SUPREME COURT

Win for GE Entities: Supreme Court Upholds Delhi HC Order Quashing Reassessment Notices Over Alleged PE in India

ASSISTANT COMMISSIONER OF INCOME TAX & ANR vs M/S GE STEAM POWER SYSTEMS CITATION : 2026 TAXSCAN (SC) 191

The Supreme Court of India dismissed a Special Leave Petition filed by the Income Tax Department against GE Steam Power Systems and other GE group entities, upholding the Delhi High Court’s decision quashing reassessment notices issued under Section 148 of the Income Tax Act.

The High Court explained that reopening of assessments requires tangible material and cannot be based on general findings from a survey without a clear link to the assessee’s case. On this basis, it set aside the reassessment notices.

Aggrieved by this decision, the Revenue approached the Supreme Court. The Bench comprising Justice J.B. Pardiwala and Justice Vijay Bishnoi observed that, after considering the material on record, no ground was made out to interfere with the High Court’s judgment.

Reopening for Escaped Income Beyond Six‑Year Limit Held Time‑Barred: SC upholds Delhi HC Ruling

ASSISTANT COMMISSIONER OF INCOME TAX vs MOHD ATHAR ANJUM CITATION : 2026 TAXSCAN (SC) 192

The Supreme Court of India dismissed the Income Tax Department’s Special Leave Petition challenging a Delhi High Court order that had quashed a reassessment notice issued beyond the statutory six‑year period under the Income Tax Act, 1961.

The Division Bench of Justices Vibhu Bakhru and Tejas Karia agreed, observing that the impugned notice was issued after the permissible six‑year period and therefore time‑barred. The Court set aside both the notice and the subsequent reassessment order dated 15 March 2025, holding that the department could not invoke the extended limitation retrospectively.

When the matter reached the Supreme Court, the bench of Justices J.B. Pardiwala and Vijay Bishnoi condoned the delay in filing but found no reason to interfere with the High Court’s reasoning.

HIGH COURT

Telangana HC Grants Pre-Arrest Bail in Alleged ₹167 Lakh Misappropriation Linked to IBC Liquidation

Sanjay Kumar Makhariya vs The State of Telangana CITATION : 2026 TAXSCAN (HC) 609

The Telangana High Court granted pre‑arrest bail to a former director of G.S. Biotech Limited, who was accused of misappropriating ₹167 lakh in government compensation after the company entered liquidation under the Insolvency and Bankruptcy Code (IBC).

The court held that the petitioner was directed to surrender before the Station House Officer, CCS (DD) Police Station, Hyderabad, within two weeks and be released on bail upon executing a personal bond of ₹25,000 with two sureties. He must cooperate with the investigation and appear before the Investigating Officer every Wednesday between 9am and 5pm for eight weeks or until the charge sheet is filed, whichever is earlier.

Gauhati HC Sets Aside ₹10.13 Cr Service Tax Demand on Hospital:Rules Healthcare Services Exempt  Under Notification

Green Valley Diagnostics & Hospitals Pvt Ltd vs Union of India CITATION : 2026 TAXSCAN (HC) 610

The Gauhati High Court set aside a ₹10.13 crore service tax demand raised against Green Valley Diagnostics & Hospitals Pvt. Ltd., Dibrugarh, holding that healthcare services rendered by a clinical establishment are exempt under Notification No. 25/2012‑Service Tax dated 20 June 2012.

The Court observed that the tax authorities had relied only on income‑tax data without examining the nature of the services provided, and ruled that such reliance cannot establish service‑tax liability for exempt medical services.

The High Court quashed the Order‑in‑Original dated 25.03.2022, which had confirmed the ₹10.13 crore demand, equal penalty, and interest. it declared the demand unsustainable, illegal, and without jurisdiction, since the petitioner’s receipts were from exempt healthcare services.

Income Tax Returns Not Indicative of Real Earnings: Gujarat HC Dismisses Plea to Reduce Maintenance Based on Tax Records

VASANTBHAI PREMJIBHAI VEKARIYA vs STATE OF GUJARAT & ANR. CITATION : 2026 TAXSCAN (HC) 612

The Gujarat High Court dismissed a criminal revision, challenging the Family Court's order directing him to pay ₹50,000 per month as maintenance to his wife and held that Income Tax Returns do not necessarily provide an accurate guide to a person's real income, especially in matrimonial disputes where there is a tendency to underestimate earnings to avoid liability.

