held that no exceptional circumstances justified condoning such a delay. The writ petition was therefore rejected.

Benami Proceedings Based on ‘Kachcha Paper’ Require Scrutiny: Allahabad HC Admits Appeals Against Benami Tag on Cash Seized During Raid Smt. Maya Verma vs Deputy Commissioner of Income Tax CITATION : 2025 TAXSCAN (HC) 2417

The Allahabad High Court admitted three connected appeals concerning the classification of cash seized during a departmental raid as benami property under the Prohibition of Benami Property Transactions Act, 1988, specifically Section 2(9)(A). The appellants had ₹1,23,63,000 recovered from their residence, which they claimed represented proceeds from the sale of gold and silver obtained through a 2008 family settlement and duly disclosed in their Income Tax Returns for the A.Y. 2009-10 and 2017-18. The Adjudicating Officer had rejected this explanation, relying heavily on a handwritten “kachcha paper” allegedly documenting amounts received from transporters, a finding affirmed by the Appellate Tribunal.

The Single Judge Bench of Justice Kshitij Shailendra observed that the matter required detailed scrutiny and admitted all three appeals. The Court emphasized that authorities cannot rely solely on suspicion or loose papers to classify the cash as benami property. It framed key questions of law regarding whether the seized cash constituted a benami transaction, whether reliance on the “kachcha paper” rendered findings perverse, and whether adverse inferences could be drawn without evidence linking the appellants as benamidar. The Court granted interim protection, directing that no coercive action be taken pending further orders.

Insolvency Plea cannot be made to Evade Paying Maintenance: Bombay HC Rejects Dance Teacher’s Plea Mehul Jagdish Trivedi vs Manisha Mehul Trivedi CITATION : 2025 TAXSCAN (HC) 2418

The Bombay High Court addressed the issue of whether maintenance payable under a Family Court order constitutes a “debt” for the purposes of insolvency under the Presidency Towns Insolvency Act, 1909. The petitioner, Mehul Jagdish Trivedi, sought to declare himself insolvent over arrears of ₹22,30,000 payable to his wife, arguing that his monthly income of ₹12,000-15,000 triggered the statutory conditions under Sections 14(1)(a), 9(1)(f), and the Explanation to Section 10 of the Act. The Court examined whether a maintenance obligation under Section 125 of the Code of Criminal Procedure qualifies as a “debt” capable of forming the basis for an insolvency petition.

The Bench of Justice Jitendra Jain dismissed the petition, noting that Section 11(a) of the Presidency Towns Insolvency Act precludes insolvency proceedings where the petitioner is not in custody for non-payment, and that maintenance obligations are moral and legal duties arising from the marital relationship rather than debts under insolvency law. The Court held that insolvency proceedings cannot be used to evade Family Court orders. Observing contradictions in the petitioner’s claims regarding income and loans, the Bench emphasized that the proceedings were an improper attempt to circumvent ongoing Family Court litigation, and dismissed the insolvency petition.

Tahsildar Failed to Act Despite Receiving VAT-GST Clarification: Orissa HC Directs to Transfer Records on Sand Quarry Tender to Mining Officer Jitendra Kumar Agrawal vs State of Odisha and others CITATION : 2025 TAXSCAN (HC) 2419

The Orissa High Court dealt with the legal issue of administrative delay in the sand quarry tender process under the Odisha Minor Minerals Concession Rules, 2016, as amended by the Second Amendment Rules, 2022. The Court addressed the failure of the Tahasildar, Jharbandh, to act on the tender despite receiving clear clarifications regarding the petitioner’s Income Tax Return (ITR) for 2021-22 filed as an HUF, VAT/GST compliance, and necessary GST documentation. The Court noted that such inaction not only frustrates public tenders but also causes financial loss to the government and delays utilization of public resources.

The Division Bench comprising Chief Justice Harish Tandon and Judge M.S. Raman directed that all relevant records, including the clarification letter, be immediately transferred to the Mining Officer within two weeks, and emphasized that the Mining Officer must take prompt action in accordance with law. The Court disposed of the writ petition with this time-bound directive, underlining that administrative authorities cannot remain idle after receiving statutory clarifications and that delays in public tender processes are impermissible.

Kerala HC Dismisses Writ Petition Challenging GST Registration Cancellation Due to Procedural Delays SHAZIL SHARIFF vs BY ADVS CITATION : 2025 TAXSCAN (HC) 2420

The Kerala High Court addressed the issue of statutory compliance under the CGST Act in relation to the cancellation of GST registration. The Court considered whether a writ petition under Article 226 of the Constitution could be entertained when the petitioner had failed to pursue the statutory remedies within the prescribed timelines.

The bench of Justice Ziyad Rahman A.A. observed that the petitioner had not filed an application for revocation within the two-month window allowed under the CGST Act and had filed an appeal more than a year after the cancellation order, exceeding the statutory three-month limit. The Court held that procedural lapses and inordinate delay rendered the writ petition unsustainable and dismissed the petition, emphasizing that courts will not intervene when statutory remedies are not availed within the prescribed time, without addressing the merits of the original cancellation.

TCS u/s 206C(1C) Not Applicable on Compounding Fees from Illegal Miners: Chhattisgarh HC Quashes ITAT Order against Mining Dept The Deputy Director (Geology And Mining) vs The DeputyCommissioner of Income Tax CITATION : 2025 TAXSCAN (HC) 2421

The Chhattisgarh High Court addressed whether Tax Collected at Source (TCS) under Section 206C(1C) of the Income Tax Act, 1961 applies to compounding fees paid by illegal miners. The Court considered the legal issue of whether penal payments made under Section 23A of the MMDR Act and Rule 71(5) of the Chhattisgarh Minor Mineral Rules, 2015 could be treated as taxable receipts attracting TCS, as alleged by the Income Tax Department following a survey in 2018. The Department had treated the Mining Officer as an “assessee in default,” imposing tax, interest, and penalty, and the ITAT had upheld this view.

The Division Bench of Justice Rajani Dubey and Justice Amitendra Kishore Prasad clarified that TCS under Section 206C(1C) applies only to payments made by lawful leaseholders or licensees, and does not extend to offenders paying compounding fees for illegal mining. The Court held that compounding fees are penal in nature and do not arise from any transfer of rights or lawful mining activity. Consequently, the High Court quashed the ITAT order dated 21.07.2023, set aside the disputed TCS demand, interest, and penalty, and allowed the appeals filed by the Deputy Director (Geology and Mining), as there is no legislative mandate to collect TCS on such penal payments.

Furnace Oil used in Manufacture and Transferred to Branches Outside State: Bombay HC rules Set-Off of Sales Tax Available after 6% Reduction of Purchase Price M/s. Borosil Glass Works Ltd. vs The Commissioner of Sales Taxand others CITATION : 2025 TAXSCAN (HC) 2422

The Bombay High Court dealt with the interpretation of Rule 41D of the Bombay Sales Tax Rules, 1959, concerning the entitlement of M/s Borosil Glass Works Ltd. to set-off of sales tax on furnace oil purchased for manufacturing goods that were partly sold locally and partly transferred to branches outside Maharashtra. The legal issue centered on whether full set-off was available under the main provision of Rule 41D or whether a mandatory reduction of 6% under Sub-Rule 3(a) applied to the portion of goods dispatched to branches outside the State.

The Division Bench of Justice M.S. Sonak and Justice Advait M. Sethna upheld the Revenue’s position, holding that furnace oil, although a consumable, has a nexus with the goods dispatched to branches and is therefore subject to the 6% reduction under Sub-Rule 3(a). The Court clarified that the expression “goods which are dispatched” must be read in context with goods manufactured for sale outside the State. Consequently, the Court dismissed the assessee’s reference, confirming that the set-off is available only after reducing 6% of the purchase price for goods transferred outside Maharashtra.

Non-Consideration of ₹2.01 Cr Earlier Deposit: Delhi HC Allows Appeal Before GSTAT Without Further Pre-Deposit by Dec 25th A AND T SECURITY SERVICES PVT LTD vs ADDL COMMISSIONER OF CGSTDELHI WEST CITATION : 2025 TAXSCAN (HC) 2423

The Delhi High Court addressed a GST dispute involving A & T Security Services Pvt. Ltd., concerning penalties imposed under Section 122 of the CGST/SGST Acts. The legal issue revolved around whether the petitioner could approach the GST Appellate Tribunal (GSTAT) without making any fresh pre-deposit, given that the company had previously deposited ₹2.01 crore during an earlier GST registration cancellation proceeding, which had not been considered in the subsequent adjudication.

The bench of Justice Prathiba M. Singh and Justice Shail Jain observed that both the adjudicating authority and the Commissioner (Appeals) had failed to account for the earlier deposit. The Court held that the petitioner should be allowed to file appeals before GSTAT without any further pre-deposit, directing that the Tribunal must entertain the appeals on merits, consider all evidence of prior payments, and ensure the matter is adjudicated holistically. The High Court set a deadline for filing before GSTAT by 25.12.2025.

SCN u/s. 130 Issued for Alleged S.35 Violation Held Without Jurisdiction: Allahabad HC Quashes GST Proceedings M/S Gospell Press Thru. Partner Mr. Rajiv Goyal vs State Of U.P.Thru. Prin. Secy. State Tax Lko And CITATION : 2025 TAXSCAN (HC) 2424

The Allahabad High Court addressed a challenge to a show cause notice and seizure order issued under Section 130 of the Uttar Pradesh Goods and Services Tax Act, 2017 (UPGST Act). The legal issue revolved around whether confiscation proceedings under Section 130 could be initiated for alleged non-compliance with Section 35 of the UPGST Act, which mandates maintenance of accounts.

The bench of Justice Shekhar B. Saraf and Justice Prashant Kumar held that the show cause notice and seizure were indeed without jurisdiction. The Court emphasized that confiscation under Section 130 cannot be invoked solely for accounting lapses under Section 35, without first determining any tax liability. Consequently, the High Court quashed the show cause notice and seizure order, while allowing the department to proceed under the appropriate provisions of the UPGST Act and permitting the petitioner to pursue the refund in accordance with law.

Notice Must Be ‘Issued’, Not Merely Generated: Delhi HC rules Income Tax Reassessment Notice Time-barred with 1 day Delay GRID SOLUTIONS SAS vs ASSISTANT COMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 2425

The Delhi High Court dealt with the validity of an income tax reassessment notice issued under Sections 148 and 148A of the Income Tax Act. The legal issue was whether a notice generated and digitally signed on 30 June 2025, but sent to the assessee only after midnight on 01.07.2025, could be considered “issued” within the limitation period.

