Supreme Court & High Courts Weekly Round-Up
A Round-Up of the Supreme Court and High Court Cases Reported at Taxscan Last Week
SUPREME COURT
Hiring Global Speakers for Media Summit Does Not Constitute ‘Event Management Service’: Supreme Court
HT MEDIA LIMITED vs PRINCIPAL COMMISSIONER DELHI SOUTH GOODS AND SERVICE TAX CITATION : 2026 TAXSCAN (SC) 121
The Supreme Court examined whether payments made to overseas booking agencies for securing the participation of foreign speakers at the Hindustan Times Leadership Summit were liable to service tax as “event management service” under the Finance Act, 1994. The core legal issue before the Court was whether the activity of booking or hiring speakers, without any involvement in planning, organising, managing, or executing the event, could be brought within the taxable category of event management service under the charging provisions of the Finance Act, 1994.
The Bench comprising Justice J.B. Pardiwala and Justice K.V. Viswanathan held that the contracts entered into by HT Media were limited strictly to booking speakers and did not amount to management of the event. The Court ruled that participation in an event is distinct from management of an event and that the booking agencies had no role in venue management, logistics, publicity, or overall execution of the summit. Emphasising strict interpretation of taxing statutes, the Supreme Court held that the services in question did not fall within the scope of event management service under the Finance Act, 1994, set aside the order of the CESTAT, New Delhi, and allowed the appeals, declaring the service tax demand to be unsustainable.
VAT Classification Dispute on Industrial ‘Felt’ Textile: Supreme Court to Examine if Material is ‘Fabric’ or ‘Machinery Part’
M/S SEALWELL INDUSTRIES THROUGH PARTNER MR ABHIMANYU CHORDIA vs COMMISSIONER CITATION : 2026 TAXSCAN (SC) 122
The Supreme Court is set to examine a challenge arising from a judgment of the Madhya Pradesh High Court concerning the correct classification of “woollen felt components” under the Madhya Pradesh Value Added Tax Act, 2002. The central legal issue was whether industrial felt supplied for use as components of machinery should be classified as “fabric”, taxable at a lower VAT rate of 4%-5%, or as a “machinery part”, attracting a higher rate of VAT of 12.5%-13%. The dispute stemmed from reassessment proceedings initiated for assessment years 2008 to 2014, wherein the Revenue reclassified the product based on audit objections, leading to enhanced tax liability.
The Special Leave Petitions were placed before a Bench comprising Justice J.B. Pardiwala and Justice K.V. Viswanathan. After condoning the delay in filing the petitions, the Supreme Court issued notice to the respondent, returnable in four weeks. The petitions challenged the Madhya Pradesh High Court’s decision, which had upheld the Revenue’s view that the decisive factor for classification under the VAT law was the product’s commercial identity and actual industrial use, and had refused to interfere on the ground that no substantial question of law arose for consideration.
Delegated Legislation has No Force of Law until Published in Official Gazette: Supreme Court on DGFT’s Steel MIP Notification
VIRAJ IMPEX PVT. LTD vs UNION OF INDIA & ANR. CITATION : 2026 TAXSCAN (SC) 123
The Supreme Court examined the legal validity and effective date of a notification issued under the Foreign Trade (Development and Regulation) Act, 1992, introducing Minimum Import Price (MIP) on specified steel products. The central issue before the Court was whether a piece of delegated legislation namely, DGFT Notification No. 38/2015-2020 could acquire the force of law merely upon being uploaded on a government website, or whether publication in the Official Gazette, as mandated under Section 3 of the parent Act, was a mandatory precondition. The dispute arose in the context of importers who had opened irrevocable Letters of Credit prior to the Gazette publication but after online uploading of the notification.
The Bench comprising Justice Pamidigantam Sri Narasimha and Justice Alok Aradhe held that delegated legislation does not become enforceable unless it is published in the Official Gazette, and that mere uploading on a website is insufficient to bind citizens. The Court set aside the judgment of the Delhi High Court and ruled that the notification acquired legal force only on 11.02.2016, the date of its Gazette publication. Emphasising strict compliance with statutory requirements, the Supreme Court held that law “to bind, must first exist,” and existence is contingent upon publication in the manner prescribed by the legislature. Consequently, the Court upheld the entitlement of importers to transitional protection under Para 1.05(b) of the Foreign Trade Policy, quashed the High Court’s ruling, and clarified that delegated legislation cannot operate in a fragmented or anticipatory manner prior to Gazette publication.
Big Relief for Nestlé India: Supreme Court Dismisses ₹101 Crore Income Tax Appeals
THE COMMISSIONER OF INCOME TAX-V vs NESTLE INDIA LIMITED CITATION : 2026 TAXSCAN (SC) 124
The Supreme Court dealt with a batch of civil appeals filed by the Income Tax Department challenging the judgments of the Delhi High Court concerning the allowability of General Licensing Fees paid by Nestlé India Limited under the Income Tax Act, 1961. The core issue pertained to whether the General Licensing Fees paid during the relevant assessment years: 1996-1998, 1999-2001, and 2004-2008 could be disallowed as being excessive or unreasonable, thereby justifying additions and consequent tax demands aggregating to approximately ₹101.21 crore.
