Supreme Court & High Courts Weekly Round-up [June 14th to June 21st, 2025]

Can Businesses Get Cash Refunds for Transitional CENVAT Credit Reversals? Supreme Court to Decide

TENORMACENTERPRISES PVT. LTD. vs THE COMMISSIONER OF CGST AND CENTRAL EXCISE CITATION : 2025 TAXSCAN (SC) 186

The Supreme Court of India is set to examine whether the reversed transitional CENVAT credit, which was previously carried forward under GST, can be refunded in cash, following an appeal filed by Tenormac Enterprises.

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The bench comprising Justices Ujjal Bhuyan and Manmohan held that, prima facie, the High Court could not have granted a stay after holding that it lacked jurisdiction and disposing of the matter as not pressed. The court issued notice to the revenue and stayed the High Court’s order of 12 June 2025. It clarified that the revenue remains free to file an appeal under Section 35-L, which would be considered on its own merits.

Delhi HC Quashes Reassessment Proceedings Initiated as Notice issued in name of Deceased Assessee

LAXMI DEVI(SINCE DECEASED) THROUGH LEGAL HEIR NARENDRA MANN vs ASSISTANT COMMISSIONERINCOME TAX DEPARTMENT CITATION : 2025 TAXSCAN (HC) 1015

The Delhi HighCourt quashed the reassessment proceedings initated as notice issued in name of deceased assessee. Since the notice issued under Section 148 of the Act was invalid as it was issued in the name of the deceased Assessee, the proceedings commenced pursuant thereto must fail.

It was further observed that the issuance of a notice under Section 148 of the Act is at the root of the jurisdiction of an AO to commence proceedings. Absent any such valid notice, the AO cannot assume jurisdiction for reopening the assessment.

Since the notice issued under Section 148 of the Act was invalid as it was issued in the name of the deceased Assessee, the proceedings commenced pursuant thereto must fail and the court set aside the impugned assessment order and the impugned notices.

Plea Against Constitutional Validity of GST S.16(2) Rejected: Karnataka HC Directs to Pursue Statutory Appeal Against Demand Order

R.S.ENTERPRISES vs THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES CITATION : 2025 TAXSCAN (HC) 1016

The High Court of Karnataka, dismissed a petition challenging the constitutional validity of Section 16(2) of the Central Goods and Service Tax/ State Goods and Service Tax (CGST/SGST) Act, 2017, citing the availability of an alternate remedy under Section 107 of the Karnataka Goods and Services Tax (KGST) Act.

However, the Court held that an appeal could be filed before the appellate authority within three months of the order, as clearly provided in the law. Since the issue was already decided by a Coordinate Bench, the Court declined to go into the merits.

The petition was dismissed, with liberty to the petitioner to file an appeal. The bench also directed that the time spent in this proceeding be condoned if the petitioner approached the appellate authority.

Relief for Kaarya Facilities: Bombay HC Clarifies 'Tax Quantification' Standard Under SVLDRS Scheme

KaaryaFacilities & Services Ltd vs Union of India CITATION : 2025 TAXSCAN (HC) 1017

In a recent ruling, the Bombay High Court ruled in favour of Kaarya Facilities & Services Ltd., holding that the GST department wrongly denied the company benefits under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS), by misinterpreting what constitutes "quantification" of tax dues.

The bench, led by Justices M.S. Sonak and Jitendra Jain, observed that the delay was not unreasonable, especially given the impact of the COVID-19 pandemic. It further observed that the CBIC circular and FAQs made it clear that a written admission of tax liability during an investigation qualifies as quantification under the scheme.

No Jurisdictional Error Found in GST Order: Madras HC directs to Re-file GST Appeal Within 15 Days

M/s. VihaHotels Private Limited vs The Assistant Commissioner of GST and Central Excise CITATION : 2025 TAXSCAN (HC) 1018

The Madras High Court has dismissed a writ petition challenging a GST ( Goods and Services Tax ) demand order, while granting liberty to the petitioner to re-file a statutory appeal within 15 days observing that there is no jurisdictional error.

The Court clarified that it was not concerned with the correctness of the decision but rather with the legality of the decision-making process, and found no procedural infirmity warranting its interference under Article 226 of the Constitution.

The petitioner stated throughout the proceedings that an appeal had previously been filed but had since been withdrawn. The Court acknowledged that the appeal could be maintained and allowed the petitioner to resubmit the statutory appeal to the Appellate Authority within 15 days after receiving the order, as long as they complied with all GST law procedural requirements.

AAR’s Classification of Inox Installation Plant as Immovable Property Lacks Reasoning: Madras HC Remands Matter

Inox AirProducts Private Limited vs Union of India CITATION : 2025 TAXSCAN (HC) 1019

In a recent ruling, the Madras High Court remanded a case back to the Appellate Authority for Advance Ruling (AAAR), Tamil Nadu, after finding that the authority had failed to provide sufficient reasoning for classifying a plant installation by Inox Air Products Private Limited as immovable property and denying Input Tax Credit (ITC).

A single bench led by Justice Mohammed Shaffiq held that the AAAR’s failure to deal with the second issue required a reconsideration. The court allowed the petitioner to file additional submissions and directed the AAAR to pass a fresh order within six months, after granting an opportunity for a hearing.

Buyer’s TDS Filing Error Won’t Deny NRI Seller's Full Credit: Delhi HC Orders Refund Processing

PARAG KESHAVBOPARDIKAR vs INCOME TAX OFFICER & ORS CITATION : 2025 TAXSCAN (HC) 1020

In a recent ruling, the Delhi High Court directed the Income Tax Department to grant full TDS credit to an NRI seller and process a refund, despite a mistake by the property buyer in filing the TDS under the wrong form.

A division bench led by Justice Vibhu Bakhru and Justice Tejas Karia held that the denial of credit due to a mere form-related error was unjust. The court found that there was no legal provision allowing the Assessing Officer to withdraw a valid assessment order and issue a revised computation without due process. It further ruled that requiring the buyer’s consent was unnecessary, as the TDS was not in dispute.’