The bench of Justice V. Kameshwar Rao and Justice Vinod Kumar, who held that “issuance” under the Act requires the notice to leave the control of the tax authorities and reach the assessee before the expiry of limitation. Mere generation or digital signing of the notice does not satisfy this requirement. The Court observed that technical delays on the Department’s portal cannot validate late issuance. Consequently, the High Court set aside the reassessment notice, holding the proceedings for A.Y. 2019-20 to be time-barred, and allowed the writ petition.

No Mens Rea in Delivery Mismatch: Allahabad HC Quashes GST Penalty M/S Singhal Enterprises vs State Of U.P. And 3 Others CITATION : 2025 TAXSCAN (HC) 2426

The Allahabad High Court examined whether a penalty under Section 129 of the Central Goods and Services Tax Act, 2017 (CGST Act) could be imposed for a mere mismatch in the delivery location of goods when valid invoices, railway receipts, and e-way bills were produced. The petitioner had purchased MS Bars from Chhattisgarh and due to a technical glitch in generating a fresh e-way bill after changing the delivery destination, the goods were intercepted during unloading. The authorities imposed tax and penalty under Section 129(3), which was upheld by the first appellate authority. The key legal question was whether a delivery mismatch, without evidence of intent to evade tax, could justify penal action.

The bench of Justice Piyush Agrawal noted that the original e-way bill remained valid, all import documents were genuine, and the delivery change followed standard commercial practice. The Court held that the authorities had failed to consider the subsequent production of the correct e-way bill and that no “mens rea” existed. Consequently, the High Court quashed both the original and appellate orders and directed the authorities to refund any amount deposited by the petitioner within two months, emphasizing that procedural discrepancies alone cannot trigger penalties under Section 129.

S.29 Cannot Be Used to Reassess ITC Claim: Allahabad HC Quashes Reassessment Initiated Without Escapement of Turnover "M/s Swati Menthal and Allied Chemical Ltd. vs State ofU.P. & 3 Others " CITATION : 2025 TAXSCAN (HC) 2427

The Allahabad High Court held that reassessment proceedings under Section 29 of the U.P. Value Added Tax Act, 2008 (U.P. VAT Act) cannot be initiated solely to reverse Input Tax Credit (ITC), as ITC does not form part of turnover and its reversal cannot be treated as escapement of turnover for reassessment purposes. The petitioner engaged in manufacturing and trading mentha oil derivatives, had their ITC claims for raw materials used in SEZ supplies accepted during regular assessments for A.Y. 2014-15, 2015-16, and 2016-17. Subsequent reassessment notices were issued alleging failure to reverse ITC on SEZ transactions.

The bench of Justice Indrajeet Shukla and Justice Saumitra Dayal Singh observed that reversal of ITC is governed exclusively under Section 14 of the U.P. VAT Act and occurs only during regular assessment proceedings. Since ITC is independent of turnover or tax rate, reassessment under Section 29, which applies only where turnover has escaped assessment or incorrect tax rates are applied, was without jurisdiction. The Court therefore quashed the reassessment authorisations and notices, ruling that authorities cannot reopen assessments solely to redetermine or reverse ITC.

Conditional Bail Granted by Allahabad HC in ₹35 Crore GST Tax Evasion Case Noting Four-Month Custody Siddhant Rana vs Union of India CITATION : 2025 TAXSCAN (HC) 2428

The Allahabad High Court granted conditional bail to Siddhant Rana, who was facing prosecution under Sections 132(1)(b), (c), (d), (f), and (i) of the Central Goods and Services Tax Act, 2017, for alleged ineligible Input Tax Credit claims through creation of fictitious firms. The Court noted that the appellant had already been in judicial custody since 18 June 2025, and the investigation had been concluded with the complaint filed before the trial court.

The bench comprising Justice Sameer Jain observed that the alleged offences, though involving GST evasion exceeding ₹35 crore, were triable by a Magistrate and carried a maximum sentence of five years. Given that the prosecution primarily relied on documentary and electronic evidence, and the trial was expected to take considerable time, the Court held that continued detention was unnecessary. Bail was therefore granted subject to conditions, including regular appearance before the trial court, non-interference with witnesses or evidence, and refraining from committing any criminal acts.

Cotton-Filled Khadi Rajai Taxable at 14% Under UP VAT Law: Allahabad High Court Denies Exemption M/S Sri Gandhi Ashram vs The Commissioner CITATION : 2025 TAXSCAN (HC) 2429

The Allahabad High Court dealt with a legal issue concerning the applicability of exemption under Section 28(ii)(2) of the Uttar Pradesh Value Added Tax Act, 2008 (UP VAT Act). The case involved cotton-filled khadi rajai and khadi gaddey, where the appellant contended that these products were exempt as khadi garments and khadi made-ups under Schedule I, Entry 11. The Assessing Officer, however, imposed a 14% tax under Schedule II-A, Entry 107, treating the filled rajai as taxable, and the matter was subsequently affirmed by the Commercial Tax Tribunal.

The bench comprising Justice Piyush Agrawal examined whether the exemption for khadi goods extended to filled rajai and gaddey. The Court noted that the appellant’s own submissions confirmed that the goods sold were cotton-filled rajai, whereas the statutory exemption applied only to unfilled khadi products. Consequently, the Court held that the tax levy was valid and dismissed the revision petition, thereby upholding the 14% VAT imposed by the authorities.

Suspicion Insufficient to Levy Penalty Under Section 48(5) of UP VAT Act Rules Allahabad HC M/S Sonu Metal Store vs The Commissioner Of Commercial Tax U.P. CITATION : 2025 TAXSCAN (HC) 2430

The Allahabad High Court addressed the legal issue of whether a penalty under Section 48(5) of the U.P. Value Added Tax Act, 2008 (U.P. VAT Act) can be imposed solely based on suspicion or the seizure of goods, without verification of business records to establish intent to evade tax. The appellant had transported scrap metal worth ₹29,922 along with Central Tax of ₹5,980, but the vehicle was intercepted and the goods were allegedly misdeclared. A penalty of ₹1,22,400 was imposed after the seizure, and subsequent appeals before the Commercial Tax Tribunal were dismissed.

The bench of Justice Piyush Agrawal held that penalties under Section 48(5) require a definite finding of intentional omission from books of account with intent to evade tax. The Court noted that entries were recorded in the appellant’s books after the seizure, and the authorities failed to verify their correctness through survey or assessment. Observing that the penalty was imposed merely on suspicion arising from the seizure, the Court set aside all penalty orders and allowed the revision, holding that mere suspicion without verification is insufficient to levy a penalty.

Retrospective Cancellation of GST Regn.: Delhi HC Revises Effective Date from 2017 to 2021 After Confirming No Fraudulent ITC Availed SHIVAY IRON SCRAP vs COMMISSIONER OF GOODS AND SERVICE TAX CITATION : 2025 TAXSCAN (HC) 2431

The Delhi High Court addressed the legal issue regarding the effective date of cancellation of GST registration under the CGST Act, specifically examining whether retrospective cancellation was justified when there was no allegation of fraudulent Input Tax Credit (ITC) availment. The petitioner had voluntarily applied for cancellation of registration in October 2021 due to age and health reasons, but the Department had issued an order cancelling the registration retrospectively from 11 July 2017, which adversely impacted its customers and was beyond the petitioner’s intended effective date.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain, who noted that the Show Cause Notice (SCN) did not propose retrospective cancellation and there was no evidence of fraudulent ITC. Considering that the retrospective effect caused undue hardship to customers, the Court modified the effective date of cancellation, holding that the GST registration would be deemed cancelled only from 14.12.2021, the date of the SCN. The writ petition was disposed of accordingly, ensuring that the petitioner’s customers were not unfairly penalized.

Complex GST ITC Fraud Requires Factual Determination: Delhi HC Rejects Writ Jurisdiction and Directs Appellate Remedy M/S. AMAN SANITATION vs PRINCIPAL COMMISSIONER CITATION : 2025 TAXSCAN (HC) 2432

The Delhi High Court dealt with the legal issue of whether writ jurisdiction under Article 226 of the Constitution could be invoked in cases involving alleged fraudulent Input Tax Credit (ITC) under the CGST Act, 2017. The petitioner challenged an Order-in-Original dated 21.01.2025, demanding ₹1,11,41,684 on allegations of fraudulent ITC transfers through multiple non-existent firms. The issue centered on whether the High Court could entertain the writ petition given the complexity of the factual matrix and the statutory framework providing for appellate remedies.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain, who noted that the allegations involved intricate transactions spanning over 1,155 taxpayers and multiple shell entities. Observing that the petitioner had received notices, filed replies, and participated in the adjudication process, the Court declined to exercise writ jurisdiction. The Bench directed the petitioner to pursue the statutory remedy under Section 107 of the CGST Act, permitting the appeal to be filed by 5.01. 2026 with the requisite pre-deposit, and emphasized that the appeal would be considered on merits rather than being dismissed on procedural grounds.

Crocin Trademark Sale to UK Company Constitutes Export, Exempt from Sales Tax: Bombay HC M/s. Duphar Interfran Ltd vs The State of Maharashtra CITATION : 2025 TAXSCAN (HC) 2433

The Bombay High Court addressed a sales tax reference concerning the 1996 sale of the ‘Crocin’ trademark by M/s Duphar Interfran Ltd. to SKB Play PLC, a UK-based company, under Section 5(1) of the Central Sales Tax Act, 1956. The legal issue revolved around whether the transaction constituted a local sale in Maharashtra, attracting 4% sales tax, or a sale in the course of export, which would be exempt. The question primarily involved the determination of the situs of an intangible asset (trademark) and whether assignment of ownership outside India could qualify the sale as an export.

The bench of Justice M.S. Sonak and Justice Advait M. Sethna, who ruled in favor of the Applicant. The Court held that the Brand Acquisition Agreement dated 18 January 1996 was an Agreement to Sale and that the trademark’s rights and situs effectively transferred to the UK-based entity upon assignment. Relying on the principle of “mobilia sequuntur personam”, the Court concluded that the sale constituted an export under the CST Act and was not taxable within Maharashtra. The judgment clarified that the location of registration does not determine the situs of an intangible asset, and title passes upon assignment, not registration.