The appeals were listed before a Bench comprising Justice B.V. Nagarathna and Justice Ujjal Bhuyan. During the hearing on 13 January 2026, the Additional Solicitor General, appearing for the Income Tax Department, informed the Court that she had instructions to withdraw all the appeals. Recording this statement, the Supreme Court dismissed the civil appeals as withdrawn and directed that all pending applications would also stand disposed of. As a result, the Delhi High Court’s rulings in favour of Nestlé India Limited attained finality, conclusively settling the long-standing tax dispute and granting complete relief to the company.
HIGH COURT
Employees liable to Tax If Employer Deducted TDS but Did not Deposit: Kerala HC Dismisses Writ Appeals
SARATH V.S vs THE COMMISSIONER OF INCOME TAX CITATION : 2026 TAXSCAN (HC) 201
The Kerala High Court examined whether employees can be fastened with income tax liability under the Income Tax Act, 1961 in cases where tax was deducted at source (TDS) from their salaries by the employer but not deposited with the Income Tax Department. The principal legal issue revolved around the interpretation of Sections 199 and 205 of the Income Tax Act, 1961, specifically whether Section 205 bars the Department from raising a tax demand against employees merely because TDS was deducted from salary, even though such tax was never remitted to the Central Government by the employer.
The Division Bench comprising Justice Dr. A.K. Jayasankaran Nambiar and Justice Jobin Sebastian upheld the view taken by the Single Judge and dismissed the employees’ appeals. The Court held that the protection under Section 205 is available only when TDS is deducted and paid in accordance with the statutory scheme, read with Sections 192 and 199 of the Act. Since Section 199 permits TDS credit only upon actual remittance of tax to the Central Government, employees cannot claim such credit as a matter of right where the employer has defaulted in depositing the deducted amount. The Bench clarified that the demand raised was not a prohibited “direct demand” of TDS, but a lawful demand of assessed tax liability, and observed that the appropriate remedy for employees lies in recovering the deducted amounts from the employer. The Court also noted that employees would be entitled to credit if the Department subsequently recovers the tax from the employer.
Kerala HC sets aside GST ITC Denial for FY 2019-20 u/s 16(4), Directs to pass Fresh Orders in as per S. 16(5)
SESAME TECHNOLOGIES PVT LTD vs DEPUTY STATE TAX OFFICER CITATION : 2026 TAXSCAN (HC) 202
The Kerala High Court examined the legality of denial of Input Tax Credit (ITC) under the Central Goods and Services Tax Act, 2017 for the Financial Year 2019-20 by invoking the time restriction under Section 16(4). The core legal issue was whether ITC could be denied solely on the basis of Section 16(4), without considering the subsequently introduced Section 16(5), which relaxes the time limit for availing ITC for specified financial years, including F.Y. 2019-20.
Justice Gopinath P. allowed the writ petition filed by M/s Sesame Technologies Pvt. Ltd. to the limited extent of setting aside the order dated 10.06.2024 insofar as it denied ITC by relying on Section 16(4) alone. The Court directed the competent authority to reconsider the matter afresh by specifically taking into account Section 16(5) of the CGST Act, 2017 and after granting the petitioner an opportunity of hearing. Clarifying that it had not examined the merits of the ITC claim, the High Court left the issue open for independent adjudication by the authority and directed that fresh orders be passed within three months from the date of receipt of a certified copy of the judgment.
Pre-Deposit u/s 129E Customs Act is Mandatory, Waiver Allowed Only in Rare Cases: Karnataka HC Rejects Financial Hardship Plea
M/S.PARISONS FOODS PRIVATE LIMITED vs THE COMMISSIONER OFCUSTOMS CITATION : 2026 TAXSCAN (HC) 203
The Karnataka High Court examined the scope of waiver of the mandatory pre-deposit requirement prescribed under Section 129E of the Customs Act, 1962, in the context of an appeal filed before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The principal legal issue before the Court was whether the requirement of pre-deposit of 7.5% of the duty demand under Section 129E(ii) could be waived by invoking writ jurisdiction under Article 226 of the Constitution on the ground of financial hardship, particularly after the 2014 amendment which made such pre-deposit mandatory.
Justice M. Nagaprasanna dismissed the writ petition filed by M/s Parisons Foods Private Limited, holding that the mandatory pre-deposit under Section 129E cannot be waived except in rare and exceptional circumstances involving grave injustice or extreme hardship. The Court rejected the plea of financial hardship, noting that the petitioner was an established and financially sound commercial entity engaged in large-scale imports for decades. It held that High Court interference in such matters would dilute the legislative intent behind the mandatory pre-deposit regime. The Court further observed that issues relating to the classification of crude palmolein and applicability of exemption notifications involved technical and scientific questions best left to the appellate authority. Consequently, the Court declined to exercise writ jurisdiction and upheld the statutory requirement of pre-deposit, dismissing the petition.
CA Fails to Disclose Public Deposit Liabilities, Asset Ever-Greening: Delhi HC Upholds Three-Month Name Removal from ICAI Register
COUNCIL OF THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA vsS.N. SHIVAKUMAR CITATION : 2026 TAXSCAN (HC) 204
The Delhi High Court considered a reference under Section 21(5) of the Chartered Accountants Act, 1949 seeking confirmation of the punishment imposed by the Institute of Chartered Accountants of India (ICAI) on a Chartered Accountant for professional misconduct. The legal issue before the Court was whether the removal of the respondent-CA’s name from the register of members was justified on account of serious lapses in statutory audit, including failure to disclose public deposit liabilities, failure to detect evergreening of assets, and non-compliance with mandatory regulatory requirements in the audit of Escorts Finance Limited for the Financial Year 2004-2005.
