Supreme Court

SLP Filed Merely to Get ‘Stamp of this Court’: Supreme Court Rejects Income Tax Dept Plea Against Adani Power

ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1 (1) vs ADANI POWER LIMITED 

CITATION : 2026 TAXSCAN (SC) 125s

In the Adani Power matter, the Supreme Court refused to entertain the Income Tax Department’s SLP against a Gujarat High Court order quashing reassessment, noting a 426‑day delay supported only by a vague “administrative/departmental procedures” explanation and remarking that the SLP appeared filed merely to obtain the stamp of the Court. The Court endorsed the High Court’s finding that reopening beyond four years, without any fresh tangible material and based solely on records already examined under Section 143(3), was an impermissible change of opinion, and dismissed the SLP both on limitation and on merits, thereby giving finality to the relief granted to Adani Power

In the ITAT Delhi case, the Tribunal reiterated that a mutual cooperative credit society,whose very business is to take deposits from members and lend only to those members, cannot have such member‑linked deposits and loans mechanically treated as unexplained merely for want of individual confirmations in bulk, especially when its operations and membership are formally recognised. Noting that the Assessing Officer had even overstated the actual quantum of transactions during the year, the ITAT accepted the society’s evidence, recognised its registered mutual status, and deleted large additions made towards alleged unexplained term deposits and cash deposits.

Supreme Court Upholds Odisha Entry Tax Act in Tata Sponge Iron Case, Refuses to Reopen Constitutional Challenge

M/S TATA SPONGE IRON LTD vs THE STATE OF ODISHA 

CITATION : 2026 TAXSCAN (SC) 126

In the Tata Sponge Iron matter, the Supreme Court refused to reopen the constitutional challenge to the Odisha Entry Tax Act, 1999, holding that the issue was already concluded in earlier proceedings between the same parties. Tata Sponge Iron again sought to strike down the Act and claim a refund of entry tax, alleging violations of Articles 301 and 304(a) and lack of legislative competence, but the Court accepted the State of Odisha’s objection that an identical challenge had been dismissed by the Orissa High Court in 2002 and that dismissal was affirmed by the Supreme Court in 2017. Noting that the reliefs now sought were the same as in the earlier writ and that “liberty” orders in other entry‑tax cases were confined to the petitioners in those matters, the Bench led by Justice Aravind Kumar held that Tata Sponge Iron could not use them to revive a concluded challenge. The Court therefore dismissed the SLP, declined to interfere with the 2019 Orissa High Court judgment, and clarified that its observations are confined to this case and do not affect other pending challenges to the levy.

Employer vs Employee PF/ESI Contributions Treatment under Income Tax: Supreme Court to Resolve Deduction Issue

WOODLAND (AERO CLUB) PRIVATELIMITED DIRECTOR vs ASSISTANT COMMISSIONER OF INCOME TAX 

CITATION : 2026 TAXSCAN (SC) 127

In Woodland (Aero Club) Pvt. Ltd., employees’ PF/ESI contributions of about ₹4.14 crore were deposited after the due dates under the PF/ESI laws but before the income‑tax return due date. The Delhi High Court upheld disallowance, holding that employer contributions fall under Section 36(1)(iv) read with Section 43B and are deductible if paid up to the return‑filing due date, while employees’ contributions are treated as income under Section 2(24)(x) and are deductible under Section 36(1)(va) only if paid by the “due date” in the PF/ESI Acts, with Section 43B not relaxing this condition.

On appeal, the Supreme Court has noted two conflicting views: one says employees’ contributions are allowable only if deposited within the PF/ESI statutory due dates; the other allows deduction if they are paid before the Section 139(1) return‑filing due date, like employer contributions. Because of this conflict, the Court has issued notice and will now decide which interpretation of “due date” will apply.

Service Tax Exemption Limited to PGP and not to PGPPM, PGPEM, and EPGP Courses: SC Dismisses Revenue’s Delayed Appeal Against IIM

THE COMMISSIONER OF SERVICE TAX II vs INDIAN INSTITUTE OF MANAGEMENT 

CITATION : 2026 TAXSCAN (SC) 128

IIM Bangalore was issued substantial service tax demands on fees collected for four long‑term programmes: the two‑year Post Graduate Programme in Management (PGP), and the PGPPM, PGPEM, and EPGP executive/specialised courses. During audit, the department treated these as “commercial training or coaching services” and raised demands running into several crores for 2010–2017, arguing that the programmes were not covered by any exemption.

IIM argued that all its long‑duration programmes were recognised and equivalent to MBA‑level qualifications, relying on old Ministry of Education and AIU communications recognising PGDM, later MHRD letters equating IIM programmes to MBA/PhD, the exemption notifications (including Notification No. 9/2016‑ST) covering PGP and Fellowship programmes, and even the IIM Act, 2017 declaring IIMs institutions of national importance. The Tribunal, however, drew a clear line: it accepted that the regular two‑year PGP fell squarely within the specific exemption and dropped service tax on that course, but held that PGPPM, PGPEM, and EPGP did not automatically get the same benefit merely because they were offered by IIM and were not clearly covered as recognised degree‑equivalent qualifications in the exemption framework. It also rejected the argument that the IIM Act, 2017, by itself, retrospectively exempted all IIM courses.

On this basis, the Tribunal held that only PGP was exempt, while PGPPM, PGPEM, and EPGP remained taxable. The Commissioner of Service Tax appealed to the Supreme Court, but the Court dismissed the appeal solely on the ground of delay in filing, without reopening the merits. As a result, the Tribunal’s course‑specific position now stands: exemption is confined to the PGP (and programmes explicitly covered in the notification), and the other executive/specialised programmes continue to attract service tax.

Supreme Court Refuses to Interfere with Delhi HC Ruling Holding Siemens Mobile Had No PE in India

THE COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION 3 vs SIEMENSMOBILE COMMUNICATION SPA

CITATION : 2026 TAXSCAN (SC) 129

The Supreme Court refused to interfere with the Delhi High Court’s finding that Siemens Mobile Communication SPA did not have a permanent establishment (PE) in India through its Indian subsidiary and that no income could be attributed to it in India on this basis.

The case arose from Revenue appeals against a 2019 ITAT order, where the department claimed that installation, testing, maintenance and marketing activities of the Indian subsidiary, along with alleged visits of foreign employees, created a PE under Article 5 of the India–Italy DTAA. Siemens Mobile maintained that its role was confined to offshore supply of telecom hardware from Italy, with contracts executed, title transferred and payments received outside India, and that all onshore activities were independently carried out and taxed in the hands of the Indian subsidiary.

A Division Bench of the Delhi High Court (Justice Yashwant Varma and Justice Harish Vaidyanathan Shankar) found no material to establish a PE in India, noting the limited contract period, absence of employee visits after execution and even warranty repairs being routed back to Italy, and dismissed the Revenue’s appeals. The Supreme Court Bench of Justice Pamidighantam Sri Narasimha and Justice Vijay Bishnoi dismissed the special leave petitions, thereby affirming the High Court’s decision.

No Sufficient Cause to Revise Income Tax Exemption Order after 7 Years: Supreme Court Backs Telangana HC in Tata Projects Case

TATA PROJECT PROVIDENT FUND TRUST vs THE PRINCIPAL COMMISSIONER OFINCOME TAX & ORS.

CITATION : 2026 TAXSCAN (SC) 130

Tata Projects Provident Fund Trust has lost its bid to reopen a seven‑year-old tax exemption dispute, with the Supreme Court firmly backing the Telangana High Court’s refusal to allow a highly delayed revision plea. The Trust’s claim for exemption of about ₹10.21 crore under Section 10(25) for AY 2014‑15 was disallowed in March 2016, and its rectification plea was rejected in December 2016, but it moved a revision under Section 264 only after roughly 91 months, blaming an email sent to a former employee, an explanation the tax authorities branded as gross negligence from an institutional assessee expected to track orders on the e‑filing portal.

The Telangana High Court held that the real issue was not whether the exemption was otherwise allowable, but that Tata Projects had shown no “sufficient cause” for such an extraordinary delay, and therefore could not invoke revisional powers so late in the day. On appeal, the Supreme Court Bench of Justices Dipankar Datta and Satish Chandra Sharma condoned the delay in filing the SLP but declined to interfere with the High Court’s reasoning, effectively confirming that stale income tax revision claims filed years beyond the deadline will not be revived without very strong justification.

