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 December 14, 2025 to December 20, 2025, Part-III.

HIGH COURT

Mere Non-Filling of Part-B of E-Way Bill due to Technical Glitch cannot attract GST Penalty without Intent to Evade Tax: Allahabad HC

Agrim Wholesale Private Limited vs State Of U.P CITATION : 2025 TAXSCAN (HC) 2682

The Allahabad High Court dealt with the legality of penalty proceedings under Section 129(3) of the Goods and Services Tax Act, 2017, where the petitioner’s goods were seized for non-filing of Part B of the e-way bill. The legal issue centered on whether mere non-filing of Part B due to a technical glitch can attract a penalty, in the absence of any finding of intention to evade tax.

The bench comprising Justice Piyush Agrawal held that the authorities had failed to record any finding of intent to evade tax and that non-filing of Part B of the e-way bill alone does not warrant penalty under the GST Act. Relying on earlier precedents, the Court quashed both the penalty order dated 3 May 2025 and the appellate order directing the authorities to refund any amounts deposited by the petitioner within two months. The writ petition was allowed, emphasizing that penalties under GST require a demonstration of willful non-compliance or intent to evade tax.

‘Clear Dereliction of Duty’: Bombay HC Imposes ₹25k Costs on Customs for Failing to Pass Speaking Order even after Payment of Duty ‘Under Protest

JKC General Trading Company Thr. Its Partner vs Union of IndiaThr. The Secretary And Ors CITATION : 2025 TAXSCAN (HC) 2683

Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here

The Bombay High Court addressed the failure of the Customs Department to pass a reasoned or “speaking” order under Section 17(5) of the Customs Act, 1962, even after the importer had paid disputed duty under protest. The legal issue revolved around whether Customs authorities can indefinitely delay issuing a speaking order after a remand by the Commissioner (Appeals), thereby frustrating the importer’s statutory right to challenge the assessment.

The Division Bench comprising Justice M.S. Sonak and Justice Advait M. Sethna held that the Customs authorities must issue a reasoned order within a fixed timeline and cannot rely on payment of duty voluntarily or under protest to bypass this obligation. The Court directed the officials to conduct a new personal hearing if necessary and pass the speaking order within two months. Additionally, the Bench imposed ₹25,000 costs on the Department payable to the petitioner, emphasizing accountability, and clarified that the Department may recover amounts internally from responsible officials.

Transport Dept Must Allow Vehicle Owner to Deposit MV Tax and Seek Penalty Waiver Before Taking Coercive Action: Orissa HC

Biranchi Narayan Kar vs State of Odisha & Ors CITATION : 2025 TAXSCAN (HC) 2684

The Orissa High Court addressed the issue of whether a vehicle owner must be allowed to deposit outstanding Motor Vehicle Tax and seek waiver of penalties under Section 13 of the Odisha Motor Vehicle Taxation Act, 1975 before the Transport Department initiates coercive action. The legal issue centered on ensuring that statutory procedures are followed and that the vehicle owner is given an opportunity to explain his case and comply with tax obligations before facing enforcement measures. The Court emphasised that uploading arrears on the department portal without giving an opportunity for reply or explanation is procedurally improper.

Justice Dr. Sanjeeb K. Panigrahi held that the petitioner, must be permitted to deposit the outstanding tax and file a reply seeking waiver of penalties. The Court directed the Transport Department to accept the tax payment and consider the petitioner’s request for waiver of penalties and issuance of permits and fitness certificate within a reasonable timeframe. The writ petition was disposed of with instructions that the tax be deposited within four weeks and the authority to consider the waiver application within four weeks thereafter.

GST Refund cannot be Rejected without Granting 15 Days’ Reply and Personal Hearing as Mandated u/r 92: Jharkhand HC

Carbon Resources Private Limited vs Union of India CITATION : 2025 TAXSCAN (HC) 2685

The Jharkhand High Court dealt with the legal issue of whether a GST refund application can be rejected without affording the taxpayer the mandatory fifteen days’ time to file a reply and an opportunity of personal hearing under Rule 92(3) of the CGST and JGST Rules, 2017. The issue arose from writ petitions filed by Carbon Resources Private Limited, challenging the rejection of its GST refund claim and a subsequent rectification order by the Assistant Commissioner, CGST, Division Giridih.

The Division Bench comprising Chief Justice Tarlok Singh Chauhan and Justice Rajesh Shankar held that the refund rejection and rectification orders were unsustainable in law due to procedural non-compliance and violation of principles of natural justice. The Court set aside both orders and remanded the matter to the Assistant Commissioner for fresh consideration, directing that the petitioner be granted the full fifteen days to file a reply and be provided a personal hearing before any fresh order is passed. The parties were directed to appear before the authority on 10 December 2025, and the writ petitions were allowed.