The Division Bench comprising Justice Dinesh Mehta and Justice Vinod Kumar confirmed the punishment imposed by ICAI, upholding the removal of the respondent’s name from the register of members for a period of three months. The Court noted that the respondent had failed to contest the disciplinary proceedings at every stage and that the charges, particularly non-disclosure of accrued interest liability on public deposits and failure to detect inflation of assets by showing cheques as cash were grave and went to the root of financial misrepresentation. Finding no infirmity in the disciplinary process or the decision of ICAI, the High Court confirmed the penalty and further clarified that the respondent’s membership would not stand automatically revived after the suspension period unless he applied afresh in accordance with law.
Payments for Live Telecast of Cricket Matches without Enduring Benefit Not Taxable as Royalty: Delhi HC in Sri Lanka Cricket Case
THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION vs SRILANKA CRICKET CITATION : 2026 TAXSCAN (HC) 205
The Delhi High Court examined whether payments received by Sri Lanka Cricket from Indian broadcasters for live telecast of cricket matches could be taxed as “royalty” under Section 9(1)(vi) of the Income Tax Act, 1961. The central legal issue was whether grant of limited, event-specific rights for live transmission without any right to record, archive, rebroadcast, or otherwise commercially exploit the content amounted to transfer of copyright or use of a “process” so as to fall within the definition of royalty under the Act.
The Division Bench comprising Justice Dinesh Mehta and Justice Vinod Kumar dismissed the appeal filed by the Revenue and upheld the order of the Income Tax Appellate Tribunal in favour of Sri Lanka Cricket. The Court held that live telecast of a sporting event does not constitute a copyrightable work and that royalty presupposes the grant of enduring benefits. It ruled that only where the licensee is conferred rights to record, preserve, re-telecast, or exploit the content beyond the live event can the consideration be treated as royalty. Since the agreements in question confined the rights strictly to live transmission for the duration of the series, with no enduring or residual rights, the payments could not be taxed as royalty under Section 9(1)(vi) of the Income Tax Act.
800 Days Delay in Filing Statement of Affairs: Karnataka HC Holds Official Liquidator’s Recovery Application Barred By Limitation
M/S BENETTON INDIA PRIVATE LIMITED vs OFFICIAL LIQUIDATOR CITATION : 2026 TAXSCAN (HC) 206
The Karnataka High Court examined whether an inordinate delay of over 800 days by ex-directors in filing the statement of affairs could be used to extend the statutory period of limitation for initiating recovery proceedings under the Companies Act, 1956. The core legal issue before the Court was whether a recovery application filed by the Official Liquidator under Section 446(2)(b), relying on a belated statement of affairs and invoking the exclusion of time under Section 458A, was maintainable or barred by limitation.
The Division Bench comprising Justice Jayant Banerji and Justice T.M. Nadaf allowed the appeal filed by Benetton India Private Limited and its Managing Director, setting aside the order of the Company Judge. The Court held that the statutory timelines prescribed under Section 454(3) for filing the statement of affairs must be strictly complied with and that Section 458A provides only a limited exclusion of time, which cannot be stretched to indefinitely extend the period of limitation. It ruled that courts and tribunals have no power to enlarge limitations beyond what is expressly permitted by statute, and that a delayed statement of affairs cannot revive a time-barred claim. Consequently, the recovery application filed by the Official Liquidator was held to be barred by limitation.
Reopening Assessment Twice on Same Issue Unconstitutional, Hits Articles 14 & 300A: Delhi HC in NDTv Founders’ Case
RADHIKA ROY vs DEPUTY COMMISSIONER OF INCOME -TAX CIRCLE 18(1)&ANR. CITATION : 2026 TAXSCAN (HC) 207
The Delhi High Court examined the validity of a second reassessment initiated under Section 148 of the Income Tax Act, 1961 against Dr. Prannoy Roy and Ms. Radhika Roy for Assessment Year 2009-10. The core legal issue was whether the Income Tax Department could reopen an assessment for the same transaction and assessment year after the issue had already been examined in an earlier reassessment, merely by invoking a different charging provision Section 2(24)(iv) instead of Section 2(22)(e). The Court also considered whether such repeated reassessment violated constitutional guarantees under Articles 14, 19(1)(g), and 300A of the Constitution of India.
The Division Bench comprising Justice Dinesh Mehta and Justice Vinod Kumar allowed the writ petitions and quashed the reassessment notices dated 31.03.2016 along with all consequential proceedings. The Court held that subjecting the petitioners to reassessment proceedings for a second time on the very same transaction was arbitrary, amounted to a mere change of opinion, and was without jurisdiction. It ruled that once the foundational facts relating to the interest-free loan had been fully disclosed and examined in the earlier reassessment, the Department could not reopen the case by adopting a different legal provision to tax the same transaction. Holding that Sections 2(22)(e) and 2(24)(iv) are “two sides of the same coin,” the High Court imposed token costs of ₹1,00,000 in each case on the Revenue and affirmed that repeated reopenings offend both statutory law and constitutional protections.