The Court of Justice Hasmukh D. Suthar found that the husband's claim of business closure was contradicted by documentary evidence, including a police complaint regarding a theft of ₹25 lakhs from his office and recovery proceedings against debtors, indicating active business operations.

Stamp Duty Refund Interest Principle Distinguished: Calcutta HC Dismisses Plea for Interest on Rent Deposit

AJAY RAJ AGENCIES PVT. LTD. vs STATE OF WEST BENGAL AND ORS. CITATION : 2026 TAXSCAN (HC) 613

The Calcutta High Court dismissed a writ petition seeking interest on a sum of Rs. 1,70,000/- deposited with the Rent Controller as rent by a tenant. The Court distinguished the Supreme Court’s decision in Poornima Advani regarding interest on tax refunds, holding that the Rent Controller functions as a quasi-judicial authority holding money for the landlord's benefit, rather than as a tax-collecting authority.

The Single Bench of Justice Hiranmay Bhattacharyya rejected the plea for constructive res judicata, holding that Explanation V to Section 11 of the CPC cannot be applied where there has been no actual adjudication of the rights in the earlier proceeding. However, the Court ultimately dismissed the petition on the merits.

RBI Cannot Deny NBFC Surrender of Registration Without Hearing: Calcutta HC Quashes Rejection Order

J. Thomas Finance Private Limited & Anr vs Reserve Bank of India & Ors. CITATION : 2026 TAXSCAN (HC) 615

The Calcutta High Court held that the Reserve Bank of India cannot reject an application for voluntary surrender of an NBFC’s Certificate of Registration without granting the company an opportunity of hearing and any such rejection would be invalid for violation of principles of natural justice.

Justice Krishna Rao observed that the RBI had rejected the application solely on the ground that the petitioner satisfied the Principal Business Criteria at the relevant time, but had not given any opportunity of hearing to the petitioner before doing so. The court also observed that the RBI had not issued any notice guiding the petitioner on how to proceed with surrender.

The court held that the rejection of the petitioner’s application without granting an opportunity of hearing was not sustainable in law. It found that the decision-making process suffered from procedural unfairness.

Date of DRP Direction Upload Deemed Date of Receipt by AO: Telangana HC Rejects Income Tax Appeals

Commissioner of Income Tax vs Rapsican Systems Inc. US CITATION : 2026 TAXSCAN (ITAT) 450

The bench of Justice P. Sam Koshy and Justice Narsing Rao Nandikonda observed that the specific legal question raised in these appeals had already been decided by a Division Bench of the High Court on 09.01.2025. The Revenue's counsel did not dispute this precedent but informed the Court that the matter was currently pending consideration before the Supreme Court via Special Leave to Appeal.

The Telangana High Court held that the upload of Dispute Resolution Panel (DRP) directions constitutes the receipt of such directions by the Assessing Officer (AO). Following a prior Division Bench decision on identical facts, the Court ruled against the Revenue’s contention that the date of receipt should be when the directions became visible to the AO, rather than the date of the manual upload by the DRP.

Inverted Duty Structure Refund Cannot Be Denied on Technical Grounds: Bombay HC Sets Aside Order Rejecting GST ITC Refund

CHEC-TPL Line 4 Joint Venture C/o TATA Projects Limited vs Union of India through Ministry of Finance CITATION : 2026 TAXSCAN (HC) 627

The Bombay High Court set aside the orders of the Original and Appellate Authorities rejecting the Input Tax Credit (ITC) refund claims, holding that an inverted duty structure refund cannot be denied on technical grounds.

Relying on the principle that clarificatory notifications operate retrospectively to end disputes between parties, the Court held that Notification 14/2022 cannot be applied prospectively for refund claims made within the prescribed two-year period. The Court ruled that the CBIC Circular, which restricted the notification to prospective applications, was contrary to the statutory provisions and the purport of the amendment.

