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 30, 2025 to December 06, 2025, part - I.

SUPREME COURT

Supreme Court takes up LG’s appeal against Rajasthan HC Decision upholding Entry Tax on Stock Transfers

LG ELECTRONICS INDIA PRIVATE LIMITED vs ASSISTANT COMMISSIONER CITATION : 2025 TAXSCAN (SC) 388

The Supreme Court granted four weeks’ time to file vakalatnama and counter affidavit in the Special Leave Petitions challenging the Rajasthan High Court’s decision upholding the levy of entry tax. The core legal issue arises under Section 3 of the Rajasthan Tax on Entry of Goods into Local Areas Act, 1999, read with Rule 12(3) of the Rajasthan Entry Tax Rules, 1999, concerning whether goods brought from outside the State and retained in Rajasthan for more than six months, but later stock-transferred outside the State, attract entry tax.

The Single Bench of the Rajasthan High Court comprising Justice Ashok Kumar Jain dismissed all four Sales Tax Revision Petitions filed by the appellant, holding that Rule 12(3) validly operationalizes the statutory scheme by prescribing a reasonable timeframe to identify non-taxable stock transfers. The Court held that Section 3 is the charging provision and that LG Electronics had not challenged the constitutional validity of the Rule, therefore, the six-month condition had to be applied as enacted. Finding no substantial question of law and affirming the Tax Board’s reasoning, the High Court dismissed the revision petitions. The Supreme Court has now taken cognizance of the challenge to this ruling and granted time to the respondent to complete filings before the matter is next listed.

Supreme Court Criticises Income Tax Dept for filing SLP on Issues already Settled

THE DEPUTY COMMISSIONER OF INCOME TAX vs M/S MAXIS INTERNATIONALSDN BHD CITATION : 2025 TAXSCAN (SC) 389

The Supreme Court reprimanded the Income Tax Department for repeatedly filing Special Leave Petitions on issues that already stand conclusively settled by earlier judgments, particularly the ruling in Engineering Analysis Centre of Excellence Pvt. Ltd. v. CIT (2022). The legal issue before the Court concerned the taxability of royalty on interconnect service charges paid to non-resident telecom operators, and whether such payments attract liability under Section 195 of the Income Tax Act, 1961. The Department sought to challenge a Karnataka High Court judgment which held that tax was not deductible at source on such payments made to non-residents.

The Division Bench of Justice B.V. Nagarathna and Justice R. Mahadevan dismissed the SLP, expressing strong displeasure at the Department’s persistence in litigating settled questions of law. The bench observed that the petition itself suffered from a “gross delay of 260 days,” and even after condoning the delay in refiling, the Court found no merit to justify interference. Referring to its earlier rulings, including Engineering Analysis Centre of Excellence Pvt. Ltd. v. CIT (supra), the Supreme Court held that payments made to non-resident telecom operators or foreign software providers do not constitute “royalty” and therefore do not trigger tax deduction under Section 195. Finding the earlier precedent squarely applicable, the Court dismissed the SLP and reiterated that such repetitive filings only contribute to docket congestion and waste valuable judicial time.

Foreign Law Graduates Must Mandatorily Clear Additional Qualifying Exam Despite 2-Year Bridge Course: Supreme Court

SAANIL PATNAYAK vs BAR COUNCIL OF INDIA CITATION : 2025 TAXSCAN (SC) 390

The Supreme Court declined to interfere with the regulatory framework of the Bar Council of India (BCI) which mandates that Indian citizens holding foreign law degrees must clear an additional qualifying examination, even after completing the prescribed two-year bridge course, before becoming eligible for enrolment and the All India Bar Examination (AIBE). The legal issue centered on whether the BCI has statutory authority under the Advocates Act, 1961 and the BCI Rules to impose a separate qualifying exam on foreign law graduates, and whether such a requirement amounted to arbitrary or duplicative academic scrutiny.

The Division Bench of Justice Vikram Nath and Justice Sandeep Mehta dismissed the petition, holding that the petitioner had previously approached the Delhi High Court on the same issue and had withdrawn that plea after receiving an assurance regarding provisional enrolment. The Supreme Court found no basis to re-open the challenge and declined to examine the validity of the qualifying exam, noting the petitioner had already sought identical relief earlier. By refusing to interfere, the Court effectively upheld the BCI’s position that the qualifying examination remains a mandatory prerequisite for foreign law graduates seeking enrolment in India, notwithstanding the completion of the two-year bridge course, thereby affirming the continued applicability of the BCI’s regulatory scheme.

Redevelopment Rights Not 'Assets' Under IBC if Agreement Lawfully Terminated Before Insolvency: SC

A A ESTATES PRIVATE LIMITED vs KHER NAGAR SUKHSADAN CO-OPERATIVEHOUSING SOCIETY LTD. & ORS. CITATION : 2025 TAXSCAN (SC) 391

The Supreme Court has dismissed an appeal filed by a developer undergoing Corporate Insolvency Resolution, thereby upholding the Bombay High Court’s order that allowed a housing society to appoint a new developer for a slum redevelopment project. The central legal issue before the apex court concerned the applicability of the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 (IBC) and whether development rights under a terminated redevelopment agreement could be treated as “assets” or “property” under Section 3(27) of the IBC.

The Bench of Justice J.B. Pardiwala and Justice R. Mahadevan upheld the Bombay High Court’s ruling, holding that the moratorium under Section 14 protects only existing and enforceable rights, not inchoate, forfeited, or extinguished rights arising from the developer’s non-performance. The Court concluded that since the redevelopment agreement was validly terminated in 2019,three years prior to the CIRP, the developer had no surviving proprietary or contractual right capable of protection under the IBC. Noting that the developer neither secured possession nor undertook any steps toward redevelopment, the Court ruled that such dormant development rights could not be elevated to the status of an “asset” of the corporate debtor. Emphasizing that the IBC cannot be used as a shield by defaulting developers to indefinitely stall socially vital slum redevelopment projects, the Supreme Court affirmed the High Court’s direction permitting statutory authorities to grant approvals to the newly appointed developer, thereby ensuring continuity of the welfare-oriented housing project for vulnerable residents.

SC Disposes Appeals after Department Issues C‑Form for Genuine Inter‑State Purchases Omitted from Revised Returns

THE COMMISSIONER, DEPARTMENT OF TRADE AND TAXES & ANR vsINGRAM MICRO INDIA PVT. LTD. CITATION : 2025 TAXSCAN (SC) 392

The Supreme Court has disposed of a batch of appeals concerning the denial of C-Forms for inter-State purchases under the Central Sales Tax Act, 1956, after noting that the Revenue had already complied with the Delhi High Court’s directions in the lead matter. The core legal issue before the Court concerned whether a dealer’s omission of certain inter-State purchase transactions in revised returns justified refusal of C-Forms, despite the transactions being genuine and duly verifiable.