Delhi HC Quashes Income Tax Notices against NDTV Founders, Slaps ₹2 Lakh Costs on Department
RADHIKA ROY vs DEPUTY COMMISSIONER OF INCOME -TAX CIRCLE 18(1)&ANR. CITATION : 2026 TAXSCAN (HC) 207
The Delhi High Court examined the legality of income tax reassessment notices issued in March 2016 to NDTV founders Dr. Prannoy Roy and Ms. Radhika Roy in relation to transactions involving interest-free loans advanced to RRPR Holding Pvt. Ltd., the promoter entity of NDTV. The principal legal issue before the Court was whether the reassessment proceedings were valid in law, particularly in light of earlier scrutiny and appellate proceedings, and whether the Department could reopen completed assessments on the same or substantially similar issues. The matter also arose against the backdrop of disputes relating to capital gains arising from shifting shares into a joint demat account and additions made under the head “Income from House Property.”
The Division Bench comprising Justice Dinesh Mehta and Justice Vinod Kumar quashed the reassessment notices issued to the NDTV founders and directed that all consequential proceedings arising therefrom would also stand quashed. The Court granted complete relief to the assessees, notwithstanding the fact that the Income Tax Appellate Tribunal had earlier granted only partial relief in cross appeals filed by the Revenue and the assessees. While observing that no amount of costs could adequately compensate for the harassment caused by repeated reassessment proceedings, the High Court imposed token costs of ₹2 lakh on the Income Tax Department, directing payment of ₹1 lakh each to Dr. Prannoy Roy and Ms. Radhika Roy. The detailed judgment of the Court is awaited.
Delay Alone Doesn’t Vitiate NPA Order: Delhi HC Upholds DRAT Ruling Restoring SARFAESI Measures Against Company
DHIR INTERNATIONAL PRIVATE LIMITED AND OTHERS vs KARNATAKA BANKLIMITED CITATION : 2026 TAXSCAN (HC) 208
The Delhi High Court examined the legality of an order passed by the Debt Recovery Appellate Tribunal (DRAT) restoring proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, and upholding the classification of the petitioner’s loan accounts as Non-Performing Assets (NPAs) in terms of Reserve Bank of India (RBI) guidelines. The principal legal issue before the Court was whether a delay of about nine months in pronouncement of the DRAT’s judgment could vitiate the decision, and whether the DRAT had erred in reversing the Debts Recovery Tribunal’s (DRT) order and restoring SARFAESI measures initiated by the bank.
The Division Bench comprising Justice Anil Kshetrapal and Justice Harish Vaidyanathan Shankar dismissed the writ petition and upheld the impugned order of the DRAT. The Court held that mere delay in pronouncement of a judgment, by itself, is insufficient to invalidate an otherwise reasoned decision, particularly in appellate fora burdened with heavy caseloads. It observed that unless the delay is shown to have materially affected the reasoning or caused serious prejudice, it cannot be a ground for interference. The Bench also noted that the petitioner had not availed the remedy contemplated in C by seeking early pronouncement of the judgment. Upholding the DRAT’s application of RBI prudential norms and borrower-wise NPA classification, the High Court found no illegality or arbitrariness in the restoration of SARFAESI proceedings and rejected the challenge.
GST Arrest in ₹17.88 Cr Fake ITC Without BNSS Safeguards Illegal: Bombay HC Rules in Favour of Copper Manufacturer
Hemang Bipin Varaiya vs The State of Maharashtra and Ors. CITATION : 2026 TAXSCAN (HC) 209
The Bombay High Court addressed the legality of an arrest under Section 69 of the Goods and Services Tax Act, 2017, where the petitioner had been detained without compliance with safeguards prescribed under Section 35 of the Bharatiya Nagarik Suraksha Sanhita, 2023. The legal issue before the Court was whether an arrest can be effected when a notice has been issued, the assessee has responded, and the statutory requirement of recording reasons in writing for arrest has not been fulfilled. The Court examined whether such non-compliance renders the arrest illegal, especially in cases where offences are punishable with imprisonment up to seven years, and considered the applicability of Supreme Court precedents including Arnesh Kumar v. State of Bihar (2014) and Satender Kumar Antil v. Central Bureau of Investigation (2022).
The Division Bench comprising Justice Bharati Dangre and Justice Shyam C. Chandak held that the arrest of the petitioner, Hemang Bipin Varaiya, proprietor of Mahavir Metal Industries, was illegal. The Court observed that the petitioner had replied to the notice, requested an extension, and assured cooperation, while the authorities failed to record reasons in writing as mandated by Section 35 of the Bharatiya Nagarik Suraksha Sanhita, 2023. The Bench declared the arrest and subsequent remand orders of 17 September 2025 unlawful and granted declaratory relief, noting that such safeguards are mandatory to prevent arbitrary detention and that arrest cannot be exercised without compliance with the statutory procedure.
CA Withdraws LPA against ICAI SCN: Delhi HC Permits Fresh Writ before Single Judge against Final Removal Order
MOHIT BANSAL vs INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA ANDORS CITATION : 2026 TAXSCAN (HC) 210
The Delhi High Court dealt with the procedural challenge concerning a Chartered Accountant’s appeal against the Institute of Chartered Accountants of India (ICAI) under the Chartered Accountants Act, 1949. The legal issue before the Court was whether a Chartered Accountant could directly pursue a Division Bench appeal (Letters Patent Appeal) against the dismissal of a writ petition challenging a Show Cause Notice, or whether he must first approach the Single Judge after a final removal order from membership has been passed.