Bad Debt Income Tax Deduction for Rural Branch Advances to be Computed on Aggregate Average of Monthly Outstanding Balances: Madras HC

The Commissioner of Income Tax vs M/s. The Madurai DistrictCentral Co-operative Bank Limited CITATION : 2025 TAXSCAN (HC) 2686

The Madras High Court dealt with the interpretation of Section 36(1)(viia) of the Income Tax Act, 1961, and Rule 6ABA of the Income-tax Rules, 1962, concerning the deduction for provision for bad and doubtful debts by banks. The legal issue arose from assessment proceedings for A.Y. 2010-11 involving M/s The Madurai District Central Co-operative Bank Limited, where the Revenue contended that the deduction should be computed only on incremental advances made during the year, rather than on the aggregate average of monthly outstanding advances of rural branches. The High Court was tasked with determining the correct method of computation under the relevant provisions.

The Division Bench comprising Justice Anita Sumanth and Justice Mummineni Sudheer Kumar noted that the issue was settled by earlier decisions, including Catholic Syrian Bank v. CIT (2012). The Court held that the deduction under Section 36(1)(viia) must be computed based on the cumulative outstanding advances of rural branches at the end of each month, subject to the proviso preventing double deduction. Upholding the ITAT’s computation method, the Madras High Court dismissed both appeals filed by the Income Tax Department, ruling in favour of the assessee.

CESTAT cannot be Compelled to Restore Customs Appeal After Decades of Delay and Repeated Defaults in Pre-Deposit: Delhi HC

KANCHAN LAL AGRAWAL vs COMMISSIONER OF CUSTOMS CITATION : 2025 TAXSCAN (HC) 2687

The Delhi High Court addressed the issue of whether the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) can be compelled to restore a customs appeal after decades of inaction by the appellant, under Section 130 of the Customs Act, 1962. The case arose from the seizure of 702.78 kilograms of silver on 30 August 1991, with an Order-in-Original directing confiscation of the silver and a vehicle, along with a penalty of ₹15 lakh. The appellant, Kanchan Lal Agrawal, had repeatedly failed to comply with mandatory pre-deposit requirements despite multiple opportunities and extensions granted by CESTAT and the Delhi High Court.

Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here

The Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain held that, given the appellant’s repeated non-compliance and the final dismissal of a second Special Leave Petition by the Supreme Court, CESTAT could not be compelled to restore the appeal after decades of delay. The court emphasized that the mere fact that the seized silver remained with the department did not justify reopening the proceedings. Consequently, the High Court declined to interfere with CESTAT’s order, dismissed the appeal, and noted that the appellant retained liberty to approach the Supreme Court in accordance with law.

Death of Accountant Held Sufficient Cause for Delay: Delhi HC Allows Belated Filing, Subject to SC Ruling on Section 168A Extensions

AGGARWAL TRADERS THROUGH ITS PROPRIETOR MS JYOTI AGGARWAL vsSALES TAX OFFICER CLASS II / AVATO CITATION : 2025 TAXSCAN (HC) 2688

The Delhi High Court addressed the issue of whether a belated statutory appeal under Section 107 of the Central Goods and Services Tax Act, 2017 (CGST Act) can be entertained against an adjudication order raising a GST demand, where the delay was due to circumstances beyond the petitioner’s control. The petitioner, Aggarwal Traders, represented by Ms. Jyoti Aggarwal, challenged an adjudication order for the financial year 2019-20 demanding ₹35,61,082, and also questioned the validity of Notifications Nos. 09/2023 and 56/2023 (Central and State Tax), which extended limitation periods under Section 168A of the CGST Act. The delay in filing the appeal arose due to the sudden illness and subsequent death of the tax consultant entrusted with filing the appeal.

The Division Bench comprising Justice Prathiba M. Singh and Justice Renu Bhatnagar allowed the belated appeal, holding that the circumstances constituted sufficient cause for the delay and that the appeal could not be rejected solely on limitation grounds. The Court directed the petitioner to file the appeal along with the requisite pre-deposit by 15 January 2026, and clarified that the relief granted would remain subject to the final outcome of the Supreme Court proceedings regarding the validity of the limitation-extension notifications. The Court emphasized that the adjudication order itself did not warrant writ interference, as the petitioner had not participated in the proceedings, but granted an opportunity to be heard through the statutory appeal.

Loan Sanction on Same Day Not Illegal: Chhattisgarh HC Acquits Banker, Quashes CBI Conviction in Decades Old Loan Fraud Case

Indrajeet Singh Solanki vs Union of India CITATION : 2025 TAXSCAN (HC) 2689

The Chhattisgarh High Court addressed the issue of whether sanctioning a bank loan on the same day as submission of the application, without any proven irregularity or fraudulent intent, can constitute criminal misconduct under Sections 120B, 420, 468, and 471 of the IPC and Section 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act. The appeals were filed by Indrajeet Singh Solanki, a former Branch Manager of Dena Bank’s Industrial Estate Branch, Raipur, and others, challenging their conviction in a decades-old CBI case alleging loan fraud during 1989-1992.

