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 28, 2025 to January 03, 2026.

HIGH COURT

GST SCN and Demand Order Issued When ‘Additional Notices’ Tab Not Clearly Visible on Portal: Delhi HC Remands Matter

ARYANSH ALLOYS THROUGH ITS PROP CITATION : 2025 TAXSCAN (HC) 2771

The Delhi High Court ruled that a GST show cause notice and demand order for the period July 2017 to March 2018 could not be sustained, as they were uploaded under the "Additional Notices" tab on the GST portal, which was not clearly visible at the time, denying Aryansh Alloys proper opportunity for personal hearing.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain observed that the petitioner lacked a fair hearing opportunity due to the blank personal hearing column in the notice and unclear portal visibility, violating natural justice principles. The court set aside the demand order, remanded the matter for fresh consideration, granted time till 31.01.2026 for reply, directed proper personal hearing notice via email and mobile, and left notification validity open pending Supreme Court outcome.

Statutory Income Tax Appeal Pending for Over Two Years: Calcutta HC Orders Expeditious Disposal, Refuses Refund Direction without Stay

Dinesh Infraprojects Private Limited &Anr. Vs. The Union ofIndia &Ors CITATION : 2025 TAXSCAN (HC) 2772

The Calcutta High Court addressed the prolonged pendency of a statutory income tax appeal filed against an intimation under Section 143(1) of the Income Tax Act, 1961, in a writ petition by Dinesh Infraprojects Private Limited and another petitioner. The appeal, filed before the appellate authority, remained undecided for over two years despite complaints of delay and adjustments by Revenue Authorities of refundable sums exceeding outstanding tax demands for assessment years 2021 to 2025.

Justice Om Narayan Rai observed that the two-year delay in disposing of the statutory appeal was undesirable, warranting judicial intervention for expeditious resolution, and directed the appellate authority to decide it preferably within eight weeks from the order's communication. The court refused a mandatory refund order for adjusted amounts, noting no stay of demand request, but allowed petitioners to seek relief via representation to the authority for due consideration. The writ petition was disposed of without costs.

Illness of Working Partner Sufficient Ground to Condone Delay in GST Appeal: Calcutta HC Sets Aside Appellate Order

Chanda Construction & Anr vs The State of West Bengal &Ors. CITATION : 2025 TAXSCAN (HC) 2773

The Calcutta High Court condoned the delay in filing a GST appeal under Section 107 of the West Bengal Goods and Services Tax Act, 2017/CGST Act, 2017, against an order passed under Section 73, where petitioners Chanda Construction & Anr. challenged the Appellate Authority's dismissal order dated solely on grounds of delay without reasons.

Justice Om Narayan Rai accepted the working partner's serious illness as a valid cause for the marginal delay, supported by documentary evidence, and held that the Appellate Authority erred in rejecting condonation without disbelieving the facts or assigning reasons, thereby depriving the petitioners of their appellate forum. The court set aside the impugned order, restored the appeal for fresh merits adjudication, and disposed of the writ petition without costs.

Second CRCL Report Prepared without Drawing Fresh Samples of Exported Products: Delhi HC Questions Customs

M/S TRUESPICES INDIA INC vs UNION OF INDIA & ORS CITATION : 2025 TAXSCAN (HC) 2744

The Delhi High Court examined the Customs Department's reliance on a second CRCL report issued without drawing fresh samples from exported tobacco products like pan masala and mouth fresheners, in a writ petition by Truespices India Inc. seeking finalization of shipping bills and release of bank guarantees provided for provisional clearance. the dispute involved provisional export procedures where initial CRCL reports found no issues, yet a later report reclassified the goods as gutka-like, prompting a hold on IGST refunds without a show cause notice.

The Division Bench of Justice Prathiba M. Singh and Justice Shail Jain noted the lack of clarity on the second CRCL report's basis, absence of fresh sampling, and undecided representations by Customs, directing the Commissioner to decide the bank guarantee release and issue any show cause notice. The court disposed of the petition without merits, emphasizing holistic consideration to prevent impact on future exports while preserving all parties' rights and contentions.

Kerala HC Rules NCLT’s Rejection of Resolution Plan Appealable Under Section 61 of IBC

K. SUNIL KUMAR vs UNION OF INDIA CITATION : 2025 TAXSCAN (HC) 2775

The Kerala High Court ruled that an NCLT order rejecting a resolution plan during the Corporate Insolvency Resolution Process (CIRP) of Kasargod Power Corporation Limited is appealable under Section 61 of the Insolvency and Bankruptcy Code, 2016 (IBC), barring writ jurisdiction for MMS Steel & Power Private Limited and K. Sunil Kumar.

The Division Bench of Justice Viju Abraham held that Section 61 provides a comprehensive statutory appeal remedy before the National Company Law Appellate Tribunal (NCLAT) against any Adjudicating Authority order, including rejection of resolution plans, while Section 31 empowers approval or rejection and Section 32 limits grounds only for approval appeals. The court disposed of the writ petitions, granting liberty to pursue NCLAT appeal with exclusion of High Court time from limitation and one-month interim protection continuation.

COVID Restrictions, Health Issues Not Sufficient to Condone Five-Year Delay in Filing ITR by NRI Senior Citizen: Delhi HC

MANJIT SINGH DHALIWAL vs COMMISSIONER OF INCOME TAXINTERNATIONAL TAXATION 01 NEW DELHI CITATION : 2025 TAXSCAN (HC) 2776

The Delhi High Court refused to condone a nearly five-year delay in filing an Income Tax Return (ITR) for assessment year 2020-21 by senior citizen NRI Manjit Singh Dhaliwal, upholding the Commissioner of Income Tax (International Taxation)'s rejection under Section 119(2)(b) of the Income Tax Act, 1961.

The Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar held that cited reasons—ignorance of tax rules, prior health issues and surgeries, and COVID-19 travel restrictions did not constitute "genuine hardship," as ITRs can be filed online globally and legal deadlines demand strict compliance absent exceptional proof. The court dismissed the writ petition, affirming no loss to revenue but emphasizing that lack of awareness or general hardships insufficiently justify extended delays in statutory filings.

₹84 Crore Released to NSEL Settlement Account: Bombay HC Quashes 2015 Proceedings Against 63 Moons

Financial Technologies (India) Limited vs State of Maharashtra CITATION : 2025 TAXSCAN (HC) 2777

The Bombay High Court permitted transfer of ₹84 crore with accrued interest from court deposit to a Settlement Account under a Scheme of Arrangement approved by the NCLT Mumbai, for National Spot Exchange Limited, and quashed 2015 criminal proceedings in a Criminal Writ Petition by Financial Technologies (India) Limited (now 63 Moons Technologies Limited).

The Division Bench of Justice Manish Pitale and Justice Manjusha Deshpande held that the NCLT-approved scheme accounted for pending civil and criminal proceedings, including those before the High Court and Supreme Court, with support from Economic Offences Wing under Maharashtra Protection of Interest of Depositors Act, 1999. The court allowed the interim application to facilitate scheme implementation for creditors and investors, quashed the 2015 notice in justice's interest, directed Registry transfer within stipulated time, and disposed of the writ petition with connected applications.

SEZ Entry Tax Issue Pending Before SC: Calcutta HC Refuses to Give Direction to Issue Clarificatory Circular

Vikram Solar Limited vs State of West Bengal&Ors. CITATION : 2025 TAXSCAN (HC) 2778

The Calcutta High Court refused to direct the State to issue a clarificatory circular on exemption of entry tax for SEZ units' procurement of goods under West Bengal State tax laws, in a writ petition by Vikram Solar Limited seeking consideration of its representation dated October 13, 2025.

Justice concurred with the State that the SEZ entry tax exemption issue, raised before the Taxation Tribunal with assessment orders stayed, was sub-judice before the Supreme Court, rendering a mandamus for clarification impermissible to avoid conflicting with apex court proceedings. The court granted liberty for authorities to consider and dispose of the representation expeditiously without violating Supreme Court orders, abstained from merits opinion, and disposed of the writ petition directing parties to await Supreme Court decision.

Government Entitles to Interest when Tax Paid after Statutory Due Date but Return Filed within Time limit: Bombay HC

UNITED SPIRITS LTD. vs Additional Commissioner of State Tax-II& Appellate Authority, South Goa CITATION : 2025 TAXSCAN (HC) 2779

The Bombay High Court (Goa Bench) upheld the levy of interest under Section 25(4) of the Goa Value Added Tax Act, 2005 (GVAT Act) on delayed payment of VAT for sales of Extra Neutral Alcohol (ENA)/Rectified Spirit (RS)/High Bouquet Spirit (HBS) in F.Y. 2019-20, despite timely filing of returns by United Spirits Ltd., as tax due on the 28th of each month was paid belatedly.

Justice Ashish S. Chavan and Justice Bharati Dangre distinguished between return filing and tax payment timelines, holding that returns without timely tax payment are invalid under GVAT Act, triggering automatic statutory interest from due date irrespective of post-GST confusion on ENA/HBS taxability. The bench rejected arguments of bona fide delay due to unsettled law, noting the assessee collected VAT from buyers, was aware of liability from prior assessments, and that legal confusion cannot defer statutory due dates, dismissing the writ petition.

Bombay HC to Decide on PMLA Attachments Against 63 Moons Following ₹1,950 Cr NSEL Settlement

M/s 63 Moons Technologies Limited vs Union of India & Ors. CITATION : 2025 TAXSCAN (HC) 2780

The Bombay High Court is considering whether PMLA attachments on assets of M/s 63 Moons Technologies Limited linked to the 2013 National Spot Exchange Limited (NSEL) payment default should continue, given the NCLT-approved ₹1,950 crore settlement scheme under Section 230 of the Companies Act, 2013 for affected traders.

The Division Bench of Justice Bharati Dangre and Justice Shyam C. Chandak noted the NCLT scheme's mechanism for claim settlement acknowledging PMLA proceedings, but recognized NCLT clarifications that scheme approval does not override attachments or terminate criminal cases without court orders. The court refrained from immediate release directions, granted time for Enforcement Directorate instructions, and directed re-notification of the interim application challenging Appellate Tribunal order under Section 42 of PMLA, keeping all issues open.

GST Appeal Cannot be Rejected for Non-Filing of Hard Copy: J&K & Ladakh HC says ‘Authorities could have Granted Time’

TC Tours Limited vs Union Territory of J&K and ors CITATION : 2025 TAXSCAN (HC) 2781

The High Court of Jammu & Kashmir and Ladakh held that a GST appeal under Section 107 of the J&K GST Act cannot be rejected solely for non-filing of a hard copy, where TC Tours Limited filed an online appeal on 27.08.2021 within the statutory period against a demand order under Section 73 confirming over ₹17 lakh ITC mismatch for F.Y. 2019-20.