No Anticipatory Bail when Custodial Interrogation is Essential: Punjab & Haryana HC Rejects Plea in ₹33.16L Crypto-Cyber Fraud Case MOHAMAD NASEEM vs STATE OF HARYANA CITATION : 2025 TAXSCAN (HC) 2434

The Punjab & Haryana High Court addressed the scope of anticipatory bail under the Bharatiya Nyaya Sanhita, 2023, in a case involving a serious cyber-fraud and financial offence. The legal issue pertained to whether custodial interrogation could be bypassed through anticipatory bail when the investigation involved layered transactions and tracing of siphoned funds totaling ₹33,16,700, allegedly routed through multiple bank accounts. The Court examined the factual nexus of the accused with the fraud, the necessity of custodial interrogation, and the limits of anticipatory bail in complex financial offences.

The bench of Justice Surya Partap Singh observed that anticipatory bail is an extraordinary remedy, as reiterated in Srikant Upadhyay v. State of Bihar (2024), and cannot be claimed as a matter of right. The Court held that the petitioner could not be granted anticipatory bail since his custodial interrogation was essential to uncover the truth behind the transactions, verify his connection to the bank accounts, and understand his alleged role in the cash withdrawals. Consequently, the petition for anticipatory bail was dismissed, affirming that such relief cannot be granted in serious offences requiring investigative custody.

Statutory Appeal Remedy u/s 112 of CGST Act Bars Writ: Chhattisgarh HC Declines to Interfere in ₹3.38 Cr GST Demand Against Petitioner Shri Swastik Traders Shop vs State Of Chhattisgarh CITATION : 2025 TAXSCAN (HC) 2435

The High Court of Chhattisgarh examined a writ petition challenging a demand order of ₹3,38,75,200 issued under Section 73(8) of the Central Goods and Services Tax (CGST) Act, 2017 against a partnership firm, Shri Swastik Traders. The legal issue revolved around whether the Court could interfere with an ex‑parte demand order when the petitioner had a statutory remedy available under Section 112 of the CGST Act to approach the appellate authority, despite prior ex‑parte proceedings and non-responsiveness due to illness.

The bench of Justice Naresh Kumar Chandravanshi held that the writ petition was not maintainable in view of the available statutory remedy. The Court observed that although the GST Appellate Tribunal was not yet fully functional, the Government had issued notifications enabling taxpayers to file appeals with pre‑deposit and obtain statutory stay under Section 112(9). Accordingly, the Court dismissed the petition but granted liberty to Shri Swastik Traders to file an appeal before the Tribunal within the stipulated period, subject to pre-deposit compliance, clarifying that recovery would remain stayed once the appeal is filed, and allowing the State to proceed with recovery if the requirements were not met.

More Than What Meets the Eye”: Delhi HC Dismisses Writ for De-Freezing Bank Account, cites Concealment of DGGI Probe & GST ITC Fraud AASHISH vs DIRECTORATE GENERAL OF GST INTELLIGENCE CITATION : 2025 TAXSCAN (HC) 2436

The Delhi High Court considered a petition challenging the freezing of a bank account under Section 83 of the Central Goods and Services Tax Act, 2017 (CGST Act), in connection with alleged fraudulent Input Tax Credit (ITC) amounting to ₹19.39 crore. The legal issue concerned whether the petitioner, Aashish, could seek de-freezing of his IndusInd Bank account despite concealment of ongoing DGGI investigations under Sections 67 and 74 of the CGST Act, and whether the provisional attachment exceeded the statutory period or was misused.

The Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain, which observed deliberate concealment of material facts by the petitioner and confirmed that the entity ‘M/s Steelmart India’ was non-existent at its declared address. The Court held that there was no basis to exercise writ jurisdiction under Article 226 to de-freeze the account, directed the petitioner to follow Rule 159(5) of the CGST Rules to file objections if aggrieved, imposed costs of ₹1 lakh, and permitted the DGGI and GST authorities to continue proceedings in accordance with law.

Income Tax Appellate Tribunal Cannot Sustain Tax Revision Order on Grounds Not Raised by Commissioner: Kerala HC SAVE A FAMILY PLAN (INDIA) vs THE DEPUTY COMMISSIONER OF INCOMETAX (EXEMPTIONS) CITATION : 2025 TAXSCAN (HC) 2437

The Kerala High Court addressed the scope of the Income Tax Appellate Tribunal’s (ITAT) jurisdiction under Section 263 of the Income Tax Act, 1961, ruling that the Tribunal cannot uphold a Commissioner’s revision order on grounds not originally raised by the Commissioner. The legal issue concerned whether the ITAT could sustain a tax revision order for the A.Y. 2014-15 based on reasons independent of those cited in the Commissioner’s original revision order.

The Division Bench comprising Justice A. Muhamed Mustaque and Justice Harisankar V. Menon allowed the appeal filed by the charitable trust, Save A Family Plan (India), and set aside the ITAT’s order. The Court observed that the ITAT overstepped its jurisdiction by upholding the revision on a new ground relating to the trust’s objects, which was not invoked by the Commissioner. Relying on precedent, the Court held that the Tribunal’s role is confined to examining the grounds specifically relied upon by the Commissioner under Section 263. Consequently, the original assessment in favor of the trust was restored, and both the ITAT and Commissioner’s revision orders were nullified.

Missed ITR Amid Illness Lands 82-Year-Old in Tax Battle, Gujarat HC Steps In SHUSHILABEN JAYANTIBHAI PATEL vs THE PRINCIPAL COMMISSIONER OFINCOME TAX VADODARA - 1 & ANR. CITATION : 2025 TAXSCAN (HC) 2438

The Gujarat High Court addressed the exercise of revisional powers under Section 264 of the Income Tax Act, 1961, in a case involving an 82-year-old senior citizen, Shushilaben Jayantibhai Patel, who had paid her due taxes despite missing her income tax return for A.Y. 2017-18. The legal issue concerned whether the Commissioner could reject a revision application solely on the ground of non-filing of return when the assessee had paid the requisite tax and demonstrated overall compliance, particularly considering her advanced age and medical condition.

tHE Division Bench comprising Justice Pranav Trivedi and Justice A.S. Supehia set aside the Commissioner’s order and remanded the matter for fresh consideration. The Court observed that Section 264 confers broad discretionary powers to prevent miscarriage of justice, and the Commissioner’s outright rejection without judicial consideration of the assessee’s tax payment, audit compliance, and health-related circumstances was arbitrary. The High Court directed the Commissioner to re-examine the matter and pass an appropriate order within 12 weeks, ensuring that discretion is exercised in accordance with law.

Kerala HC Orders Income Tax Authority to Decide Stay Petition Within Two Months, Puts Recovery on Hold METRO AGGREGATES AND SAND INDIA PRIVATE LIMITED vs ASSISTANTCOMMISSIONER OF INCOME TAX CITATION : 2025 TAXSCAN (HC) 2439

The Kerala High Court addressed a dispute between Metro Aggregates and Sand India Private Limited and the Income Tax Department concerning recovery of a tax demand, focusing on the legal issue of whether recovery proceedings can continue while a statutory appeal and stay petition are pending. The matter involved the assessment order for A.Y. 2015‑16, and the petitioner sought protection from coercive recovery actions until the appellate authority decided on the stay petition accompanying their appeal.

The single bench of Justice Ziyad Rahman A.A. stayed all recovery proceedings initiated under the impugned assessment order and directed the Commissioner of Income Tax (Appeals)-III to decide the stay petition within two months. The court observed that pursuing recovery while the appeal and stay petition remain pending would cause undue hardship to the assessee. By granting this interim relief, the High Court ensured that Metro Aggregates and Sand India Private Limited would not be subjected to enforcement measures before the appellate authority had an opportunity to consider the merits of their stay application.

Kerala HC Stays Income Tax Demand, Directs Filing of Stay Petition in Two Weeks K.B RAGHURAMAN vs THE INCOME TAX OFFICER CITATION : 2025 TAXSCAN (HC) 2440

The Kerala High Court addressed a tax recovery dispute, staying proceedings based on a demand notice and directing the assessee to file a stay petition. The matter concerned K.B. Raghuraman, who had a statutory appeal pending against an assessment order, challenged the Income Tax Department’s coercive recovery actions initiated while the appeal remained undecided. The legal issue revolved around whether the department could pursue recovery before the appellate authority had an opportunity to consider a stay application.

The single bench of Justice Ziyad Rahman A.A. disposed of the writ petition by ordering the petitioner to file a stay petition within two weeks. The court directed the Commissioner of Income Tax (Appeals) to consider the stay application and pass an appropriate order within two months of filing. In the meantime, all coercive recovery proceedings were stayed, ensuring that the assessee would not face enforcement action until the appellate authority determined the stay petition. This interim relief safeguards the petitioner from undue hardship while his statutory appeal is under consideration.

Income Tax Penalty u/s 271(1)(c): Kerala HC directs Legal Heirs to Appeal M.J. GEORGE vs THE ASSESSMENT UNIT CITATION : 2025 TAXSCAN (HC) 2441

The Kerala High Court addressed a writ petition challenging a penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961 for the A.Y. 2006-07, involving the legal heirs of the deceased assessee, M.J. George. The dispute arose from a penalty levied on a substantial addition of ₹9.68 crore as Long Term Capital Gains from a land sale. The key legal issue was whether a writ petition under Article 226 could be entertained where the central question involved a factual dispute concerning the service of a purported 2008 show-cause notice, which the Income Tax Department relied upon to initiate penalty proceedings in 2024.

The single bench of Justice Ziyad Rahman A.A. disposed of the petition, holding that the alleged 2008 notice’s existence and service constituted a disputed question of fact unsuitable for adjudication via a writ petition. The court directed the legal heirs to pursue the matter through the statutory appeal process, granting them one month from receipt of the judgment to file the appeal, and instructed the appellate authority to decide the matter independently. The interim stay granted by the court was extended for three months to allow the petitioners to avail of this statutory remedy.

GST ITC Claim of FY 2017-2021 Calcutta HC orders Dept to Examine matter in light of S. 16(5) M/s. Svaksha Distillery Limited vs The Assistant Commissioner ofWBGST CITATION : 2025 TAXSCAN (HC) 2442

The Calcutta High Court exercised its writ jurisdiction to set aside an order rejecting a rectification request under Section 107 of the West Bengal Goods and Services Tax Act, 2017 read with the Central Goods and Services Tax Act, 2017 (CGST Act). The legal issue concerned the entitlement of M/s Svaksha Distillery Limited to claim retrospective Input Tax Credit (ITC) for the F.Y. 2018-19 and 2019-20 in its GSTR-3B return for January-March 2020-21. The Court examined the applicability of Section 16(5) of the CGST Act, 2017, which permits taxpayers to claim ITC for earlier years within the prescribed period, and whether the Appellate Authority was obliged to reconsider the rectification plea in light of this updated legal framework and the Notification dated 8.10.2024 issued under Section 148 of the CGST Act.