The bench comprising Justice Rajani Dubey held that mere same-day sanctioning does not indicate fraud or criminal intent, noting that standard banking practice allows loan approvals when documentation and compliance criteria are met. The Court observed that insurance of hypothecated stock was properly obtained, repayments were made, and no departmental enquiry was ever initiated. Applying the Supreme Court standards for criminal conspiracy, forgery, and cheating, the Court found no mens rea, dishonesty, or proof of falsified documents, and held that strong suspicion cannot substitute valid proof. Accordingly, the Chhattisgarh High Court set aside the convictions and sentences and acquitted all appellants of all charges.

Delhi HC Grants Limitation Relief to File Statutory Appeal Despite GST Adjudication Order Passed After Considering Taxpayer’s Reply

NEELGIRI MACHINERY vs COMMISSIONER DELHI GOODS CITATION : 2025 TAXSCAN (HC) 2690

The Delhi High Court addressed the issue of whether a GST taxpayer can be allowed to file a belated statutory appeal against an adjudication order under the Central Goods and Services Tax Act, 2017 (CGST Act), Section 107, particularly when legal uncertainty exists regarding limitation-extension notifications issued under Section 168A. The petition was filed by Neelgiri Machinery, through proprietor Mrs. Asha Devi, challenging a show cause notice dated 11 December 2023 and the subsequent adjudication order dated 30 April 2024 for the tax period April 2018 to March 2019. The petitioner also questioned the validity of certain notifications extending adjudication timelines, which were under consideration before multiple High Courts and the Supreme Court in M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors (SLP No. 4240/2025).

The Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain held that, although the adjudication order had been passed after considering the petitioner’s reply, the ongoing legal uncertainty justified granting relief. The Court permitted the petitioner to file a statutory appeal within the time allowed by the High Court and directed that the appeal should not be treated as barred by limitation. The Court emphasized that the appeal must be decided on merits by the appellate authority and clarified that the outcome would remain subject to the Supreme Court’s final decision on the validity of the limitation-extension notifications, ensuring that the petitioner’s right to statutory remedy was preserved.

Customs Duty Exemption Denied for Misrepresentation and Only 5.18% Value Addition: Karnataka HC Sets Aside CEGAT Order

THE PRINCIPAL COMMISSIONER OF CUSTOMS vs LUCKY EXPORTS CITATION : 2025 TAXSCAN (HC) 2691

The Karnataka High Court dealt with the issue of whether the benefit of customs duty exemption under the Export-Import Policy, 1997-2002, could be availed when the claimed value addition on exported goods was minimal and licence conditions were misrepresented. The dispute arose from exports of ventilator systems to Russia, where the respondents claimed exemption under advance licences obtained from the Directorate General of Foreign Trade (DGFT), asserting that imported components were manufactured or processed in India before export. The Customs Department alleged that only 5.18% value addition had occurred, significantly below the minimum 33% required under the policy, and that the assembly and manufacturing processes were largely superficial.

The Division Bench comprising Justice D. K. Singh and Justice Venkatesh Naik T held that exemption under the policy and relevant notifications could only be granted when all conditions, including minimum value addition and compliance with licence conditions, were fully satisfied. The Court found that the Tribunal had ignored evidence of misrepresentation, lack of intrinsic value addition, and violation of DGFT licence conditions, and had mechanically applied precedents without considering the factual distinctions. Consequently, the Karnataka High Court set aside the Tribunal’s Final Order, restoring the original duty demand, confiscation, and penalties imposed by the Commissioner of Customs, Bengaluru, under Sections 28, 111, 114, and 114A of the Customs Act, 1962.

Diesel used in Telecom Towers Taxable under UP VAT if Source Not Proven: Allahabad HC Dismisses Vodafone’s Revisions

M/S Vodafone South Limited vs The Commissioner CITATION : 2025 TAXSCAN (HC) 2692

The Allahabad High Court addressed the issue of whether value added tax (VAT) under the Uttar Pradesh Value Added Tax Act, 2008 (UP VAT Act) could be levied on diesel consumed in diesel generator sets used for telecom towers. The petitioner, M/s Vodafone South Limited, operates mobile telecommunication services and installed diesel generator sets at its towers to ensure uninterrupted power supply. During the assessment year 2008-09, the Assessing Authority treated diesel consumed in these generator sets as taxable purchases from unregistered dealers, imposing VAT and entry tax on the ground that Vodafone failed to furnish evidence that the diesel had been purchased from registered dealers and had already suffered tax. The Commercial Tax Tribunal, Meerut, upheld the assessment in second appeal, prompting Vodafone to seek revision before the High Court.

Justice Piyush Agrawal held that Vodafone, as the assessee, bore the onus of proving that the diesel used in running the generator sets had been purchased from registered dealers and had already been taxed. The Court observed that mere contractual arrangements with third-party service providers responsible for refuelling could not substitute for documentary proof such as bills or invoices. Since Vodafone failed to provide any cogent evidence to substantiate its claim, the High Court dismissed the sales tax revisions, upholding the levy of VAT and confirming that the impugned orders were neither perverse nor violative of natural justice, thereby ruling in favor of the revenue.