Justice Sindhu Sharma and Justice Shahzad Azeem observed that neither Section 107 nor Rule 108 mandates hard copy submission for electronic appeals, and Rule 108 amendments via S.O 104 removed certified copy requirements when orders are GST portal-uploaded, rendering rejection unsustainable. The court set aside the impugned appellate order, directed fresh adjudication per GST Act mandates, and noted authorities could have granted time for compliance instead of dismissing on hyper-technical grounds violating natural justice.

GST Authorities cannot Continue Bank Attachment after Statutory Pre-Deposit: Calcutta HC allows Appeal Before GSTAT once Functional

S. S. Civil Construction Private Limited vs AssistantCommissioner of Revenue CITATION : 2025 TAXSCAN (HC) 2782

The Calcutta High Court held that GST authorities cannot continue bank attachment or recovery proceedings once statutory pre-deposit under Section 112(8) of the GST Act, 2017 is made, in a writ petition by S. S. Civil Construction Private Limited challenging recovery of ₹2.76 crore after dismissal of its Section 107 appeal against the department's order.

Justice Om Narayan Rai ruled that Section 112(9) automatically stays recovery for the balance amount upon 10% pre-deposit, rendering continued bank attachment unjustified, and directed lifting of attachment within two weeks of deposit while deeming further proceedings stayed. The court addressed fears of additional account attachments, clarified no further risk post-deposit, and permitted appeal filing before the GST Appellate Tribunal upon its functionality.

Clinical Trial Services to Foreign Clients Qualify as Export of Services: Karnataka HC Quashes GST Demand

M/S. IPROCESS CLINICAL MARKETING PVT LTD. vs ASST. COMMISSIONEROF COMMERCIAL TAXES CITATION : 2025 TAXSCAN (HC) 2783

The Karnataka High Court held that clinical trial services provided by IProcess Clinical Marketing Private Limited to foreign clients during April 2018 to March 2019 qualify as export of services under Section 13(2) of the IGST Act, quashing the GST adjudication order and appellate order that treated them as taxable domestic supplies.

Justice S.R. Krishna Kumar observed that recipients were located outside India, making place of supply their location, and ruled Notification No. 04/2019-Integrated Tax dated 30.09.2019 clarificatory per 37th GST Council recommendations, applicable retrospectively despite authorities' prospective application claim. The court set aside both orders, holding no GST liability on such pharmaceutical R&D services including clinical trials exported abroad, and allowed the writ petition.

GST cannot be Levied on Data Management Services Provided toForeign Affiliate: Karnataka HC

IQVIA RDS vs UNION OF INDIA CITATION : 2025 TAXSCAN (HC) 2784

The Karnataka High Court held that data management services provided by IQVIA RDS (India) Private Limited to its US-based affiliate IQVIA Holdings Inc. under a Master Service Agreement qualify as export of services, quashing GST orders treating them as intra-State supplies.

Justice S.R. Krishna Kumar observed that the May 4, 2018 circular specifies the place of supply for software-related services including data management, development, testing, and modification as the recipient's location outside India. The court allowed the writ petitions, set aside GST demands on these exported services, and left all other petitioner issues open without opinion.

100% GST penalty upheld in Wrong Destination in E-Way Bill: MP HC says it ‘Not Mere Clerical Error'

AMARA RAJA BATTERIES LIMITED vs THE STATE OF MADHYA PRADESH ANDOTHERS CITATION : 2025 TAXSCAN (HC) 2785

The Madhya Pradesh High Court upheld a 100% penalty under Section 129 of the MP GST Act against Amara Raja Batteries Limited for incorrect destination city (Indore instead of Jabalpur) in the E-way bill for batteries transported from Ahmedabad warehouse on 26.02.2019, despite paid IGST/SGST of Rs. 2,17,305.

Justice Vivek Rusia and Justice Pradeep Mittal observed that the vehicle passed Indore en route to Bhopal without correction, distinguishing it from minor address errors covered by CBIC circular dated 14.09.2018 Clause 5(c), as this involved an entirely different city with no proof of genuine intent. The court dismissed the writ petition against the notice and appeal order, holding the mistake was not clerical given transit opportunity to rectify and GST officers' reliance on E-way bill for goods tracking.

No Stay on Income Tax Demand as Assessee itself Proposed Instalment Payment before AO: Calcutta HC

M/s. A.D. Electrosteel Co. Pvt. Ltd. and another vs Union ofIndia and others. CITATION : 2025 TAXSCAN (HC) 2786

The Calcutta High Court refused to stay income tax demand notices under Section 156 for A.Y. 2012-13 against A.D. Electrosteel Co. Pvt. Ltd., where the assessee proposed installment payments of outstanding dues including Rs. 8,73,40,410/- with interest under Section 220(2).

Justice Om Narayan Rai noted the ITAT appeal remains unrestored despite the Division Bench order on May 6, 2025 permitting restoration application, and accepted departmental evidence of petitioner's October 17, 2025 email undertaking monthly payments from November 20, 2025, leading to bank account attachment lift. The court directed a decision on Section 220(6) stay application within four weeks, clarified no automatic demand stay from its order, permitted independent departmental recovery actions, and disposed of the writ petition.

Illness of Accountant & Closure of Business are ‘Lame Excuses’ to Condone Delay in GST Appeal: Gujarat HC

TAPI READY PLAST vs STATE OF GUJARAT CITATION : 2025 TAXSCAN (HC) 2787

The Gujarat High Court dismissed a writ petition challenging rejection of a GST appeal under Section 107 filed by M/s Tapi Ready Plast with a delay of 2 months and 16 days beyond the three-month statutory period plus one-month condonation window, against an Order-in-Original following a show cause notice under Section 73 for F.Y. 2018-19 under-declared outward supplies.