The Bench of Justice B.V. Nagarathna and Justice R. Mahadevan observed that the Department had already issued the required C-Forms in the lead case and completed the assessment proceedings, thereby implementing the High Court’s findings in full. Since all other appeals arose from identical factual backgrounds and merely followed the same High Court reasoning, the Supreme Court found no basis to reopen issues already resolved and accepted by both parties. The Court noted that the High Court had rightly held that Rules 5(4)(i) and 5(4)(iv) of the CST (Delhi) Rules were not attracted, as the omission in returns did not constitute concealment nor cause any revenue prejudice. Accordingly, the Court disposed of the appeals by directing the Department to extend similar compliance and issue C-Forms and F-Forms in all connected matters, subject to the assessees furnishing indemnity bonds.

Supreme Court rejects Split view of Manufacturing Process Leading to One Final Product, upholds Excise Duty Demand on Cotton Processor

COMMISSIONER OF CUSTOMS vs NARSIBHAI KARAMSIBHAI GAJERA CITATION : 2025 TAXSCAN (SC) 393

The Supreme Court has ruled that where multiple units collectively contribute to a continuous and integrated manufacturing process, excise duty cannot be avoided by treating the units as separate entities. The case concerned the scope of “manufacture with the aid of power” under Section 2(f) of the Central Excise Act, 1944, and the eligibility of exemption under the relevant power-based processing notification.

The Bench of Justice Pamidighantam Sri Narasimha and Justice Atul S. Chandurkar set aside the CESTAT’s order and restored the Commissioner’s demand and penalties, holding that both units were jointly engaged in a power-aided, continuous manufacturing process, thereby disqualifying the assessee from exemption. The Court emphasized that if the various processes undertaken by different units collectively form a single, inseparable chain culminating in the final product, the entire operation constitutes manufacture with the aid of power, even if power is used at only one essential stage. The Court further observed that the Tribunal had ignored clear evidence from the panchnama showing power usage, and had incorrectly relied on belated retractions by the partners. Noting that bleaching and mercerising at Unit 1, squeezing and stentering at Unit 2, and final bailing and packing at Unit 1 formed a seamless production line, the Supreme Court held that both units together manufactured finished cotton fabrics using power, rendering the exemption inapplicable.

Customs Department - Broker Bond of Trust Breached in Gold Smuggling Case: SC Refuses to Interfere with Kerala HC Ruling of Revoking License

M/S CAPPITHAN AGENCIES vs COMMISSIONER OF CUSTOMS CITATION : 2025 TAXSCAN (SC) 394

The Supreme Court dealt with an issue concerning the revocation of a Customs Broker licence under the Customs Brokers Licensing Regulations (CBLR), 2018, in the context of a large-scale diplomatic-cargo gold smuggling racket. The legal questions before the Court stemmed from allegations of violation of obligations under Regulation 10(a), (d), (e), (m), and (n) of the CBLR, 2018, relating to due diligence, verification of documents, and safeguarding the integrity of customs processes.

The bench comprising Justice J.B. Pardiwala and Justice Prasanna B. Varale dismissed the Special Leave Petition (SLP) filed by Cappithan Agencies, thereby affirming the Kerala High Court’s judgment that upheld the revocation of the broker’s licence. The Supreme Court found no grounds to interfere with the findings of the High Court, which had held that denial of cross-examination caused no prejudice, that the 90-day timeline under Regulation 17(5) was directory rather than mandatory, and that serious breaches of trust by the broker, particularly in repeatedly misdeclaring consignor details in diplomatic cargo justified the harsh regulatory action. By refusing to intervene, the apex court effectively validated the Commissioner’s original order and the Tribunal’s confirmation of licence revocation, forfeiture of security deposit, and penalty.

Supreme Court Likely to Hear Indian National Congress’ ₹199-Crore Income Tax Exemption Dispute on Dec 5

INDIAN NATIONAL CONGRESS vs DEPUTY COMMISSIONER OF INCOME TAX,CENTRAL CIRCLE -19 & ORS

CITATION : 2025 TAXSCAN (SC) 395

The Supreme Court is set to hear a crucial tax dispute concerning the Indian National Congress on 5 December 2025, involving the denial of a ₹199-crore income tax exemption under Section 13A of the Income Tax Act, 1961, a provision that grants tax benefits to registered political parties. The underlying legal issues arise from allegations that the party filed its return belatedly in violation of Section 139(4B) and accepted cash donations exceeding ₹2,000, contrary to clause (d) of the first proviso to Section 13A. These alleged violations led the Assessing Officer to deny the exemption, raise a substantial tax demand, and initiate recovery proceedings under Section 226(3) of the Act.

The Bench led earlier by Justice B.V. Nagarathna and Justice Nongmeikapam Kotiswar Singh issued notice in the party’s Special Leave Petition on 20 August 2024, clarifying that the pendency of the matter would not prevent the ITAT from proceeding with the main appeal. The Supreme Court later listed the matter for final hearing on 5 December 2025, after the Delhi High Court had declined to interfere with the ITAT’s rejection of the stay application holding that the Tribunal had applied its mind and supplied the required prima facie reasoning. With nearly ₹65.94 crore already recovered by the Department, the High Court had permitted the Congress to file a fresh stay request before the ITAT based on changed circumstances. The forthcoming hearing before the Supreme Court will now determine the trajectory of the ₹199-crore Section 13A exemption dispute.

SC Questions Centre on Ending GST Relief for Disabled Car Buyers after Plea by Blind Petitioner

KULDIPAK RAJESH PRASHAD vs UNION OF INDIA & ORS. CITATION : 2025 TAXSCAN (SC) 396

The Supreme Court issued notice to the Union of India in a writ petition challenging the withdrawal of GST concessions on motor vehicles for persons with disabilities. The case raises an issue concerning whether a series of government notifications and clarifications issued between 2021 and 2025, culminating in the Finance Ministry’s clarification dated 29.09.2025 and the Heavy Industries notification dated 8.10.2025 have unlawfully extinguished the concessional GST regime for disabled car buyers.

The Bench comprising Justice Vikram Nath and Justice Sandeep Mehtathe petitioner’s challenge alleging that recent policy actions have effectively dismantled a mobility-support framework in place since 1999. After noting the allegations of arbitrary exclusion of non-orthopaedically disabled persons, inconsistent governmental positions before various High Courts, and the absence of any alternative mechanism ensuring mobility assistance, the Supreme Court issued notice to the Union of India, directing it to file its response within four weeks.

Supreme Court upholds Partial Recovery through IBC Liquidation by Sriram City Union Finance, directs to pay 24% Interest on Loans

SRI LAKSHMI HOTEL PVT. LIMITED & ANR vs SRIRAM CITY UNIONFINANCE LTD. & ANR CITATION : 2025 TAXSCAN (SC) 397

The Supreme Court dealt with the legality of interest awarded in an arbitral award under Section 31(7)(b) of the Arbitration and Conciliation Act, 1996. The legal issue concerned whether the arbitrator could award 24% interest on high-risk commercial loans, challenged by the appellants as usurious and contrary to RBI guidelines and the Usurious Loans Act, 1918.

The Bench of Justices J.B. Pardiwala and K.V. Viswanathan dismissed the appeal, holding that arbitrators have discretion to determine interest rates in commercial loan agreements, and the interest awarded did not violate public policy. The Court emphasized that interference under Section 34 of the Act is limited and cannot be invoked merely on grounds of alleged contractual misinterpretation. The Supreme Court upheld the arbitral award directing payment of ₹2.21 crore with 24% interest, noting that partial recovery through insolvency proceedings had occurred and it would be unjust to deprive the lender of its rights. The appeal was dismissed, reaffirming the principle that courts should not disturb arbitral awards absent patent illegality or breach of fundamental justice principles.