Foreign Exchange Fluctuation Linked to International Transactions is Operating in Nature: Delhi HC Reaffirms

THE PR. COMMISSIONER OF INCOME TAX -7 vs STERIA INDIA PVT. LTD. CITATION : 2025 TAXSCAN (HC) 2693

The Delhi High Court dealt with the legal issue of whether foreign exchange gains or losses arising from international transactions should be treated as operating or non-operating for tax purposes. The appeal was filed by the Revenue against the ITAT’s order in favor of Steria India Pvt. Ltd. for Assessment Years 2010-11 and 2011-12.

The Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar observed that the foreign exchange fluctuations arose from international transactions forming part of the assessee’s regular business operations and, therefore, must be treated as operating in nature, following the reasoning in Ameriprise India Pvt. Ltd. The Court noted that the ITAT had correctly applied this settled legal position and that the Revenue’s appeal suffered from an unexplained delay of 1,265 days. Consequently, the High Court dismissed the appeal and the pending application, reaffirming that foreign exchange gains or losses in such business transactions are operating in nature.

Govt Approved Revival & Full Liability Undertaking Justify Recall of Winding‑Up: Kerala HC Allows Keltron to Take Over KPDL & KRCL

Kerala State Electronics Development Corporation Limited VsKeltron Power Devices Limited CITATION : 2025 TAXSCAN (HC) 2694

The Kerala High Court allowed applications filed by the Kerala State Electronics Development Corporation (Keltron) to recall the winding‑up orders passed in 2005 and 2006 against its subsidiaries, Keltron Power Devices Ltd. (KPDL) and Keltron Rectifiers Ltd. (KRCL). The Court considered the State Government’s approval of a revival proposal, which involved transferring part of the companies’ land to the Centre for Materials for Electronics Technology (C‑MET) to settle outstanding dues and developing the remaining land jointly for a Common Facility Centre for sensor manufacturing, calibration, testing, and electronics production.

The Official Liquidator, while not opposing the revival, required Keltron to assume responsibility for all present and future liabilities of the companies, which Keltron undertook through a formal affidavit. The Court noted that both the Government and the Liquidator supported the scheme, and that no secured creditors were affected. Accordingly, the High Court recalled the winding‑up orders, permitting Keltron to take over the assets, liabilities, records, pending cases, decrees, and surplus funds of KPDL and KRCL. This decision enables the operational revival of the subsidiaries and implementation of the C‑MET–Keltron development project on the reclaimed land.

GST Appeal Cannot be Filed Due to Non-Functional Tribunal: Chhattisgarh HC directs to File Appeal Once President Takes Charge

M/s Simran Constructio vs State Of Chhattisgarh Through TheSecretary CITATION : 2025 TAXSCAN (HC) 2695

The Chhattisgarh High Court dealt with the legal issue concerning the statutory right of a taxpayer to file an appeal under Section 112 of the Chhattisgarh Goods and Services Tax Act, 2017, despite the GST Appellate Tribunal in the State being non-operational due to the non-appointment of the President and Members. The Court examined whether administrative delays in constituting the Tribunal could bar a taxpayer from pursuing a statutory appeal and considered the applicability of CBIC Order No. 09/2019-Central Tax, which clarifies that the limitation period for filing such an appeal commences only when the President or State President assumes office.

The bench of Justice Naresh Kumar Chandravanshi, held that the petitioner, M/s Simran Construction, could file a statutory appeal under Section 112 as soon as the President or State President of the Tribunal took charge, subject to making the prescribed pre-deposit. The Court directed that the Tribunal shall decide the appeal strictly on merits and in accordance with law, and clarified that the statutory stay under Section 112(9) would protect the petitioner from coercive recovery proceedings until the appeal is disposed of. The judgment ensures that taxpayers are not left without a remedy due to administrative delays in constituting the GST Appellate Tribunal.

Customs Orders Must Bear Name and Designation of Officer Passing Them: Delhi HC Rejects Staff Shortage Justification

PR. COMMISSIONER OF INCOME TAX -7 vs STERIA INDIA PVT. LTD. CITATION : 2025 TAXSCAN (HC) 2696

The Delhi High Court addressed the legal issue of transparency and accountability in Customs orders, emphasizing that every order must clearly indicate the name and designation of the officer who actually passes it. The Court observed that a shortage of staff cannot justify the omission of this information, as failing to identify the decision-maker affects accountability and the very purpose of judicial oversight.

The Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain, which directed that all Customs orders and communications must clearly state the officer’s name and designation, whether signed physically or digitally, to ensure authenticity. While acknowledging administrative convenience in having another official communicate the order, the Court held that the identity of the actual decision-maker cannot be misrepresented. The petitioner, Guru Kirpa Enterprises, was granted four weeks to file a rejoinder, and the matter was scheduled for further hearing on 23.04.2026.