SVLDRS Benefits Not Available for Voluntary Disclosure When Tax is Admitted in Filed Returns: Madras HC

Taufiq ManpowerConsultants Private Limited vs The Assistant Commissioner of GST and CentralExcise CITATION : 2025 TAXSCAN (HC) 1021

In a recent ruling, the Madras High Court held that benefits under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) are not available for voluntary disclosure when the taxpayer has already filed returns admitting the tax liability.

The bench presided over by Justice C. Saravanan observed that the petitioner deliberately reduced the admitted tax liability while filing the declaration under SVLDRS and misrepresented the amount as if it fell under the “arrears” category. The court explained that once a return has been filed admitting tax due, the benefit of voluntary disclosure is not available under the scheme.

Gauhati HC Grants CST Section 6(2) Benefit Despite Non-Furnishing of ‘C’ Forms, Citing Uncontested Inter-State Movement of Goods

M/S BharatTrading Corporation vs State of Assam CITATION : 2025 TAXSCAN (HC) 1022

The Gauhati High Court held that the benefit under Section 6(2) of the Central Sales Tax (CST) Act, 1956, cannot be denied merely due to the non-furnishing of ‘C’ Forms, especially when the inter-State movement of goods by the petitioner is not disputed.

The high court, by relying on the decision of the Bombay High Court in the case of M/S. Prism Cement Limited and Another vs. State of Maharashtra and Others, Writ Petition No. 6475 of 2009, held that “even after the amendment of Section 8(5) by the Finance Act, 2002, the State Government in public interest may, subject to the fulfilment of the requirements of Section 8(4), applicable to the transactions covered under Section 8(1), grant total/partial exemption from tax payable on inter-State sales covered under Section 8(1) as also under Section 8(2) of the CST Act.”

Himachal Pradesh HC Allows Benefit u/s 80-IC of Income Tax Act @ 100% of profit relying on Supreme Court Judgement

M/s J.C.International vs Deputy Commissioner of Income Tax. CITATION : 2025 TAXSCAN (HC) 1023

Relying on the Supreme Court judgment in Principal Commissioner of Income Tax, Shimla vs. Aarham Softronics (2019), the Himachal Pradesh High Court has held that an assessee who sets up a new industry of a kind mentioned in Section 80-IC(2) of the Income Tax Act and starts availing exemption of 100% tax under Section 80-IC(3) (which is admissible for five years) can start claiming exemption at the same rate of 100% beyond the period of five years.

In this case, the Supreme Court has clearly held that “An undertaking or an enterprise which had set up a new unit between 7th January, 2003 and 1st April, 2012 in State of Himachal Pradesh of the nature mentioned in clause (ii) of sub-section (2) of Section 80-IC, would be entitled to deduction at the rate of 100% of the profits and gains for five assessment years commencing with the ‘initial assessment year’. For the next five years, the admissible deduction would be 25% (or 30% where the assessee is a company) of the profits and gains.”

Customs Rejects IOCL’s 104 Shipping Bill Conversion Relying on Circular Declared Ultra Vires by HC: Madras HC directs Reconsideration

TheCommissioner of Customs (Preventive) vs Indian Oil Corporation Ltd CITATION : 2025 TAXSCAN (HC) 1024

The Madras High Court has directed the Customs Department to reconsider Indian Oil Corporation Ltd.’s ( IOCL ) request for conversion of 104 free shipping bills to drawback shipping bills, which was rejected by a circular which was declared ultra vires by the Gujarat HC.

The Bench comprising Chief Justice K.R. Shriram and Justice Mohammed Shaffiq observed “Since the Gujarat High Court has held that the impugned circular to the extent of paragraph 3(a) is ultra vires Articles 14 and 19(1)(g) of the Constitution of India, as also ultra vires Section 149 of the Customs Act, 1962, the question of the Commissioner or the Original Authority relying on the said provision in the circular does not arise.”

Win for Deloitte: Madras HC Rules Firms and HUFs Cannot Be Partners in a Firm, Quashes PCIT Order Disallowing Partner Remuneration

M/s.DeloitteHaskins & Sells vs The Assistant Commissioner of Income tax CITATION : 2025 TAXSCAN (HC) 1025

In a recent decision, the Madras High Court quashed the Principal Commissioner of Income Tax’s (PCIT) order against Deloitte Haskins & Sells, ruling that only individuals and not firms or Hindu Undivided Families (HUFs) can be partners in a partnership firm. The court also ruled that the Rs. 3.23 crore remuneration paid to Deloitte’s partners was valid and could not be disallowed.

The court further observed that since the firm and its partners together paid the correct amount of tax, there was no financial disadvantage to the government. It held that the PCIT had no valid basis to revise the original assessment order.

Accordingly, the court allowed Deloitte’s appeal and dismissed the Revenue’s appeal. It held that the PCIT’s revision order under Section 263 was unjustified and should be set aside.

SARFAESI and RDB Act Prevail Over TN General Sales Tax Act in Public Interest: Madras HC Grants Relief to Indian Bank

Indian Bank vsThe Commercial Tax Officer CITATION : 2025 TAXSCAN (HC) 1026

In a recent ruling, the Madras High Court has held that the provisions of the SARFAESI Act and the Recovery of Debts and Bankruptcy Act ( RDB Act ) would prevail over the Tamil Nadu General Sales Tax Act ( TNGST Act ), granting relief to Indian Bank in a dispute concerning priority of claims over secured assets.

The Court noted that the bank’s lease arrangement was genuine, had continued without interruption since 1992, and was part of a legitimate effort to adjust dues under the overdraft facility. The property had since been auctioned under SARFAESI proceedings, with proceeds appropriated to settle the loan account.