The single Judge Bench of Justice Om Narayan Rai held that the Appellate Authority had failed to apply the amended statutory provisions and consider the rectification request in accordance with the special procedure mandated by the Notification. The Court observed that the appellant had filed its ITC claim within the time allowed under Section 16(5), and thus was entitled to relief. Consequently, the Court set aside the order rejecting the rectification request and remanded the matter to the Appellate Authority for fresh consideration in accordance with law, permitting the appellant to also claim a refund of any amounts already recovered.

Karnataka HC Set Aside Cancellation of GST Registration Over Absence of Mandatory Hearing Schedule R. M. SERVICES vs COMMISSIONER OF COMMERCIAL TAXES CITATION : 2025 TAXSCAN (HC) 2443

The High Court of Karnataka addressed the legality of cancelling a Goods and Services Tax (GST) registration under Section 29 of the Karnataka Goods and Services Tax Act, 2017 (KGST Act), where the show-cause notice (SCN) did not specify the date and time for a personal hearing. The Court examined whether such omission violated the statutory safeguard provided under the proviso to Section 29(2), which mandates that a personal hearing must be granted before cancellation of registration. The legal issue centered on whether proceeding with cancellation without providing this opportunity deprived the assessee of the statutory right to be heard.

The Single Judge Bench comprising Justice M. Nagaprasanna held that the SCN’s failure to mention a specific date and time for personal hearing rendered the cancellation order unsustainable. The Court observed that compliance with the proviso to Section 29(2) is a statutory right, not a discretionary formality, and the cancellation order did not demonstrate that the assessee was provided a meaningful hearing. Consequently, the Court allowed the petition, set aside the cancellation order, and remitted the matter to the authority for fresh consideration starting from the issuance of the show-cause notice.

GST Interest and Penalty order passed without Proper Hearing Despite Request: Karnataka HC orders Fresh Adjudication M/S. SIRI KANAKADURGHA AGENCIES vs STATE OF KARNATAKA CITATION : 2025 TAXSCAN (HC) 2444

The High Court of Karnataka addressed the validity of an ex-parte adjudication order issued under the Central Goods and Services Tax Act, 2017 (CGST Act) and the Karnataka Goods and Services Tax Act, 2017 (KGST Act), in a matter where the petitioner had been denied a personal hearing and the statutory limitation relied upon was under challenge before the Supreme Court. The legal issue revolved around whether an adjudication order passed without granting a hearing and based on notifications whose validity was sub judice could be sustained.

The Single Judge Bench of Justice M. Nagaprasanna set aside the ex-parte order issued against M/s. Siri Kanakadurgaha Agencies and directed that fresh adjudication be conducted only after the Supreme Court concludes its examination of SLP (C) No. 4240 of 2025 concerning the limitation-extension notifications. The Court observed that passing adjudication while the Apex Court is seized of the matter could lead to conflicting legal positions, and reiterated that the petitioner is entitled to a personal hearing as per principles of natural justice. The matter was therefore remitted to the Deputy Commissioner of Commercial Taxes for reconsideration in accordance with law.

Delhi HC Remands Ex-Parte GST Demand as Petitioner Claimed Inability to Access Portal, Imposes ₹10K Costs Payable to STBA M/S WALSONS SERVICES PVT. LTD. vs SALES TAX OFFICER/CLASS II(STO), DGST & ANR CITATION : 2025 TAXSCAN (HC) 2445

The Delhi High Court addressed a case concerning an ex-parte demand order under the Goods and Services Tax (GST) regime, focusing on whether the assessee was afforded an adequate opportunity to respond to a show-cause notice (SCN). The issue arose under the GST framework, where principles of natural justice require that a taxpayer be given proper access to the portal and an opportunity to be heard before an adjudication confirming a demand is passed.

The Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain set aside the ex-parte demand order issued against M/s Walsons Services Pvt. Ltd. for F.Y. 2019-20, amounting to ₹44,84,321 in tax and ₹86,63,462 including interest and penalty. The Court noted that the petitioner had missed the original SCN due to lack of portal access and inadvertent oversight, and that the impugned order was non-speaking and passed without due process. The matter was remanded to the Adjudicating Authority to permit the petitioner to file a reply by 15.12.2025, grant a personal hearing, and ensure notice is served via registered email and mobile. Portal access was also directed to be restored within one week. Costs of ₹10,000 were imposed on the petitioner, while the issue regarding the validity of certain GST notifications remains pending before the Supreme Court.

Fresh Reply to SCN Must Be Considered: Karnataka HC Quashes Entire Service Tax Proceedings SHRI. SHAFIQAHMED DONGARKHE vs THE PRINCIPAL COMMISSIONER OFCENTRAL TAX CITATION : 2025 TAXSCAN (HC) 2446

The High Court of Karnataka addressed a service tax dispute under the Finance Act, 1994, concerning the validity of a show cause notice, Order-in-Original, and Order-in-Appeal issued against Shafiqahmed Dongarkhe. The legal issue revolved around whether the assessee was liable to pay service tax, considering factors such as classification of services, applicability of the negative list, exemptions under relevant notifications, and limitations under law.

The Single Judge Bench comprising Justice M. Nagaprasanna quashed the show cause notice and both the original and appellate orders, remanding the matter to the Assistant Commissioner for fresh adjudication. The Court directed the adjudicating authority to reconsider the matter from the stage of filing the reply, applying parameters laid down in Karnataka Chinmaya Seva Trust v. Joint Commissioner of Central Tax (2024), including determination of whether the assessee qualifies as a service provider, whether the services are exempt or fall under the negative list, and whether any claims are barred by limitation. The petitioner was instructed to file a fresh reply within four weeks, and the authority was required to pass orders in accordance with law.

Municipal Body cannot Levy Advertisement Tax post-GST: Allahabad HC Quashes ₹2 Cr Recovery Certificate & Directs Deposit Refund M/S Saffron Communication Pvt Ltd vs State Of U.P. CITATION : 2025 TAXSCAN (HC) 2447

The Allahabad High Court addressed the legal issue of whether municipal corporations retain the authority to levy advertisement tax following the implementation of the Goods and Services Tax (GST) regime under the 101st Constitution Amendment and the U.P. GST Act, 2017. The dispute arose under the U.P. Municipal Corporation Act, 1959, where the petitioner, Saffron Communication, had paid advance advertisement tax for placing advertisements on public hoardings and signage. The key legal question was whether such a levy post-GST was valid, given that the GST framework subsumed the power to collect indirect taxes, including those previously imposed by local authorities.

The Division Bench of Justice Saumitra Dayal Singh and Justice Indrajeet Shukla ruled in favor of the petitioner, holding that municipal corporations no longer possess legislative competence to levy advertisement tax independently. The Court quashed the recovery certificate and the related demand notices issued by Nagar Nigam, Ghaziabad, and directed the refund of amounts deposited by the petitioner for the post-GST period within three months. The judgment reaffirmed that all local taxes on advertisement are now governed exclusively under the GST framework.

Non‑Disclosure of Turnover and Wrong Availment of GST ITC: Delhi HC Directs Petitioner to Reply to SCN M/S LAKHDATAR ENTERPRISES vs PRINCIPAL COMMISSIONER CITATION : 2025 TAXSCAN (HC) 2448

The Delhi High Court dealt with the legal issue concerning the violation of Section 16 of the Central Goods and Services Tax (CGST) Act, 2017, arising from non-disclosure of turnover and questionable availing of Input Tax Credit (ITC) by the petitioner, Lakdhatar Enterprises. The writ petition challenged inaction on a show cause notice (SCN) issued by the GST authorities, with the petitioner claiming undue delay in adjudication. The Court noted serious non-disclosures in the petition, including turnover exceeding ₹17.5 crore during the period of GST registration and purchases from cancelled dealers, which cast doubt on the genuineness of ITC claims.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain directed the petitioner to file a reply to the SCN and comply with the earlier court directive to disclose business details, turnover, and ITC availed. The Court allowed the GST authorities to proceed with adjudication in accordance with law and disposed of the writ petition, emphasizing that the petitioner cannot evade statutory proceedings by withholding material facts.

Bombay HC Rejects Discharge Plea of CGST Officers in Rs. 1000 Bribery Case Vijaykumar W/o. Dnyandev Raut vs The State of Maharashtra CITATION : 2025 TAXSCAN (HC) 2450

The Bombay High Court addressed a criminal revision application concerning the rejection of a discharge plea in a bribery case against Vijaykumar Raut, a Superintendent of CGST. The legal issue involved whether the material on record was sufficient to constitute a prima facie case under Section 7 of the Prevention of Corruption Act, 1988, read with Section 120-B of the IPC, thereby justifying the continuation of the trial for allegedly demanding a bribe of ₹1,000. The applicant contended that he was falsely implicated, highlighting issues with the evidence, including the absence of an electronic evidence certificate under Section 65B of the Evidence Act and the alleged invalidity of the sanction.

The bench of Justice Abhay S. Waghase held that the trial court had correctly assessed the matter at the discharge stage under Sections 227 and 228 of the Cr.P.C., which requires only a determination of prima facie material and not a detailed examination of evidence. The High Court observed that the complaint and verification report sufficiently named the applicant and his subordinate, establishing a prima facie case. The Court dismissed the revision application, noting that issues regarding the electronic evidence certificate or validity of sanction could be addressed during trial, thereby affirming the trial court’s order to proceed with framing charges.

Sex Toys/Massagers Not for Therapy or Disease Alleviation: Delhi HC Dismisses Customs’ Review Plea, Holds DCGI Approval Not Required TECHSYNC vs THE SUPERINTENDENT OF CUSTOMS SIIB ACC IMPORTS ANDORS CITATION : 2025 TAXSCAN (HC) 2452

The Delhi High Court examined whether imported body massagers and similar wellness products fall within the regulatory ambit of the Medical Devices Rules, 2017, particularly in light of the Customs Department’s insistence that such goods required regulatory approvals before release. The core legal issue involved determining whether these massagers could be classified as medical devices intended for therapeutic or disease-alleviating purposes, or whether they were merely general wellness products outside the scope of medical-device regulation.

The Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain held that there was no merit whatsoever in the Customs Department’s review petitions. The Court reaffirmed that, as per CDSCO FAQs, non-therapeutic wellness massagers are not regulated as medical devices, and further noted that Public Notice No. 46/2023 expressly permits importers to obtain the EPR certificate even after release of the goods. Observing that Customs had previously released identical consignments, the Bench found the review petitions to be frivolous and indicative of harassment. Consequently, the Court dismissed the review petitions, imposed ₹25,000 costs in each case recoverable from the salary of the concerned Assistant Commissioner, and directed that the goods be provisionally released within two days upon application for EPR processing.

Heavy Rainfall Valid Reason for Income Tax Delay: Karnataka HC Quashes Commissioner's Order "R N SHETTY TRUST vs THE PRINCIPAL COMMISSIONER OF INCOMETAX" CITATION : 2025 TAXSCAN (HC) 2453

The High Court of Karnataka examined whether a 36-day delay in filing income tax returns attributed to system failure caused by heavy rainfall constituted “genuine hardship” warranting condonation under Section 119(2)(b) of the Income Tax Act, 1961. The petition challenged the order dated 24.02.2021 and its corrigendum issued by the Principal Commissioner of Income Tax, which had rejected the assessee’s application for condonation of delay for A.Y. 2017-18. The central legal issue was whether the circumstances described by the petitioner satisfied the threshold for condonation as contemplated by CBDT Circular No. 9/2015, and whether the authorities had adopted an unduly technical approach in denying relief.

The Single Judge Bench of Justice S.R. Krishna Kumar allowed the petition and held that the delay was indeed supported by bona fide and unavoidable circumstances, amounting to “genuine hardship” under Section 119(2)(b). The Court found the Principal Commissioner’s order to be erroneous and hyper-technical, noting that the petitioner’s inability to file returns due to system failure was a sufficient and justifiable cause. Accordingly, the Court set aside the impugned order and its corrigendum, allowed the condonation application, and directed the Income Tax Department to accept the petitioner’s return for AY 2017-18 and thereafter verify and proceed in accordance with law.

GST Paid Before SCN Acknowledged: Delhi HC Quashes Demand Subject to Payment of 15% Penalty u/s 74(5) DELHI SALES CORPORATION vs THE PRINCIPAL COMMISSIONER OF CENTRALTAX & ORS CITATION : 2025 TAXSCAN (HC) 2454

The Delhi High Court examined the legality of a demand raised through Form DRC-07 despite the petitioner having already discharged its tax liability prior to the issuance of the show cause notice (SCN). The core issue involved the correct interpretation and application of Section 74 of the Central Goods and Services Tax Act, 2017, particularly the distinction between Section 74(5) (payment before SCN) and Section 74(8) (payment after SCN). The petitioner, Delhi Sales Corporation, challenged the Order-in-Original and the subsequent DRC-07 demand, arguing that the tax and interest had been fully paid in August 2022 well before the SCN dated 7 June 2024 thereby rendering further proceedings unsustainable under the statutory scheme.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain held that the petitioner’s case was squarely covered under Section 74(5), since the tax and interest had been deposited prior to the issuance of the SCN. The Court ruled that once the pre-SCN payment mechanism under Section 74(5) is invoked, proceedings cannot be continued except for recovery of a 15% penalty. Accordingly, the Bench directed that upon the petitioner depositing 15% of the penalty within four weeks, the impugned order and the Form DRC-07 demand would stand quashed qua the petitioner. The Court clarified that the benefit of this order would not extend to other notices involved in the wider investigation, thereby disposing of the writ petition.

Chhattisgarh HC Rejects Anticipatory Bail to Lottery Scam Accused Aazad Hussain S/o Moh. Rafique Ansari vs State Of ChhattisgarhThrough The Station House Officer CITATION : 2025 TAXSCAN (HC) 2455

The Chhattisgarh High Court dealt with the issue of whether an accused facing allegations of involvement in an interstate cyber-fraud racket was entitled to anticipatory bail under Section 438 of the Code of Criminal Procedure, 1973. The case arose from Crime No. 55/2021, registered for offences under Sections 420, 467, 468, and 471 of the Indian Penal Code along with Section 66-D of the Information Technology Act, 2000. The central question was whether pre-arrest bail could be granted to the applicant, Aazad Hussain, who was accused of participating in a cyber-crime conspiracy and was allegedly absconding when the charge sheet was filed.

The Single Judge Bench of Justice Deepak Kumar Tiwari rejected the anticipatory bail application, holding that no grounds existed to grant protection from arrest. The Court accepted the State’s contention that the applicant had not cooperated with the investigation, had absconded, and was implicated through financial traces and co-accused statements indicating his involvement in the cyber fraud. Noting the seriousness of the allegations and the applicant’s conduct during the investigation, the Bench concluded that this was not a fit case for exercising discretion under Section 438 CrPC and accordingly dismissed the anticipatory bail plea.

No Scope for Remand in Detailed GST Order: Madras HC orders 100% Pre-Deposit, directs to Adjust any Recovered Amount to Deposit APR Logistics vs The State Tax Officer CITATION : 2025 TAXSCAN (HC) 2456

The Madras High Court examined whether an assessment passed under the Tamil Nadu Goods and Services Tax Act, 2017 (TNGST Act) could be remanded for reconsideration when the assessee alleged that the order was ex parte. The dispute concerned an assessment order imposing interest under Section 50 of the TNGST Act and tax dues of ₹9,33,430 each under CGST and SGST, along with IGST interest of ₹7,688. The petitioner, APR Logistics, sought remand on the ground that it had not been afforded an effective opportunity to present its case.

The Single Judge Bench of Justice C. Saravanan refused to remand the matter, holding that the assessment was not ex parte but a detailed, reasoned order passed after considering the petitioner’s written submissions. Since the petitioner failed to avail a personal hearing or file an appeal within time, the Court declined to interfere with the merits. However, the Bench permitted the petitioner to file an appeal before the Appellate Authority subject to 100% pre-deposit of the disputed tax, with credit for any recovery already made. It further directed that if the deposit is made within 30 days, the appeal shall be entertained on merits without raising limitation objections; failure to do so would result in dismissal of the writ petition and allow the GST department to proceed with recovery.

Valuation Disputes Lie within Supreme Court Jurisdiction: Gauhati HC Dismisses Excise Appeals THE COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX vs M/S S CJOHNSON PRODUCTS PRIVATE LIMITED CITATION : 2025 TAXSCAN (HC) 2457

The Gauhati High Court examined whether two excise appeals filed by the Commissioner of Central Excise & Service Tax were maintainable under Section 35G of the Central Excise Act, 1944, in a dispute concerning fixation of the special rate of value addition under Notification No. 32/99-CE and related amendments. The core legal issue was whether questions arising out of the methodology for computing value addition based on unit-wise apportionment of consolidated financial statements constituted a valuation dispute, which under Section 35L falls within the exclusive appellate jurisdiction of the Supreme Court, thereby barring High Court intervention.

The Division Bench comprising Justice Michael Zothankhuma and Justice Mitali Thakuria held that the appeals were not maintainable, as the questions raised directly pertained to the valuation of goods for assessment of duty, a category expressly excluded from the High Court’s jurisdiction under Section 35G. The Bench ruled that the dispute was valuation-centric, particularly since the Commissioner had accepted the same methodology for the prior year (2009-10). Consequently, the Court dismissed the excise appeals, affirming that such issues must be agitated only before the Supreme Court under Section 35L.

Gujarat HC strikes Down GST demand u/s 74 ruling No GST leviable on Leasehold Assignments M/S. SIEMENS LTD. THROUGH AUTHORISED SIGNATORY MANOJ DHIRAJLALPALA vs UNION OF INDIA & ORS. CITATION : 2025 TAXSCAN (HC) 2458

The Gujarat High Court examined whether the assignment of long-term leasehold rights amounts to a transfer of immovable property and thus falls outside the scope of “supply” under the Central Goods and Services Tax Act, 2017. The core legal question was whether such assignment executed through two Deeds of Assignment transferring 99-year leasehold rights could be treated as a taxable supply of service under Section 7(1)(a) or whether it stood excluded from GST by virtue of Clause 5 of Schedule III, which removes sale of land from the ambit of supply. The matter arose from a show cause notice issued under Section 74 demanding GST of ₹34.83 crore on the transaction, which the petitioner contended was legally unsustainable.

The Division Bench of Justice A.S. Supehia and Justice Pranav Trivedi held that the issue was fully settled by the Court’s earlier decision in Gujarat Chamber of Commerce & Industries v. Union of India, wherein it was conclusively ruled that assignment of leasehold rights for the unexpired lease term extinguishes the assignor’s interest and constitutes a transfer of immovable property. Reiterating this position, the Bench held that such transfer cannot be categorised as a supply of service under Section 7(1)(a) and squarely falls within the Schedule III exclusion relating to sale of land. As a result, the Court found the Section 74 show cause notice to be devoid of legal basis and quashed the notice, ruling that no GST is leviable on assignment of long-term leasehold rights.

2 Persons, 1 PAN: Madras HC Orders Income Tax Dept to Allot New Number After Original Holder Denied Loans Over Low CIBIL S.Senthil vs The Commissioner of Income Tax CITATION : 2025 TAXSCAN (HC) 2459

The Madras High Court dealt with the legal issue arising from the erroneous duplicate allotment of a Permanent Account Number (PAN), which resulted in severe adverse credit consequences for the original allottee. The core question before the Court was whether an assessee could be compelled to retain a PAN that had been wrongly issued to another person who later defaulted on loans, thereby affecting the petitioner’s credit identity. The dispute also involved the Revenue’s reliance on Instruction No. 9 ITBA-PAN dated 25.03.2021, issued by the Directorate of Income Tax (Systems), which stipulates that the first allottee must retain the original PAN. The petitioner sought judicial intervention after continued hardship, arguing that the Department’s administrative error and rigid adherence to internal instructions violated his rights and required issuance of a fresh PAN under the Income-tax Act, 1961.

The bench of Justice C. Saravanan, who examined the sequence of events leading to the petitioner’s impaired credit profile and held that no assessee can be made to suffer lifelong financial repercussions due to the Department’s mistakes. The Court found that the petitioner’s financial identity remained unjustly linked to the defaults of the second allottee despite departmental corrections, and that strict application of Instruction No. 9 continued to cause prejudice. Concluding that equity and fairness required prompt remedial action, the Bench directed the Income Tax Department to issue a fresh PAN to the petitioner after verifying that no tax dues or liabilities were attached to the earlier PAN, and mandated that the entire exercise be completed within three months from receipt of the order.