Draft Income Tax Assessment u/s 144C Issued Post-Amalgamation Invalid: Delhi HC Permits Fresh Action Against SMS India

SMS INDIA PRIVATE LIMITED VS ASSESSMENT UNIT INCOME TAXDEPARTMENT CITATION : 2025 TAXSCAN (HC) 2697

The Delhi High Court dealt with the issue of validity of income tax assessment proceedings initiated against a non-existent entity under Section 144C of the Income Tax Act, 1961. The Court held that an assessment cannot be sustained if issued in the name of a company that has ceased to exist due to amalgamation, as such action amounts to substantive illegality rather than a mere procedural defect. The ruling relied on the principles established by the Supreme Court in Principal Commissioner of Income Tax v. Maruti Suzuki India Limited (2019), affirming that post-merger assessments must be addressed to the successor entity.

The Division Bench comprising Justice V. Kameswar Rao and Justice Vinod Kumar, which set aside the draft assessment order issued in the name of Paul Wurth India Private Limited for A.Y. 2022-23. The Court granted the Revenue liberty to initiate proceedings against SMS India Private Limited, the successor company, in accordance with law, emphasizing that assessment actions post-amalgamation must recognize the legal existence of the successor entity.

GST ITC Reversal Cannot Be Ordered Without Proper Scrutiny of Records: Calcutta HC Remands Appeal

Soumyendu Bikash Jana vs The State of West Bengal & Ors CITATION : 2025 TAXSCAN (HC) 2698

The Calcutta High Court addressed the issue of Input Tax Credit (ITC) reversal under the GST Act and clarified that an appellate order cannot be sustained unless the appellate authority conducts a proper scrutiny of the taxpayer’s records and supporting documents. The case involved Sections 73 and 107 of the WBGST/CGST Act, 2017, relating to short payment of tax and ITC reversal claims.

The bench of Justice Om Narayan Rai, who set aside the appellate order dated 18 July 2025 passed against Soumyendu Bikash Jana and remanded the case for fresh consideration. The Court directed that the petitioner be allowed to file additional submissions and instructed the appellate authority to decide the appeal within six weeks after duly examining all documents on record, ensuring that reversal of ITC is based on reasoned evaluation rather than perfunctory confirmation of the original adjudication.

Calcutta HC Condones 35-Day Delay Beyond Statutory Limit in GST Appeal, Sets Aside Dismissal Passed without Considering Medical Grounds

Eximpo Tea Limited vs Additional Commissioner of Revenue CITATION : 2025 TAXSCAN (HC) 2699

The Calcutta High Court addressed the issue of condonation of delay in filing a GST appeal under Sections 73 and 107 of the CGST/WBGST Act, 2017. The case concerned Eximpo Tea Limited, whose appeal against an adjudication order under Section 73 was rejected by the appellate authority solely on the ground of limitation.

The bench of Justice Om Narayan Rai, who condoned the 35-day delay, set aside the appellate order dated 29 October 2025, and restored the appeal for fresh adjudication on merits. The Court noted that the appellate authority had failed to consider medical grounds specifically, the serious illness of the mother of the promoter-director, the authorised signatory which explained the delay. The Court also observed that the delay was marginal and not due to gross negligence, and it lifted the attachment on the petitioner’s bank account, ensuring that the appeal could proceed fairly.

Writ Jurisdiction Not Invocable at SCN Stage: Chhattisgarh HC Dismisses State Beverages Corporation’s Plea on Service Tax Demand

Chhattisgarh State Beverages Corporation Limited vs Office OfThe Commissioner CGST And Central Excise GST Bhawan CITATION : 2025 TAXSCAN (HC) 2700

The Chhattisgarh High Court dealt with the issue of invocation of writ jurisdiction at the show cause notice (SCN) stage under Article 226 of the Constitution of India. The matter involved Chhattisgarh State Beverages Corporation Limited (CSBCL), which challenged a service tax demand for the year 2006-07, proposed by the Central GST and Excise authorities, claiming it could not be treated as a “Clearing and Forwarding Agent” under the Finance Act, 1994. The Court emphasized that a writ petition is premature at the SCN stage, as the petitioner must first participate in the adjudication process and raise all factual and legal objections before the statutory authority.

The bench of Justice Naresh Kumar Chandravanshi, who dismissed the writ petition as premature while granting liberty to the petitioner to raise all contentions, including reliance on prior judicial precedents, before the adjudicating authority. The Court held that interference at the SCN stage is ordinarily unwarranted, especially when no final order has been passed, and emphasized that the petitioner could later seek legal remedies if aggrieved by the adjudication outcome.