Defective Affidavit in Section 7 Application should not Lead to Automatic Rejection: Supreme Court allows HDFC to cure defects

Livein Aqua Solutions Private Limited vs HDFC Bank Limited CITATION : 2025 TAXSCAN (SC) 399

The Supreme Court addressed a procedural issue under the Insolvency and Bankruptcy Code, 2016 (IBC) concerning a Section 7 application filed by a financial creditor. The legal issue involved whether a defective affidavit accompanying a Section 7 petition warrants automatic rejection of the application, with the Court examining the interplay between Section 7(5)(b) and the NCLT Rules.

The Bench of Justice Sanjay Kumar and Justice Alok Aradhe allowed the appeal, holding that procedural defects that are curable should not defeat substantive rights. The Court observed that the NCLT had erred by failing to issue a specific notice under Section 7(5)(b) to the bank to rectify the defect before rejecting the application. The Supreme Court directed HDFC Bank to cure the defective affidavit within seven days and instructed the NCLT, Ahmedabad Bench, to hear the matter in accordance with law. The judgment reinforces that procedural technicalities cannot override substantive justice in insolvency proceedings.

No 18% GST on Rented Residential Hostels for Students Prior to 2022: Supreme Court Grants Exemption

THE STATE OF KARNATAKA & ANR vs TAGHAR VASUDEVA AMBRISH& ANR CITATION : 2025 TAXSCAN (SC) 400

The Supreme Court adjudicated a dispute concerning the levy of Goods and Services Tax (GST) at 18% on the leasing of residential premises used as hostels. The legal issue centered on whether the exemption under Entry 13 of Notification No. 9/2017-Integrated Tax (Rate) dated 28 June 2017 applied when a residential property was leased to a company for long-term student accommodation prior to the 2022 amendment to the exemption notification.

The Bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan dismissed the appeals filed by the State of Karnataka, holding that the property qualified as a “residential dwelling” and that the exemption applied as long as the ultimate use was residential, irrespective of whether the lessee personally occupied it. The Court emphasized that taxing such leases before 18.07.2022 would contradict the legislative intent of the exemption and affirmed that the assessee was entitled to GST exemption for the relevant period.

Tax Audit u/s 44AB Restrictions under ICAI Guidelines: Key Takeaways from Shaji Poulose vs ICAI

SHAJI POULOSE vs INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA& OTHERS CITATION : 2025 TAXSCAN (SC) 401

The Supreme Court dealt with the legal issue concerning the validity of ICAI Guidelines limiting Chartered Accountants to a maximum of 60 tax audits per financial year under Section 44AB of the Income Tax Act, 1961. The core question before the Court was whether the ICAI, under the Chartered Accountants Act, 1949, possessed the authority to impose such a restriction and whether exceeding the limit could constitute professional misconduct warranting disciplinary action.

The Bench upheld the Guidelines as constitutionally valid and quashed all prior disciplinary proceedings initiated against CAs for exceeding the specified limit. The Court recognized the ICAI’s authority to ensure audit quality and maintain public trust in financial reporting. The judgment was delivered with prospective effect from April 1, 2024, allowing ICAI to review and adjust the ceiling limit as necessary, thereby balancing regulatory oversight with the professional rights of Chartered Accountants.

HIGH COURT

Rajasthan HC invalidates S. 148 notice by JAO, disagrees with Gujarat HC Decision that Faceless Scheme omits Search Cases

Mani Ram S/o Shri Luna Ram vs Principal Commissioner Of IncomeTax Jodhpur CITATION : 2025 TAXSCAN (HC) 2486

The Rajasthan High Court has examined the legal validity of a reassessment notice issued under Section 148 of the Income Tax Act, 1961, holding that such notices must mandatorily be issued only through the Faceless Assessing Officer (FAO) under the Notification, which operationalised the faceless reassessment architecture. The central legal issue before the Court was whether a Jurisdictional Assessing Officer (JAO) retains authority to issue reassessment notices, particularly in cases involving information arising from search and seizure under Sections 132 and 132A or whether the faceless regime has fully displaced such jurisdiction.

The Division Bench comprising Justice Sanjeet Purohit and Justice Pushpendra Singh Bhati quashed both the notice and the reassessment order. The Court held that the FAO is fully competent to issue reassessment notices even in search-related cases, and that no statutory exception exists in the 29 March 2022 faceless framework permitting a JAO to exercise such powers. Observing that the Gujarat High Court’s reasoning was based on an incomplete consideration of the CBDT’s 2021 orders and a mistaken assumption about the FAO’s limitations, the Bench concluded that a JAO issuing notice under Section 148 acts without jurisdiction. Consequently, the reassessment proceedings were quashed, with liberty to the Revenue to revive them if the Supreme Court later overturns the governing precedents.

Two GST Number Allotment Not Justifies 4 Year Delay: Delhi HC Dismisses Writ Petition Challenging ₹1.49 Cr GST Demand

LAKHMI CHAND TEJOO MAL vs COMMISSIONER OF GST AND ANR CITATION : 2025 TAXSCAN (HC) 2487

The Delhi High Court examined whether a writ petition filed under Article 226 of the Constitution of India challenging a GST demand of ₹1,49,67,207 could be entertained despite an unexplained delay of more than four years from the date of the impugned order. The core legal issue before the Court was whether the challenge to the order dated 27 August 2021, passed pursuant to a Show Cause Notice (SCN) under the Goods and Services Tax regime, was barred by the doctrine of laches. .

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain rejected the explanation offered for the delay and dismissed the petition as barred by laches. The Court held that even if the existence of two GST numbers issued in 2017 was accepted, the petitioner ought to have sought cancellation of the duplicate registration at the relevant time. Noting that the petitioner had duly responded to the SCN on 4 March 2021 and that the impugned order was passed the same year, the Court found “no justification for not challenging the said order for a period of four years.” Accordingly, the writ petition was dismissed, with liberty granted to the petitioner to pursue any other remedies available under law.

Company Appeal must Precede Constitutional Remedy in EPFO Dispute: Karnataka HC dismisses Writ Petition

M/S. MAIYAS BEVERAGES AND FOODS PVT. LTD vs REGIONAL PROVIDENTFUND COMMISSIONER AND RECOVERY OFFICER CITATION : 2025 TAXSCAN (HC) 2488

The Karnataka High Court examined whether a writ petition under Article 226 of the Constitution of India challenging a Warrant of Attachment of Movable Property dated 22 July 2025 issued by the Employees’ Provident Fund Organisation (EPFO) was maintainable when a specific statutory appellate remedy existed. The central legal issue was whether Maiyas Beverages, the petitioner, could bypass the statutory appeal mechanism provided under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, particularly the remedy of appeal under Section 7-I, against orders passed under Section 7A, and directly seek constitutional relief from the High Court.