Justice A.S. Supehia and Justice Pranav Trivedi held that Section 107(4) permits Appellate Authority to condone delay only up to one additional month upon sufficient cause, with no power beyond the aggregate five-month maximum, referencing Supreme Court precedents in Glaxo Smith Kline (2020) and Singh Enterprises (2007). The court characterized the accountant's illness and business closure as "lame excuses" insufficient to invoke Limitation Act discretion or override statutory limits, refused interference, and upheld the Appellate Authority's April 23, 2025 rejection order.

New GST Registration used to Clear Rs. 37 Lakh Railway Payment After Contractor’s Death: Allahabad HC Refuses Discharge of Co-Accused

Beena Parihar vs Central Bureau of Investigation/Anti Corruption CITATION : 2025 TAXSCAN (HC) 2788

The Allahabad High Court, Lucknow Bench, refused to discharge Beena Parihar as co-accused in a CBI anti-corruption case under IPC and Prevention of Corruption Act provisions, where a new GST registration obtained post-contractor Ajit Kumar Singh's death on 30.01.2021 enabled clearance of Rs. 37,11,709 railway payment to Chauhan Constructions on 14.01.2022.

Justice Saurabh Lavania held that at discharge stage, unrebutted record evidence including proprietorship takeover, fresh GST registration, addendum entry in railway records, payment receipt, and Rs. 30 lakh transfer to joint firm with co-accused husband sufficiently indicated coordination and conspiracy involvement. The court dismissed the criminal revision, finding no interference warranted as detailed evidence appraisal impermissible pre-trial, and directed proceedings to continue per law.

LoC Condition under Notification Inapplicable to Non‑LoC Exporters: Chhattisgarh HC Orders Refund of ₹2.01 Cr Customs Duty on Parboiled Rice Exports

M/s Eastman International vs Union of India CITATION : 2025 TAXSCAN (HC) 2789

The Chhattisgarh High Court ruled that Condition No. 6(ii) of Notification No. 50/2023-Customs dated 25.08.2023 requiring irrevocable letters of credit for export duty exemption on parboiled rice does not apply to exporters like Eastman International who realize proceeds through cash-on-delivery, quashing the levy of ₹2,01,28,295 duty on consignments entered ICD CONCOR Naya Raipur pre-cutoff.

ChiefJustice Ramesh Sinha and Justice Bibhu Datta Guru held that export via LoC lacks statutory mandate, invoking lex non cogit ad impossibilia as non-LoC exporters cannot retrospectively comply, rejecting conjunctive reading of clauses (i) and (ii) as mechanical and violative of Article 14 equality. The court directed refund with interest within eight weeks, noting the condition's temporary nature till 15.10.2023 served protective purposes already fulfilled by realized proceeds, leaving broader constitutional challenges open without costs.

Marketing & Technical Support Services to Foreign Group Company Qualify as Export of Services, Not ‘Intermediary Services’: Karnataka HC

M/S EXCELPOINT SYSTEMS (INDIA) PVT LTD vs JOINT COMMISSIONER OFCENTRAL TAX CITATION : 2025 TAXSCAN (HC) 2790

The Karnataka High Court held that marketing support and technical support services provided by Excelpoint Systems (India) Pvt. Ltd. to its Singapore group company Excelpoint Systems Pte. Ltd. under an agreement qualify as zero-rated export of services under GST law, not intermediary services under Section 2(13) of the IGST Act.

Justice S.R. Krishna Kumar observed that the petitioner rendered support services on a principal-to-principal basis without arranging or facilitating supplies between the foreign entity and its customers, distinguishing it from intermediary activities involving three-party transactions. The court set aside the Assistant Commissioner's refund rejection and Joint Commissioner's appellate upholding for April 2021-March 2022 claiming Rs. 18,92,697 ITC refund, applied prior judgments including Amazon and Columbia Sportswear, directed refund with interest within three months, and allowed the writ petition.

Income Tax Dept’s NFAC has Exclusive Power to issue Notice u/s 148: Punjab & Haryana HC

MADAN LAL vs UNION OF INDIA AND OTHERS CITATION : 2025 TAXSCAN (HC) 2791

The Punjab and Haryana High Court held that only the National Faceless Assessment Centre (NFAC) holds exclusive jurisdiction to issue reassessment notices under Section 148 of the Income Tax Act, 1961, rendering notices by jurisdictional Assessing Officers invalid under the CBDT Notification dated 29.03.2022 mandating faceless scheme compliance.

Justice Lisa Gill and Justice Meenakshi I. Mehta disposed of Madan Lal's petition challenging the Section 148 notice, following the precedent in Jatinder Singh Bhangu where similar notices were set aside. The court affirmed that Sections 144B, 151A with the notification establish faceless applicability from notice issuance stage, rejecting jurisdictional AO authority as circulars cannot override unambiguous statutory provisions.

GST DRC-13 Cannot be issued against Independent Company Merely Due to Common Director: Karnataka HC orders Refund with Interest

M/S RAMMS INDIA PRIVATE LIMITED vs THE DEPUTY COMMISSIONER OFCOMMERCIAL TAXES CITATION : 2025 TAXSCAN (HC) 2792

The Karnataka High Court ruled that GST authorities cannot raise demands or recover dues through Form GST DRC-13 from an independent third-party company like M/s Ramms India Private Limited merely due to common directors with the defaulting taxpayer XRMPL, as corporate separateness prevails absent garnishee status.