Supreme Court Declines to Entertain Plea Against Delhi HC Ruling Setting Aside SFIO Investigation into Moser Baer Group

KARANARTHAM VIRAMAH FOUNDATIONvs THE ADDITIONAL DIRECTOR & ORS

CITATION : 2026 TAXSCAN (SC) 131

The Supreme Court has declined to entertain a plea challenging the Delhi High Court judgment that had set aside the Central Government’s order directing an SFIO probe into the affairs of Moser Baer India Ltd. and its group companies. The petition also sought to assail an earlier Bombay High Court decision, but the Court noted that the same Bombay High Court order had already been challenged in 2017 and the Special Leave Petition was then dismissed both on the ground of delay and on merits, while the present attempt came after an extraordinary delay of 3,299 days.

On the Delhi High Court leg, the petitioner argued that the High Court had wrongly quashed the SFIO investigation ordered under Section 212(1)(c) of the Companies Act, 2013, and that the Central Government’s “opinion” could be supported by additional reasons furnished later in affidavits. The Bench of Justices Prashant Kumar Mishra and N.V. Anjaria held that the High Court had correctly applied settled law, referring to Barium Chemicals Ltd. v. Company Law Board and Mohinder Singh Gill v. Chief Election Commissioner to reiterate that the power under Section 212(1)(c) is not to be exercised casually and that the validity of such an order must stand or fall on the reasons recorded in the order itself, not on subsequent justifications. Finding no error in the Delhi High Court’s reasoning, the Supreme Court dismissed the Special Leave Petition in KARANARTHAM VIRAMAH FOUNDATION v. THE ADDITIONAL DIRECTOR & ORS., decided on 27 January 2026.

Supreme Court issues Notice on Centre’s Plea Claiming Power to Levy Interest & Penalty on IGST Under Unamended Customs Tariff Act

UNION OF INDIA vs A. R. SULPHONATES PRIVATE LIMITED

CITATION : 2026 TAXSCAN (SC) 132

The Supreme Court has agreed to examine whether interest and penalty could legally be levied on IGST on imported goods under Section 3(12) of the Customs Tariff Act, 1975, in its unamended form, i.e., before the Finance Act 2 of 2024. The Union of India has challenged a Bombay High Court judgment which had held that such interest and penalty could not be imposed on IGST, prompting the Centre to file a Special Leave Petition against that decision.

Before the Supreme Court, the Centre argued that the unamended Section 3(12) operated as legislation by reference and that once the power to levy IGST was incorporated, the ancillary powers to levy interest and penalty followed, relying on Ujagar Prints. In response, A. R. Sulphonates Private Limited contended that there was no specific provision authorising interest and penalty on IGST in the unamended law and cited Mahindra & Mahindra and Orient Fabrics to assert that such imposts require clear statutory authority. A Bench of Justices K.V. Viswanathan and Vipul M. Pancholi condoned the delay, issued notice to the respondent, and fixed 7 April 2026 for further hearing, framing it as an important question of law on the scope of Section 3(12); the Court will now decide whether, under the pre‑2024 regime, interest and penalty on IGST were at all permissible.

“Targeted Departmental Vendetta, Mala Fide Actions”: Supreme Court Sets Aside ITAT Accountant Member Selection, Orders Fresh SCSC for Ex-Army Officer

CAPTAIN PRAMOD KUMAR BAJAJ vs UNION OF INDIA

CITATION : 2026 TAXSCAN (SC) 133

The Supreme Court has set aside the selection process for the post of Accountant Member, ITAT, in the case of ex-Army officer Captain Pramod Kumar Bajaj, calling it a “sordid tale of targeted departmental vendetta, full of mala fide actions and protracted persecution.” The Court noted that Bajaj, a disabled war veteran who later became Commissioner of Income Tax and secured All India Rank 1 in the 2014 SCSC process for ITAT Member (Accountant), was never issued an appointment order despite being duly recommended, and was instead subjected to repeated adverse actions, including compulsory retirement under FR 56(j) just months before superannuation, an order earlier quashed in 2023 as punitive, not in public interest.

In the present writ, the Bench of Justices Vikram Nath and Sandeep Mehta held that the reconstituted 2024 SCSC was vitiated by bias because it included an officer against whom contempt proceedings had been initiated at the instance of the petitioner, and stressed that even one biased member contaminates the entire selection. The Court also recorded that the Union of India did not file any reply despite being given time, leaving serious allegations of mala fides unrebutted. Accordingly, it set aside the SCSC minutes dated 1 September 2024 insofar as they related to Bajaj, directed the DoPT to convene a fresh SCSC within four weeks excluding the tainted officer, and imposed costs of ₹5 lakh on the respondents.

Supreme Court Upholds ₹2.9 Crore GST Refund to SAIL on Unutilised ITC of Coal

THE STATE OF JHARKHAND & ORS vs STEEL AUTHORITY OF INDIA LIMITED

CITATION : 2026 TAXSCAN (SC) 134

The Supreme Court has upheld the Jharkhand High Court’s direction to grant a GST refund of ₹2.9 crore to Steel Authority of India Limited (SAIL) towards unutilised input tax credit of compensation cess paid on coal for exports made without payment of tax in 2017–18. The High Court had found that although the department initially communicated that the refund was sanctioned in October 2019, no amount was actually released, and the alleged refund rejection order was neither served on SAIL nor traceable in official records, making the rejection invalid and requiring processing of the original refund claim with 6% interest.

On appeal, the Supreme Court Bench of Justices J.B. Pardiwala and K.V. Viswanathan noted a substantial delay of 676 days in the State of Jharkhand’s filing, which was inadequately explained, and also saw no justification to interfere with the High Court’s reasoning on merits. The Court therefore dismissed the State’s appeal both on limitation and merits, while expressly keeping the broader question of law on interest open, thereby confirming SAIL’s entitlement to the ₹2.9 crore GST refund as ordered by the Jharkhand High Court.

Supreme Court Dismisses CBDT SLPs against Telangana HC Order Quashing Income Tax Notices issued to Telangana Pollution Control Board

CENTRAL BOARD OF DIRECT TAXES & ORS. vsTELANGANA STATE POLLUTION CONTROL BOARD

CITATION : 2026 TAXSCAN (SC) 135

The Supreme Court has declined to interfere with the Telangana High Court’s decision quashing Income Tax Department communications issued to the Telangana State Pollution Control Board. The Board had argued that, as a statutory body performing regulatory public functions under environmental laws, it could not be mechanically treated like an ordinary commercial assessee and subjected to routine income tax compliance notices.

A Division Bench of Justices M.S. Ramachandra Rao and T. Vinod Kumar accepted this contention and set aside the impugned departmental actions. On appeal, a Bench of Justices B.V. Nagarathna and Ujjal Bhuyan heard the CBDT and Union of India but found no ground to disturb the High Court’s reasoning, dismissing the Special Leave Petitions and thereby confirming the relief granted to the Telangana State Pollution Control Board.

Supreme Court Stays Bombay HC Order Refusing to Condone Delay in Central Excise Appeals Filed During Pendency of Rectification Applications

SANVIJAY ROLLING AND ENGINEERING LTD vs COMMISSIONER OF CGST AND CENTRALEXCISE NAGPUR

CITATION : 2026 TAXSCAN (SC) 136

The Supreme Court has stayed a Bombay High Court order that had refused to condone delay in Central Excise appeals filed by Sanvijay Rolling and Engineering Ltd. while its rectification applications were still pending before CESTAT. The High Court had held that an assessee cannot simultaneously pursue rectification under Section 35C(2) and an appeal under Section 35G, rejected delay‑condonation requests, and even imposed costs of ₹5,000 per application.

Sanvijay Rolling and Engineering Ltd. had received the CESTAT order with the 180‑day appeal period ending on 30.08.2022, but filed appeals only on 27.02.2023 and sought condonation of 184 days’ delay, arguing that the limitation should run from the rectification order since that application was pending. The Bombay High Court rejected this, held Section 14 of the Limitation Act inapplicable because CESTAT had proper jurisdiction, and treated the assessee as attempting two parallel remedies that could lead to conflicting views. On 06.02.2026, however, the Supreme Court Bench of Justices P.S. Narasimha and Alok Aradhe issued notice in the SLP and stayed the operation of the High Court’s order, keeping the matter open for a final decision on whether such appeals can be treated as within time when rectification is pending.

Supreme Court upholds Rajasthan HC Ruling Quashing S. 148 Reassessment Notices Based on Third-Party Search Material

ASSISTANT COMMISSIONER OF INCOME TAX & ANR vs GOPAL PRASAD GUPTA

CITATION : 2026 TAXSCAN (SC) 137

The Supreme Court has refused to entertain the Income Tax Department’s SLP against a Rajasthan High Court judgment that quashed Section 148 reassessment notices issued solely on the basis of search material seized from a third party, the Ramesh Manihar Group. The High Court had held that where the entire basis for reopening is seized documents, pen drives and statements from a third‑party search, the proper route is the special provision under Section 153C (for “other person” cases), not a general reassessment under Section 148, and accordingly set aside the notices and rejection orders while leaving liberty to proceed as per law.