Benami Attachment Cannot Breach the “Impregnable Firewall” of NCLT‑Approved Resolution Plan: Madras HC

Milan Textile Enterprises vs Initiating Officer CITATION : 2025 TAXSCAN (HC) 2701

The Madras High Court addressed the issue of whether a National Company Law Tribunal (NCLT)‑approved Resolution Plan under the Insolvency and Bankruptcy Code, 2016 (IBC), Section 32A, can protect corporate debtor property from benami attachment under the Prohibition of Benami Property Transactions Act, 1988 (PBPT Act), Section 24. The Court examined whether benami property covered under a Resolution Plan constitutes the “property of the corporate debtor” and whether pre‑CIRP attachment orders could be enforced against such property.

The bench of Justice Swaminathan, who held that the Resolution Plan approved by the NCLT acts as an impregnable firewall preventing enforcement of benami attachment against the property. The Court rejected the Department’s argument that benami property is not “property of the corporate debtor” and clarified that a change in management under a Resolution Plan does not amount to a transfer of property. Allowing the writ petition, the Court restrained the Income Tax Department from enforcing attachment over the commercial property, Milanem Mall, confirming that the property remains protected under Section 32A of the IBC and emphasizing that the new management can operate with a clean slate.

Packing Materials Form Part of Sale Price u/s 2(u) of Bihar Finance Act: Patna HC Upholds Unified 11% Sales Tax on Cement, Dismisses ACC’s Appeals

M/S ACC Limited vs The State of Bihar through the PrincipalSecretary CITATION : 2025 TAXSCAN (HC) 2702

The Patna High Court addressed the legal issue of whether cement and its packing materials can be taxed separately under Section 12 of the Bihar Finance Act, 1981. The Court examined whether amounts charged for gunny bags and HDPE bags used for packing cement could be treated as distinct taxable commodities or whether they must be included in the sale price of cement for sales tax purposes. The case arose from appeals filed by ACC Limited challenging consolidated tax treatment adopted by the Commercial Taxes Tribunal for A.Y.s 1996-97 to 2000-01.

The bench of Division Bench of Justice Dr. Anshuman and Justice Bibek Chaudhuri, upheld the Tribunal’s decision. The Court held that packing cement in bags is an integral part of the sale, occurring at or before delivery, and therefore falls within the statutory definition of “sale price” under Section 2(u) of the Bihar Finance Act. Since ACC Limited failed to produce evidence showing that packing materials were sold independently, the High Court dismissed all five appeals and affirmed that the value of packing materials must be included in the taxable turnover of cement.

Bidder's Refusal to Accept LOI Triggers Valid Forfeiture of Earnest Money: Karnataka HC Sets Aside Refund of ₹70 lakh

PANKAJ SRIVASTAVA LIQUIDATOR vs DINESH PULIPATI CITATION : 2025 TAXSCAN (HC) 2703

The Karnataka High Court dealt with the legal issue of forfeiture of Earnest Money Deposit (EMD) and Participation Deposit Money (PDM) under a liquidation auction, in the context of a successful bidder refusing to accept the Letter of Intent (LOI). The Court examined whether the liquidator had the authority to forfeit deposits under Clause 6.2 of the Auction Memorandum and applicable provisions of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, even when the bidder challenged the forfeiture before the Single Judge.

The Division Bench of Justice Vibhu Bhakru and Justice CM Poonacha, which reversed the Single Judge’s order directing a refund of ₹70 lakh. Relying on Supreme Court precedents including Shri Hanuman Cotton Mills v. Tata Air Craft Ltd. (1969), the Court held that the bidder’s refusal to accept the LOI amounted to a clear default, justifying forfeiture. Since no concluded contract arose, Section 74 of the Contract Act did not apply, and the liquidator was entitled to forfeit the entire EMD and PDM. The Court thus restored the liquidator’s decision, upholding forfeiture of approximately 5.08% of the bid value.

Schedule I of IBBI Regulations Only ‘Ordinarily’ Applies, Liquidator May Set Stricter Auction Terms: Karnataka HC Upholds EMD Forfeiture

SRI PANKAJ SRIVASTAVA LIQUIDATOR OF M/S SAMRUDHI REALTY LTD. vsSRI DINESH PULIPATI CITATION : 2025 TAXSCAN (HC) 2703

The Karnataka High Court addressed the legal issue of whether a liquidator can include forfeiture clauses in an Auction Memorandum under the IBBI (Liquidation Process) Regulations, 2016, even if Schedule I does not expressly provide for such forfeiture. The Court examined the scope of Regulation 33 and Schedule I of the Regulations, considering whether the liquidator’s power to prescribe stricter auction terms, including forfeiture of Earnest Money Deposit (EMD) and Participation Deposit Money (PDM), is consistent with the statutory framework.

The Division Bench of Justice Vibhu Bhakru and Justice CM Poonacha, which reversed the Single Judge’s order directing refund of ₹70 lakh to the bidder. The Court held that Schedule I applies only “ordinarily” and does not restrict the liquidator from imposing stricter conditions, such as mandatory acceptance of the Letter of Intent (LOI) and forfeiture upon refusal. Since the bidder had unconditionally accepted the Auction Memorandum and later refused to proceed, the forfeiture clause was valid and enforceable. Consequently, the forfeiture of EMD and PDM, totaling 5.08% of the bid value, was upheld in full.