Former Kerala Finance Minister Charged with Defamation: Sikkim HC Refuses to Quash Summons, Petition Dismissed

Dr. T. M.Thomas Issac vs Santiago Martin CITATION : 2025 TAXSCAN (HC) 1027

The Sikkim High Court has dismissed a plea by the former Kerala Finance Minister seeking to quash criminal defamation summons issued against him in connection with a controversial press statement made after a GST Council meeting held on December 19, 2019.

​​The court observed that “Pertinently, it may be remarked that the judicial system in our country is an adversarial system and not inquisitorial, where the Magistrate would be expected to be actively involved in investigating into the matter personally for arriving at the truth. Under the present legal system followed, it suffices that the Magistrate has taken steps for examining the witnesses as held in Vijay Dhanuka (supra). Consequently, this argument advanced by Learned Senior Counsel for the Petitioner also cannot be countenanced.”

GST Dept Counsel Admits No Personal Hearing Granted before Passing Order: Madras HC remands Matter on Pr-edposit Requirement

M/S QualitySurgical Stores vs The Deputy State Tax officer 1 CITATION : 2025 TAXSCAN (HC) 1028

The Madras High Court has quashed a GST assessment order that was passed without granting the petitioner an opportunity for a personal hearing. Notably, the counsel for the GST department herself conceded before the Court that no such hearing had been provided, in clear contravention of the mandatory requirement under Section 75(4) of the CGST Act.

Considering the submissions, Justice Krishnan Ramasamy observed that the impugned assessment order had been passed in clear violation of the statutory mandate under Section 75(4) of the GST Act and the principles of natural justice.

Accordingly, the Court set aside the order dated 30.08.2024 and remanded the matter to the respondent authority for fresh consideration. The Court directed the petitioner to pay 25% of the disputed tax amount, after adjusting the sum already recovered, within a period of four weeks.

GST Rectification Application Rejected Stating ‘No errors apparent on the face of the record’: Madras HC sets aside Rejection Order

KR Agencies vsThe State Tax Officer (ST) CITATION : 2025 TAXSCAN (HC) 1029

In a recent ruling, the Madurai bench of Madras High Court quashed an order rejecting a GST ( Goods and Services Tax) rectification application on the ground that the petitioner was denied a hearing, violating the principles of natural justice.

Accordingly, the Court set aside the rejection order and remanded the matter back to the concerned GST authority. It directed the authority to pass a fresh order under Section 161 of the GST Act after providing the petitioner an opportunity for personal hearing. The entire direction is to be completed within three months from the date of receipt of the order, said the bench.

Duplication of GST Proceedings on Same Matter: Kerala HC Quashes Rejection of Rectification Request Filed by Mail

M/S. WINTERWOOD DESIGNERS & CONTRACTORS INDIA PVT. LTD vs THE STATE TAX OFFICER WORKSCONTRACT CITATION : 2025 TAXSCAN (HC) 1030

In a significant ruling, the Kerala High Court has quashed an order-in-original issued against an already adjudicated issue and the rejection of a rectification request under Section 161 of the Goods and Services Tax (GST) Act, observing that the error in question was “apparent on the face of record” and should have been rectified regardless of the manner of submission.

Justice Ziyad Rahman A.A., delivering the judgment, held that the rejection was unsustainable. “When such a serious error was clearly pointed out before the competent authority, within the statutory period, such authority could not have refrained from invoking the powers of rectification,” the Court observed.

Merely Being a Subsidiary Does Not Qualify as 'Agent' under GST: Bombay HC Criticizes Dept for Relying on Unrelated Definitions

Sundyne Pumpsand Compressors India Pvt Ltd vs The Union of India CITATION : 2025 TAXSCAN (HC) 1031

In a recent decision, the Bombay High Court ruled that a wholly owned Indian subsidiary providing services to its foreign parent company does not automatically become an “agent” under Section 2(5) of the CGST Act, 2017. The court held that merely being a subsidiary is not enough to deny the benefits of “export of services,” and it criticized the GST department for relying on definitions of “agent” from unrelated sources to reject refund claims.

The bench of Justices B.P. Colabawalla and Firdosh P. Pooniwalla observed that there was no material to suggest that the petitioner acted on behalf of the foreign entity. The agreement between the parties made it clear that the relationship was that of an independent contractor and a client. The court observed that the revenue had relied on definitions from other laws that were not applicable, despite the GST law having its own specific definition of “agent” under Section 2(5).

Relief to Retired Central Excise Officer: Madras HC Bars Dept from Acting on Caste Certificate Allegations

M.Karuppanan vsThe Tamil Nadu State Level Scrutiny Committee CITATION : 2025 TAXSCAN (HC) 1032

The Madurai Bench of the Madras High Court recently granted relief to a retired Central Excise officer by quashing an order that community doubt on the validity of his caste certificate from 1977, even though it was initially evident that the petitioner belonged to the backward class rather than the ST Community.

The Madurai Bench of the Madras High Court recently granted relief to a retired Central Excise officer by quashing an order that community doubt on the validity of his caste certificate from 1977, even though it was initially evident that the petitioner belonged to the backward class rather than the ST Community.

Reply to SCN Must Be Uploaded On GST Portal or Filed Physically: Madras HC

M/s.ShreeBalaji Enterprises vs Joint Commissioner of GST & Central Excise CITATION : 2025 TAXSCAN (HC) 1033

After remanding the case to the GST department, the Madras High Court instructed the assessee to submit the response either in person or via the Goods and Services Tax (GST) portal. The reply was not considered by the officer before passing the order as it was not uploaded through the portal.

Justice Krishnan Ramasamy observed that the impugned order was passed without granting the petitioner any opportunity of personal hearing, in clear violation of the principles of natural justice. It was also admitted by the department that the email reply was not considered due to non-submission via the official GST portal.

GST Cancellation Over Non-Filing of Returns Set Aside: Madras HC Grants Opportunity to Clear Dues Barring Adjustment from Unutilised ITC

Presannaraj vsThe Superintendent of GST and Central excise CITATION : 2025 TAXSCAN (HC) 1034

The Madras High Court has set aside the suo motu cancellation of a taxpayer’s GST ( Goods and Services Tax) registration on the ground of non-filing of returns for over six months, granting the petitioner an opportunity to regularise compliance subject to specific conditions.