The Single Bench of Justice Jyoti M. declined to exercise writ jurisdiction and dismissed the petition, holding that the petitioner must first exhaust the statutory remedy of appeal before the EPF Appellate Tribunal under Section 7-I of the Act. The Court reiterated that Article 226 is an extraordinary and discretionary remedy and cannot be invoked to circumvent legislatively mandated procedures, especially where the statute provides an effective alternative remedy. Finding no exceptional circumstances warranting interference, the Court dismissed the writ petition, discharged all interim orders, and disposed of connected applications.

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 legality of a GST registration cancellation order issued under the provisions of the Goods and Services Tax Act, 2017, particularly in the context of procedural fairness required under Section 29 (cancellation of registration) read with the principles of natural justice embedded in the Act. The Court was dealing with the issue of whether the tax authority could cancel a dealer’s GST registration through a non-speaking, unreasoned order, despite the assessee having filed a detailed reply to the show cause notice.

The Division Bench comprising Justices Saumitra Dayal Singh and Indrajeet Shukla set aside the cancellation order, strongly criticising the tax authority for acting in “complete defiance of the minimum requirement of procedural law.” The Bench held that merely remarking that the assessee’s reply was “not satisfactory” without giving any reasons violated the fundamental requirement of a reasoned order, especially when cancellation of GST registration results in the “economic death” of a business entity. Allowing the writ petition, the Court not only quashed the impugned order but also issued directions to the Commissioner of Commercial Tax, Uttar Pradesh, to transfer the matter to a competent officer and to issue statewide administrative instructions imposing penal consequences to prevent recurrence of such non-speaking orders.

Cross-LoC Barter Trade Constitutes Intra-State Supply Under GST Law: J&K&L HC Rules Transaction Taxable

M/s New Gee Enn & Sons vs Union of India & Ors. CITATION : 2025 TAXSCAN (HC) 2490

The Jammu & Kashmir and Ladakh High Court examined the legality of GST demands raised on traders engaged in the Cross-LoC barter trade, addressing the core legal issue of whether such barter transactions constituted an “intra-State supply” under the Central Goods and Services Tax Act, 2017, particularly with reference to Section 74(1) and the definitional provisions under Section 2(64) read with Section 8 of the IGST Act, 2017.

The Division Bench comprising Justice Sanjeev Kumar and Justice Sanjay Parihar dismissed the petitions and held that the Cross-LoC barter trade was an intra-state supply, fully taxable under the GST regime. The Court relied on statutory definitions including Section 2(56) of the CGST Act defining “India” and Section 2(103) of the J&K GST Act defining “State” to hold that Pakistan-occupied Kashmir formed part of the territory of the erstwhile State of Jammu & Kashmir. Since both the supplier's location and the place of supply (PoK) fell within the same State, the transactions were intra-state in nature. The Bench emphasized that no exemption had been issued under Section 11 of the CGST Act for Cross-LoC barter trade, making GST liability unavoidable. Accordingly, all connected writ petitions challenging the GST demands were dismissed.

Chartered Accountants Association of Surat Files Writ against CBDT in Gujarat HC on Delayed Release of ITR Forms & Utilities

CHARTERED ACCOUNTANTS ASSOCIATION, SURAT (CAAS) vs UNION OF INDIA CITATION : 2025 TAXSCAN (HC) 2491

The Gujarat High Court has been approached wherein the Chartered Accountants Association of Surat (CAAS) has challenged the persistent technical failures of the Income-tax e-filing portal and the repeated delay in release of statutory Income-tax Return (ITR) forms, utilities, and schemas by the Central Board of Direct Taxes (CBDT). The petition raises substantial legal issues relating to systemic portal malfunctions, delayed statutory utilities, and statutory compliance hardship, alleging violations of Articles 14, 19(1)(g), 21, and 265 of the Constitution of India. It specifically questions the legality of excessive Category-A validations, interest imposition under Section 234C, and the CBDT’s repeated non-compliance with timely release of ITR forms arguing that these actions are unconstitutional, ultra vires, and cause undue burden on taxpayers and professionals.

While the matter is yet to be adjudicated, the petition lays out extensive evidence of portal outages between 10-16 September 2025, delays in utilities for A.Y. 2025-26, and exponential rise in portal-blocking validations, claiming that these failures crippled statutory compliance, including filing of returns, uploading audit reports, e-verification, and even payment of advance tax. CAAS has prayed for multiple directions, including mandating release of all ITR forms and utilities by 1 April each year, restricting pre-filing validations to basic checks only, automatic waiver of interest and late fees arising from system failures, and creation of an independent technical monitoring committee comprising ICAI, NIC, industry, and technology experts. The petition also seeks disciplinary action against responsible officials/vendors and a specific waiver of interest and late fees for the blackout period of 10-16 September 2025, during which compliance was rendered impossible due to portal failures.

GST Appeal Filing till June 30, 2026 with 10% Deposit Condition: Orissa HC Allows Stay of Appellate Order

M/s.Sunanda Enterprises vs Chief Commissioner of CT & GST CITATION : 2025 TAXSCAN (HC) 2492

The Orissa High Court considered a writ petition f challenging an order dated 26th August 2025 issued by the First Appellate Authority under the Central Goods and Services Tax Act, 2017 (CGST Act). The legal issue pertained to the petitioner’s inability to file a statutory appeal due to the non-constitution of the Appellate Tribunal and sought directions for staying the impugned order. The case involved interpretation of Section 112(1) of the CGST Act, 2017, which prescribes the time frame for filing appeals before the Appellate Tribunal against orders under Sections 107 and 108 of the Act.

The Two-Member Bench of Chief Justice Harish Tandon and Justice M.S. Raman allowed a stay of the first appellate order upon the petitioner depositing 10% of the disputed tax amount within four weeks. The Court also extended the deadline for filing the statutory appeal to 30th June 2026 and directed that the appeal be filed through the GSTAT e-Filing Portal as per prescribed procedures. The petitioner was thus permitted to pursue the appeal in accordance with the notification while ensuring compliance with the deposit requirement for maintaining the stay of the impugned order.

Parts Replaced During Warranty with Consideration is Taxable: Allahabad HC favours State applying TATA Motors Ruling

Ms Telco Construction Equipment Company Limited vs CommissionerCommercial Tax CITATION : 2025 TAXSCAN (HC) 2493

The Allahabad High Court upheld the levy of sales tax on parts replaced under warranty by M/s Telco Construction Equipment Company Ltd., finding that such transactions constitute a “sale” under the Central Sales Tax Act, 1956 when consideration, direct or indirect, is involved. The legal issue centered on whether parts replaced during the warranty period, which were claimed to be “free of cost,” could be considered exempt from sales tax.

The bench of Justice Piyush Agrawal dismissed the revision petition. The Court relied on factual findings from the first appellate authority and the Tribunal, noting that dealers acted as consignees, invoices reflected prices and quantities for the parts, and reimbursements or credit notes effectively involved consideration. The Court also observed that parts supplied under Annual Maintenance Contracts (AMC) involved monetary consideration and could not be treated as gratuitous. Justice Agrawal emphasized that unchallenged evidence showing realization of amounts through direct or indirect consideration renders such warranty replacements taxable sales. Accordingly, the revision was dismissed, affirming the State’s imposition of sales tax.