The Division Bench comprising Chief Justice Devendra Kumar Upadhyaya and Justice Tejas Karia allowed the appellant, Mohit Bansal, to withdraw his Letters Patent Appeal filed against the dismissal of his writ petition and granted him liberty to file a fresh writ petition before the Single Judge challenging the final removal order dated 01 March 2023. The Court observed that the proper procedure requires first approaching the Single Judge against the final order and directed that the writ petition, once filed, should ideally be heard and decided within six months. The ICAI did not object to this course of action, and the LPA was dismissed as withdrawn.
Land Claim Linked to Company in Liquidation Rejected for Want of Originals: Delhi HC Grants Two Weeks to File Documents with OL
SWATANTRA BATRA vs OFFICIAL LIQUIDATOR & ORS. CITATION : 2026 TAXSCAN (HC) 211
The Delhi High Court addressed the legal issue of recognition of claims over assets of a company under liquidation, specifically whether a claimant could be allowed to submit original documents to the Official Liquidator in support of his claim. The Court considered the provisions of Rule 164 of the Companies (Court) Rules, 1959, which allows aggrieved claimants to pursue a statutory appeal when their entitlement over company assets is disputed or rejected. The matter arose after the appellant’s claim over land forming part of the assets of a company under liquidation at Haridwar, Uttarakhand, was rejected by the Official Liquidator due to non‑submission of original documents.
The Division Bench comprising Justice V. Kameswar Rao and Justice Manmeet Pritam Singh allowed the appeal filed by the appellant, Swatantra Batra, condoned delays of 209 days in refiling and 45 days in filing the appeal, and granted him two weeks to submit the original documents, including receipts, to the Official Liquidator. The Bench directed the Official Liquidator to examine the submitted documents and decide the claim in accordance with the law, noting that the relief was consistent with the precedent set in Devender Singh Rawat and that no objection had been raised by the Official Liquidator.
GST Adjudication Order Cannot Travel Beyond SCN, Appellate Authority Errs in Treating Statutory Violation as Mere Technicality: Calcutta HC
M/s. Vedant Road Carriers Pvt. Ltd. & Anr. vs The AssistantCommissioner of West Bengal State Tax, Jorasanko & Jorabagan Charge &Ors. CITATION : 2026 TAXSCAN (HC) 212
The Calcutta High Court addressed the legal issue of whether a Goods and Services Tax adjudication order can be passed on grounds not mentioned in the show cause notice, in the context of Section 75(7) of the Central Goods and Services Tax Act, 2017. The matter arose after Vedant Road Carriers Private Limited, a goods transport agency, received six show cause notices dated 15 March 2023 alleging under‑declaration of outward turnover in its GSTR‑3B returns for multiple financial years. The adjudication order, however, held the petitioner liable under the Forward Charge Mechanism, which was not part of the original notices, raising the question of whether the authorities could rely on new grounds and undisclosed GST Back Office portal data without providing an opportunity for the petitioner to respond.
Justice Om Narayan Rai set aside both the adjudication order and the appellate order, holding that the adjudication could not go beyond the grounds mentioned in the show cause notices and that reliance on undisclosed data violated principles of natural justice. The Court directed the proper officer to rehear the matter, share all relevant material with the petitioner, and pass a fresh adjudication in accordance with law, clarifying that such a procedural violation could not be treated as merely technical.
Ex-Director’s Locus & Surplus Funds Plea Rejected, Liabilities Mandate Asset Sale: Delhi HC Dismisses Company Appeals
V.K. SHARMA vs JVG FINANCE LIMITED CITATION : 2026 TAXSCAN (HC) 213
The Delhi High Court dealt with the legal issue of the rights of ex-directors and subsequent bidders to challenge the auction of a company’s property during liquidation proceedings under the Companies Act, 2013, in the context of ensuring the discharge of outstanding liabilities. The case arose from the liquidation of VG Group companies, following Reserve Bank of India restrictions on deposit acceptance in 1997 and a winding-up order in 2003. The property in dispute, valued at Rs 88.9 crore, was auctioned in January 2024 to Beekalene Fabrics Private Limited, and the appellant, an ex-director, challenged the sale claiming locus and alleging surplus funds with the Official Liquidator that could satisfy liabilities without the auction.
The division bench comprising Justice Anil Kshetrapal and Justice Harish Vaidyanathan Shankar dismissed the appeals, holding that the ex-director had no locus in the matter and that liabilities to statutory authorities, financial creditors, and investors far exceeded available resources. The Court emphasized that the appellant could not dictate which assets were to be sold and that liquidation proceedings pending for 27 years must conclude to protect public deposits. The judgment upheld the lawful auction of the Mumbai property and rejected claims of surplus funds or alternative asset sales, ensuring that the liquidation process proceeds unhindered.
Kerala HC Grants Interim Relief against GST Levy on Group Health Insurance Premiums Paid by Union Bank Retirees
VINOD MUKUNDAN vs UNION OF INDIA CITATION : 2026 TAXSCAN (HC) 214
The Kerala High Court addressed the legal issue of whether Goods and Services Tax under the Goods and Services Tax Act, 2017 can be levied on group health insurance premiums for retired employees and family pensioners of banks. The case arose when retired employees and family pensioners of Union Bank of India, represented by the All India Union Bank Pensioners & Retirees Federation, challenged the imposition of GST on premiums paid for group health insurance for the policy year 2025-26. The appellants contended that such taxation was contrary to the principle of GST exemption on health insurance, which they argued should cover their group policies.