Justice S.R. Krishna Kumar held that distinct juristic entities under the Companies Act require independent assessment and recovery proceedings, rejecting common directorship as insufficient basis to lift the corporate veil or invoke garnishee action against Ramms for XRMPL's Section 73 dues. The court quashed the recovery of Rs. 24.73 lakhs from petitioner's bank account, directed refund with interest following precedent in SJ Prime Corporation Pvt. Ltd., and clarified no legal authority exists for such inter-company liability transfer.

Custodial Interrogation Not Mandatory in GST Fake ITC Cases Punishable up to 5 Years: Karnataka HC Grants anticipatory Bail

AKRAM PASHA vs ENIOR INTELLIGENCE OFFICER DGGI CITATION : 2025 TAXSCAN (HC) 2793

The Karnataka High Court granted anticipatory bail to Akram Pasha, proprietor of a steel trading concern accused of fraudulent availment and passing of fake Input Tax Credit (ITC) through bogus invoices, holding that custodial interrogation is not mandatory for offences under Sections 132(1)(b) and 132(1)(c) of the CGST Act punishable by up to five years imprisonment.

Justice Shivashankar Amarannavar observed that GST offences are compoundable under Section 138 except specified circumstances, diluting their heinousness despite economic nature, and records like transactions and returns on GST portal reduce arrest necessity post-DGGI summonses under Section 70. The court distinguished from P. Chidambaram v. Directorate of Enforcement, ruling arrests not default for bail decisions, imposed Rs. 5 lakhs bond with conditions requiring cooperation, as departmental information obtainable without custody.

Transfer Pricing Dispute: Delhi HC Refuses to Condone Income Tax Department’s 1285-Day Delay in Re-Filing Appeal

PR. COMMISSIONER OF INCOME TAX -7 vs M/S TCK ADVISERS PVT. LTD. CITATION : 2025 TAXSCAN (HC) 2794

The Delhi High Court dismissed the Income Tax Department's appeal against an ITAT order upholding the Dispute Resolution Panel's exclusion of comparables in a transfer pricing adjustment for TCK Advisers Pvt. Ltd., due to a 1285-day unexplained delay in re-filing.

Justice V. Kameswar Rao and Justice Vinod Kumar held that condonation of delay requires reasonable explanation covering the entire period, which revenue failed to provide despite procedural lapse. The court found no substantial question of law in DRP/ITAT's detailed factual analysis and dismissed on both delay and merits grounds.

ECIR Registered 9 Years After Alleged PMLA Offence, Main Accused Still Free: Delhi HC Grants Bail to Co-Accused

SANDEEPA VIRK vs DIRECTORATE OF ENFORCEMENT CITATION : 2025 TAXSCAN (HC) 2795

The Delhi High Court granted regular bail to Sandeepa Virk in a money laundering case stemming from a 2016 Mohali FIR alleging Rs. 6 crore fraud for a film role, where ED registered ECIR in August 2025 nearly nine years later and arrested her swiftly despite main accused Amit Gupta remaining a proclaimed offender.

Justice Swarna Kanta Sharma noted relaxed PMLA bail conditions for women, completed investigation, petitioner's months-long custody, Rs. 2.7 crore partial restitution, and lack of charge-sheeting in prior proceedings, rejecting ED claims of evidence destruction amid delayed ECIR filing. The court imposed conditions including passport surrender, investigation cooperation, and non-influence of witnesses, clarifying observations limited to bail without prejudice to trial merits.

No SCN Issued for in GST Fraud Case: Delhi HC allows to Operate Attached Bank A/c with Minimum Balance of Rs. 50L

SL GOLDEN PAPTECH PVT vs THE PRINCIPAL ADDITIONAL DIRECTORGENERAL CITATION : 2025 TAXSCAN (HC) 2796

The Delhi High Court permitted operation of SL Golden Paptech Pvt Limited's attached bank account maintaining a minimum Rs. 50 lakhs balance, balancing revenue protection against GST fraud allegations with petitioner's business continuity needs.

Justices Prathiba M. Singh and Justice Shail Jain noted absence of show cause notice, unquantified Rs. 17.92 crores alleged liability (Rs. 8.96 crores tax plus penalty/interest), missing 2020-2023 data from search, but acknowledged petitioner's Rs. 2 crores deposit (25% of tax) and attached properties including Rs. 1.2 crores bank balance. The court granted partial operational relief absent formal quantification, protecting revenue while enabling business operations post-search findings.

PMLA Twin Conditions and Triple Test Satisfied: Delhi HC Grants Bail to Accused in ₹48,000 Crore Illegal Investment Scheme Case

HARSATINDER PAL SINGH HAYER vs DIRECTORATE OF ENFORCEMENT CITATION : 2025 TAXSCAN (HC) 2797

The Delhi High Court granted bail to Harsatinder Pal Singh Hayer, former director implicated in the ₹48,000 crore PACL Ltd. illegal investment scheme, finding both PMLA Section 45 twin conditions and general triple test satisfied in the case originating from a 2014 CBI FIR.

Justice Neena Bansal Krishna noted the applicant's late addition via May 2025 second supplementary complaint despite 2016 ECIR and prior charge sheets/prosecution complaints omitting him, with most fund transfers predating his directorship and family ties as sole linkage. The court rejected ED opposition citing completed documentary investigation, applicant's consistent cooperation including court-permitted foreign travel, lack of flight risk, and absence of compelling late-stage March 2025 arrest justification, granting bail without specified conditions detailed.