Using Word ‘Supply’ cannot Break Composite Contract into Parts: Allahabad HC allows Claim for S. 3(F)(2)(b) Benefit

M/S Corrtech International Pvt. Ltd vs The CommissionerCommercial Tax CITATION : 2025 TAXSCAN (HC) 2494

The Allahabad High Court held that merely using the term “supply” in a contract does not convert an indivisible composite works contract into separate sale transactions. The legal issue centered on whether the goods imported into Uttar Pradesh for execution of the contract could be taxed as intra-State sales, or whether the deduction under Section 3(F)(2)(b) of the UP Trade Tax Act applied for goods brought in for consumption under a pre-existing inter-State contract.

The bench of Justice Piyush Agrawal set aside the orders of the Assessing Authority, First Appellate Authority, and Commercial Tax Tribunal, which had wrongly treated the contract as divisible. The Court emphasized that the contract, when read in its entirety, was an indivisible works contract, and the supply of components was merely an integral element of the contract. Citing precedents such as Santosh & Company and Heera Electrodes, the Court held that goods brought into the State for execution of a works contract under a prior agreement qualify for deduction under Section 3(F)(2)(b), as their movement constitutes an inter-State sale under the CST Act. Accordingly, the bench quashed the impugned orders and allowed the assessee to claim the statutory benefit.

P&H HC Slams CBDT’s Last Moment Approach, Directs to issue Circular Extending ITR Due Date for Audit Cases

Ashwini Kumar vs Central Board of Direct Taxes CITATION : 2025 TAXSCAN (HC) 2495

The Punjab and Haryana High Court addressed writ petitions challenging delays in the issuance of audit report formats and e-filing utilities by the Central Board of Direct Taxes (CBDT) under the Income Tax Act, 1961. The core legal issue was whether the delay justified extending the income tax return due date for audit cases, in light of statutory requirements that mandate a one-month gap between the filing of audit reports and income tax returns.

The Division Bench of Justice Lisa Gill and Justice Meenakshi I. Mehta observed CBDT’s repeated last-minute circulars and delays, noting that waiting until late October to act was unreasonable. The Court directed CBDT to extend the return filing due date for audit-case assessees to 30 November 2025, in line with the statutory framework requiring a gap between audit report and return filings. The bench accepted CBDT’s clarification regarding Section 12A renewal applications and held no extension was needed there. All connected writ petitions were disposed of with the direction to issue the circular, ensuring compliance relief for assessees.

VAT ITC Refund Cannot Be Claimed without TRAN-1 Post-GST: Allahabad HC Holds Refund on Capital Goods

M/S Madhukesh G Associates vs The Commissioner Commercial Tax CITATION : 2025 TAXSCAN (HC) 2496

The Allahabad High Court addressed a revision petition concerning the refund of unutilised Input Tax Credit (ITC) accumulated under the UP VAT Act, which was claimed after the introduction of Goods and Services Tax (GST). The legal issue before the Court was whether an assessee could claim refund of VAT-era capital-goods ITC post-GST implementation without filing TRAN-1, the statutory form prescribed under the CGST Act, 2017 for transitional credit.

The bench of Justice Piyush Agarwal upheld the Commercial Tax Tribunal’s order denying a refund of ₹3,84,730 claimed by M/s Madhukesh G Associates for A.Y. 2017-18. The Court observed that the assessee neither carried forward the ITC through TRAN-1 nor identified any provision under the UP VAT Act permitting such a refund. It emphasized that transitional ITC claims must strictly follow statutory provisions under the CGST Act, and failure to file TRAN-1 results in the lapse of unutilised VAT ITC. Accordingly, the revision petition was dismissed, reinforcing that ITC and refunds are strictly subject to legislative provisions.

Issuance of Penalty order without Adjudication violates Article 265 of Constitution: Karnataka HC Directs Refund for Vehicle Seizure

M/S ATTAR FULLERS EARTH REPRESENTED BY ITS PARTNER vs THE STATEOF KARNATAKA REPRESENTED BY ITS SECRETARY (MSME AND MINES) CITATION : 2025 TAXSCAN (HC) 2497

The Karnataka High Court addressed the legal issue of imposing penalties and collecting compounding fees from mineral traders without following proper adjudication procedures, in violation of Article 265 of the Constitution of India, which mandates that no tax shall be levied or collected except by authority of law. The case involved alleged violations under Section 4(1) of the Mines and Minerals (Development & Regulation) Act, 1957, read with Rules 42 and 43 of the Karnataka Minor Mineral Concession Rules, 1994, where vehicles transporting legally purchased minor minerals were seized and a penalty of Rs. 87,750 per vehicle was coercively collected.

The bench comprising Chief Justice Vibhu Bakhru and Justice C.M. Poonacha observed that no formal adjudication or seizure orders had been issued, rendering the penalty collection without legal authority. The Court quashed the Rs. 2,63,250/- penalty, directed the immediate refund of the amount with interest, and allowed the authorities to issue a reasoned show cause notice for any future alleged violations, safeguarding the petitioners’ rights to natural justice and proper legal procedure.

Prolonged Trustee Suspension, Sealed Records Left Trust Unable to File Returns: Bombay HC Condones Delay for Six Assessment Years

The Bombay Diocesan Trust Association Private Limited vsCommissioner of Income Tax (Exemptions) and Ors CITATION : 2025 TAXSCAN (HC) 2499

The Bombay High Court addressed a case involving condonation of delay under Section 119(2)(b) of the Income Tax Act, 1961, concerning the filing of Income Tax Returns and statutory forms by a charitable trust. The petitioner, Bombay Diocesan Trust Association Private Limited, challenged the order of the Commissioner of Income Tax (Exemptions) [CIT(E)], which had refused to condone the delay despite prolonged trustee suspension, sealed records, and administrative takeover under Section 41D of the Maharashtra Public Trust Act, 1950. The legal issue revolved around whether genuine hardship due to circumstances beyond the trust’s control justified condoning the delay for multiple assessment years.

The bench of Justice B. P. Colabawalla and Justice Amit S. Jamsandekar held that the CIT(E) had failed to consider undisputed facts showing that the Trust was unable to function from December 2012 to October 2017, with bank accounts accessible only from March 2018. The Bench noted that the rejection of condonation for only one assessment year, despite the application covering six years, was flawed. The Court quashed the CIT(E) order, condoned the delay for all six assessment years, and directed that the Income Tax Returns be processed as if filed within time, recognizing the substantial hardship faced by the Trust.

Delay of Document Production During Transit Not Ground for VAT Penalty u/s 48(5): Allahabad HC quashes Penalty

M/S New Tech Engineers vs Commissioner Of Commercial Tax CITATION : 2025 TAXSCAN (HC) 2500

The Allahabad High Courtdealt with a case concerning the imposition of a VAT penalty under Section 48(5) of the Uttar Pradesh Value Added Tax (UP VAT) Act, 2008. The legal issue revolved around whether a temporary delay in producing transit documents could justify initiating penalty proceedings. The Court examined whether the Commercial Tax Tribunal erred in overturning the factual findings of the First Appellate Authority and initiating penalty proceedings despite proper entries in the books of account, reliance on Form-C, and supporting affidavits.