The Division Bench comprising Justice V.G. Arun and Justice Harisankar V. Menon in Writ Appeal No. 111 of 2026 granted interim relief, directing that GST shall not be levied on the insurance premiums for the policy year 2025-26. The Bench clarified that the appellants had provided an undertaking to pay applicable GST if the writ appeal is ultimately decided against them. The matter has been listed for further hearing on February 23, 2026, while the interim order protects the retirees and family pensioners from GST liability on their group health insurance premiums.
Ocean Freight IGST under RCM Not Payable for Pre-2023 Period: Calcutta HC Clarifies ‘Mohit Minerals Ruling’ applies Retrospectively
Sunrise Timply Company Pvt. Ltd. vs Union of India & Ors. CITATION : 2026 TAXSCAN (HC) 215
The Calcutta High Court addressed the legal issue of whether Integrated Goods and Services Tax under the Goods and Services Tax Act, 2017 is payable on ocean freight under the reverse charge mechanism for periods prior to 01.10.2023. The case arose when Sunrise Timply Company Private Limited challenged an Order-in-Original dated 30.01.2025, which imposed a tax liability of ₹18,61,047 for the period July 2017 to March 2018, alleging non-payment of IGST on imported ocean freight under the reverse charge mechanism. The petitioner also contested the rejection of its rectification application dated 25.03.2025, asserting that the Supreme Court had already settled the issue in Mohit Minerals.
Justice Om Narayan Rai held that the demand for IGST on ocean freight under reverse charge for periods before 01.10.2023 could not be sustained. The Court noted that a judgment of a Constitutional Court declaring the law applies retrospectively unless expressly made prospective, while statutory amendments apply prospectively unless expressly made retrospective. It further observed that a notification cannot override the parent statute and must operate within the statute. Accordingly, the High Court set aside both the Order-in-Original dated 30.01.2025 and the rectification rejection dated 25.03.2025, disposing of the matter in favour of the petitioner.
Multi-Noticee in GST ITC Fraud Cases: Delhi HC Clarifies How Adjudicating Authority is Determined
MANIKJEET SINGH KALS vs UNION OF INDIA & ORS CITATION : 2026 TAXSCAN (HC) 216
The Delhi High Court addressed the legal issue concerning the determination of the adjudicating authority in cases under the Central Goods and Services Tax Act, 2017, involving multiple noticees and allegations of fraudulent availment of Input Tax Credit. The case arose when Manikjeet Singh Kals, proprietor of Bharat Facilities, challenged an adjudication order that imposed tax, interest, and penalty demands on him. The dispute originated from an investigation by the Directorate General of GST Intelligence into a purported racket of fake invoices used by several entities to wrongfully claim Input Tax Credit, in which the petitioner’s firm was allegedly involved.
The Division Bench comprising Justice Prathiba M. Singh and Justice Shail Jain held that the adjudicating authority in multi-party cases is determined based on the jurisdiction where the highest tax demand arises, as per applicable circulars and notifications. The Court observed that procedural steps, such as uploading Form DRC-07 by a Superintendent or higher officer, do not affect the validity of the order. Noting that the impugned order specified that appeals lie before the Commissioner (Appeals), Gurugram, the High Court declined to exercise writ jurisdiction and directed the petitioner to raise objections before the appellate authority, disposing of the writ petition.
Best Judgment Assessment u/s 62 cannot Survive Once GST Returns Filed: Andhra Pradesh HC
M/S MUNCHESTER vs THE STATE OF ANDHRA PRADESH CITATION : 2026 TAXSCAN (HC) 217
The Andhra Pradesh High Court addressed the legal issue concerning the validity of best judgment assessment orders passed under Section 62 of the Goods and Services Tax Act, 2017, once the registered person files the pending GSTR-3B returns. The case arose when M/s Munchester, a registered GST dealer, challenged multiple ex-parte best judgment assessment orders for the tax period January 2023 to July 2023 and a common endorsement dated 11.09.2024 issued by the appellate authority rejecting the appeals under Section 107 on the ground of limitation. The petitioner had filed the pending GSTR-3B returns and paid the applicable tax with interest and late fee after the issuance of the assessment orders.
The Division Bench comprising Justice R. Raghunandan Rao and Justice T.C.D. Sekhar held that once the registered person files the pending GSTR-3B returns and pays the tax, the best judgment assessment orders under Section 62 of the Goods and Services Tax Act, 2017 are automatically withdrawn under Section 62(2). The Court set aside the appellate endorsement dated 11.09.2024 and directed that all consequential recovery measures, including garnishee proceedings and attachment of bank accounts, be revoked. The writ petition was allowed with no order as to costs.
No GST on Transfer of Leasehold Rights by State Industrial Development Corporation: Bombay HC holds it Not ‘Supply of Services’
Aerocom Cushions Private Limited vs Assistant Commissioner CITATION : 2026 TAXSCAN (HC) 218
The Bombay High Court addressed the legal issue of whether the sale and transfer of leasehold rights in respect of an industrial plot allotted by the Maharashtra Industrial Development Corporation (MIDC) to a third party for consideration attracts levy under the Goods and Services Tax Act, 2017. The case arose when Aerocom Cushions Private Limited transferred its leasehold rights in an MIDC-allotted industrial plot to M/s Rishita Industries for ₹1,50,00,000, after obtaining MIDC’s consent and paying an additional premium of ₹3,95,650. The Revenue issued a show cause notice demanding Goods and Services Tax of ₹27,00,000, treating the transaction as a taxable supply of service under Section 7(1) of the Goods and Services Tax Act, 2017 read with clause 2(b) of Schedule II.