In the lead case of Gopal Prasad Gupta (AY 2014‑15, returned income ₹18.76 lakh), the department alleged unaccounted loans and interest from the third‑party search material, but the High Court rejected its contention that Sections 153A/153C do not bar use of Section 148, despite reliance on precedents like M.R. Shah Logistics and Abhisar Buildwell. When the department carried the matter to the Supreme Court, a Bench of Justices J.B. Pardiwala and Sandeep Mehta noted an unexplained delay of 560 days in filing the SLP and found no reason to interfere on merits, dismissing the petition both on limitation and substance and thereby letting the Rajasthan High Court ruling stand.

Reassessment Notices Beyond Six-Year Limitation Invalid: Supreme Court Upholds Delhi HC Order

INCOME TAX OFFICER WARD 27 DELHI vs KALPANA BUILDMART PRIVATE LIMITED

CITATION : 2026 TAXSCAN (SC) 138

The Supreme Court has affirmed that the extended ten‑year reassessment window under the new Section 149 cannot be used to reopen cases that were already time‑barred under the earlier six‑year regime. For AY 2014‑15, the Delhi High Court had quashed a reassessment notice dated 30.08.2024 issued to Kalpana Buildmart Pvt Ltd under Section 148, holding it was barred by limitation because the six‑year period from the end of that year expired on 31.03.2021 and the new law cannot revive a dead assessment.

Relying on the Supreme Court’s own decision in Union of India v. Rajeev Bansal and the earlier ruling in Manju Somani, the High Court noted that for assessment years up to 2021–22, a fresh notice under the “new regime” is possible only if, on the date of issue, limitation under the old Section 149(1)(b) still survives, once the six years are over, the game is over, regardless of the new ten‑year framework. When the Revenue challenged this before the Supreme Court, a Bench of Justices J.B. Pardiwala and Sandeep Mehta found the SLP was hit by an unexplained delay of 327 days and, finding no merit to interfere with the High Court’s reasoning, dismissed it on both limitation and merits, thereby letting the Delhi High Court’s order stand.

Supreme Court Upholds Gujarat HC Ruling Quashing Mechanical Income Tax Reopening Notices Based on ‘National Shroff Angadiya’ Search Inputs

INCOME TAX OFFICER ITO WD 2(1)(1), RKT & ANR vs AMITKUMAR CHANDULALRAJANI

CITATION : 2026 TAXSCAN (SC) 139

The Supreme Court has upheld the Gujarat High Court’s decision quashing reassessment notices issued under Section 148 that were mechanically based on search/survey inputs from the “National Shroff” angadiya group. The Assessing Officer had reopened AYs 2013–14, 2014–15 and 2015–16 solely on a generic intimation from DCIT, Central Circle‑1, Rajkot, alleging transactions with the searched group, without citing any specific transaction of the assessee, and even wrongly assumed that returns were not filed for some years.

Before the Gujarat High Court, the assessee pointed out these factual errors, the absence of any underlying documents or statements being supplied despite request, and argued that the AO’s “reasons to believe” were mere borrowed satisfaction without independent enquiry. The High Court held that reasons were recorded in a purely mechanical manner, that calling the material “confidential” could not justify withholding it, that objections were not properly dealt with, and that there was no live link between the information and alleged escapement of income; it therefore quashed the 30 March 2021 notices for all years. The Income Tax Department’s SLP was then taken up by a Supreme Court Bench of Justices Manoj Misra and Manmohan, which, after condoning delay, saw no ground to interfere under Article 136 and dismissed the petition, letting the Gujarat High Court’s ruling stand.

Reassessment Invalid If AO fails to Dispose Objections by Speaking Order: Supreme Court Refuses to Interfere With Karnataka HC Order

THE DEPUTY COMMISSIONER OFINCOME TAX CIRCLE vs HEWLETT PACKARD FINANCIAL SERVICES (INDIA) PVT LTD

CITATION : 2026 TAXSCAN (SC) 140

The Supreme Court has affirmed that a reassessment is invalid if the Assessing Officer fails to dispose of the assessee’s objections by a separate, reasoned (speaking) order before proceeding. In the Hewlett Packard Financial Services (India) Pvt. Ltd. case, the Karnataka High Court had set aside both the Section 148 notice and the reassessment order because, after communicating the reopening reasons, the AO did not pass a speaking order on the assessee’s objections as mandated in GKN Driveshafts.

On appeal, the Revenue argued this lapse was a mere curable irregularity and sought a remand, but the Karnataka High Court held that non‑compliance with the GKN procedure vitiates the reassessment itself, especially given that limitation had already expired. A Division Bench (Justice Krishna S. Dixit and Justice G. Basavaraja) reiterated that reopening is a serious step and procedural safeguards cannot be bypassed. The Revenue’s further challenge by special leave was then dismissed by the Supreme Court (Bench of Justices Dipankar Datta and Satish Chandra Sharma), which, while condoning delay, declined to interfere with the High Court’s reasoning, thereby confirming that failure to pass a speaking order on objections is fatal to the reassessment.

Supreme Court set to examine whether Income Tax Dept. can condone ITR filed with 30-Month Delay

SIREZ LIMITED vs UNION OF INDIA

CITATION : 2026 TAXSCAN (SC) 141

The Supreme Court has agreed to examine whether the Income Tax Department can condone a 30‑month delay in filing an Income Tax Return under Section 119(2)(b) of the Income-tax Act, 1961. In M/s Sirez Limited’s case (AY 2018‑19), the company missed the extended due date of 31.10.2018 and filed its ITR only on 20.09.2021, and CBDT’s refusal to condone the delay has resulted in denial of carry‑forward of business loss of ₹1,06,60,750 and refund/credit of TDS of ₹19,73,540.

The Delhi High Court had earlier rejected Sirez’s writ, holding that internal disputes among directors and financial hardship did not amount to “genuine hardship” and that no proof of extraordinary circumstances was produced. Hearing Sirez’s SLP, a Bench of Justices J.B. Pardiwala and K.V. Viswanathan has now issued notice, framing the key question as whether delay in filing a return of income can be condoned under Section 119(2)(b), and has listed the matter for further hearing on 09.03.2026, with the outcome expected to shape future treatment of heavily delayed ITRs and condonation requests.

SC Stays Enforcement of Substantial Tax Demand, Bars Coercive Recovery Against Fantasy Gaming Company

FANMADE11 FANTASY SPORTS PRIVATE LIMITED vs UNION OF INDIA & ORS

CITATION : 2026 TAXSCAN (SC) 142

The Supreme Court has granted strong interim protection to Fanmade11 Fantasy Sports Pvt Ltd by staying enforcement of a substantial tax demand arising from its online fantasy sports operations. The Court has directed that no coercive recovery steps, such as recovery proceedings, attachment of property, or other enforcement measures, be taken against the company for now.

A Bench led by Chief Justice Surya Kant, with Justices Joymalya Bagchi and Vipul M. Pancholi, noted that similar issues are already pending in the Gameskraft Technologies matter, where judgment has been reserved, and decided that Fanmade11’s case will be listed only after that judgment is delivered. In effect, the tax demand has been put in cold storage, and the fantasy gaming company is shielded from immediate harm until the Supreme Court settles the broader questions around GST treatment of online gaming and the “game of skill vs gambling” debate.

Supreme Court Stays TDS Demand Notices Against SBI in Foreign LTC Reimbursement Case

STATE BANK OF INDIA vs THE DEPUTY COMMISSIONER OF INCOME-TAX

CITATION : 2026 TAXSCAN (SC) 143

The Supreme Court has stayed TDS demand notices issued against State Bank of India in the foreign Leave Travel Concession reimbursement dispute, putting the Karnataka High Court’s adverse ruling on hold for now. The High Court had earlier upheld demands under Sections 201(1) and 201(1A), after a survey revealed SBI had not deducted TDS on LTC payments where employees’ journeys included a foreign leg, which the Revenue argued was outside the exemption in Section 10(5).

SBI contended that it had tried to withdraw foreign LTC benefits but was constrained by interim court orders in parallel litigation, and therefore should not be treated as a defaulter in TDS deduction. The Revenue relied on the Supreme Court’s 2023 ruling holding that LTC involving foreign travel is not exempt and that employers must deduct TDS. The present Supreme Court Bench of Justices Dipankar Datta and Satish Chandra Sharma has now issued notice and stayed the impugned demand notices, giving SBI interim breathing space until the matter is finally heard and decided.