Kerala HC Disallows Deduction u/s 37 for Interest on Agricultural Income Tax Payment Delays "ASPINWALL AND COMPANY LIMITED PRESENTLY AT POST BOX NO 560vs THE COMMISSIONER OF INCOME TAX C.R.BUILDING " CITATION : 2025 TAXSCAN (HC) 2460

The Kerala High Court examined whether interest paid on delayed Agricultural Income Tax (AIT) could be claimed as a deductible business expenditure under Section 37 of the Income Tax Act, 1961. The issue arose in an Income Tax Appeal filed by Aspinwall and Company Limited, which challenged the disallowance of ₹94,00,179 paid as interest on delayed AIT dues. The central legal question was whether such interest levied under the Kerala Agricultural Income Tax Act could be treated as a business expense "wholly and exclusively" incurred for business purposes under Section 37, particularly when agricultural income itself is exempt under Section 10(1) of the Act.

The Division Bench comprising Justice A. Muhammed Mustaque and Justice Harisankar V. Menon upheld the findings of the Income Tax Appellate Tribunal. The Bench ruled that interest paid for delay in remitting AIT cannot qualify as a business deduction, as postponing tax obligations is not an activity undertaken in the course of business. The Court emphasized that interest “takes its colour from the tax” to which it relates, and since AIT itself is not an allowable deduction, the corresponding interest is inherently non-deductible. Distinguishing the precedents relied upon by the assessee, the judges noted that in those cases the underlying tax was itself deductible, unlike in the present matter. Consequently, the High Court dismissed the appeal, answering the substantial question of law against the assessee and in favor of the Revenue.

Taxpayer Files Writ without Submitting GST Reply: P&H HC Directs to File Response to SCN in ITC Difference Matter

JAIN AMAR CLOTHING PVT LTD vs STATE OF HARYANA AND ORS CITATION : 2025 TAXSCAN (HC) 2461

The Punjab & Haryana High Court dealt with the issue of whether a writ petition challenging a GST show-cause notice issued under Section 74 of the Haryana Goods and Services Tax Act, 2017 could be entertained when the taxpayer had not filed any reply to the notice. The legal question centered on the assessee’s challenge to the SCN alleging differences in Input Tax Credit (ITC) availed in GST returns, which the petitioner claimed was mechanical, vague, and issued merely to save limitation. Since Section 74 governs cases of tax not paid, short-paid, or ITC wrongly availed due to fraud or suppression, the core issue before the Court was whether the petitioner could bypass the statutory process without first responding to the notice.

The Division Bench comprising Justice Lisa Gill and Justice Parmod Goyal refused to entertain the writ petition, noting that the petitioner had not filed any reply to the show-cause notice. The Court accepted the State’s submission that despite the expiry of the original timeline, the petitioner would still be permitted one additional week to submit a reply, which the competent GST authority must consider strictly in accordance with law. Granting the petitioner liberty to raise all objections, the Bench disposed of the petition without examining merits, holding that there was no reason to continue writ proceedings at this premature stage.

Goods Never Cleared for Home Consumption: Bombay HC Orders Refund of ₹35.37 Lakh Customs Duty u/s 23 to Importer M/s. Ajay Industrial Corporation Ltd. vs CITATION : 2025 TAXSCAN (HC) 2462

The Bombay High Court adjudicated an issue concerning the refund of customs duty under Sections 13, 23, and 27 of the Customs Act, 1962, where the imported goods were never delivered to the importer and were found either short-landed or lost before clearance for home consumption. The core legal question was whether Customs could retain ₹35.37 lakh in duty paid by the petitioner, M/s Ajay Industrial Corporation Ltd, when the consignment of PVC Resin did not reach the importer, despite duty having been paid through banking channels and SCRIPs. The Court examined the interplay of statutory provisions dealing with pilferage (Section 13), loss or destruction before clearance (Section 23), and the refund mechanism (Section 27), holding that duty cannot be collected or retained where goods are not available for clearance.

The Division Bench of Justice M.S. Sonak and Justice Advait M. Sethna ruled firmly in favor of the importer, holding that the case fell squarely within Section 23 since the goods were never cleared for home consumption. The Court rejected the conflicting stands taken by Customs and the Mumbai Port Authority, emphasizing that the importer could not be penalized for a dispute between two public authorities. Noting that the petitioner had pursued the matter for nearly three years without redress, the Bench held that Customs was legally obligated to remit the duty and directed a refund of ₹35.37 lakh, along with applicable interest. The Court also criticized the insistence on a “closure letter” for the Bill of Entry as an improper and dilatory tactic, reiterating that the statutory scheme clearly shields importers from duty liability where goods are lost, short-landed, or unavailable before clearance.

Prolonged Trustee Suspension, Sealed Records Left Trust Unable to File Returns: Bombay HC Condones Delay for Six Assessment Years Bombay Diocesan Trust Association Private Limited VsCommissioner of Income Tax (Exemptions) CITATION : 2025 TAXSCAN (HC) 2463

The Bombay High Court examined whether prolonged suspension of trustees, sealed records, and administrative takeover of a charitable trust constituted “genuine hardship” for the purpose of condonation of delay under Section 119(2)(b) of the Income Tax Act, 1961. The dispute arose after the Commissioner of Income Tax (Exemptions) refused to condone delay in filing Income Tax Returns and statutory forms for six assessment years (A.Y. 2012-13 to 2017-18), despite the Trust’s inability to file due to proceedings under Section 41D of the Maharashtra Public Trust Act, 1950, during which its trustees were removed and records sealed.

The Bench comprising Justice B. P. Colabawalla and Justice Amit S. Jamsandekar set aside the rejection order, holding that the CIT(E) had ignored undisputed and compelling circumstances demonstrating genuine hardship. The Court emphasised that from 2012 to 2017, the Trust was legally incapacitated—its Board suspended, its records inaccessible, bank operations restricted, and accounts finalized only by late 2018. The Bench further noted that although the application sought condonation for six years, the authority had inexplicably considered only one year, rendering the decision arbitrary. Accordingly, the High Court quashed the impugned order, condoned delay for all six assessment years, and directed the Department to process the Trust’s returns as though they had been filed within the prescribed time.

Charitable Trust can Exclude Doctors’ Fees to Calculate 2% Indigent Patient Fund Contribution: Bombay HC sustains ₹11.9 Cr Deduction CIT (Exemptions) vs Sir Kikabhai Premchand Settlement TrustNo.XI CITATION : 2025 TAXSCAN (HC) 2464

The Bombay High Court addressed the legal issue of whether a charitable hospital trust, governed by the Indigent Patient and Weaker Section Scheme, could exclude doctors’ fees from its “gross billing” while computing the mandatory 2% annual contribution to the Indigent Patient Fund (IPF). The dispute arose during A.Y. 2012-13, when the Assessing Officer invoked provisions relating to Section 11 of the Income Tax Act, 1961 to dispute the Trust’s computation, arguing that the entire billing including amounts directly paid to doctors should form part of the IPF calculation. The core legal question before the Court was whether the AO had jurisdiction to reinterpret the Scheme framed under the High Court’s supervision, and whether exclusion of doctors’ fees aligned with the statutory and scheme-based framework governing charitable hospital trusts.

The Division Bench comprising Justice R.I. Chagla and Justice Farhan P. Dubash upheld the concurrent findings of the CIT(A) and the Income Tax Appellate Tribunal (ITAT), confirming that the Trust had correctly computed its 2% contribution by excluding doctors’ fees. The Bench noted that the Tribunal had consistently applied the same principle in the assessee’s own cases for earlier years, and further emphasised that the Charity Commissioner alone possesses the authority to determine compliance with the IPF Scheme an area where the AO could not “usurp jurisdiction”. Finding no perversity or legal error in the ITAT’s reasoning, the High Court dismissed the Revenue’s appeal and affirmed the deduction of ₹11.9 crore, thereby sustaining the Trust’s method of computation under the IPF Scheme.

Blocking ITC Without Independent “Reasons to Believe” Violates Rule 86A of KGST Rules: Karnataka HC Quashes ECL Freeze M/S BEE JAY ENGINEERS vs STATE OF KARNATAKA CITATION : 2025 TAXSCAN (HC) 2465

The High Court of Karnataka dealt with the legality of blocking a taxpayer’s Electronic Credit Ledger (ECL) under Rule 86A of the Central Goods and Services Tax (CGST/KGST) Rules, 2017, in a writ petition filed by Bee Jay Engineers. The core legal issue before the Court was whether the jurisdictional authority could restrict the petitioner’s Input Tax Credit (ITC), a statutory right under the CGST Act, 2017 without independently forming “reasons to believe” as mandated by Rule 86A. The petitioner contended that the blocking order was mechanically passed based solely on communications from other officials, without any inquiry, reasons, or application of mind, thereby violating statutory safeguards and principles of natural justice.

The bench of Justice M. Nagaprasanna, who held that the blocking of the ECL was unsustainable, being founded on “borrowed satisfaction” rather than an independent formation of opinion by the competent authority. The Court found the order to be cryptic, vague, and non-speaking, failing to disclose any material justifying invocation of Rule 86A. The Bench ruled that the action was ultra vires Rule 86A. Accordingly, the High Court allowed the writ petition, set aside the impugned order, and directed that the petitioner’s ITC ledger be unblocked.

100% EOUs Entitled to Refund of Unutilised GST ITC on Zero-Rated Exports: Gujarat HC Holds CBIC Circular Inapplicable SHAH PAPERPLAST INDUSTRIES LTD. & ANR. Vs UNION OF INDIA& ORS. CITATION : 2025 TAXSCAN (HC) 2466

The Gujarat High Court addressed the entitlement of 100% Export Oriented Units (EOUs) to claim refund of unutilised Input Tax Credit (ITC) on zero-rated exports made without payment of tax under Section 54(3) of the Central Goods and Services Tax Act, 2017, read with Rule 89(4) of the CGST Rules, 2017. The core legal issue was whether the administrative CBIC Circular No. 172/04/2022-GST dated 06.07.2022, which disallowed refund of ITC in respect of deemed exports, could override the statutory right of EOUs to claim refunds on genuine zero-rated supplies. The petitioners contended that the circular was not applicable as they had exported goods under a Letter of Undertaking (LUT) and had not received any deemed-export supplies.

The Division Bench of Justice Bhargav D. Karia and Justice Niral R. Mehta held that the petitioners were entitled to the refund of unutilised ITC, noting that Section 54(3) clearly provides for refund in the case of zero-rated supplies made without payment of tax. The Court observed that the refund formula under Rule 89(4) applies only to zero-rated exports and not to deemed exports. It further clarified that Paragraph 2.2 of CBIC Circular No. 172/04/2022-GST had no applicability to the petitioners’ case. Accordingly, the High Court quashed all recovery and rejection orders and directed the Revenue to pay the refund already sanctioned within 12 weeks from receipt of the judgment.