Iron Ore Exports Must Be Assessed on Wet Metric Tonne (WMT) Basis: Orissa HC Sets Aside Customs Order

OCL Iron and Steels Limited vs Union of India CITATION : 2026 TAXSCAN (HC) 626

The Orissa High Court set aside the Order-in-Original passed by the Commissioner of Customs (Preventive), Bhubaneswar and held that for export transactions occurring before the Finance Act, 2022 amendment, the determination of iron ore fines (Fe content) must be done on a Wet Metric Tonne (WMT) basis, rejecting the Dry Metric Tonne (DMT) method adopted by the Adjudicating Authority.

The bench of Chief Justice Mr. Harish Tandon and Justice Mr. Murahari Sri Raman considered the submissions regarding the "taxable event" and the binding nature of Board Circulars.

Consequently, the Writ Petition was allowed. The Order-in-Original was set aside as being perverse and inconsistent with settled law. The matter was remanded to the Commissioner of Customs (Preventive), Bhubaneswar, for fresh adjudication on the WMT basis.

Second GST Refund Application for Omitted Invoice Valid if Filed Within Limitation: Bombay HC sets aside Rejection of ₹1.10 Crore

Valmet Flow Control Pvt. Ltd vs Union of India CITATION : 2026 TAXSCAN (HC) 622

The Bombay High Court has held that a second GST refund application filed for an inadvertently omitted invoice cannot be rejected merely because an earlier refund application covering an overlapping tax period had already been sanctioned. The Court set aside the rejection of a refund claim amounting to ₹1.10 crore filed under Section 54 of the Central Goods And Service Tax Act.

The Division Bench of Justice G. S. Kulkarni and Justice Aarti Sathe held that Section 54(1) of the CGST Act makes no provision whatsoever as far as filing more than one application is concerned. More specifically, the omission of a claim made due to negligence will not pose any hurdle before the person availing the benefit of a refund application.

GST Not Leviable on University Affiliation Fees: Bombay HC Quashes ₹16.9 Cr Demand Against Mumbai University

University of Mumbai vs Union of India & Ors. CITATION : 2026 TAXSCAN (HC) 620

the Bombay High Court allowed a writ petition filed by the University of Mumbai and quashed a GSTdemand of Rs. 16.9 crores raised on affiliation fees collected from colleges.

The court also observed that since the activity itself does not qualify as “supply,” the charging provision under Section 9 of the CGST Act would not apply. It explained:

“once such activity itself is not ‘supply’ and/or it is not business within the meaning and purview of sub-section 1(a) of Section 7, there is no question of the charging provision i.e. Section 9 which provides for levy and collection being applicable.”

Affiliation & NOC Fees collected by Universities outside GST Net: AP HC struck down Demand against Universities

JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY KAKINADA (JNTUK) vs THE PRINCIAPL COMMISSIONER OF CENTRAL TAX CITATION : 2026 TAXSCAN (HC) 619

The Andhra Pradesh High Court has ruled that affiliation fees and No Objection Certificate (NOC) fees collected by State universities do not fall under the Goods and Services Tax ( GST) net. The court set aside tax demands issued against the universities and quashed assessment orders demanding over ₹2.64 crore, along with applicable interest.

The High Court, agreeing with the universities, conducted an examination of Sections 2(17), 7, and 9 of the GST Act.

The bench noted that GST can only be levied on supplies made in the course or furtherance of a "business." The Court noted that the core functions of these universities such as granting affiliations are strict statutory obligations rather than voluntary, profit-driven commercial activities.

"Dishonest" to Deny Loan Liability before Civil Court After Deducting TDS: Calcutta HC Grants Attachment Order

K.P. CREDIT AND TRADERS PVT. LTD. vs SHRI ANURAG RUNGTA CITATION : 2026 TAXSCAN (HC) 632

The Calcutta High Court (Commercial Appellate Division) held that a respondent cannot "approbate and reprobate" by admitting a loan transaction before the Income Tax authorities and subsequently denying liability before the Civil Court. The Court found that deducting Tax Deducted at Source (TDS) on interest payments serves as an admission of a "jural relationship" between the lender and borrower.

The Court held that the Respondent could not invite the Income Taxauthorities to assess returns based on the existence of a loan and then deny the same liability in civil proceedings. It found that a prima facie case was made out and that the balance of convenience lay overwhelmingly in favor of the Appellant.