COVID-19 Window u/s 10A IBC Not Applicable If Default Predates 25 March 2020: Supreme Court Holds Failed Restructuring Can’t Shift Default Date

Power Trust vs Bhuvan Madan

CITATION : 2026 TAXSCAN (SC) 144

The Supreme Court has held that the COVID‑19 moratorium under Section 10A of the Insolvency and Bankruptcy Code cannot be invoked if the borrower’s default occurred before 25 March 2020, and that a failed restructuring proposal cannot be used to “reset” or shift the original default date. In the case of Hiranmaye Energy Ltd., REC Ltd. claimed default as far back as 31 March 2018 on loans under a 2013 agreement, with dues exceeding ₹21,83 crore as of June 2021, and both NCLT Kolkata (2 January 2024) and NCLAT (25 January 2024) had already admitted REC’s Section 7 application and commenced CIRP.

Power Trust, the promoter, argued that a restructuring proposal dated 21 February 2020 revised the repayment schedule so that interest would start from 30 June 2020 and instalments from 31 December 2020, thereby pushing the default into the Section 10A COVID window. The Court, per Justice Joymalya Bagchi (with CJI Surya Kant and Justice Vipul M. Pancholi), rejected this, noting that key pre‑implementation conditions of the restructuring (tariff order, DSRA, priority debt, working capital) were never fulfilled, so it never took effect and could not alter the 2018 default date. It further stressed that Section 10A, by its own Explanation, only shields defaults occurring on or after 25 March 2020, and even on the second restructuring version the first instalment was due on 31 March 2021, i.e., after the 10A window; accordingly, the Section 7 application was held to be valid and not barred.

Supreme Court Refuses to Entertain Challenge in GST Fake ITC Matter, Extends Time for Filing Statutory Appeal

M/S C L INTERNATIONAL & ANR vs ADDITIONAL COMMISSIONER

CITATION : 2026 TAXSCAN (SC) 145

The Supreme Court has declined to interfere with the Delhi High Court’s refusal to entertain a writ petition in a GST fake ITC case, but has granted the taxpayer more time to pursue the statutory appeal route. M/s C L International & Anr. had challenged a show cause notice and Order‑in‑Original alleging bogus ITC claims through fake invoices and non‑existent entities, arguing that relied‑upon documents were not supplied and their SCN reply was ignored.

The Delhi High Court, however, held that the dispute involved complex factual inquiries, about multiple entities, their promoters, addresses and inter‑linkages, which are best examined in an appeal under Section 107 of the CGST Act, not in writ jurisdiction, and gave time till 1 February 2026 to file such appeal with pre‑deposit. On SLP, a Bench of Justices K.V. Viswanathan and Vipul M. Pancholi found no ground to upset that order but, on request, extended the deadline to 16 March 2026, reiterating that the appeal must be filed with the requisite pre‑deposit and then decided on merits.

High Courts

Dormant Partner- Wife Not Vicariously Liable for Benami Transactions: Madras HC confirms Charges against Husband and Firm

R.Kalaivani vs Deputy Commissioner of Income Tax

CITATION : 2026 TAXSCAN (HC) 226

The Madras High Court has held that a dormant partner‑wife cannot be fastened with vicarious criminal liability for alleged benami transactions of a partnership firm in the absence of specific pleadings about her role, while allowing prosecution to continue against the husband (Managing Partner) and the firm.

In the case concerning M/s V.P.C. & Co., the Department alleged suspicious cash deposits of ₹68.71 crore during demonetisation, supported by allegedly fabricated sales bills and vehicle details, and sought to prosecute the husband, wife and firm under the PBPT Act. The Court found a clear prima facie case to proceed against the Managing Partner and the firm, noting his signatures on financials and his control over affairs, and therefore declined to discharge them. However, as regards the wife, it accepted her stand that she was only a dormant partner, noted that the complaint lacked the specific averments required under Section 62 PBPT Act to show she was “in charge of and responsible for” the conduct of business, applied the principle that vicarious criminal liability requires precise pleadings and proof (not mere status as partner), and therefore discharged her, while clarifying she could be added later under Section 319 CrPC if evidence emerges.

23 Days Delay in Filing GST Appellate Appeal: Orissa HC Directs Liberal Approach

M/s. Meghnath Kapri vs Chief Commissioner of CT and GST and others

CITATION : 2026 TAXSCAN (HC) 227

The Orissa High Court has held that a GST appeal filed with a short delay, 23 days in this case, should not be thrown out mechanically and that such delay must be viewed liberally when it falls within the condonable period. The petitioner, Meghnath Kapri, had challenged an assessment for 2017–18 raising a demand of about ₹2.99 crore and filed an appeal that was 23 days late; the appellate authority rejected it solely because no reply was filed to its notice on delay.

A Division Bench of Chief Justice Harish Tandon and Justice Murahari Sri Raman noted that the delay was within the statutory condonable window and that the assessee cited medical and uncontrollable circumstances, yet was denied a real opportunity to explain. The Court quashed the rejection order, remanded the matter, and directed the appellate authority to first give the petitioner a chance to justify the delay and then decide the appeal on merits, emphasising that minor, condonable delays should not defeat substantive appellate rights.

GST Department Cannot Recover Interest u/s 79 Without Adjudicatory Process: AP HC Orders Refund to Iron Dealer

M/S SONA ENTERPRISES vs ASSISTANT COMMISSIONER OF CENTRAL TAX

CITATION : 2026 TAXSCAN (HC) 228

The Andhra Pradesh High Court has ruled that the GST Department cannot use coercive recovery powers under Section 79 to collect interest without first completing a proper adjudicatory process. In the case of M/s Sona Enterprises, an iron and steel scrap dealer, the Department had directly issued recovery and bank‑attachment notices for interest, citing alleged wrong use of ITC for July 2017 to March 2021, without any show cause notice or reasoned order explaining how interest was computed.

The Court held that Section 75(12), which allows straight recovery of “self‑assessed tax” admitted in returns, is confined to clearly admitted liabilities in GSTR‑3B and does not cover disputed issues like alleged misuse of ITC. Such disputes must be examined through adjudication under Sections 73 or 74, and only after a determination can Section 79 be invoked. Setting aside the recovery and bank attachment, the Bench directed refund of the interest already taken from the petitioner’s bank account, while leaving the Department free to start proper adjudication proceedings if it chooses.

GST Demand for Advertisement Fee Cannot Be Enforced Without Hearing: P&H HC

CSJ Infrastructure Private Limited vs Union Territory of Chandigarh

CITATION : 2026 TAXSCAN (HC) 229

The Punjab & Haryana High Court has held that a GST demand for advertisement fee cannot be straightaway enforced without first giving the affected party a fair hearing. In the case of CSJ Infrastructure Private Limited, the Municipal Corporation, Chandigarh had directly issued a demand of ₹2.12 crore towards advertisement fee, penalty, interest and GST for displays within the petitioner’s mall, without any prior notice or opportunity to respond.

During the hearing, counsel for the Municipal Corporation agreed that due process would be followed and that the impugned demand could be treated as a show cause notice. Justice Harsh Bunger therefore directed that the demand notice be treated only as an SCN, and ordered the competent authority to hear the petitioner and pass a reasoned, speaking order within four weeks. This ensures that no coercive recovery can be based on the demand unless and until such a hearing and fresh decision take place.

CIT Not Competent Authority to Grant Sanction to Prosecute Income Tax Officer in Corruption Case: Calcutta HC

Central Bureau of Investigation vs Chandra Nath Kayal

CITATION : 2026 TAXSCAN (HC) 230

The Calcutta High Court has held that a Commissioner of Income Tax is not a competent authority to grant sanction to prosecute an Income Tax Officer (ITO) who was appointed by the Chief Commissioner of Income Tax in a corruption case. The Court stressed that, under Section 19(1)(c) of the Prevention of Corruption Act, 1988 and Article 311(1) of the Constitution, sanction must come from the authority that has the power to remove the public servant from service; since the ITO’s appointing/removal authority was the Chief Commissioner, a sanction signed by the Commissioner was void ab initio.

In the CBI case against ITO Chandra Nath Kayal, the Special CBI Court had already discharged the officer on this ground. On revision, Justice Uday Kumar upheld that discharge, rejecting CBI’s reliance on departmental notifications and its plea to cure the defect by obtaining a fresh sanction. The Court reasoned that administrative notifications cannot override constitutional safeguards and, crucially, since the State of West Bengal has withdrawn general consent to CBI under the DSPE Act, obtaining a fresh, valid sanction would require a new exercise of investigative power that the CBI can no longer lawfully undertake in the State, making the defect incurable in this case.