The Division Bench comprising Justice Anil L. Pansare and Justice Nivedita P. Mehta held that the transaction constituted neither a lease nor a sub-lease, but a transfer of leasehold rights akin to transfer of immovable property. The court noted that the essential elements of a taxable supply of service under Section 7 of the Goods and Services Tax Act, 2017 were absent. Relying on the Gujarat High Court decision in Gujarat Chamber of Commerce and Industry v. Union of India (2025), the court allowed the writ petition and quashed the impugned show cause notice.
GST not Leviable on Statutory Fee Collected by Electricity Regulatory Commission: P&H HC Quashes SCN
Punjab State Electricity Regulatory Commission vs Union of India CITATION : 2026 TAXSCAN (HC) 219
The Punjab & Haryana High Court addressed the legal issue of whether statutory fees such as petition fees, Annual Revenue Requirement (ARR) processing fees, and licence fees collected by a State Electricity Regulatory Commission attract levy under the Goods and Services Tax Act, 2017. The case arose when the GST authorities issued a show cause notice demanding GST on amounts collected by the Punjab State Electricity Regulatory Commission (PSERC) while performing functions under the Electricity Act, 2003. The Commission contended that these fees are collected strictly under statutory mandate in the exercise of quasi-judicial and regulatory functions under Section 86 of the Electricity Act, 2003, and therefore do not constitute consideration for supply of services under the GST law.
The Division Bench comprising Justice Lisa Gill and Justice Ramesh Chander Dimri held that such statutory fees are exempt from GST as they are received in the course of judicial, quasi-judicial, and statutory regulatory functions and do not amount to “consideration” under Section 7 of the Goods and Services Tax Act, 2017. The court relied on the Delhi High Court’s earlier decision in Central Electricity Regulatory Commission v. Additional Director, DGGI, which held that regulatory functions such as tariff regulation, licence issuance, and inter-State transmission regulation cannot be treated as business activity under GST. Observing that the Supreme Court had dismissed the Revenue’s SLP against the Delhi High Court judgment, the High Court set aside the GST notice issued to the Commission.
Income Tax Recovery without Supplying a Copy of Assessment Order Lacks Authority of Law: Delhi HC
PHILCO EXPORTS PRIVATE LIMITED vs ASSISTANT COMMISSIONER OFINCOME TAX CITATION : 2026 TAXSCAN (HC) 220
The Delhi High Court addressed the legal issue of whether the Income Tax Department can recover tax dues without serving the assessment order and statutory demand notice under Section 156 of the Income Tax Act, 1961. The case arose when Philco Exports Private Limited challenged the recovery of ₹11.14 lakh by adjusting refunds from subsequent assessment years against an alleged outstanding demand for Assessment Year 2001-02. The petitioner contended that no statutory liability can arise without a duly served assessment order followed by a demand notice, and that recovery without complying with these mandatory steps violated fundamental legal rights.
The bench comprising Justice Dinesh Mehta and Justice Vinod Kumar held that recovery without service of the assessment order and demand notice is unsustainable and amounts to collection without authority of law. The High Court directed the Income Tax Department to refund ₹11.14 lakh along with applicable interest on or before 31 March 2026, while clarifying that if the Department succeeds in tracing and serving the assessment order by that date, the refund would not be required and the assessee could challenge the assessment under Section 246A without limitation objections. The court also restrained the department from making any further recovery relating to the alleged demand for Assessment Year 2001-02 until the stipulated date.
Is Corporate Guarantee given by Parent Company for Subsidiaries a ‘Supply’ under GST? Bombay HC to hear ₹870 Cr Stake matter
Atlanta Infra Assets Limited vs The Union of India and others CITATION : 2026 TAXSCAN (HC) 221
The Bombay High Court is currently examining the legal issue of whether issuance of corporate guarantees by a parent company for its subsidiaries constitutes a “supply of service” under Section 7 of the Central Goods and Services Tax Act, 2017, and is therefore liable to tax under Section 9. The matter arises from writ petitions filed by Atlanta Infra Assets Ltd., challenging an Order-in-Original passed by the GST authorities that treated corporate guarantees worth ₹870 crore -₹700 crore to Mora Tollways Ltd. and ₹170 crore to Atlanta Ropar Tollways Pvt. Ltd. as taxable supplies. The petitioner contends that providing such guarantees does not amount to a supply under GST law, relying on precedents including the decision in Schloss HMA Pvt. Ltd. v. Union of India (2025) before the Bombay High Court.
The preliminary hearing was conducted by a Division Bench comprising Justice G.S. Kulkarni and Justice Aarti Sathe. The Bench observed that the issue requires careful examination, particularly whether such guarantees constitute intra-state or inter-state supply under the GST law. The Court adjourned the matter to 16 February 2026, to be listed along with other companion matters, and directed that in case any coercive action is contemplated against the petitioner, a clear notice of seven days must be provided.