GST Fraud Writ Delayed Due to Unremoved Defects for 3 Months: Delhi HC Grants One-Time Liberty to File Statutory Appeal Beyond Limitation

NAVNEET BANSAL vs ADDITIONAL COMMISSIONER CITATION : 2025 TAXSCAN (HC) 2704

The Delhi High Court dealt with the legal issue of whether writ jurisdiction can be invoked in a GST fraud case under Section 174 of the CGST Act, 2017 read with Rule 26 of the Central Excise Rules, 2002, where a penalty of ₹1.63 crore was imposed for alleged issuance of invoices without actual supply of goods. The Court examined the scope of writ remedies in cases involving disputed factual issues related to fraudulent availment of input tax or CENVAT credit and emphasized that statutory remedies under Section 107 of the CGST Act are ordinarily available to challenge such orders.

The Division Bench of Justice Prathiba M. Singh and Justice Renu Bhatnagar, which dismissed the writ petition but granted the petitioner, Navneet Bansal, a one-time opportunity to file a statutory appeal despite the expiry of the limitation period. The Court observed that the writ petition was filed with some procedural delay and, taking this into account, allowed the appeal to be filed on or before 31.01.2026, directing that it be considered on merits by the appellate authority. The Court clarified that its observations would not bind the appellate authority during adjudication.

Commercial Expediency Cannot be Rewritten by TPO: Delhi HC upholds Avery Dennison’s Intra-Group Services at Arm’s Length

PRINCIPAL COMMISSIONER OF INCOME TAX vs AVERY DENNISON (INDIA)PVT. LTD. CITATION : 2025 TAXSCAN (HC) 2705

The Delhi High Court addressed the legal issue of whether transfer pricing adjustments proposed by the Transfer Pricing Officer (TPO) could be upheld in respect of intra-group service payments under the Income Tax Act, 1961. The Court examined whether the payments made by M/s Avery Dennison (India) Private Limited for intra-group services could be re-characterised despite evidence showing that the services were rendered and commercially expedient. The dispute arose under Section 260A of the Act, where the Revenue challenged the ITAT’s deletion of transfer pricing additions for A.Y. 2012-13 and 2015-16.

The Division Bench of Justice V. Kameswar Rao and Justice Mini Pushkarna, which dismissed the Revenue’s appeal, holding that no substantial question of law arose. The Court relied on principles of consistency and noted that the TPO had failed to produce cogent evidence to prove that the intra-group services were not rendered. Consequently, the ITAT’s findings accepting the arm’s length nature of the payments were upheld, and the Revenue was denied relief.

Orissa HC Directs GSTAT Route: Writ Against GST Appeal Order Disposed With Mandatory Deposit Condition u/s. 112(8)

Mahendra Suniani vs The Commissioner of Commercial Taxes CITATION : 2025 TAXSCAN (HC) 2707

The Orissa High Court addressed the legal issue of whether a taxpayer can invoke writ jurisdiction to challenge a GST appellate order in the absence of an operational statutory forum. The matter arose under Section 74 and Section 112(8) of the Central Goods and Services Tax Act, 2017 (CGST Act), where the petitioner, Mahendra Suniani, challenged an adjudication order for the tax period April 2019 to March 2020, claiming that the Goods and Services Tax Appellate Tribunal (GSTAT) was not constituted when the appeal became due, thereby leaving him without a remedy.

The Division Bench of Chief Justice Harish Tandon and Justice Murahari Sri Raman, which disposed of the writ petition, held that once the GSTAT became functional with staggered appeal timelines, writ jurisdiction could not be used to bypass the statutory pre-deposit requirement under Section 112(8). The Court directed the petitioner to deposit the statutory amounts, if not already paid, and file the appeal before the GSTAT within the prescribed timelines, clarifying that it did not express any opinion on the merits of the appellate order.

Former Director Cannot be Forced to Represent Company in PMLA Case: Calcutta HC

Suman Chattopadhyay vs Enforcement Directorate CITATION : 2025 TAXSCAN (HC) 2709

The Calcutta High Court addressed the question of whether a former director can be compelled to represent a company in criminal proceedings under the Prevention of Money Laundering Act, 2002 (PMLA). The petitioner, Suman Chattopadhyay, challenged a CBI Court order dated 3 November 2022, which required him to represent M/s Disha Production & Media Pvt. Ltd. in a money laundering case linked to the Sarada Group, despite his resignation from the company in March 2013. The Court examined the interplay between Section 70 of the PMLA, which imposes liability on persons in charge of a company at the time of the offence, and Section 305 Cr.P.C., which governs company representation during trial.