The bench of Justice Piyush Agrawal held that initiating penalty proceedings solely due to temporary non-production of documents, without verifying entries or conducting a provisional assessment, was improper and violated the statutory framework. The Court observed that immediate submission of documents during transit and maintained books of account precluded the levy of penalty. Consequently, the High Court set aside the impugned order, allowed the revision, and ruled in favour of the petitioner, affirming that mere delay in producing documents cannot form the basis for Section 48(5) penalties.

Himachal Pradesh HC Dismisses Bail Plea in NDPS Case citing Conscious Possession of Commercial Quantity

Nittu vs State of Himachal Pradesh CITATION : 2025 TAXSCAN (HC) 2501

The Himachal Pradesh High Court dealt with a bail plea under the Narcotic Drugs and Psychotropic Substances Act (NDPS Act), 1985, concerning the conscious possession of a commercial quantity of contraband. The legal issue before the Court was whether the petitioner could be granted regular bail after being arrested for possession of 3.670 kilograms of charas, which constitutes a commercial quantity under Sections 20 and 29 of the NDPS Act. The Court examined the applicability of Section 37 of the NDPS Act, which sets stringent conditions for granting bail in cases involving commercial quantities of narcotics.

The bench of Justice Rakesh Kainthla dismissed the bail plea, holding that the petitioner failed to satisfy the mandatory twin conditions under Section 37: proving that there were reasonable grounds to believe he was not guilty and that he was unlikely to commit an offence while on bail. The Court observed that all occupants of a vehicle from which narcotics are recovered are deemed to be in conscious possession. It further held that delay in trial cannot be a sole ground for bail when the special provisions of the NDPS Act apply. Consequently, the bail petition was dismissed, upholding the strict framework for commercial quantity offences under the NDPS Act.

Delhi HC Gives Second Chance in GST Appeal Filing citing Director's Illness

PING PONG GLOBAL LIMITED THROUGH ITS MANAGING DIRECTORSIDDHARTHA JAIN vs UNION OF INDIA THROUGH JOINT SECRETARY& ORS. CITATION : 2025 TAXSCAN (HC) 2502

The Delhi High Court addressed a case concerning Goods and Services Tax (GST), where the petitioner, Ping Pong Global, sought to file a delayed appeal against a GST demand order of Rs. 75,78,297 for the financial year 2019-20. The legal issue revolved around whether a delay in filing an appeal could be condoned due to bonafide reasons, including the medical condition of the company’s director, and whether Notification No. 56/2023-Central Tax, extending adjudication time limits, affected the appeal process. The matter also intersected with constitutional and statutory questions pending before the Supreme Court in S.L.P. No. 4240/2025.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain granted relief by allowing the company to file a delayed appeal after making the necessary pre-deposit, provided it is submitted by January 10, 2026. The Court held that the lapse was bonafide, noting the director’s serious medical condition, and clarified that the appeal would be adjudicated on merits, with its final outcome subject to the Supreme Court’s decision on the related notification. The Court emphasized that this order did not address the validity of the notification itself but merely allowed the petitioner a second opportunity to be heard.

Relief Denied in ₹100 Cr GST Fake ITC Case: Rajasthan HC Says ‘He Who Comes Into Equity Must Come With Clean Hands'

Korfex Industries Private Limited vs State Of Rajasthan CITATION : 2025 TAXSCAN (HC) 2503

The Rajasthan High Court dealt with a writ petition filed by Korfex Industries Pvt. Ltd. concerning an alleged ₹100 crore fake Input Tax Credit (ITC) chain under the Goods and Services Tax (GST) regime. The legal issues involved the legality of detention under MOV‑02, the inspection and movement of goods under Sections 68, 129, and 130 of the GST Act, and whether procedural lapses could justify relief in the face of fraudulent claims.

The Division Bench of Acting Chief Justice Sanjeev Prakash Sharma and Justice Sanjeet Purohit dismissed the writ petition. The Court held that the petitioner’s involvement in a larger sham ITC scheme barred it from seeking discretionary relief, citing the equity principle “he who comes into equity must come with clean hands”. While procedural lapses by authorities were noted, the Court imposed costs of ₹5 lakh on the petitioner and directed GST authorities to continue proceedings under Section 130, emphasizing that fraudulent practices cannot be excused even if technical irregularities occur.

Blatant Abuse of Process of Law’: Delhi HC dismisses Guarantor's Plea against PNB, Canara Bank, Imposes Rs 1 Lakh Cost

SANJEEV KRISHAN SHARMA vs PUNJAB NATIONAL BANK & ANR CITATION : 2025 TAXSCAN (HC) 2504

The Delhi High Court addressed a writ petition filed by Sanjeev Krishan Sharma, a guarantor and former director of M/s KMG A to Z Systems Pvt. Ltd., challenging recovery actions by Punjab National Bank and Canara Bank. The legal issues involved the petitioner’s attempt to obtain discharge from his personal guarantee, release of mortgaged property, and a stay on personal insolvency proceedings under the Insolvency and Bankruptcy Code (IBC), despite ongoing proceedings before the Debt Recovery Tribunal (DRT) and National Company Law Tribunal (NCLT). The Court examined whether the writ under Article 226 of the Constitution could be invoked when efficacious statutory remedies existed under the Recovery of Debts and Bankruptcy Act (RDB Act), SARFAESI Act, and IBC.

The Division Bench of Justice Anil Kshetarpal and Justice Harish Vaidyanathan Shankar dismissed the petition. The Court held that the petitioner had failed to exhaust the specific statutory remedies available and that a writ petition cannot be used to bypass specialized forums or statutory procedures. Characterizing the filing as a “blatant abuse of process,” the Court imposed costs of Rs. 1 lakh, directing the amount to be deposited with the AIIMS Poor Patients’ Fund, and emphasized that extraordinary remedies under Article 226 must not circumvent alternative legal channels.

Omission of Rule 96(10) CGST Applies to All Pending Orders and Appeals: Delhi HC Quashes Exporters’ IGST Refund Restrictions

VINAYAK INTERNATIONAL HOUSEWARES P LTD vs UNION OF INDIA &ORS CITATION : 2025 TAXSCAN (HC) 2505

The Delhi High Court addressed petitions filed by exporters, including Vinayak International Housewares Pvt. Ltd., Ashish Foils Pvt. Ltd., and Mayedass International, challenging the validity of Rule 96(10) of the Central Goods and Services Tax (CGST) Rules, 2017. The legal issue concerned whether the rule, which restricted exporters from claiming IGST refunds if certain exemptions or concessional notifications were availed, was ultra vires Section 16 of the IGST Act, and whether the omission of Rule 96(10) applied only prospectively or also to pending proceedings, including show cause notices, orders, and appeals.

The Division Bench of Justice Prathiba M. Singh and Justice Saurabh Banerjee held that the omission of Rule 96(10) applied to all pending proceedings, as it was deleted without any saving clause by Notification No. 20/2024 dated 8 October 2024. the Court quashed all show cause notices, orders, and appeals arising under the deleted rule. The bench clarified that exporters are entitled to claim IGST refunds without being restricted by Rule 96(10), which was declared unconstitutional and unenforceable.