Following that precedent, Justice Krishnan Ramasamy directed the petitioner to file all pending returns for the period prior to cancellation and pay applicable taxes, interest, fines, and late fees within 45 days.

The Court barred the use of unutilised ITC for such payments, mandating that dues be cleared in cash. Any unutilised ITC can only be applied after departmental scrutiny and approval.

Proviso to S.3-B(2)(d) of TNGST Act Not Applicable to Contractor Assigning Work to Registered Sub-Contractor: Madras HC

M/s. ChaitanyaBuilders & Leasing (P) Ltd. vs The Assistant Commissioner (CT) CITATION : 2025 TAXSCAN (HC) 1035

The High Court of Madras held that the proviso to Section 3-B(2)(d) of the Tamil Nadu General Sales Tax Act, 1959, would not apply where a contractor assigns work to a registered sub-contractor.

The Madras High Court noted that the same issue was already decided in Larsen & Toubro Ltd. v. Assistant Commissioner (CT), where the proviso was read down. That decision, based on Supreme Court rulings in Larsen & Toubro Ltd. and Builders Association of India, held that the proviso would not apply where the contractor assigned work to a registered sub-contractor.

Relying on that precedent, the Court partly allowed the petition and read down the proviso, clarifying that it would not apply when the sub-contractor was a registered dealer.

ED Search under PMLA Not Harassment: Madras HC Allows PMLA Proceedings Against TASMAC to Continue

Tamil NaduState Marketing Corporation Limited vs Directorate of Enforcement CITATION : 2025 TAXSCAN (HC) 1036

The High Court of Madras, held that the Enforcement Directorate’s search under the Prevention of Money Laundering Act (PMLA) was lawful and did not amount to harassment, allowing proceedings against TASMAC to continue.

Justice S.M Subramaniam and Justice K.Rajasekar held that TASMAC officials, as public servants, were duty-bound to cooperate with the ED during the search. It noted that valid authorisation was produced as per Rule 3(4) of the PMLA Rules, and the Panchnama showed the search was peaceful, without coercion or damage, and witnessed by independent parties.

The Court rejected allegations of fundamental rights violations and said that only affected individuals, not the State, should have approached the Court. It criticised the petition as an attempt to obstruct the investigation.

GST Registration Cancelled Without Providing Proper Notice: Gauhati HC sets aside Order Rejecting Revocation Application

Devendra SinghRathore vs CGST and CX and Anr CITATION : 2025 TAXSCAN (HC) 1037

The Gauhati High Court set aside the order rejecting the revocation application on the grounds that the Goods and Services Tax registration was canceled without providing proper notice.

Considering the facts and circumstances on the record, the single bench of Justice Robin Phukan Court is inclined to allow the petition by setting aside the impugned cancellation order dated 04.12.2023. The respondent authorities are directed to verify whether any further amount is due from the petitioner and if any amount is found to be due.

Calcutta HC Permits to File Connected Application Against SCN u/s 74 of CGST and Adjudication Order

Tara MarineSyndicate Private Limited & Anr. vs The Superintendent CITATION : 2025 TAXSCAN (HC) 1038

In a recent case, the Calcutta High Court permitted the filing of a connected application against a show cause notice (SCN) under section 74 of the Central Goods and Service Tax (CGST) Act, 2017, and an adjudication order.

Considering the fact that an order in original has already been passed upon adjudication of the show cause notice,a single bench of Justice Raja Basu Chowdhury viewed that the petitioner cannot be permitted to challenge the same by way of a connected application as the same gives rise to a separate cause of action.

Since, the show cause has already been adjudicated and has merged with the final order, the court viewed that the above writ petition can be disposed of by permitting the petitioners to challenge not only the show cause but also the adjudication order in original dated 5th February, 2025 in a composite manner in accordance with law, if so advised.

Differences of ITC availed in Form GSTR-3B against Form GSTR-2A: Orissa HC Quashes GST Order on violation of Natural Justice Principle

M/s. D.R.Patnaik vs Commissioner, GST and Central Excise CITATION : 2025 TAXSCAN (HC) 1039

The High Court of Orissa ina case regarding the differences of Input Tax Credit (ITC) availed in Form GSTR-3B against Form GSTR-2A, quashed the Central Goods and Service Tax (CGST) order in violation of the Natural Justice Principle.

This Court is persuaded to believe that the proper authority has failed to consider the reply to show-cause notice in Form GST DRC-06 along with other documents uploaded. The bench set aside the Order-in- Original dated 20.02.2025 vide Annexure-7 as also Summary Order dated 24.02.2025 passed under Section 73 of the GST Act by the Additional Commissioner, GST & Central Excise, Commissionerate, Rourkela-Opposite Party No.1 on the ground of violation of principles of natural justice and remitted the matter to the said authority concerned for fresh adjudication.

“Sheer Ignorance of Law”: Himachal Pradesh HC Slams AO for Income Tax Order against Deceased Proprietor

V. EagleSecurities vs Joint Commissioner of State Taxes and Excise & anr. CITATION : 2025 TAXSCAN (HC) 1040

In a scathing rebuke to tax authorities, the Himachal Pradesh High Court has quashed an assessment order issued against a deceased individual, condemning the Assessing Officer (AO) for acting in "sheer ignorance of law" or under a "pre-determined mind" to pass the order despite knowing the legal impossibility of such action.

The division bench comprising Justice Tarlok Singh Chauhan and Justice Sushil Kukreja delivered the strong-worded judgment while hearing a writ petition filed by the legal heir of late Sanjeev Shyam, the sole proprietor of M/s V. Eagle Securities Services.