The Bench of Justice Ajoy Kumar Mukherjee, held that a former director cannot be forced to represent a company, noting that corporate representation is a matter for the company to decide. Citing precedents including RC Cooper v. Union of India (1970), the Court clarified that while directors may be personally liable for offences committed during their tenure, this does not translate into an obligation to represent the company in trial. Consequently, the Court set aside the trial court order requiring Chattopadhyay to appear on behalf of Disha Production, directing that the company be summoned at its registered office to nominate its own representative, and if it fails, the magistrate may proceed under Section 305(4) Cr.P.C.

Calcutta HC Finds Prima Facie PMLA Violations, allows ED to Attach and Freeze Assets, Directs Committee to Share Property List

Ham Sabhi Welfare Society & Ors. vs Union of India &Ors. CITATION : 2025 TAXSCAN (HC) 2711

The Calcutta High Court dealt with a case concerning alleged money laundering activities by the Prayag Group of Companies and its directors, addressing the scope of provisional attachment, seizure, and freezing of properties under the Prevention of Money Laundering Act, 2002 (PMLA). The matter arose from investigations by the Enforcement Directorate (ED) following FIRs filed by the CBI for offences including cheating, criminal breach of trust, and criminal conspiracy. The ED sought to attach and freeze properties of the Prayag Group under Sections 5 and 17 of the PMLA, citing prima facie violations and the risk of dissipation of assets critical for safeguarding depositors’ interests.

The Division Bench comprising Justice Uday Kumar and Justice Rajarshi Bharadwaj granted the ED leave to proceed with attachment and freezing of the Prayag Group’s properties, including those listed in a sealed cover by the One‑Man Committee headed by retired Justice S.P. Talukder. The Court emphasised that these powers are preventive and remedial, allowing action even where possession lies with another agency, provided due process is followed. The Bench directed the Committee to share a complete property list with the ED and instructed all concerned authorities to extend full cooperation, noting that ₹16 crore currently with the CBI could be used to refund depositors. The Court’s order establishes the prima facie authority of the ED to act under PMLA while investigations continue.

Failure to Supply Certificate and Consider Delay Vitiates OPDR Proceedings: Orissa HC Quashes ₹40.49‑Crore Electricity Duty Recovery

Arcelor Mittal Nippon Steel vs State of Odisha CITATION : 2025 TAXSCAN (HC) 2712

The Orissa High Court addressed a case concerning the recovery of electricity duty arrears under the Odisha Public Demands Recovery Act, 1962 (OPDR Act), specifically examining the legality and procedural compliance of actions taken by the Certificate Officer under Sections 8 and 9 of the Act. The Court considered whether the Certificate Officer had violated principles of natural justice by confirming a recovery certificate prematurely, without providing the petitioner, Arcelor Mittal Nippon Steel India Ltd, with the certificate or supporting documents, and without giving a meaningful opportunity to contest the demand. The matter arose from arrears pertaining to Essar Power Orissa Ltd., following a SARFAESI auction of its generating assets.

The bench of Justice Sanjay Kumar Mishra found that the Certificate Officer had acted inconsistently and failed to adhere to statutory procedure, including considering the petitioner’s denial petition and evidence. The Court noted procedural lapses, including premature confirmation of the certificate, ignoring written objections, and failing to allow cross-examination of witnesses. The Court emphasized that violation of natural justice renders writ jurisdiction maintainable even in the presence of alternative remedies. Consequently, the High Court set aside the certificate orders, along with all consequential actions, and remitted the matter for fresh adjudication in strict compliance with Section 9 of the OPDR Act, directing that the petitioner’s denial petition and supporting documents be considered on merits.

Recovery Beyond 20% of Disputed IT Demand Held Unfair During Appeal Stage: Calcutta HC Orders Refund

GAURAV ENTERPRISES vs UNION OF INDIA AND ORS CITATION : 2025 TAXSCAN (HC) 2713

The Calcutta High Court addressed the scope of recovery of disputed income tax demands during the pendency of an appeal under the Income Tax Act, 1961, specifically under Sections 143(3), 144B, and 246A. The legal issue involved whether the Income Tax Department could adjust amounts from refunds exceeding the permissible limit while an appeal was pending before the Commissioner of Income Tax (Appeals). The petitioner, Gaurav Enterprises, challenged recovery of ₹5.01 crore from refunds pertaining to other assessment years, arguing that such recovery exceeded the 20% limit prescribed in CBDT Office Memoranda dated 29.01.2016, and 31.07.2017, which restrict recovery during appeal proceedings except in exceptional circumstances.

The bench of Justice Om Narayan Rai held that recovery beyond 20% of the disputed demand during pendency of appeal is impermissible unless the exceptional circumstances under paragraph 4B of the CBDT Office Memorandum are demonstrated. Distinguishing a Delhi High Court ruling cited by the Revenue, the Court noted that no such circumstances existed in this case. The High Court directed the Income Tax authorities to refund the excess amount recovered within eight weeks, allowing the petitioner an opportunity to clarify the quantum of recovery. The Court also requested the appellate authority to expedite disposal of the pending appeal, thereby emphasizing adherence to statutory limits on recovery and the importance of timely adjudication of tax appeals.

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