Natural Justice Breach in Faceless Assessment: Delhi HC Nullifies AO’s Order, Directs CBDT to Fix DRP Procedure

EXPRESS FREIGHT CONSORTIUM vs ASSESSMENT UNIT, INCOME-TAX DEPARTMENT

CITATION : 2026 TAXSCAN (HC) 231

The Delhi High Court has set aside a faceless final assessment order and demand against Express Freight Consortium after finding a breach of natural justice: the Assessing Officer completed the assessment without considering the assessee’s objections that had actually been filed before the Dispute Resolution Panel (DRP). The assessee had filed objections against the draft order in time before the DRP but did not forward a copy to the AO, assuming the DRP would do so; the AO, seeing no objections on record, treated the situation as if none had been filed and passed the final order.

The Bench (Justices Dinesh Mehta and Vinod Kumar) held that although Section 144C(2)(b) technically requires the assessee to send a copy of objections to the AO, this lapse could not nullify the statutory scheme which is meant to ensure that once objections are filed, the AO must await the DRP’s directions before finalising the assessment. Passing a final order mid‑way effectively rendered the DRP process meaningless and violated natural justice, so both the assessment order and demand notice were quashed. Importantly, the Court also directed CBDT to introduce a procedural safeguard: the DRP registry should not accept objections unless the assessee also files proof that they have been served on the AO, to avoid both inadvertent lapses and deliberate attempts to game timelines.

Income Tax Reassessment Notice for AY 2015-16 Issued Beyond 10 Years is Time-Barred: Delhi HC Quashes Proceedings

M/S UCB DEVELOPERS LLP vs ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE32, DELHI & ANR.

CITATION : 2026 TAXSCAN (HC) 232

The Delhi High Court has held that a reassessment notice for AY 2015–16 issued beyond the outer limit of ten years is time‑barred and therefore invalid. In UCB Developers LLP’s case, the assessee had received a notice under Section 148A(b), followed by an order under Section 148A(d) and a reassessment notice under Section 148, all seeking to reopen AY 2015–16.

The Bench of Justices Dinesh Mehta and Vinod Kumar applied the second proviso to Section 149(1) and reasoned that since the order under Section 148A(d) fell in AY 2025–26, looking back ten years allowed reopening only up to AY 2016–17; AY 2015–16 lay outside this window, making the notice dated 31 August 2024 and all consequential proceedings time‑barred. The Court also noted that the facts were materially identical to its earlier decision in Pankaj Jain, where a notice for the same year issued on 30 August 2024 had been quashed, and held that a one‑day difference in notice date did not change the legal result. The writ petition was therefore allowed, and the reassessment notice and all follow‑up actions were quashed.

GST Payers Must Remain Vigilant of Portal Orders, Says Gujarat HC as it Rejects Appeal Delay Beyond 120 Days

AGRAWAL ENTERPRISES vs STATE OF GUJARAT

CITATION : 2026 TAXSCAN (HC) 233

The Gujarat High Court has held that GST taxpayers must actively monitor orders and notices on the GST portal and cannot seek extra time beyond the clear statutory cap of 120 days for filing appeals. In Agrawal Enterprises’ case, a demand order dated 21 March 2024 under Section 74 created a liability of about ₹5.03 lakh; however, the firm tried to appeal only after 284 days, well past the 90‑day appeal period plus the additional condonable 30 days allowed under Section 107(4).

The Court rejected arguments based on lack of computer literacy, reliance on a part‑time accountant, and non‑receipt of physical or email notice, observing that such excuses are unacceptable in the present digital era and that taxpayers are expected to be vigilant about portal‑based communication. Relying on Supreme Court rulings like Singh Enterprises and Glaxo SmithKline, the Bench (Justices A.S. Supehia and Pranav Trivedi) held that limitation in tax laws is mandatory; once 120 days have lapsed, neither the appellate authority nor the High Court can extend time, and the writ petition was therefore dismissed.

No Discharge Certificate issued for 2019 SVLDRS despite Payment: Kerala HC Directs Central GST & Excise Dept to Issue Certificate

GEO FOUNDATIONS AND STRUCTURES PVT. LTD vs THE JOINT COMMISSIONER OFCENTRAL TAX & CENTRAL EXCISE

CITATION : 2026 TAXSCAN (HC) 234

The Kerala High Court has held that once an assessee has paid the amount determined under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, the authorities are bound to issue the discharge certificate, and they cannot deny it merely because the online portal has been shut down. In the case of Geo Foundations and Structures Pvt. Ltd., a works contractor who had duly opted into SVLDRS, filed the declaration, and remitted the full payable amount, the Central GST and Central Excise Department failed to generate Form SVLDRS‑4, citing the non‑functional status of the legacy scheme portal.

Justice Ziyad Rahman A.A. ruled that the exoneration under the scheme flows from payment and compliance, not from the technical availability of a portal, and that if the system is non‑operational it becomes the department’s obligation to issue a manual discharge certificate. Accordingly, the Court directed the Central GST and Central Excise authorities to manually issue the SVLDRS discharge certificate to the petitioner within two months, formally evidencing settlement of the legacy dues.

GST Registration Cancelled for ITC Violation Without Reply: Calcutta HC Allows Revocation Plea

Sk. Amir Chand vs The State of West Bengal & Ors.

CITATION : 2026 TAXSCAN (HC) 235

The Calcutta High Court has held that a taxpayer whose GST registration was cancelled for alleged wrongful ITC availment can still seek revocation before the Proper Officer, instead of approaching the High Court directly. In Sk. Amir Chand’s case, his registration was cancelled on 29 July 2025 for ITC violations under Section 16 after he failed to reply to a show‑cause notice, which he said was due to a serious illness in the family.

Justice Om Narayan Rai noted that Section 30 of the GST Act read with Rule 23 allows an assessee to apply for revocation of cancellation, and that Amir Chand had come to court within that revocation window. While declining to interfere with the cancellation order or examine the ITC merits, the Court granted him liberty to file a revocation application within two weeks, directed the Proper Officer to treat it as within time, and ordered that it be decided within four weeks in accordance with law, with all issues left open for the departmental authority to consider.

Failure to Afford Opportunity to Furnish Documents Violates Natural Justice: Calcutta HC sets aside Order u/s 148A(3) of IT Act Against Co-operative Bank

Bankura District Central Co-operative Bank Limited vs Union of India& Ors.

CITATION : 2026 TAXSCAN (HC) 236

The Calcutta High Court has held that failure to give an assessee a fair chance to furnish basic financial documents like balance sheet and profit and loss account vitiates reassessment under Section 148A. In the case of Bankura District Central Co‑operative Bank Ltd., reassessment for AY 2019‑20 was initiated on the basis of information linked to an old PAN, even though the bank had a new PAN and had already clarified the PAN change in earlier AY 2020‑21 proceedings, where the same Assessing Officer accepted the explanation and made no addition.

For AY 2019‑20, the bank replied to the Section 148A(1) notice and repeatedly expressed willingness to provide further records. Nonetheless, the AO passed an order under Section 148A(3) on 25 June 2025 stating that no return or financials had been produced, and simultaneously issued a notice under Section 148. Justice Om Narayan Rai held that when an assessee is willing to cooperate, the AO is bound to afford an opportunity to file the relevant documents; refusing this breaches natural justice. The Court therefore quashed the Section 148A(3) order and the consequential Section 148 notice, directed the bank to file all required documents within two weeks, and instructed the AO to pass a fresh order in accordance with law, explicitly leaving the merits of reassessment open for reconsideration.

Amendment to S.80HHC of Income Tax Act Cannot be applied Retrospectively: Delhi HC Quashes Notices u/s 147/148

GOLDTEX FURNISHING INDUSTRIES vs UOI & ORS.

CITATION : 2026 TAXSCAN (HC) 237

The Delhi High Court has held that a reassessment based solely on the so‑called “retrospective” amendment to Section 80HHC is invalid, and that the amendment cannot be applied retrospectively to past years like the one in dispute. In the case of Goldtex Furnishing Industries, the Department had issued a notice dated 30 March 2007 under Sections 147/148 to reopen the assessment by invoking the 80HHC amendment; the Bench of Justices Dinesh Mehta and Vinod Kumar quashed this notice, relying on Gujarat High Court’s view (later affirmed by the Supreme Court in CIT v. Avani Exports and Saroj Dassani v. UOI) that the amendment cannot operate with retrospective effect.