SIM Cards, Recharge Coupons, and Value-Added Services Not Taxable as Services: Madras HC

D.Sivanandam vsThe Assistant Commissioner CITATION : 2025 TAXSCAN (HC) 1041

The Madras High Court has dismissed a service tax imposition on the distribution of SIM cards, recharge coupons, and value-added services, reiterating that these do not constitute taxable services under the Finance Act, 1994.

The court also referred to the Supreme Court’s ruling in Commissioner of Customs, Central Excise & Service Tax vs. MS Suzlon Energy Ltd., which held that customized engineering drawings are not goods but services, supporting the non-taxability of SIM cards under service tax provisions.

The court directed the petitioner to submit a reply to the show cause notice within four weeks. The respondents were instructed to pass orders after considering the petitioner’s objections, providing a reasonable opportunity for a hearing, and adhering to the cited judicial precedents.

Madras HC Strikes Down Central Excise R.8(4) Ultra Vires, Quashes Demand Orders With Fresh Hearing

Salem TextilesLimited vs The Superintendent of Central Excise CITATION : 2025 TAXSCAN (HC) 1042

The Madras High Court has struck down Rule 8(4) of the Central Excise Rules, 2001 and 2002, declaring it inconsistent with Rules 3 and 4 of the Cenvat Credit Rules, 2001 and 2002, and ultra vires Section 37(2)(xxviii) of the Central Excise Act, 1944. The court also set aside a demand order and a recovery notice issued against Salem Textiles Limited, directing a fresh hearing.

The Court directed the commissioner to pass orders within four weeks after hearing the petitioner’s submissions.

The court held that failure to appear on the specified date would result in the withdrawal of the benefits granted under the order. The writ petitions were disposed of with no costs, and the connected miscellaneous petitions were closed.

Madras HC Validates Reassessment Notices Issued Pre-Finance Act, 2021 Citing TOLA Extension

Ramadoss Srikanthivs The Assistant Commissioner of Income Tax CITATION : 2025 TAXSCAN (HC) 1043

The Madras High Court has dismissed a writ petition challenging reassessment notices and an order issued under the Income Tax Act, 1961, for the Assessment Year (AY) 2015-2016, ruling that the notices were validly issued within the extended limitation period provided by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA).

The court observed that TOLA extended the deadline for actions due between 20.03.2020 and 31.03.2021 to 30.06.2021. The court held that the period from the deemed notice’s issuance (31.03.2021) to the supply of information on 02.06.2022 and the two-week response period, was excluded from limitation calculations. The court dismissed the writ petition and connected miscellaneous petitions were closed.

Inadvertent Non-Compliance of Pre-Deposit Condition: Madras HC Restores GST Appeal on conditions

Tvl.ArunTraders vs The Union of India CITATION : 2025 TAXSCAN (HC) 1044

The Madras High Court has restored a Goods and Services Tax ( GST ) appeal considering the petitioner’s inadvertent failure to pay the mandatory 10% pre-deposit and directed the petitioner to deposit the pre-deposit amount within two weeks and ordered the appellate authority to hear and dispose of the appeal within three months thereafter.

Justice Vivek Kumar Singh observed that the petitioner’s failure to deposit the pre-deposit was due to inadvertence. The court directed the petitioner to pay the required pre-deposit within two weeks from the receipt of the court’s order in the interest of justice.

Customs Authorities Can Issue Notices Even If a Trade Agreement Exists: Bombay HC Upholds SCN Against Importers

Customs Authorities Can Issue Notices Even If a Trade Agreement Exists: Bombay HC Upholds SCN Against Importers

Purple ProductsPrivate Limited vs Union of India through CITATION : 2025 TAXSCAN (HC) 1045

In a recent ruling, the Bombay High Court held that the customs department has the power to issue show cause notices (SCNs) even when a Free Trade Agreement (FTA) like the ASEAN-India FTA is involved. The court rejected the importers’ plea that the customs authorities could not take action without first using the dispute resolution process under the trade agreement.

The court, led by Justice M.S. Sonak and Justice Jitendra Jain, observed that international treaties like the ASEAN-India FTA do not automatically become part of Indian law unless they are passed by Parliament. Since Article 24 had not been incorporated into any Indian law or rule, the court said it could not be enforced in Indian courts. The court also noted that the Customs Act clearly gave authorities the power to investigate and take action in cases involving fraud or misrepresentation.

Gujarat High Court upholds Validity of GST Summons without DIN issued by State GST Officers

M/S NRM METALS(INDIA) PRIVATE LIMITED & ANR vs UNION OF INDIA & ORS CITATION : 2025 TAXSCAN (HC) 1046

In a significant ruling for State Goods and Services Tax (GST) administrations, the Gujarat High Court has held that the absence of a Document Identification Number (DIN) on summons, notices or provisional-attachment orders issued by State GST officers does not make those instruments invalid.

Rejecting the DIN objection, the Bench observed that Circular 37/2019 is addressed solely to commissioners and officers of the Central tax administration. No parallel circular has been issued by the Gujarat GST commissionerate, nor do the GGST Act or its rules prescribe a DIN system. “Circular No. 37 of 2019 cannot be said to be applicable to communications issued by State Tax authorities,” the judges wrote, adding that there is currently “no mechanism” within the state framework to generate DINs.

Rejecting GST ITC Refund on Basis of Extraneous Material: Patna HC Directs Rejection Order be treated as SCN for pursuing Proceedings

VaishnodeviAdivsory Private Limited vs The State of Bihar CITATION : 2025 TAXSCAN (HC) 1047

The Patna High Court recently dealt with the principles of natural justice under the Goods and Services Tax (GST) regime, setting aside an assessment order that rejected the refund of Input Tax Credit (ITC) that was concluded on the basis of extraneous material without giving the assessee an opportunity to respond.

The Division Bench further referenced the Supreme Court decision in Oryx Fisheries Private Ltd. vs. Union of India & Ors. (2010) where it was held that quasi-judicial authorities must base their decisions on disclosed materials and give affected parties an opportunity to respond. Another interesting observation in Oryx Fisheries (supra) was where the Apex Court held that “justice must not only be done it must also appear to be done as well”.