GST Officer Impersonation & Fortuner Auction Fraud: Jharkhand HC Grants Relief to Accused who Received Amount in Account, Orders Surrender

Akash Sinha vs The State of Jharkhand CITATION : 2026 TAXSCAN (HC) 629

The Jharkhand High Court has ordered the surrender of the accused in a cyber fraud case relating to impersonation of a GST ( Goods and Services Tax ) officer and auction of Fortuner car, where an amount of ₹1.27 lakh was transferred into the petitioner’s bank account.

The Court considered the petitioner’s lack of criminal history, his limited role as claimed, and his willingness to return the amount. Therefore, Justice Sanjay Kumar Dwivedi directed the petitioner to surrender before the concerned trial court within two weeks. After such surrender, the trial court has been instructed to release him on bail subject to appropriate terms and conditions.

GST ITC Dispute: HP HC orders to Submit Objections with with Proof of Genuine Transactions and Supplier Credibility

Vardhman Ispat Udyog vs Union of India & Ors CITATION : 2026 TAXSCAN (HC) 630

the Himachal Pradesh High Court directed the assessee to file fresh objections along with supporting documents to establish the genuineness of transactions and the credibility of suppliers.

The High Court accepted this limited prayer and said that the determination of ITC eligibility must be based on a proper verification of facts and documents. The Court directed that the petitioner be allowed to submit fresh objections along with all relevant documentary evidence, including proof of genuine trhansactions and verification of supplier identity and credentials.

The Justices Vivek Singh Thakur and Ranjan Sharma instructed the competent authority to examine whether the purchases were bona fide, supported by valid invoices, and occurred before the cancellation of the supplier’s registration.

Death of Counsel "Sufficient Cause" for Delayed Filing: Calcutta HC Directs ITAT to Examine Jurisdictional Validity of S.151 Approval

JAYANTA GHOSH vs INCOME TAX OFFICER, MANIKTALA CITATION : 2026 TAXSCAN (HC) 633

The Calcutta High Court held that the death of a counsel and the consequent transition of files in a digital environment qualify as "sufficient cause" to justify delay in filing an appeal before the Income Tax Appellate Tribunal (ITAT) under Section 5 of the Limitation Act, warranting a liberal approach to ensure substantial justice.

The High Court allowed the appeal. It set aside the impugned ITAT order, condoned the 430-day delay, and remanded the matter to the ITAT for fresh adjudication on merits, specifically directing it to decide the jurisdictional validity of the Section 151 approval as a preliminary issue.

Separate Invoices Don't Bar 70:30 GST Split: Andhra Pradesh HC Sets Aside Rs. 9.19 Crore Demand on Tata Power

TATA POWER RENEWABLE ENERGIES LIMITED vs UNION OF INDIA, REP BY ITS REVENUE SECRETARY CITATION : 2026 TAXSCAN (HC) 631

The Andhra Pradesh High Court held that the issuance of separate invoices for goods and services does not preclude the application of the 70:30 valuation mechanism prescribed in GST Notifications for solar power generating systems. The Court set aside an assessment order that had levied an 18% tax on the entire turnover, resulting in a demand of Rs. 9.19 Crores.

The Court held that mere issuance of separate invoices does not alter the nature of the supply or take the transaction out of the ambit of the beneficial notifications. It further noted that the Department failed to conduct any exercise to ascertain the individual values of goods and services if it truly believed they were separate supplies, and instead arbitrarily levied 18% on the entire turnover.

Telangana HC Grants Anticipatory Bail in ₹97.25 Crore GST ITC Case

Devendra Surana vs Union of India and another CITATION : 2026 TAXSCAN (HC) 634

The Telangana High Court granted anticipatory bail to Devendra Surana, Managing Director of Bhagyanagar India Limited, in a case involving alleged wrongful availment of Input Tax Credit (ITC) of Rs. 97.25 crores.

The single judge bench comprising Justice K. Sujana observed that the case is mainly based on documents which are already with the authorities. The court also observed that the petitioner cooperated with the investigation and has no past criminal record. It further pointed out that the petitioner already deposited Rs. 17.5 crores

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