GST Notices for Old-Cancelled GSTIN Served Only via Portal: Madras HC allows Merger of Old & New GSTIN for ITC Utilisation
Mathusamy Thangamuthu Nachiyar vs The Commissioner Of CommercialTaxes CITATION : 2026 TAXSCAN (HC) 222
The Madurai Bench of the Madras High Court addressed the legal issue of whether notices and assessment orders passed under a cancelled GSTIN (Goods and Services Tax Identification Number) are valid, and whether Input Tax Credit (ITC) utilisation can be continued after obtaining a new GSTIN. The matter arose from writ petitions filed by M/s. Mathusamy Thangamuthu Nachiyar, challenging multiple ex‑parte assessment orders for various financial years issued under the old GSTIN, which had been suo motu cancelled on 31 December 2019. The petitioner argued that notices and reminders were uploaded only on the GST portal under the cancelled GSTIN, depriving it of a fair opportunity to respond, and sought permission to deposit 25% of the disputed tax to contest the matter on merits.
Justice Krishnan Ramsamy observed that the GST authorities could have utilised alternative statutory modes of service under Section 169 of the Goods and Services Tax Act, 2017, such as registered post with acknowledgement due, rather than relying solely on portal notifications. The Court set aside the impugned assessment orders, permitting the petitioner to deposit 25% of the disputed tax from the bank‑attached account and directed the GST department to lift the freeze after payment. Further, the Court allowed the petitioner to continue business under the new GSTIN and ordered the merger of the old and new GSTIN to enable future utilisation of Input Tax Credit.
‘Bunching’ of GST notices across Multiple FYs Not Permissible: Madras HC; Holds Section 74A applicable from FY 2024-25
Tvl.Shot X Retail Private Limited vs The State Tax Officer (ST) CITATION : 2026 TAXSCAN (HC) 223
The Madras High Court addressed the legal issue of whether the Goods and Services Tax authorities can issue a single show cause notice or pass a consolidated assessment order by combining multiple financial years. The matter arose from a challenge by Shot X Retail Private Limited against an assessment order dated 15 December 2025, passed under Section 73 of the Tamil Nadu Goods and Services Tax Act, 2017, where the department issued one consolidated proceeding covering four financial years, FY 2022-23 to FY 2025-26, under the same GSTIN. The petitioner contended that Sections 73 and 74 do not apply to FY 2024-25 and FY 2025-26 following their statutory omission with effect from 1 April 2024, and that clubbing multiple years in a single notice violated settled legal principles.
Justice Krishnan Ramasamy noted that the impugned order combined multiple financial years and issued notices under Section 73 for periods where the provision no longer applied, reflecting total non-application of mind. The High Court quashed the consolidated assessment order and all notices for F.Y. 2024-25 and F.Y. 2025-26 but clarified that the department is free to initiate separate proceedings for each financial year independently in accordance with law.
GST ITC for FY 2017-21Invoices can be Availed till Nov 30, 2021 If Return Filed: Jharkhand HC Orders Reconsideration in Light of S. 16(5)
Tvl.Shot X Retail Private Limited vs Principal Commissioner CITATION : 2026 TAXSCAN (HC) 224
The Jharkhand High Court dealt with the legal issue concerning the availment of Input Tax Credit under the Central Goods and Services Tax Act, 2017, specifically in light of the subsequent insertion of Section 16(5) which permits registered persons to claim ITC for invoices pertaining to Financial Years 2017-18 to 2020-21 if the return is filed by 30 November 2021. The matter arose from a challenge by Manoj Kumar Singh against an appellate order that denied his claim for ITC for the period October 2018 to March 2019. The department had rejected the claim as barred by the time limit under Section 16(4) of the CGST Act.
The Division Bench comprising Chief Justice M. S. Sonak and Justice Rajesh Shankar observed that the insertion of Section 16(5) and guidance issued under CBIC Circular No. 237/31/2024/GST must be taken into account. The High Court quashed the appellate order and remanded the matter to the appellate authority for fresh consideration, directing the authority to decide the appeal within four months while leaving all issues open for determination.
Single GST SCN for Multiple Years Wrongly Aggregates Different Tax Periods with Different Due Dates & Limitations: Bombay HC Quashes Notice
M/s. Marfani Steel Impex vs The Principal Commissioner CITATION : 2026 TAXSCAN (HC) 225
The Nagpur Bench of the Bombay High Court addressed the legal issue of whether a consolidated Show Cause Notice (SCN) spanning multiple financial years could be issued under Section 74 of the Central Goods and Services Tax Act, 2017. The Court observed that each financial year constitutes a separate tax period with independent limitation provisions under Sections 73(10) and 74(10), and therefore, consolidation of SCNs across years contravenes the statutory framework and the due dates applicable to each period. The matter arose from a writ petition filed by M/s Marfani Steel Impex challenging a SCN dated 30 May 2025, which alleged suppression of taxable value and short payment of tax for multiple financial years.
The Division Bench comprising Justice Anil L. Pansare and Justice Nivedita P. Mehta held that the consolidated notice was legally untenable. The Court relied on its prior rulings in M/s Milroc Good Earth Developers v. Union of India (2025) and Rite Water Solutions (India) Ltd. v. Joint Commissioner, CGST & C.Ex., Nagpur (2025), which had established that SCNs must be issued separately for each tax period. The Court quashed and set aside the show cause notice dated 30 May 2025 and granted liberty to the authorities to re-issue notices strictly in accordance with Section 74 of the CGST Act, preserving the statutory year-wise structure.
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