“Proceedings to Reopen Assessment not akin to Review Proceedings”: Bombay HC quashes Delayed Reopening due to Change of Opinion

GenesysInternational Corp. Ltd vs Assistant Commissioner of Income Tax CITATION : 2025 TAXSCAN (HC) 1048

The Bombay HighCourt, in yet another instance has underscored the requisite jurisdictional parameters to be satisfied by the Income Tax Department to effectuate reopening of an income tax assessment after a period of 4 years from the relevant assessment year.

Observing that the revenue failed to satisfy the jurisdictional parameters for reopening the assessment beyond 4 years, the Bombay High Court stated that proceedings to reopen an assessment are not akin to review proceedings.

In light of the circumstances, the Bombay High Court allowed the writ petition and made the rule absolute, thereby quashing the reassessment notice dated 30 March 2021, the order rejecting objections dated 8 February 2022, and the draft assessment order dated 14 March 2022.

Cash Credit Account Not Attachable u/s 83 of MGST Act as It Is Not Account Holder's Property: Bombay HC

Skytech RollingMill Pvt. Ltd. vs Joint Commissioner of State Tax Nodal CITATION : 2025 TAXSCAN (HC) 1049

The High Court of Bombay held that a cash credit account is not the property of the account holder and therefore cannot be provisionally attached under Section 83 of the Maharashtra Goods and Services Tax (MGST) Act,2017.

The division bench comprising Justice Jithendra Jain and Justice M.S Sonak noted that no contrary judgments were presented and reaffirmed that a cash credit account could not be considered the account holder’s property under Section 83 of the MGST Act.

It directed the authorities to withdraw the attachment letter dated 8 May 2025 issued to ICICI Bank and inform the bank within 24 hours.

Denial of CCS Benefits for Castor Oil Exports Due to New Technical Test Change Unjustified: Bombay HC

Sanjay KumarAgarwal vs Union of India

CITATION : 2025 TAXSCAN (HC) 1050

In a recent ruling, the Bombay High Court held that benefits under the Cash Compensatory Support (CCS) Scheme could not be denied to a castor oil exporter merely because of a change in the method of quality testing. The court directed the government to refund over Rs. 4.33 crore to the petitioner, ruling that the change in test did not alter the nature of the product being exported.

A division bench led by Justice Jitendra Jain observed that the earlier ruling on duty drawback applied equally to the present case, as the core issue was the same. The court also referred to several judgments which held that benefits under government schemes could not be denied for export contracts executed before a change in rules or testing procedures.

GST Registration Suspended while Taxpayer Was Unable to Access Portal: Delhi HC Retracts Suspension and Directs SCN Reply Opportunity

MANSURA BRUSHWORKS THROUGH ITS PROPRIETOR MOHAMMAD HASHIM vs COMMISSIONER OF DELHI GOODS ANDSERVICE TAX DGST & ORS CITATION : 2025 TAXSCAN (HC) 1051

The Delhi HighCourt recently retracted the suspension of Goods and Services Tax (GST) registration of an appellant against whom the department had initiated action while he was unable to access the GST portal to reply to a show-cause notice.

The bench comprising Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta, addressing the petitioner’s grievance regarding inability to access the GST portal, directed the restoration of access for a period of at least 30 days to enable the petitioner to file a reply to the Show Cause Notice. The Court further directed the authorities to take a decision within 30 days from the date of appellant's reply.

Madras HC Upholds GST Exemption on Revenue Share for Duty-Free Shops at Airport as Zero-Rated Supply

Union of Indiavs Flemingo Duty Free Shop Private Limited CITATION : 2025 TAXSCAN (HC) 1052

In a recent ruling, the Madras High Court held that the levy of GST on revenue share or minimum guarantee amounts paid by duty-free shop operators at airports is not valid under GST law, as such supplies qualify as zero-rated under the Integrated Goods and Services Tax (IGST) Act.

The court clarified that authorities are free to examine whether the transactions were genuinely revenue-neutral for the period before April 2021 and take action as per law if not. The direction requiring payment of GST with refund claims from April 2021 onwards was left undisturbed. The Airports Authority’s refund application was directed to be processed within four weeks, along with applicable interest. The writ appeal was dismissed.

ITC Denial Solely Due to Supplier’s Retrospective GST Cancellation Unjust Without Verifying Transactions’ Genuineness: Himachal Pradesh HC

M/s HimalayaCommunication Pvt. Ltd. vs Union of India and others CITATION : 2025 TAXSCAN (HC) 1053

The Himachal Pradesh High Court has held that denial of Input Tax Credit ( ITC ) solely on the ground of the supplier’s GST ( Goods and Services Tax ) registration being cancelled retrospectively, without verifying the genuineness of the underlying transaction, is unjustified.

The decision was made in response to a writ suit that the petitioner had filed contesting the GST authorities' rulings that denied ITC for the applicable tax period.

The Court noted that the sole reason for denial of ITC was the retrospective cancellation of the supplier’s registration, without any enquiry into whether the transaction was genuine.

JusticesTarlok Singh Chauhan and Sushil Kukreja observed that the authorities failed to examine any documents to ascertain the authenticity of the transaction and had instead proceeded directly to issue notices under Section 16(2) of the CGST Act.

Subsidy Received by BOI from RBI Cannot be Treated as 'Interest' Chargeable u/s 4 of Income Tax Act: Bombay HC

Bank of Indiavs Deputy Commissioner of Income Tax CITATION : 2025 TAXSCAN (HC) 1054

The Bombay High Court held that the amount of subsidy received by the Bank of India (BOI) from RBI cannot be treated as 'interest' chargeable under Section 4 of the Income Tax Act, 1961.

The issue before the bench was whether the amount of subsidy received by the Assessee from RBI under the Scheme can be treated as 'interest' as defined under Section 2(7) of the Income Tax Act.