Charitable Status Recognised u/s 12A cannot Cease under FCRA: Madras HC sets aside Rejection, Orders Reconsideration

Arsha Vidya Parampara Trust vs The Union of India CITATION : 2025 TAXSCAN (HC) 2798

The Madras High Court ruled that Section 12A charitable recognition under the Income Tax Act, 1961 for Arsha Vidya Parampara Trust cannot be negated under the Foreign Contribution (Regulation) Act, 2010 (FCRA), setting aside rejection of its FCRA registration application.

Justice GR Swaminathan held the first rejection ground unsustainable as foreign fund receipt violations were compounded via Rs. 3,70,500 payment, wiping the slate clean, with no prior notice on alleged fund transfers violating natural justice. The court rejected the religious nature claim, citing Bhagavad Gita's philosophical status per Allahabad High Court precedent, Vedanta as ancestral philosophy, and yoga's universality, reinforced by ITAT's Section 12A charitable status persisting under FCRA Section 52. The impugned order was quashed with directions for reconsideration within three months.

Delhi HC Flags Incongruity in Provisional Release Provisions under GST, Refers Issue to GST Council to Decide Policy

PHX ELECTRONICS PVT. LTD vs COMMISSIONER CGST AND CENTRAL EXCISECITATION : 2025 TAXSCAN (HC) 2799

The Delhi High Court identified a policy gap between Section 67(6) of the CGST Act and Rule 140(1) of CGST Rules regarding provisional release of seized goods in suspected GST evasion cases like PHX Electronics Pvt. Ltd.'s ₹1.34 crore televisions and motherboards, referring the issue to the GST Council for resolution.

Justices Prathiba M. Singh and Shail Jain noted Section 67(6)'s flexibility for bond/security or tax-interest-penalty payment contrasts Rule 140's strict bank guarantee requirement for unquantified demands, creating practical infeasibility during prolonged pre-adjudication despite SCN mention of release option. The court directed placing the matter before GST Council for suitable mechanisms accommodating perishable/depreciating goods, refrained from merits adjudication amid jurisdictional disputes, ordered SCN reply submission, and CBIC copy-sharing without quashing the Section 130 notice.

SIM Cards, Recharge Coupons, VAS Not ‘Goods’ Under KVAT Act: Kerala HC Quashes Assessment Order Against Airtel

M/S. BHARTI AIRTEL LIMITED vs UNION OF INDIA CITATION : 2025 TAXSCAN (HC) 2800

The Kerala High Court quashed the assessment order against Bharti Airtel under the Kerala Value Added Tax Act, 2003 (KVAT Act), ruling that SIM cards, recharge coupons, fixed monthly charges, and value-added services like SMS, ringtones, and music downloads do not qualify as "goods" subject to KVAT.

Justice Dr. AK Jayasankaran Nambiar and Justice Jobin Sebastian held that merger principles inapplicable as prior Division Bench reserved statutory remedies liberty, directly applying Supreme Court affirmed Andhra Pradesh High Court precedent in State of Andhra Pradesh v. Bharat Sanchar Nigam Ltd. (2012) classifying such telecom services outside VAT goods definition. The court allowed the writ appeal, set aside KVAT demands on these items despite Section 25(1) limitation disputes, rejecting State's distinction attempts as futile against binding precedent without further appeal.

20% Pre-Deposit Not Mandatory for Grant of Stay u/s 220(6) of Income Tax Act: Delhi HC

CLEARMEDI HEALTHCARE PRIVATE LIMITED vs DEPUTY COMMISSIONER OFINCOME-TAX CITATION : 2025 TAXSCAN (HC) 2801

The Delhi High Court ruled that Assessing Officers cannot mechanically refuse stay applications under Section 220(6) of the Income Tax Act, 1961 solely for non-payment of 20% disputed demand, as CBDT office memos do not mandate such pre-deposit.

Justice V. Kameswar Rao and Justice Vinod Kumar held that Section 220(6) confers discretionary power requiring consideration of prima facie merits, financial hardship, and revenue protection, rather than rigid administrative instructions. The court set aside the AO's rejection order against Clearmedi Healthcare Private Limited for A.Y. 2023-24, remanding for fresh adjudication per settled law, as the mechanical approach demonstrated non-application of mind.

No Documentary Proof of Hearing Notice Dispatch Alone Doesn’t Mean Natural Justice Violated: Delhi HC in GST Fake ITC Case

VDR COLORS AND CHEMICALS PVT vs COMMISSIONER OF DELHI CITATION : 2025 TAXSCAN (HC) 2802

The Delhi High Court held that absence of documentary proof for dispatching personal hearing notices does not automatically violate natural justice principles in fraudulent Input Tax Credit (ITC) cases, where petitioners VDR Colors and Chemicals Pvt. Ltd., A.V. Metals Marketing Pvt. Ltd., and Surender Kumar Jain were aware of proceedings via Show Cause Notice and filed replies.

Justice Prathiba M. Singh and Justice Shail Jain observed petitioners' vague replies failed to address DGARM-reported bogus transactions through non-existent Paramount Enterprises chain availing Rs. 18.24 crore ITC without goods movement, despite recorded hearing opportunities and recorded statements (later retracted). The court declined writ jurisdiction for complex factual ITC fraud matters appealable under Section 107 CGST Act, directing appeals with pre-deposit by 31.01.2026 to avoid limitation dismissal, disposing petitions while preserving all rights and contentions.