GST Dept. cannot Bypass Penal Provisions under Act to Prosecute under IPC: MP HC grants Anticipatory Bail in Fraud ITC Case

DHEERAJ GUPTA vs THE STATE OF MADHYA PRADESH

CITATION : 2026 TAXSCAN (HC) 238

The Madhya Pradesh High Court has held that where alleged conduct falls squarely within the scheme of the GST Act, authorities cannot bypass that special statute and prosecute under the Indian Penal Code instead, as this risks abuse of process and double jeopardy. In the anticipatory bail plea of Dheeraj Gupta, accused of orchestrating bogus GST registrations and fake returns to fraudulently avail ITC of about ₹72.66 lakh in the complainant’s name, the Court noted that he had already been proceeded against and arrested under CGST provisions for the same factual allegations and later released on bail.

Justice Sandeep N. Bhatt observed that the offence was essentially one under Section 132 of the CGST Act, which is a complete code with its own investigation, arrest, prosecution and sanction regime (including the safeguard of prior sanction under Section 132(6)). Allowing a fresh IPC‑based FIR by the Economic Offences Wing on the same facts would bypass these safeguards and expose the applicant to a second prosecution for the same offence, offending Article 20(2). Considering the maximum punishment (five years), availability of compounding, and absence of need for custodial interrogation, the Court granted anticipatory bail, directing that in the event of arrest he be released on a ₹5 lakh personal bond with two sureties and standard conditions.

Interest on Ocean Freight IGST Refund applies from Date of Deposit, No from Refund Application: Orissa HC

Paradeep Phosphates Limited vs Additional Commissioner

CITATION : 2026 TAXSCAN (HC) 239

The Orissa High Court has held that interest on refund of IGST paid on ocean freight is payable from the date of deposit of the tax, not from the date of the refund application. In Paradeep Phosphates Ltd.’s case, IGST on ocean freight (paid under protest on CIF imports) was later refunded after the levy was held unsustainable post‑Mohit Minerals; the Department denied interest by invoking the 60‑day rule for delayed refunds.

The Court clarified that this was not a “delayed refund” situation under Section 56 of the CGST Act, but a case of illegal exaction, since the levy itself never validly existed, the tax collected was without authority of law. It therefore held that interest must run for the entire period during which the State wrongfully retained the money and restrained the assessee from using it, i.e., from the original date of payment, and directed payment of interest at 6% per annum within eight weeks, rising to 9% per annum if not paid within that time.

Double Disallowance Not Permissible: Delhi HC Directs Rectification of ₹1.37 Cr Demand on Portronics

PORTRONICS DIGITAL PRIVATE LIMITED vs ASSISTANT COMMISSIONER OFINCOME-TAX CIRCLE 19(1), DELHI & ORS.

CITATION : 2026 TAXSCAN (HC) 240

The Delhi High Court has held that a demand created purely due to a double disallowance arising from a technical error in the return cannot be sustained and must be rectified. In Portronics Digital Private Limited’s case (AY 2024‑25), the company had already suo motu added back about ₹4.26 crore in its profit and loss account, but the automated processing at CPC again disallowed the same amount under Section 143(1), leading to a wrongful demand of ₹1.37 crore.

The Court (Justices Dinesh Mehta and Vinod Kumar) noted that the same item had been disallowed twice, once voluntarily by the assessee and once by system processing, and that such double disallowance is impermissible in law. It directed Portronics to file a rectification application with corrected particulars in the relevant schedule and ordered the department to process it in accordance with law, further restraining any coercive recovery of the ₹1.37 crore demand until the rectification decision is passed.

Employee Cannot Be Denied TDS Credit Due to Kingfisher Airlines’ Default in Depositing Tax: Delhi HC

VENKATACHALAM THANGAVELU vs ITO

CITATION : 2026 TAXSCAN (HC) 241

The Delhi High Court has reaffirmed that an employee cannot be denied TDS credit merely because the employer (here, Kingfisher Airlines) failed to deposit the tax deducted from salary with the Revenue. In Venkatachalam Thangavelu’s case (AY 2012–13), the Department had raised a demand of about ₹12.28 lakh in a Section 143(1) intimation by disallowing credit for roughly ₹10.34 lakh of TDS shown in his Form 16 but not reflected in Form 26AS, and had even adjusted his refunds.

A Division Bench of Justices Dinesh Mehta and Vinod Kumar rejected the Revenue’s jurisdiction objection (based on later transfer of the AO to Bengaluru), holding that territorial jurisdiction is tested as on the date of filing. On merits, the Court followed its earlier ruling in Satwant Singh Sanghera and held that while the Revenue is free to proceed against the defaulting employer, it cannot punish the employee for no fault of his by denying TDS credit. It therefore quashed the intimation to the extent of non‑grant of TDS credit, declared the consequential demand and refund adjustments illegal, and directed that the recovered amount be refunded with interest under Sections 244(1) and 244(1A) within three months.

Bombay HC Grants Interim Relief to Mad Over Donuts Parent Company in 5% vs 18% GST Classification Case

Himesh Foods Pvt. Ltd. vs Union of India

CITATION : 2026 TAXSCAN (HC) 242

The Bombay High Court has granted significant interim relief to Himesh Foods Pvt. Ltd., the parent company of “Mad Over Donuts”, in a GST classification dispute of over ₹100 crore concerning whether donuts are taxable at 5% or 18%. The company contends that donuts are “ready‑to‑eat bakery products” liable at 5%, while the DGGI is treating them as confectionery/dessert items attracting 18%.

An earlier Bench had already protected the assessee from coercive recovery while directing the Union to file its reply. At the latest hearing on 20 January 2026, since the authorities had still not completed their affidavit and similar classification matters (like Hindustan Coca Cola Beverages) were already pending with interim protection, the Division Bench of Justices G.S. Kulkarni and Aarti Sathe ordered that the impugned order be stayed until final disposal of the petition. The case is now listed for final hearing on 26 February 2026, where the core question, 5% vs 18% on donuts, will be adjudicated on merits.

Delhi HC Dismisses Income Tax Dept’s Review Pleas Against Direction to Process Bechtel’s Returns

BECHTEL POWER CORPORATION vs ASSISTANT COMMISSIONER OF INCOME TAX CIRCLEINTERNATIONAL TAX 112 & ANR

CITATION : 2026 TAXSCAN (HC) 243

The Delhi High Court has refused to entertain the Income Tax Department’s attempt to review its earlier order directing that Bechtel’s income tax returns be processed, holding that no “error apparent on the face of the record” had been shown. Bechtel group entities had earlier filed writ petitions complaining that their returns, filed around 14 February 2018, were not being processed, and by judgment dated 27 March 2025 the Court directed the Department to process those returns in accordance with law.

In the review petitions, the Department argued that (i) it had not been given an adequate opportunity to file counter‑affidavits, and (ii) the Court had not decided whether the returns themselves were valid, yet still directed processing based on a CBDT circular. The Bench (Justices Tejas Karia and Dinesh Mehta) rejected both points, noting that the Revenue had been represented and heard at the time of the original decision, and that the earlier judgment merely required the returns to be processed “in accordance with law” – which by itself allowed the Department to examine issues of validity at the processing stage. Emphasising that review is not an appeal and cannot be used to re‑argue the matter, the Court found no legal mistake or new material warranting interference, and dismissed all review petitions, leaving its original directions intact.

Online Notice Rejecting GST TRAN-1 for ITC on Excise Duty challenged only after 2 Years: Kerala HC upholds Validity of SCN

DHANYAMOL V vs STATE TAX OFFICER

CITATION : 2026 TAXSCAN (HC) 244

The Kerala High Court has upheld the validity of an assessment order rejecting a GST TRAN‑1 claim for excise‑duty ITC, holding that service of the order via upload on the GST portal is valid and that a challenge filed after two years is not entertainable. In Dhanyamol V’s case, the assessment under Section 73 rejecting her TRAN‑1 claim was passed on 28.12.2023 and placed on the GST portal; she did not appeal within time and approached the High Court only after receiving an arrear notice more than two years later, claiming she was unaware of the portal order.

Justice Ziyad Rahman A.A. noted that the petitioner herself did not dispute that, under Section 169 CGST Act, uploading the order on the common portal amounts to valid service. Given the unexplained delay and failure to use statutory remedies or constitutional remedies within a reasonable time, the Court refused to interfere and dismissed the writ petition, reiterating that portal‑based service is sufficient and that taxpayers must act within limitation.