The Division Bench of Chief Justice Alok Aradhe and Justice Sandeep V. Marne stated that “the amount of subsidy received by the Assessee is not relatable in loan or advance given by the assessee to the RBI and therefore, the amount of subsidy can neither be treated as commitment charges nor discount on promissory notes on bill of exchange drawn or made in India.”

ITC Denied Without Reasoning for One Supplier: Calcutta HC Stays GST Demand Until December 2025

Amar NathJaiswal vs The Assistant Commissioner of State Tax CITATION : 2025 TAXSCAN (HC) 1055

In a recent case, the Calcutta High Court stayed a GST demand issued against a taxpayer after input tax credit (ITC) was denied for one supplier without any reasoning. The court found the denial arbitrary and also questioned whether the demand was issued within the time limit set by law.

A single bench led by Justice Raja Basu Chowdhury found that the petitioner had raised serious concerns, both about the limitation period and the lack of justification in the ITC denial. The court directed that the impugned GST demand be stayed until December 2025 or until further orders. The court also allowed the State six weeks to file an affidavit in opposition, and permitted the petitioner to file a reply within four weeks thereafter.

GST Demand of Rs. 16.67Cr Mechanically Confirmed on Mismatch in ITC Claim: Madras HC Quashes Order

Sri BalajiTollways (Madurai) Private Limited vs The Deputy State Tax Office CITATION : 2025 TAXSCAN (HC) 1056

The Madras High Court has set aside a GST ( Goods and Services Tax ) demand of ₹16.67 crore raised against a tollway company, holding that the proceedings were mechanical and failed to consider the assessee’s reply.

Observing that the demand had been affirmed in a mechanical manner, without due consideration of the appellant’s submissions or evidence, the Court ruled that the assessment order violated principles of natural justice.

The Court accordingly quashed the order and remitted the matter back to the respondent for fresh adjudication in accordance with law, clarifying that it had not expressed any opinion on the merits.

GST Appeal filing Delayed by 58 Days due to Pendency in Rectification Application: Madras HC Grants Relief

Sas Hotels AndEnterprises Limited vs Deputy Commercial Tax Officer CITATION : 2025 TAXSCAN (HC) 1057

The Madras High Court has condoned a 58-day delay in filing a GST ( Goods and Services Tax ) appeal, caused by the pendency of a rectification application, and directed the authorities to hear the appeal on merits.

JusticeKrishnan Ramasamy, after examining the facts, found the explanation for the delay to be genuine and held that a party’s bonafide reliance on pending rectification proceedings is a valid ground for delay.

Observing that justice would be served by allowing the appeal to be heard, the Court set aside the rejection order and condoned the delay, subject to the petitioner depositing an additional 5% of the disputed tax amount. The Deputy Commissioner was directed to admit the appeal and dispose of it on merits after granting an opportunity of hearing.

Income Tax Deduction u/s 80HHC Had to Be Given Without Reducing S. 80IB Deduction: Madras HC Follows SC Ruling

Commissioner ofIncome Tax vs M/s.Rane Brake Lining Ltd CITATION : 2025 TAXSCAN (HC) 1058

The Madras High Court has reaffirmed that deduction under Section 80HHC of the Income Tax Act, 1961 must be granted without reducing the amount allowed under Section 80IB.

The Court also ruled on a second issue concerning the inclusion of scrap sales in total turnover for computing 80HHC benefits. Referring to the Supreme Court’s judgment in CIT v. Punjab Stainless Steel Industries, it held that proceeds from scrap sales cannot form part of total turnover for the purpose of 80HHC computation.

With these findings, the High Court answered both substantial questions of law in favour of the assessee and dismissed the appeal filed by the Revenue.

Reopening of Assessment Without Complying with S. 143(2) Procedure Is Bad in Law: Madras HC

Siva Industries& Holdings Limited vs The Assistant Commissioner of Income Tax CITATION : 2025 TAXSCAN (HC) 1059

The Madras High Court has held that reopening of an income tax assessment without issuing a mandatory notice under Section 143(2) of theIncome Tax Act, 1961 is invalid in law.

The bench of Chief Justice K.R. Shriram and Justice Sunder Mohan restated that if a notice under Section 143(2) is not issued prior to completing a reassessment, the entire process is invalidated referring to its previous decisions in Sapthagiri Finance & Investments v. ITO and CIT v. Alstom T & D India Ltd.

Accordingly, the Court held the reopening of assessment to be legally untenable and allowed the appeal in favour of the assessee. Since the reopening itself was declared bad in law, the Court declined to examine the merits of the case.

At Least One GST Reminder Must Be Sent via RPAD Before Passing Ex-Parte Order : Madras HC

M/s. PioneerProducts vs The State Tax Officer (FAC) CITATION : 2025 TAXSCAN (HC) 1060

The Madras High Court has held that before passing an ex-parte order, the tax authority must send at least one reminder notice through Registered Post Acknowledgement Due (RPAD) or any other valid mode as prescribed under Section 169 of the GST ( Goods and Services Tax ) Act.

The High Court stated that mere uploading of notices on the GST portal without any attempt to reach the assessee through physical service undermines the requirement of due process.

"When an ex-parte order is passed, the respondent should have sent at least one reminder notice through RPAD or by way of any other mode as specified under Section 169 of the Act," the Court observed.

The Madras High Court rejected the challenged assessment judgment and sent the case to the assessing authority for further review, taking into account the petitioner's offer to pay 25% of the contested tax.

Failure to examine legality of ITC availed: Calcutta HC Remands Appeal of Bajaj Wheels to GST adjudicating authority

Bajaj WheelsPrivate Limited & anr. vs The Union of India & ors. CITATION : 2025 TAXSCAN (HC) 1061

In a recent case, the Calcutta High Court remanded the appeal of Bajaj Wheels to the Goods and Services Tax (GST) adjudicating authority on finding that the authority failed to examine the legality of the ITC availed. The court found that no fruitful purpose would be served by keeping the matter pending.