Validity of GST Notifications Extending Adjudication Timelines Pending before SC: Delhi HC allows to file Appeal by Jan 31, 2026

BHUTANI AUTOMOBILES LLP vs UNION OF INDIA & ORS. CITATION : 2025 TAXSCAN (HC) 2803

The Delhi High Court declined to adjudicate the validity of GST Notifications No. 09/2023 (Central/State Tax) issued under Section 168A of the CGST Act extending adjudication timelines, noting the issue pending before the Supreme Court in Bhutani Automobiles LLP's challenge to an order against a show cause notice for F.Y. 2017-18.

Justice Prathiba M. Singh and Justice Shail Jain observed the adjudication order appeared issued without adequate personal hearing opportunity despite petitioner's prior show cause notice reply, rendering it suitable for appellate remedy under Section 107. The court directed that appeals filed by 31.01.2026 with requisite pre-deposit would not face limitation dismissal and must be decided on merits, disposing the writ petition while preserving all rights and contentions.

EOU Licence from DoC Not Equivalent to DPIIT Licence for Defence Tenders: Delhi HC dismisses Bidder’s Challenge

MKU LIMITED AND ANR vs UNION OF INDIA CITATION : 2025 TAXSCAN (HC) 2804

The Delhi High Court dismissed writ petitions by MKU Limited challenging its technical disqualification from Army tenders for ballistic helmets, bullet-proof jackets, and night-vision equipment, ruling that an Export Oriented Unit (EOU) licence from the Department of Commerce (DoC) does not equate to a Department for Promotion of Industry and Internal Trade (DPIIT) industrial licence required under tender conditions.

Chief Justice Devendar Kumar and Justice Tushar Rao Gedela Upadhyaya held that despite both issuing under the Industries (Development and Regulation) Act, 1951 within the Ministry of Commerce and Industry, DoC EOU licences and DPIIT defence licences operate under distinct regulatory frameworks involving different processes, committees, and security vetting including Ministry of Home Affairs involvement absent in EOU approvals. The court found no arbitrariness in bid rejection as tenders explicitly mandated DPIIT licences, which MKU lacked, rejecting claims of DoC acting as DPIIT delegate for EOUs or absence of statutory distinction under IDRA, 1951 or Defence Acquisition Procedure 2020.

Section 25(4) of Customs Act Declared Arbitrary: Karnataka HC Orders Refund to Patanjali Foods

M/S PATANJALI FOODS LIMITED vs UNION OF INDIA CITATION : 2025 TAXSCAN (HC) 2805

The Karnataka High Court declared Section 25(4) of the Customs Act, 1962, as amended by the Finance Act, 2016, unconstitutional and arbitrary, ordering ₹3.40 crore refund to Patanjali Foods (formerly Ruchi Soya Industries) for differential basic customs duty on crude palm oil reassessed post-Notification No. 29/2018-Cus dated 01.03.2018 raising rate from 30% to 44%.

Justice S.R. Krishna Kumar applied Supreme Court precedent in Union of India v. G.S. Chatha Rice Mills (2021) and High Court rulings from Andhra Pradesh, Gujarat, Delhi, and Madras, holding notifications effective only upon electronic Gazette publication on 06.03.2018, not issue date, as bills of entry submitted 01.03.2018/02.03.2018 crystallised duty at prior 30% rate. The court quashed reassessments under Section 25(4) for violating publication requirements under Sections 25(1)/(2A), rule of law principles from Harla v. State of Rajasthan (1952), and Information Technology Act, 2000 e-publication mandates, directing refund with interest within three months.

Post-Decisional Hearing Cannot Cure Lack of Proper Hearing: Calcutta HC Quashes GST Registration Cancellation by Different Authority

S.K.M. Timber vs Superintendent CITATION : 2025 TAXSCAN (HC) 2806

The Calcutta High Court quashed a GST registration cancellation order under Section 29(2) of the CGST/WBGST Act, 2017 passed against S.K.M. Timber Private Limited following a show cause notice holding that the order violated natural justice principles.

Justice Om Narayan Rai ruled that the final cancellation order issued by the Superintendent after personal hearing by the Assistant Commissioner defied the principle that the authority hearing must decide, constituting a non-speaking order lacking reasons or application of mind. The court rejected the GST department's post-decisional hearing proposal as impermissible for orders passed without reasoning, directed fresh hearing based on petitioner's SCN reply, and set aside the impugned order as arbitrary and void.

Income Tax Assistant Took ₹600 Bribe in 2011: Patna HC Upholds 1-Year Imprisonment in 2025

Ram Narayan Singh vs The State of Bihar CITATION : 2025 TAXSCAN (HC) 2807

The Patna High Court upheld the conviction and sentence of Income Tax Assistant Ram Narayan Singh under Sections 7 and 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988, for demanding and accepting a ₹600 bribe in 2011 to process a ₹5,826 income tax refund for Sahara India field worker.

Justice Alok Kumar Pandey confirmed prosecution proof beyond reasonable doubt through consistent witness testimonies (12 including complainant, shadow witness, trap team, IO), phenolphthalein-treated currency recovery, chemical tests, and Section 20 presumption unrebutted despite defence claims of non-entitlement to refund processing. The court affirmed concurrent rigorous imprisonment sentences six months plus ₹2,500 fine under Section 7; one year plus ₹2,500 under Section 13(2) cancelled bail, and directed immediate surrender after 14-year proceedings originating from March 2011 CBI complaint and trap, rejecting inconsistencies arguments as untenable.