GST ITC cannot be Denied u/s 17(5) when Insurance is for Business Premises, Stock-In-Trade and not Motor Vehicle: Gujarat HC ARRAYCOM(INDIA) LIMITED vs STATE OF GUJARAT & ORS. CITATION : 2025 TAXSCAN (HC) 2467

The Gujarat High Court addressed the issue of whether input tax credit (ITC) can be denied under Section 17(5)(b) of the CGST Act, 2017 when the insurance policy pertains to stock-in-trade, business premises, and manufacturing equipment rather than motor vehicles. The petition was filed by Arraycom (India) Limited, a manufacturer engaged in thick-film materials, solar power solutions, and system integration services, against the tax authorities’ classification of the insurance premium as ineligible for ITC. The Court examined whether the premium paid for standard fire and special perils policies covering business infrastructure could lawfully be disallowed under the restriction on ITC for motor vehicle insurance.

The Division Bench of Justice Bhargav D. Karia and Justice Pranav Trivedi held that the department’s demand was based on a factual misclassification, noting that the insurance policies clearly covered business premises, stock-in-trade, and plant machinery. The Court ruled that Section 17(5)(b)(iii) restricts ITC only for motor vehicle insurance, and therefore the petitioner was entitled to claim ITC on the said insurance premiums. Consequently, the High Court set aside the impugned demand dated 7 February 2025 and made the writ rule absolute to the extent of allowing ITC, while also emphasizing that the authorities could not assume jurisdiction to disallow credit for policies unrelated to motor vehicles.

Bombay HC Seeks Fresh Review of Yamaha’s Pre-GST Rebate Claim After Misapplication of S.142 and SVLDRS India Yamaha Motor P. Limited vs The Union of India CITATION : 2025 TAXSCAN (HC) 2468

The Bombay High Court considered the legality of the rejection of a rebate claim filed by India Yamaha Motor Private Limited under Rule 18 of the Central Excise Rules, 2002, relating to exports made in the pre-GST regime. The legal issue centered on whether the rebate claim pertaining to National Calamity Contingent Duty (NCCD) could be denied despite utilisation of pre-GST CENVAT credit, subsequent cash payment, and settlement under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS). The Court examined the applicability of Section 142 of the Central Goods and Services Tax Act, 2017, which governs lapsing of claims post-GST transition, and whether the rebate claim on exported goods remained valid and independent of such transition and settlements.

The Division Bench comprising Justice M.S. Sonak and Justice Advait M. Sethna held that the revisional authority had failed to consider critical statutory aspects, including: (i) the proper scope of Section 142(4) of the CGST Act regarding lapsing of claims, (ii) the independent nature of the rebate under Rule 18, and (iii) the impact of pre-GST CENVAT credit utilisation alongside subsequent cash payment. The Court observed that the impugned order lacked reasoning on whether the SVLDRS settlement extinguished the rebate claim and whether the claim could legitimately lapse. Consequently, the High Court set aside the revisional order and remanded the matter to the Principal Commissioner for fresh adjudication within six months, ensuring that all statutory provisions and prior payments were properly examined.

Income Tax Notice issued to Deceased Invalid: Calcutta HC orders to Re-initiate Proceedings against Legal Heirs KRIPA SHANKAR MAHAWAR vs THE PRINCIPAL CHIEF COMMISSIONER OFINCOME TAX-1 CITATION : 2025 TAXSCAN (HC) 2469

The Calcutta High Court addressed the legality of an income tax reassessment notice issued under Section 148A(b) of the Income Tax Act, 1961 in the name of a deceased assessee. The legal issue involved whether the Income Tax Department could continue reassessment proceedings against an individual who had passed away, without properly impleading the legal heirs. The Court examined whether such proceedings, initiated against a deceased person and subsequently continued without due recognition of the petitioner as the legal representative, were valid under the statutory framework.

The bench of Justice Om Narayan Rai held that the reassessment process was vitiated and legally unsustainable, noting that notices issued to the deceased and continuation without properly naming the legal heirs violated established legal principles. The Court set aside both the reassessment notice and the assessment order, while clarifying that the Income Tax Department is empowered to re-initiate reassessment proceedings in accordance with law, issuing fresh notices under Section 148 to the legal heirs. The petitioner was directed to provide names of other legal heirs if required, failing which the Department may proceed against him as the deemed sole legal representative.

GST Authorities Cannot Issue SCN to Dead Person: Delhi HC Rules Notice Void Ab Initio HARSH GOEL vs GST OFFICER /AVATO CITATION : 2025 TAXSCAN (HC) 2470

The Delhi High Court dealt with the legality of a Show Cause Notice issued under the Central Goods and Services Tax Act, 2017 to a deceased taxpayer. The legal issue concerned whether GST proceedings initiated against a person who had already passed away could give rise to a valid demand. The Court examined the jurisdictional validity of the notice issued to Late Pushkar Goel, the proprietor of M/s Nand Plastics Industries, and the consequential demand order for ₹10,83,044.

The bench of Justice Prathiba M. Singh and Justice Shail Jain held that issuance of a Show Cause Notice to a deceased individual is void ab initio. The bench noted that since the very foundation of the proceedings was defective, the subsequent demand order could not survive. Accordingly, the Court set aside both the Show Cause Notice and the demand order, while clarifying that the GST Department may proceed against the estate of the deceased proprietor in accordance with Section 93(1)(b) of the CGST Act, 2017, if permissible under law.

Income-Tax Concealment Prosecution can be Quashed even after Trial Court Cognizance: Rajasthan HC Invokes S. 482 CrPCNagendra Choudhary vs Union of India, through Special P.P CITATION : 2025 TAXSCAN (HC) 2472

The Rajasthan High Court addressed whether criminal proceedings under Section 276C(1) of the Income Tax Act, 1961 could be quashed even after a trial court had taken cognizance of the complaint. The legal question revolved around the High Court’s powers under Section 482 of the Code of Criminal Procedure (CrPC) to prevent abuse of process, particularly where the factual foundation for prosecution had been nullified by the Income Tax Appellate Tribunal’s removal of the penalty under Section 271AAB, which found no undisclosed income.

The bench of Justice Anand Sharma, who held that cognizance by a trial court does not oust the inherent powers of the High Court under Section 482 CrPC. The Court noted that continuation of the prosecution would constitute an abuse of process since the Tribunal had already determined that no concealment existed. Relying on Supreme Court precedents, the bench quashed the criminal proceedings in Criminal Case No. 140/2017, while granting the Income Tax Department liberty to revive the prosecution if its appeal against the Tribunal’s order succeeds.

IBC Trumps Income Tax Law: Bombay HC Upholds Extinguishment of Pre-Resolution Claims V Hotels Limited vs The National Faceless Assessment Centre,Delhi & Ors CITATION : 2025 TAXSCAN (HC) 2473

The Bombay High Court considered whether notices issued under Sections 143(2) and 142(1) of the Income Tax Act, 1961 could be sustained against a corporate debtor for periods preceding the approval of a Corporate Insolvency Resolution Plan (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC). The legal issue revolved around whether pre-resolution claims are extinguished once a resolution plan is sanctioned, and if government authorities, including the Income Tax Department, can pursue claims not included in the approved plan.

The division bench of Justice B.P. Colabawalla and Justice Amit S. Jamsandekar held that the impugned notices for A.Y. 2024-25 were untenable, as the approved CIRP plan extinguished all pre-resolution claims. The Court affirms that an approved resolution plan binds all stakeholders, including revenue authorities. Observing that the notices sought to examine periods prior to the plan’s approval, the bench quashed the notices, upholding the ‘clean slate’ principle of the IBC.

GST Cancellation without reason is 'Economic Death' and Unlawful: Allahabad HC M/S Anil Art And Craft vs State Of Uttar Pradesh And Another CITATION : 2025 TAXSCAN (HC) 2474

The Allahabad High Court examined the validity of an order cancelling GST registration under the Goods and Services Tax (GST) regime, highlighting procedural lapses in tax administration. The legal issue centered on whether a cancellation order could be sustained when issued as a “non-speaking order” without providing reasons, thereby depriving the registered taxpayer of the ability to issue tax invoices, claim or pass on input tax credit (ITC), effectively causing the “economic death” of the business.

The division bench of Justices Saumitra Dayal Singh and Indrajeet Shukla held that the impugned cancellation order against M/s Anil Art and Craft was legally unsustainable. The Court observed that merely stating the petitioner’s reply was “not satisfactory” without recording reasons violated fundamental procedural law. The bench set aside the cancellation, underscoring the critical impact of such orders on business operations, and directed the Commissioner of Commercial Tax, Uttar Pradesh, to ensure that only competent officers issue reasoned orders, issuing administrative instructions to prevent recurrence and stipulating penal consequences for non-compliance.

Retrospective GST Cancellation: Delhi HC orders Re-inspection of Business Premises after Address Change SAKSHI GOYAL PROPRIETOR vs PRINCIPAL COMMISSIONER CENTRAL GST CITATION : 2025 TAXSCAN (HC) 2475

The Delhi High Court addressed a challenge to a retrospective GST registration cancellation issued to the petitioner, Sakshi Goyal, at her old business address despite an approved change of address. The legal issue involved whether the GST authorities could proceed with cancellation without considering the updated place of business, and the Court exercised powers under Articles 226 and 227 of the Constitution of India to examine the procedural correctness of the Show Cause Notice and subsequent cancellation. The petitioner’s challenge highlighted that the order was passed without taking into account the amended address, approved on 9th October, 2024, even though the Show Cause Notice dated and the cancellation order had already been issued.

The bench comprising Justice Prathiba M. Singh and Justice Shail Jain held that the authorities erred in disregarding the petitioner’s amended business address. The Court directed a fresh inspection of the updated premises and permitted the petitioner to file a reply to the Show Cause Notice. It further ordered that the adjudication of the SCN must proceed in accordance with law, following a personal hearing and proper verification of documents. The High Court emphasized that procedural fairness required consideration of the new business location before passing any adverse orders and disposed of the writ petition with detailed directions to ensure compliance and cooperation during ongoing GST investigations.