A single bench of Justice Raja BasuChowdhury, while setting aside the order impugned, including the order passed by the adjudicating authority dated 30th October, 2023, let the matter stand remanded back before the adjudicating authority for a fresh decision on merits.

The adjudicating authority is directed to decide upon the aforesaid within a period of eight weeks from the date of communication of this order by issuing an appropriate notice of hearing and by affording an opportunity of hearing to the petitioner.

Relief to Mahindra & Mahindra Ltd, AO Has No Jurisdiction to Alter Net Profit in P & L Account Except Under S. 115J of Income Tax Act: Bombay HC

M/s. Mahindra& Mahindra Ltd. vs Commissioner of Income-tax CITATION : 2025 TAXSCAN (HC) 1062

In a ruling in favour of Mahindra & Mahindra Ltd, the Bombay High Court stated that assessing officer do not have the jurisdiction to go behind net profit in profit and loss (P&L)account except as per explanation to Section 115J of Income Tax Act, 1961.

The Division Bench, consisting of Chief Justice Alok Aradhe and Justice M.S. Karnik observed that Section 115 J of the 1961 Act stipulates that, after certain adjustments, the total income chargeable to tax for a company whose total income as calculated under the Act 1961's provisions is less than 30% of the book profit will be 30% of the book profit as shown in the profit and loss account prepared in accordance with Part II and III of Schedule VI of the Companies Act 1956.

Rule 96(10) of CGST Rules Omission Operates Prospectively But Applies to Pending Proceedings: Gujarat HC

MESSRS ADDWRAPPACKAGING PVT. LTD. vs UNION OF INDIA & ORS. CITATION : 2025 TAXSCAN (HC) 1063

The Gujarat High Court in a recent case held that omission of Rule 96(10) of Central goods and Service Tax (CGST) Rules, 2017 operates prospectively but applies to all pending proceedings.

The Division Bench of Justices Bhargav D. Karia and D.N. Ray viewed that the 2024 Rules have been issued by Notification No.20/2024, and Rule 10 of those Rules has eliminated Rule 96(10) of the CGST Rules with immediate effect. This would lead to three scenarios: first, whether it would apply retroactively; second, whether it would apply prospectively; or third, whether it would apply prospectively but also to "pending proceedings." Additionally, Rule 10 of the Rules, 2024, applies to ongoing cases as well as prospectively.

Claim of Breach under Article 265 cannot be from a interlocutory order by Assessing Officer: Bombay HC

FcbulkaAdvertising Pvt Ltd. vs Assistant Commissioner of Income Tax Circle CITATION : 2025 TAXSCAN (HC) 1064

The Bombay High Court held that a claim of breach of Article 265 of the constitution cannot be alleged or sustained based upon a preliminary, prima facie, or interlocutory order and not a final order by assessing officer.

The Division Bench, consisting of Justices M.S. Sonak and Jitendra Jain observed that if the communication dated 29 November 2018 is an order, it being like a preliminary, prima facie, or interlocutory order and not a final order, the Petitioner cannot base their claim on this communication to allege breach of Article 265 of the Constitution. The communication dated 29 November 2018 is based on preliminary verification and is subject to processing, and therefore, it is in the nature of a preliminary/prima facie/interlocutory order.

RLDA Not a Juristic Entity, Madras HC sets aside Property Tax by Municipality on Railway Land Being Unconstitutional

Madurai MultiFunctional Complex Private Limited vs The Madurai Corporation CITATION : 2025 TAXSCAN (HC) 1065

The Madras High Court has held that the Railway Land Development Authority (RLDA) is not a juristic entity and set aside the property tax imposed by the municipality on railway land being unconstitutional.

A division bench of Justice G.R.Swaminathan and Justice M.Jothiraman observed that RLDA is not a separate entity at all. It is an alter-ego of Railways. RLDA cannot hold properties in its own name. At no point of time, the title over the site was transferred from Railways to RLDA or from RLDA to Ircon or from Ircon to the MMFC (the petitioner herein). Merely because Ircon was permitted to construct the building or the petitioner herein was permitted to develop it further would not result in vesting of the title over the building either in Ircon or in the petitioner. The expression “vesting” has a technical meaning.

Bombay HC directs Income Tax Commissioner to decide Royalty on Payment for Transponder Services

VIACOM 18 MEDIAPVT LTD vs Deputy Commissioner of Income Tax CITATION : 2025 TAXSCAN (HC) 1066

In a decision affecting how payments for satellite transponder services are taxed, the BombayHigh Court has ordered the Income Tax Commissioner (Appeals) to closely examine whether fees paid for such services should be classified as “royalty” under Indian tax laws and the India-USA Double Taxation Avoidance Agreement (DTAA).

Highlighting this gap, the Court held that deciding such a complex tax question requires a thorough factual inquiry, which can only be done by the tax authorities themselves.

The Court sent the matter back to the Commissioner of Income Tax (Appeals) with clear instructions to verify if Intelsat Corporation was held liable to pay tax in India for the years in question. If Intelsat is not taxable, Viacom 18 should not face withholding tax liability.

Design & Engineering Services to Foreign Entities Are Zero-Rated Supplies: Bombay HC Allows Refund of Unutilized ITC u/s 54 of CGST Act

Sundyne Pumpsand Compressors India Pvt Ltd vs The Union of India CITATION : 2025 TAXSCAN (HC) 1067

The Bombay High Court ruled that engineering and design services provided to foreign organizations are zero-rated supplies and allowed the assessee to a reimbursement of any unutilized the ITC under Section 54 of the Central Goods and Services Tax (CGST), 2017.

The bench said that the assessee for the same services applied for and received a refund for the April 2020–March 2021 and April–June 2021 periods. The responders chose not to appeal the two previous orders that gave the assessee a refund. The assumption for the refunds was that the assessee's services qualified as "export of services." Finality has been obtained on these orders. After this, the department cannot deny the refund claim on the grounds that the assessee's services do not constitute "export of service," particularly if the client agreements and all other relevant information are still the same.

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