GST ITC Utilisation Up to 90% is Not a Bar to Refund: Delhi HC Directs Dept to Pay Refund of Rs. 25,16,760 with Interest

PHOENIX IMPEX vs SALES TAX OFFICER CLASS II AVATO & ANR. CITATION : 2025 TAXSCAN (HC) 2808

The Delhi High Court directed GST authorities to credit Phoenix Impex's sanctioned refund of Rs. 25,16,760 for unutilised Input Tax Credit (ITC) from November 2023, filed January 15, 2024 under ARN No. AA0701240394778, along with statutory interest due to delayed processing beyond Section 54 CGST Act timelines.

Justices Prathiba M. Singh and Justice Shail Jain noted the September 19, 2025 refund order omitted interest despite prior show cause notice on August 21, 2025 regarding supplier M/s Garg Enterprises' Rule 86B compliance, following petitioner's reliance on Suraj Mangar precedent mandating timely processing. The court ordered payment within one month, disposed of the writ petition keeping the refund order subject to final proceedings outcome after personal hearing directions and departmental reply.

Technical Glitches Cannot Deny Legitimate Credit: Delhi HC Directs GST Dept. to Reflect Rs. 99.18 Lakh Transitional ITC on ECL

CLYDE PUMPS PRIVATE LIMITED vs UNION OF INDIA & ORS. CITATION : 2025 TAXSCAN (HC) 2809

The Delhi High Court ruled that Input Service Distributors (ISDs) like Clyde Pumps Private Limited cannot be denied transitional Input Tax Credit (ITC) of ₹99,18,972 from eligible CENVAT credit for March-June 2017 merely due to GST portal glitches preventing TRAN-1 filing during the initial transition.

Justices Prathiba M. Singh and Justice Shail Jain held Sections 20 and 140(7) of the CGST Act explicitly recognise ISD rights to carry forward and distribute pre-GST credits, rejecting departmental claims that ISDs lack Electronic Credit Ledger (ECL) maintenance or TRAN-1 filing ability. The court directed crediting recorded TRAN-1 ITC to ECL within three months, subsequent distribution to units within one month, and GSTN-Delhi GST coordination, applying precedents like Vision Distribution (2019) and Dell International (2025) against penalising taxpayers for systemic failures, disposing the petition.

Customs to Release Seized Gold within Two Weeks: Delhi HC Enforces OIO, Limits Warehousing Charges to Pre-Order Period

RAMESH KUMAR JANGIR vs COMMISSIONER OF CUSTOMS CITATION : 2025 TAXSCAN (HC) 2810

The Delhi High Court directed the Customs Department to implement an Order-in-Original permitting release of seized gold items: a chain as personal effects without duty and two pieces upon customs duty payment for passenger Ramesh Kumar Jangir arriving from Kuwait via IGI Airport in February 2024.

Justices Prathiba M. Singh and Justice Shail Jain held that once the Department accepted the adjudication categorizing items under Baggage Rules, 2016 with no penalty, implementation must occur within two weeks without warehousing charges post-July 29, 2025, though prior period charges apply. The court ordered petitioner appearance before Customs nodal officer for compliance, immediate release upon duty fulfilment, and disposed of the petition affirming voluntary red channel declaration warranted no undue detention post-adjudication.

Customs Duty on Gold: Delhi HC Upholds Mandate u/s 110(2) of Customs Act, Directs Release of Seized Gold Due to Non-Issuance of SCN

SUHEL KHAN vs COMMISSIONER OF CUSTOMS CITATION : 2025 TAXSCAN (HC) 2811

The Delhi High Court directed Customs authorities to release Suhel Khan's detained 116.60-gram gold bar from Saudi Arabia arrival on May 19, 2024 at IGI Airport upon payment of applicable customs duty, redemption fine, and penalty, despite no Show Cause Notice under Sections 110 and 124 of the Customs Act, 1962.

Justice Prathiba M. Singh and Justice Shail Jain noted petitioner's personal hearing undertaking on May 15, 2025 to pay dues, Supreme Court precedent in Union of India v. Jatin Ahuja required SCN within six months or written extension, and absent formal notice rendering continued detention unlawful absent payment agreement. The court waived warehousing charges, appointed a nodal officer for compliance, required petitioner appearance before Customs, and disposed of the writ petition affirming release post-financial fulfilment per recorded commitments.

Delhi High Court Sets Aside Ex-Parte GST Order Against Logistics Firm, Remands Matter for Fresh Adjudication

HKX LOGISTICS INDIA PRIVATE LIMITED vs SALES TAX OFFICER CITATION : 2025 TAXSCAN (HC) 2812

The Delhi High Court set aside an ex-parte GST adjudication order passed against HKX Logistics India Private Limited for FY 2019-20 pursuant to a show cause notice holding that notices uploaded solely under the GST portal's "Additional Notices" tab failed to provide effective hearing opportunity.

Justices Prathiba M. Singh and Justice Shail Jain ruled the order unsustainable per Sugandha Enterprises v. Commissioner, Delhi GST (2025), despite constitutional challenges to Notification No. 56/2023 (Central Tax) extending limitation periods pending Supreme Court adjudication following divergent High Court views including Telangana's invalidity finding. The court imposed ₹20,000 costs, granted time till January 15, 2026 for comprehensive SCN reply, directed fresh personal hearing notice, and clarified any new order subject to Supreme Court outcome on notifications' validity, disposing the petition restoring merits contestation rights.

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