GST dept cannot Block ITC Exceeding available Credit in ECL: P& H HC directs for Recovery, quashes Negative Block Order M/S MANNAT STEELS vs UNION OF INDIA AND ANOTHER CITATION : 2025 TAXSCAN (HC) 2476

The Punjab & Haryana High Court recently addressed the legality of blocking Input Tax Credit (ITC) under Rule 86A of the CGST Rules, 2017, in a case involving M/s Mannat Steels. The legal issue was whether the GST authorities could block an amount exceeding the credit available in the taxpayer’s Electronic Credit Ledger (ECL). The petitioner contended that the department’s negative blocking of ₹8,00,164/- despite an ECL balance of only ₹66/- was ultra vires Rule 86A and violated principles of natural justice. The Court examined the scope of Rule 86A and noted that the power to block ITC is contingent upon the credit actually available in the ECL, and any attempt to create a negative balance is impermissible.

The bench comprising Justice Lisa Gill and Justice Deepak Manchanda held that the GST authorities acted beyond their jurisdiction by attempting to block ITC in excess of the ECL balance. Relying on precedents, the Court clarified that Rule 86A allows blocking only to the extent of available credit. The High Court set aside the negative block order and directed that recovery of excess ITC, if any, must be pursued under Sections 73 or 74 of the CGST/PGST Act, 2017, following proper statutory procedures. The writ petition was allowed, upholding the taxpayer’s right to protection from arbitrary reduction of ECL balances.

GST Proper Officer states 'Not Agreed With Taxpayer' But fails to Explain for Dropping Demand: Delhi HC Directs for Explanation FEDRAL BANK LTD vs THE GST PROPER OFFICER, DELHI AND ANR &ANR CITATION : 2025 TAXSCAN (HC) 2477

The Delhi High Court recently examined an apparent contradiction in a GST demand order issued to Fedral Bank Ltd., relating to alleged excess claims of input tax credit (ITC) and other ineligible credits under the Central Goods and Services Tax Act, 2017. The legal issue revolved around the assessing authority’s treatment of certain demands: while some issues, including ITC to be reversed on non-business transactions, under-declaration of ineligible ITC, and ITC claimed from cancelled dealers, were formally “dropped,” the order simultaneously recorded that the officer “Not Agreed with Tax Payer.” The petitioner challenged the inclusion of these dropped demands in Form GST DRC-07 and the rejection of a rectification application without hearing.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain noted the prima facie inconsistency in the impugned order and directed the Department to explain why demands were dropped despite recording disagreement with the taxpayer. The Court also granted the petitioner liberty to approach the bench if any coercive action is initiated in the interim. The matter has been listed for further hearing on December 17, 2025.

GST Payer Misrepresents Date of Receival of Provisional Attachment Letter: Delhi HC Recalls Order Permitting Bank A/c Operation EBIXCASH LIMITE Vs DIRECTORATE GENERALOFGSTINTELLIGENCE CITATION : 2025 TAXSCAN (HC) 2479

The Delhi High Court recently recalled its earlier order permitting Ebix Technologies Limited (formerly EbixCash Limited) to operate its bank accounts after observing that the petitioner misrepresented the date of receipt of a provisional attachment letter issued under Section 83 of the Central Goods and Services Tax Act, 2017. The legal issue arose from the provisional attachment of bank accounts by the GST Department under Section 83 to protect revenue during pendency of proceedings under Sections 62, 63, 64, 67, 73, or 74, and the petitioner’s contention that the attachment letter was received only on WhatsApp on November 4, 2025.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain examined the GST Department’s dak records, which indicated that the provisional attachment letter dated September 25, 2025, was dispatched via speed post on October 8, 2025, and received on October 10, 2025, directly contradicting the petitioner’s claim. Noting a prima facie misrepresentation by the petitioner, the Court recalled its earlier order, while directing the petitioner to file an affidavit within two weeks clarifying the misrepresentation. The GST Department was instructed to provide proper reasons for the attachment within one week, and the requirement for the petitioner to maintain a balance of ₹1 crore in its accounts was upheld. The matter has been listed for further hearing on November 28, 2025.

Income Tax Reassessment Notice Quashed as Time-Barred Under 'Surviving Time' Principle: Gujarat HC strikes down S 148 Notice DAHYABHAI NARAYANDAS PATEL HUF BY ITS KARTA DAHYABHAI N vsINCOME TAX OFFICER CITATION : 2025 TAXSCAN (HC) 2480

The Gujarat High Court recently quashed a reassessment notice issued under Section148 of the Income Tax Act, 1961 for Assessment Year 2017-18, holding it to be time-barred. The petitioner, Dahyabhai Narayandas Patel, challenged the notice under Article 226 of the Constitution of India, contending that the notice was issued beyond the permissible period even after considering the extended timelines under the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (TOLA).

The Division Bench of Justice A.S. Supehia and Justice Pranav Trivedi examined the timeline and found that the Assessing Officer issued the notice on 28.08.2022, whereas the “surviving time” to issue the notice expired on 11.07.2022. Relying on the Supreme Court precedents and the statutory framework under Section 148A(d) of the Act, the High Court held that the reassessment notice, all consequential proceedings including the order under Section 147 read with Section 144B dated 29.05.2023, and penalty notices dated 29.05.2023 were legally unsustainable. The Court quashed and set aside all actions, making the rule absolute to this extent.

Customs Dept vs GST dept: Delhi HC to examine Customs Authority's Power over IGST Refund Recovery M/S TALBROS SEALING MATERIAL PRIVATE LIMITED vs ADDITIONALCOMMISSIONER OF CUSTOMS EXPORT CITATION : 2025 TAXSCAN (HC) 2481

The Delhi High Court addressed the legal issue of whether Customs officers can recover IGST refunds and export benefits from an exporter, and clarified the interplay between the Customs Act, 1962, the Integrated Goods and Services Tax Act, 2017 (IGST Act), and the Central Goods and Services Tax Act, 2017 (CGST Act). The petitioner challenged an Order-in-Original dated 25th June 2025 issued by the Commissioner of Customs (Export), which rejected claims for IGST refund, Drawback, and RoDTEP benefits, imposed redemption fines and penalties, and directed recovery of amounts under Sections 114(iii) and 114AA of the Customs Act, 1962.

The Bench of Justice Prathiba M. Singh and Justice Shail Jain allowed the petitioner to file an appeal on the classification issue within 30 days, waiving the limitation period. Recognizing the broader legal question regarding the jurisdiction of Customs versus CGST authorities in recovering IGST and export benefits, the Court directed the Customs and CGST Departments to file a joint affidavit within four weeks clarifying their respective powers. The matter has been listed before the Joint Registrar on 8th January 2026 and before the Court on 24th February 2026 for further hearing.

Bombay HC Acquits Ex-Income Tax Officer as Prosecution Fails to Prove Demand for Bribe, CBI Trap Collapses C. V. NARAYANA REDDY vs STATE THR CENTRAL BUREAU OFINVESTIGATION CITATION : 2025 TAXSCAN (HC) 2482

The Bombay High Court at Goa recently dealt with the acquittal of a former Income Tax Officer, Reddy, challenging his 2016 conviction under the Prevention of Corruption Act, 1988. The central legal issue was whether the prosecution could establish the essential elements of demand and acceptance of illegal gratification, which are prerequisites for conviction under the PC Act, including the applicability of the statutory presumption under Section 20. The CBI had alleged that Reddy demanded ₹1 lakh (later negotiated to ₹60,000) from partners of M/s Swastik Cruises during scrutiny of their income tax return for A.Y. 2007-08, leading to a trap operation in Panaji on 13 July 2009.

The bench of Justice Ashish S. Chavan held that the prosecution failed to prove the demand for illegal gratification, rendering the trap operation unreliable. The court highlighted serious inconsistencies in the testimony of the complainant, his brother, and the firm’s CA, alongside unexplained delays in lodging the complaint and lapses in the trap proceedings. The electronic evidence was also deemed inadmissible due to procedural defects and potential manipulation. Observing that mere recovery of money without proof of voluntary demand cannot sustain a conviction, the High Court set aside the 2016 conviction and acquitted the officer, holding that the Sessions Court had erred in relying on conjectures and inferences.

VAT Security Deposit Retained in GST Period is without Authority: Tripura HC Directs Refund of Transporter’s ₹12 Lakh with Interest M/s North East Carrying Corporation Ltd vs The State of Tripurarepresented by the Secretary of Finance CITATION : 2025 TAXSCAN (HC) 2484

The Tripura High Court recently addressed the legality of retaining security deposits collected under the Tripura Value Added Tax Act, 2004 (TVAT Act) after the introduction of the Goods and Services Tax (GST) regime in July 2017. The legal issue revolved around whether the State authorities could continue to hold security deposits from transporters when the TVAT Act had been repealed by Section 174 of the Tripura State GST Act, 2017, and no corresponding provision under GST required such deposits. The petitioner, North East Carrying Corporation Ltd, had deposited ₹12 lakh in 2013 under Section 22(4) of the TVAT Act and sought its refund after the repeal of the Act.

The Division Bench comprising Chief Justice M.S. Ramachandra Rao and Justice S. Datta Purkayastha held that the retention of the deposit by the State authorities was unlawful. The Court observed that refund provisions under the repealed TVAT Act applied only to “tax” and not to security deposits, and directed the refund of ₹12 lakh with 7% interest from 5th April 2023, the date of the refund application. The bench also imposed costs of ₹20,000 on the respondents and quashed the show‑cause notices issued under Section 77 of the repealed TVAT Act, affirming that authorities had no power to retain such deposits post-GST.

Nine-Month Delay in Filing Revised ITR "Too Huge": Delhi HC refuse to Condone Delay SANJAY KHURANA vs INCOME TAX DEPARTMENT MINISTRY OF FINANCE CITATION : 2025 TAXSCAN (HC) 2485

The Delhi High Court dealt with the issue of condonation of delay in filing a revised income tax return under Section 119(2)(b) of the Income Tax Act, 1961. The legal question concerned whether a nine-month delay in filing the revised ITR for A.Y.2021-22 could be excused, given the petitioner’s claims of errors in the original return, reliance on professional advice, and his status as a non-resident Indian.

The bench comprising Justice V. Kameswar Rao and Justice Vinod Kumar dismissed the petition filed by Sanjay Khurana, upholding the order of the Principal Commissioner of Income Tax (PCIT) dated 5th August 2025. The Court observed that the delay was “too huge” and that the petitioner had failed to demonstrate sufficient cause, noting that the e-filing portal was globally accessible and that ignorance of law or reliance on an advisor does not constitute adequate justification. Consequently, the petition was dismissed and the PCIT’s rejection of the condonation request was affirmed.

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