Directors cannot Directly Targeted for Company’s GST Dues During Liquidation: Madras HC Grants Liberty to ‘Extricate’ Liability

N.Ramkhuar Narasimhan, Poorani Nagarajan vs Assistant Commissioner (ST)T.Nagar Assessment Circle,

CITATION : 2026 TAXSCAN (HC) 245

The Madras High Court has held that directors of a company in liquidation cannot be directly targeted for recovery of the company’s GST dues without following the specific mechanism in Section 88 of the GST Act. In the case of N. Ramkhuar Narasimhan and Poorani Nagarajan, former directors of Infinitas Energy Solutions Pvt. Ltd., the company had gone into CIRP with an IRP appointed on 08.09.2017 and was ordered into liquidation on 06.02.2019, yet GST dues arose for the period April 2019–March 2021 while the business was being run under the liquidator.

Instead of proceeding through the liquidation process and against the company’s assets, the State Tax Department attached the personal bank accounts of the directors, relying only on MCA records to treat them as liable. Justice C. Saravanan examined Section 88(3), which makes directors jointly and severally liable only if tax, interest or penalty “cannot be recovered” from the company and even then gives them a chance to show that non‑recovery was not due to their gross neglect, misfeasance or breach of duty. Since part of the tax had already been recovered from the company’s credit ledger and only interest/penalty remained, and as Section 88(3) had not been properly invoked, the Court found no basis for attaching the directors’ personal accounts.

The Court granted the directors liberty to file an application before the State Tax authorities within 15 days to “extricate” themselves from the alleged liability, directed the authorities to decide that application on merits within 15 days thereafter with an opportunity of hearing, and ordered that lifting or continuation of the attachment would depend on the final order so passed.

Telangana HC Directs Customs to Provisionally Release Seized 127 Imported Copiers on Enhanced Duty Deposit

M/s. Akshya Copier Solutions vs The Commissioner of Customs (Hyderabadlt) lmports

CITATION : 2026 TAXSCAN (HC) 246

The Telangana High Court has ordered provisional release of 127 seized imported multifunction copiers to M/s Akshya Copier Solutions, subject to strict financial conditions. The firm must first deposit the “enhanced” customs duty as quantified by the department and furnish a bank guarantee equal to 10% of the total value of the machines; Customs has one week to compute the enhanced duty.

A Division Bench of Justice P. Sam Koshy and Justice Suddala Chalapathi Rao followed its earlier interim orders in similar copier‑import cases, holding that conditional release is appropriate while adjudication continues. The Court clarified that provisional release will not bar further investigation or adjudication and directed the importer to maintain full records of all onward sales (customers, prices, transaction details) and make them available to Customs when required. On demurrage, it added that if the importer applies for waiver, the request must be considered objectively by the competent authority.

Mandatory Three Month Gap Required between SCN and Final Order u/s 73 of GST Act: Bombay HC

Ms. Suchishree Mukherjee W/o Sandeep Kunte vs The Union of India,through Ministry of Finance, Department of Revenue, New Delhi and ors.

CITATION : 2026 TAXSCAN (HC) 247

The Bombay High Court (Nagpur Bench) has held that there must be a mandatory minimum gap of three months between the issue of a show cause notice under Section 73(2) of the CGST Act and the passing of the final adjudication order under Section 73(10). In the case concerning A.M. Marketplace Pvt. Ltd., the notice and order were separated by only about one month and 24 days, so the Court found the timeline contrary to the statute and to principles of natural justice.

The Bench (Justices Anil L. Pansare and Nivedita P. Mehta) reasoned that the three‑month window is not a mere outer‑limit drafting quirk but is intended to allow the assessee time to: respond, avail the option of paying tax with reduced consequences, and have a meaningful hearing. Because this mandatory gap was not respected, the Court quashed the show cause notice and set aside the final order, while recognising that Section 73(10) still provides a separate outer limit of three years for adjudication.

GST Assessment Order Passed Against Unregistered Contractor Due to Identical Name Confusion on WAMIS & Income Tax Portal Data Quashed: Orissa HC

Srikant Das vs Joint Commissioner of State Tax, (Appeal), TerritorialRange, Ganjam, Berhampur and others

CITATION : 2026 TAXSCAN (HC) 248

The Orissa High Court has quashed a GST assessment that had wrongly fastened tax liability on an unregistered contractor solely because his name matched that of another registered contractor whose data appeared in government systems.

In Srikant Das’s case, he had stopped his works‑contract business in 2016 and never took GST registration. Despite this, the department generated a temporary GSTIN in his name, issued a best‑judgment notice in Form GST ASMT‑14, and passed an ex parte assessment under Section 63 using turnover data pulled from WAMIS (the Works and Accounts Management Information System) and the Income Tax portal. Those figures, however, actually belonged to another contractor with the same name who was properly registered under GST.

When the matter reached the Orissa High Court, State counsel themselves produced instructions admitting that the turnover details relied on by the authorities related to a different, registered person and that the confusion arose only due to identical names and mis‑attribution of portal data. A Division Bench of Chief Justice Harish Tandon and Justice Murahari Sri Raman held that once it is accepted that the entire basis of the assessment (the turnover and identity of the taxable person) is wrong, the orders cannot stand in law. The Court therefore set aside both the ex parte assessment order passed under Section 63 and the appellate order that had confirmed it, and allowed the writ petition in favour of the unregistered contractor.

Airline Liable to Deduct TDS on Supplementary Commission Paid to Travel Agents, Revenue Can Recover Interest Only if Agents Paid Tax: Delhi HC

COMMISSIONER OF INCOME TAX DELHIXVII vs ROYAL JORDANIAN AIRLINES

CITATION : 2026 TAXSCAN (HC) 249

The Delhi High Court has reaffirmed that airlines must deduct TDS under Section 194H on supplementary commission paid to travel agents, but the Revenue’s recovery is limited where those agents have already paid tax on that income.

In the appeal by the Commissioner of Income Tax against Royal Jordanian Airlines, the Department argued, relying on the earlier Singapore Airlines ruling (later upheld by the Supreme Court), that the airline–agent relationship is one of principal and agent, so commission (including supplementary commission) attracts TDS under Section 194H. The Court agreed that the legal position on TDS liability stood concluded in favour of the Revenue.

However, following the Supreme Court’s principle, it held that if the travel agents have already paid income tax on the relevant commission, the Department cannot recover the principal tax amount again from the airline; only interest for the period of default in deduction/remittance of TDS can be demanded. Recognising that more than a decade had passed and the airline had ceased Indian operations, the Court also directed that the Assessing Officer should not insist that the airline prove whether each agent paid tax. Instead, the officer is to raise demand only for interest on the TDS, with no separate tax component, and the airline must pay that interest within two months of receiving the demand.

FT&TR Reference under India-Hong Kong Tax Treaty Not Permissible for Pre-2019 Taxable Events to Extend Limitation: Delhi HC

PR. COMMISSIONER OF INCOME TAX vs SANJAY JAIN

CITATION : 2026 TAXSCAN (HC) 250

The Delhi High Court held that an FT&TR reference under the India–Hong Kong tax treaty cannot be invoked to extend the limitation period for assessments relating to pre‑2019 taxable events such as AY 2017‑18. The Court accepted that, in principle, the protocol allows exchange of information for periods prior to the treaty’s entry into force, but stressed that this is conditional on such information being relevant to a fiscal year or taxable event occurring after the treaty becomes effective.

Since the India–Hong Kong tax treaty came into force on 30 November 2018 and the taxable event for AY 2017‑18 is deemed to occur at the beginning of that assessment year, the Court held that no information for AY 2017‑18 could be validly sought under this treaty route. Consequently, the FT&TR reference made on 4 December 2018 was treated as improper and incapable of extending limitation under Section 153B, with the result that the assessments were declared time‑barred and the Revenue’s appeals were dismissed.

CAG Officer Conducted Unauthorised Audits by Impersonating Superior Officer: Delhi HC Upholds Dismissal

SC VOHRA vs COMPTROLLER AND AUDITOR GENERAL OF INDIA AND ORS

CITATION : 2026 TAXSCAN (HC) 251

The Delhi High Court has upheld the dismissal of a Senior Auditor of the CAG who had conducted unauthorised audits by impersonating a superior officer and misusing official authority.

S.C. Vohra, a Senior Auditor, was found to have, between 1996 and 1999, visited industrial units without authorisation, conducted Central Excise audits, issued audit completion certificates, and impersonated an Assistant Audit Officer, including using the superior’s name and seal. A departmental inquiry held these charges proved, leading to his dismissal in 2005; his departmental appeal was also rejected.