Illegal arrest by ED : Bombay HC Grants Bail to Kenyan National in PMLA Case

NEWTON MUTHURI KIMANI vs DIRECTORATE OF ENFORCEMENT CITATION : 2025 TAXSCAN (HC) 2506

The Bombay High Court examined constitutional and procedural issues concerning the applicant’s arrest under the Prevention of Money Laundering Act (PMLA). The central legal question was whether the detention of a Kenyan national by immigration authorities at Delhi Airport, pursuant to a Look Out Circular (LOC) issued at the behest of the Enforcement Directorate, would count toward the 24-hour limit mandated under Article 22(2) of the Constitution and Section 57 of the Code of Criminal Procedure (CrPC). If so counted, the subsequent delay in producing him before a magistrate would render the arrest illegal.

The bench of Justice Valmiki Menezes held that the arrest was illegal and vitiated in law. The Court ruled that custody begins when an individual’s liberty is first curtailed at the direction of the investigating agency, even if under immigration authorities. Since the applicant was not produced before a magistrate within 24 hours of his initial detention, the Court held that the ED had violated Article 22 and Section 57 CrPC. Accordingly, the High Court set aside the Special Court’s order denying bail and granted the applicant bail, subject to stringent conditions such as surrendering his passport, furnishing a bond and surety, and regularly reporting to the ED.

GST Cannot be Levied on Work Contracts Already Taxed Under VAT: Allahabad HC

M/S Vimlesh Kumar Contractor vs State Of U.P. And 3 Others CITATION : 2025 TAXSCAN (HC) 2507

The Allahabad High Court examined a jurisdictional issue under the Central Goods and Services Tax (CGST) Act, 2017, specifically involving proceedings initiated under Section 73 for the financial year 2018–19. The core legal question was whether GST authorities could levy tax, interest, or penalty on payments received after July 1, 2017, when the underlying works contracts had been executed prior to the GST regime and were already subjected to Value Added Tax (VAT) under the then-existing laws.

The bench of Justice Piyush Agrawal held that the GST authorities had acted without jurisdiction in invoking Section 73 for transactions belonging entirely to the VAT regime. The Court found that the contracts were executed before GST implementation and the payments were already subjected to VAT, and therefore the mismatch between GSTR-3B and Form 26AS could not form the basis of a GST demand. Emphasizing that no provision of the CGST Act empowered authorities to impose GST on pre-GST work merely because payment was received later, the Bench quashed the impugned orders. The writ petition was allowed, and the Court directed that any amount deposited by the petitioner be refunded with interest, to be released within one month of submission of the certified order.

Karnataka HC Quashes OIA Since Issue Already Settled by Coordinate Bench, Remands Service Tax Dispute on Labour Charges

SHRI. SIDRAM BHUTHAPPA HIREKURABAR vs UNION OF INDIA THROUGH ITSSECRETARY " CITATION : 2025 TAXSCAN (HC) 2508

The Karnataka High Court examined a service tax valuation dispute arising under the Finance Act, 1994, specifically concerning the levy of service tax on labour charges for the period April 2015 to June 2017. The central legal issue before the Court was whether the department had erred in imposing service tax on the entire value of labour charges without applying the statutory apportionment mechanism prescribed under the Service Tax (Determination of Value) Rules, 2006.

The bench of Justice M. Nagaprasanna noted that the petitioner relied heavily on the 2024 coordinate bench judgment in Karnataka Chinmaya Seva Trust v. Joint Commissioner of Central Tax. That decision required that similar valuation disputes be re-examined from the show cause notice stage, after considering key statutory provisions such as Section 65B(44) of the Finance Act, the negative list, relevant exemption notifications, Rule 2(1)(d) regarding liability, and the Supreme Court’s jurisprudence on limitation. Since the respondents did not dispute the applicability of this precedent, the Court set aside the impugned Order-in-Appeal and remanded the matter to the original adjudicating authority. The petitioner was granted four weeks to file a fresh reply to the show cause notice, and the authority was directed to reconsider the case in accordance with law while being free to regulate its own procedure and carry the matter to its logical conclusion.

Forged Rent Deed used before GST Dept: P&H HC says ‘Petitioner do not Deserve the Concession of Anticipatory Bail

Indu Mahajan and another vs State of Punjab CITATION : 2025 TAXSCAN (HC) 2509

The Punjab & Haryana High Court dealt with the legal issue of whether the accused were entitled to anticipatory bail under Section 438 of the Code of Criminal Procedure (CrPC) in a case involving alleged offences under Sections 420 and 120-B of the Indian Penal Code (IPC). The matter arose from allegations that the petitioners had submitted a forged and unsigned rent deed before the GST Department, thereby fabricating tenancy rights over a property to secure GST registration. The Court examined whether the nature of the forgery, the use of false documents before a government authority, and the overall conduct of the accused justified the grant of pre-arrest bail.

The bench of Justice Sumeet Goel examined the FIR, the material collected during the investigation, and the rival submissions. The Court held that the allegations reflected organised deceit, supported by prima facie evidence, and that the petitioners’ conduct “did not inspire confidence.” Justice Goel observed that the unsigned rent deed, unsupported bank transfers, and unreliable ledger entries, coupled with the clear denial by the property owner, justified custodial interrogation. Accordingly, the Court dismissed the petitions and refused anticipatory bail, holding that the gravity of the offences under Sections 420 and 120-B IPC warranted a full and unhindered investigation.

Pre-Trial Incarceration Not Substitute for Punishment: Punjab & Haryana HC Grants Bail to Accused in ₹48.6 Lakh GST Cement Supply Fraud Case

Sahil Goyal vs State of Punjab CITATION : 2025 TAXSCAN (HC) 2510

The Punjab & Haryana High Court examined the legal issue of whether an accused was entitled to regular bail under Section 439 of the Code of Criminal Procedure, in connection with a case registered under Sections 318(4), 336(2), 340(2) and 336 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS). The allegations pertained to a purported GST-related cement supply fraud amounting to ₹48,60,500, involving alleged fabrication of fake invoices and supply of only a fraction of the promised cement bags. The Court was required to determine whether continued custodial detention was warranted despite the investigation having been completed and the challan filed.

The bench of Justice Manisha Batra noted that the petitioner had been in custody since 16.07.2025 and that the police had already filed the charge-sheet, making further custodial interrogation unnecessary. Observing that the allegations were primarily documentary and that prolonged pre-trial incarceration could not be justified when trial would likely take time, the Court held that continued detention served no purpose. Accordingly, Justice Batra allowed the petition and granted regular bail to Sahil Goyal, directing his release upon furnishing requisite bonds, while clarifying that the observations in the order were confined to the bail adjudication and would not affect the merits of the trial.

Can Arrest Warrants in Economic Offences and Heinous Crimes Be Converted into Bailable Warrants? Rajasthan HC Refers Matter to Larger Bench

Nirmal Kumar Sharma S/o Ram Swroop Sharma vs Union Of India CITATION : 2025 TAXSCAN (HC) 2511

The Rajasthan High Court examined the legal question concerning the convertibility of Non-Bailable Warrants (NBWs) into bailable warrants under Section 70(2) of the Cr.P.C. and Section 72(2) of the Bharatiya Nagarik Suraksha Sanhita (BNSS) in cases involving serious economic offences under the CGST Act and the Customs Act, including an alleged tax evasion of ₹10.65 crores. The fundamental issue before the Court was whether an accused in economic offences or heinous crimes could claim such conversion as a matter of right, particularly in light of conflicting coordinate bench judgments.

The bench of Justice Anoop Kumar Dhand noted the conflicting views of two coordinate benches on whether NBWs could be converted to bailable warrants in economic offence cases. Observing that the Supreme Court has consistently stressed stricter treatment for economic offences due to their systemic impact, and recognising the judicial dilemma caused by contradictory precedents, the Court held that judicial propriety required reference to a larger forum. Accordingly, Justice Dhand referred the matter to the Chief Justice for constitution of a Special/Larger Bench to settle the following legal question: Whether arrest warrants in cases involving economic offences or heinous crimes can be converted into bailable warrants as a matter of right under Section 70(2) Cr.P.C. and Section 72(2) BNSS. The writ petition was disposed of in these terms.

GST Evasion Investigation Completed and No Antecedents: Rajasthan HC Grants Bail to accused Considering Over Four Month Incarceration

NEMICHAND TETARWAL vs UNION OF INDIA THROUGH INTELLIGENCEOFFICER GOODS AND SERVICE TAX DICTORATE CITATION : 2025 TAXSCAN (HC) 2512

The Rajasthan High Court (Jaipur Bench) addressed the legal issue of grant of regular bail under Section 483 of the Bharatiya Nagarik Suraksha Sanhita (BNSS) in a case involving alleged GST evasion under Sections 132(1)(a), (b), (f), (h), and (i) of the Central Goods and Services Tax Act, 2017. The petitioner, Nemichand Tetarwal, Proprietor of Parveen Motor, had been arrested in connection with an alleged clandestine supply of goods without invoices and issuance of ineligible Input Tax Credit (ITC), leading to a purported tax liability exceeding ₹22.95 crore. The Court considered key factors such as the completion of investigation, absence of criminal antecedents, and the petitioner’s period of incarceration exceeding four months, in evaluating whether continued detention was necessary for the purposes of trial.

The bench of Justice Vinod Kumar Bharwani noted that the charge sheet had already been filed and that the maximum punishment for the alleged offences was five years’ imprisonment. Relying on the Supreme Court rulings such as Ratnambar Kaushik v. Union of India, which emphasized granting bail in cases based primarily on documentary evidence where prolonged pre-trial custody is unwarranted, the Court held that further incarceration of the petitioner was unjustified. Consequently, Justice Bharwani granted regular bail to the petitioner on furnishing a personal bond of ₹2,00,000 with two sureties of ₹1,00,000 each, subject to conditions including cooperation with the trial and restrictions on travel. The application was accordingly allowed.

Failure to Consider ITC Claimed in GSTR‑9 and Written Representation: Calcutta HC Sets Aside Order and Remands

Laxmi Ghosh vs The State of West Bengal & Ors. CITATION : 2025 TAXSCAN (HC) 2513

The Calcutta High Court examined the legality of an appellate order passed under Section 107 of the Central Goods and Services Tax Act, 2017, read with the corresponding provisions of the WBGST Act, 2017. The core legal issue before the Court concerned whether the Appellate Authority had failed to consider the petitioner’s written representation and her claim of Input Tax Credit (ITC) validly disclosed in the annual return (GSTR-9) for the financial year 2018-19.

The Single Judge Bench of Justice Om Narayan Rai held that the appellate order suffered from non-application of mind and was legally unsustainable. The Court observed that the Appellate Authority had incorrectly stated that the petitioner made no written representation and had also failed to evaluate the ITC claimed in GSTR-9, despite the settled legal position affirmed in Pioneer Co-operative Car Parking Servicing and Constructions Society Ltd. v. State of West Bengal (2025) requiring due consideration of annual return particulars. Finding that the appellate order neither identified the “missing documents” nor explained why the petitioner’s explanation was illogical, the Court set aside the order and remanded the matter for fresh consideration. The petitioner was permitted to file additional representations within two weeks, and the Court recorded that she had already deposited the differential tax amount of ₹83,608.07 after disposal of the appeal.

Non-Disclosure of CESS in GSTR-3B Revenue Neutral, Dept Overlooked GSTR-9 Filing: Calcutta HC Remands Matter

Bidyut Autotech Private Limited and another vs The AssistantCommissioner of State Tax CITATION : 2025 TAXSCAN (HC) 2514

The Calcutta High Court examined whether the GST authorities were justified in ignoring the petitioners’ GSTR-9 annual return, particularly when the non-disclosure of CESS in GSTR-3B was revenue neutral and the return had been filed before the amended Section 44(2) of the GST Act came into force. The case arose from an appeal under Section 107 of the WBGST/CGST Act, challenging an adjudication order issued under Section 74, later converted to Section 73, demanding CESS, interest, and penalty for FY 2017—8. The central legal question was whether, under the unamended statutory scheme, a belatedly filed GSTR-9, along with the petitioners’ accumulated ITC of CESS, could be disregarded while confirming substantial tax liability—particularly when such non-disclosure did not cause revenue loss.

The single judge bench of Justice Om Narayan Rai held that the appellate authority’s order suffered from non-application of mind and violated the constitutional mandate under Article 265, which prohibits levy or collection of tax without authority of law. The Court noted that the appellate authority failed to evaluate the petitioners’ GSTR-9 disclosure, their available unutilised CESS ITC, and the differential tax already paid—factors that rendered the omission in GSTR-3B revenue neutral. It further held that the pre-amendment framework of Section 44(2) did not bar late filing of GSTR-9, and the existence of late fees under Section 47 implied its permissibility. Consequently, the Court declared the appellate order unsustainable, set it aside, and remanded the matter for fresh adjudication after proper consideration of the GSTR-9 return and the petitioners’ claim of unavailed ITC. The writ petition was disposed of without costs.

Two GST Appeals filed Challenging Same Adjudication Order: Orissa HC Treats Later Appeal as Non Est

M/s. Sumitra Mohapatra vs The Commissioner CT & GST CITATION : 2025 TAXSCAN (HC) 2515

The Orissa High Court addressed a procedural issue under the Goods and Services Tax (GST) Act, specifically concerning the maintainability of multiple appeals filed against the same adjudication order under Section 107 of the Act. The legal question before the Court was whether the later appeal, rejected as time-barred by the appellate authority, could survive when the earlier appeal had already been restored pursuant to the Court’s order dated 6 November 2023, particularly in light of Notification No. 53/2023-Central Tax and the mandate under Section 107(13) regarding timely disposal of appeals.

The Division Bench of Chief Justice Harish Tandon and Justice Murahari Sri Raman held that the second appeal, filed on 5 December 2024, had no legal existence (non est) since the earlier appeal, Appeal No. AD211222009941O, was already alive and pending due to the Court’s earlier revival order. The Bench observed that the appellate authority erred in dismissing the later appeal on limitation without considering that it challenged the same adjudication order already under appeal. The Court therefore set aside the appellate order dated 17 January 2025 and directed that the later appeal be treated as non est. It further instructed the appellate authority to take up the earlier restored appeal and decide it on merits, after granting the petitioner a reasonable opportunity of hearing, preferably within three months.

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