In his writ petition, Vohra attacked the dismissal on grounds of delay in issuing the charge-sheet, alleged bias in the inquiry, lack of proof of personal gain or departmental loss, and disproportionate punishment given his length of service. The High Court rejected all these grounds. It held that:

● The delay in initiating proceedings had been satisfactorily explained and no real prejudice was shown.

● Disciplinary proceedings are not governed by strict rules of evidence; as long as there is some relevant material, the findings will not be interfered with.

● The absence of proven monetary gain or loss does not dilute serious misconduct such as impersonation, misuse of position, and unauthorised exercise of official functions.

● Non‑action against other officers, if any, does not exonerate the petitioner.

On punishment, the Court stressed that misconduct involving loss of integrity strikes at the root of public service and that dismissal in such circumstances is not “shockingly disproportionate”. It therefore dismissed the writ petition and affirmed the dismissal order, making no order as to costs.

No Higher Sales Tax on Kenwood Car Audio Systems Manufactured Using Imported Parts: Madras HC upholds 12.5% Levy

Nippon Audiotronix Ltd. vs The State of Tamil Nadu

CITATION : 2026 TAXSCAN (HC) 252

The Madras High Court held that Kenwood car audio systems manufactured in India by Nippon Audiotronix Ltd. from imported components and domestically sourced parts could not be classified as “imported goods” so as to attract a higher sales tax rate of 20% plus surcharge. The assessee had imported only parts and spares, carried out assembly/manufacture in India, and cleared the finished systems on payment of central excise duty, and the Court treated this as genuine manufacturing activity rather than mere sale of imported finished goods.

The Court approved the first appellate authority’s factual finding that the finished audio systems were an amalgam of imported and local components under the licence agreement with Kenwood, Japan, and held that this manufacturing within India attracted the 12.5% rate under Entry 14(vi) of Part D of the First Schedule to the Tamil Nadu General Sales Tax Act, 1959. It found the Sales Tax Appellate Tribunal to have erred in disturbing those factual findings, set aside the Tribunal’s order, restored the 12.5% levy, and held the higher rate and penalty under Section 16(2) for alleged concealment to be unsustainable.

Failure to Respond to SCN Not Excused by CA’s Lapse: Delhi HC Dismisses Mobile Phone Dealer's Plea Against ₹2.32 Lakh GST Demand

M/S FONE ZONE NXT vsCOMMISSIONER OF DGST

CITATION : 2026 TAXSCAN (HC) 253

The Delhi High Court held that a dealer cannot avoid the consequences of not replying to a GST show cause notice by blaming their Chartered Accountant for not informing them about it. The Court emphasized that linking the GST registration and portal communications to the CA’s email was a conscious choice of the petitioner, and the primary responsibility to monitor notices and comply with statutory requirements remains with the registered person.

In this case, the mobile phone dealer’s registration had been suspended at their own request, SCNs and hearing notices were duly issued, but no reply was filed and no appearance was made, leading to ex parte orders and a demand of ₹2.32 lakh. The Court noted that no action had even been initiated against the CA, found the “CA’s lapse” plea unconvincing, distinguished the earlier discretionary relief in Walsons Services on facts, and held that even the offer to pay 50% of the demand could not justify interference with a procedurally valid assessment, thereby dismissing the writ petition.

Tax Recovery Officer Has No Power to Declare Mortgage Void Ab Initio, Can Only Enforce Attachment: Madras HC in Sree Gokulam Chit Case

Sree Gokulam Chit and Finance vsThe Tax Recovery Officer

CITATION : 2026 TAXSCAN (HC) 254

The Madras High Court held that a Tax Recovery Officer cannot declare a mortgage void ab initio; his authority is confined to enforcing attachment and recovering tax dues from the property. The Court clarified that, because the equitable mortgage in favour of Sree Gokulam Chit and Finance was created after service of notice under Rule 2 of the Second Schedule, it is ineffective as against the Income Tax Department’s claim, but it is not void in law, and the department may proceed with sale of the attached property and apply any surplus in accordance with law.

ED Account Freeze Under PMLA: Karnataka HC Seeks Employee Salary Details before Considering Interim Relief to WINZO subsidiary

ZO PVT. LTD vs DIRECTORATE OF ENFORCEMENT

CITATION : 2026 TAXSCAN (HC) 255

The Karnataka High Court declined to immediately allow ZO Pvt. Ltd. (a WINZO group entity) to operate its bank account that had been frozen by the Enforcement Directorate under Section 17(1A) of the PMLA, and instead called for granular salary details first. The company argued that, under recent Board Resolutions, it was obligated to pay salaries and statutory dues of WINZO employees through this account and sought limited operational permission for that purpose, while also questioning ED’s very jurisdiction to invoke Section 17(1A).

The Court noted that apart from the legal challenge to ED’s jurisdiction, the Enforcement Directorate must get a fair opportunity to verify whether the employees and salary obligations projected by the petitioner were genuine and not a device to defeat the freeze. It therefore directed ZO Pvt. Ltd. to furnish to ED details of the concerned employees, their designations and the bank accounts into which salaries would be paid, made it clear that such verification was a precondition to considering any interim relief, and re‑listed the matter for 29 January 2026, without granting any interim permission to operate the frozen account at this stage.

Non-Speaking Order Ignoring Advance Authorisation Claim Cannot Stand: Madras HC Sets Aside Customs Confiscation

Arasu Texports vs The Addl.Commissioner Of Customs

CITATION : 2026 TAXSCAN (HC) 256

The Madras High Court held that a customs order confiscating goods and imposing a penalty of ₹50,000 on Arasu Texports was unsustainable because it completely ignored the importer’s core plea that the goods were imported under a valid Special Advance Authorisation and were therefore exempt from customs duty. The petitioner had specifically contended that DGFT Notification No. 77/2023 on Minimum Import Price did not apply to its September 2024 imports under the Advance Authorisation, and had also filed a detailed representation explaining the Foreign Trade Policy position, but none of this was dealt with in the order‑in‑original, rendering it a non‑speaking order in violation of natural justice.

Justice Abdul Quddhose observed that if the Special Advance Authorisation claim was correct, failure to even examine it could cause serious hardship, including the petitioner’s inability to get the goods released, improve them, and re‑export to its US buyer within the 18‑month FTP window. Holding that the authority was bound to consider the licence, relevant FTP provisions and notifications before fastening duty and confiscation, the Court quashed the order‑in‑original and set it aside, thereby undoing the confiscation and penalty so that the matter could be reconsidered in accordance with law.

Double Taxation on GSTR-3B Delay Unsustainable: Madras HC Quashes Duplicate GST Interest Order

Velavan Fireworks vs The commercial Tax Officer

CITATION : 2026 TAXSCAN (HC) 257

The Madras High Court held that once interest for delay in filing GSTR‑3B for a particular period has been quantified and paid under a valid order, a second order fastening interest again for the very same period and very same default amounts to impermissible double taxation. The Court noted that two different authorities had passed two separate orders for delay in GSTR‑3B for April 2020–March 2021, leading to overlapping demands, and on this clear duplication of proceedings, it ruled that the later interest order dated 06.01.2023 was unsustainable in law and quashed it, allowing the writ petition.

GST Registration Found Not Credible, Fails to File Returns: Madras HC Refuses to Condone 418-Day Delay in Appeal

Tvl. SK Knit Apparels vs Deputy Commissioner (ST)-GST Appeal

CITATION : 2026 TAXSCAN (HC) 258

The Madras High Court refused to condone a 418‑day delay in filing a writ appeal by S.K Knit Apparels against a GST assessment order for 2017‑18. The assessee cited vague personal difficulties (bereavement and hospitalisation) and a supposed belief that an appeal would lie to the yet‑to‑be‑constituted GST Appellate Tribunal, but the Court found no supporting evidence and noted that the assessee had already earlier approached the High Court in writ, fully aware that the Tribunal did not exist.

The Division Bench (Justices Anita Sumanth and Mummineni Sudheer Kumar) also stressed that the Single Judge had, on merits, recorded adverse findings: the GST registration itself lacked credibility and, despite holding registration, statutory returns were not filed as required under Section 39(8) of the TNGST Act. In that backdrop, the Court held there was no “sufficient cause” for the 418‑day delay, rejected reliance on the September 2025 notification extending tribunal‑appeal timelines as irrelevant to writ appeals, and dismissed both the delay‑condonation petition and the writ appeal at the SR stage, without costs.

GST SCN did Not Specify Default Period or Dues: Delhi HC sets aside Retrospective Reg. Cancellation

M/S GLO INTERIO vs SALES TAX OFFICER

CITATION : 2026 TAXSCAN (HC) 259

The Delhi High Court set aside the retrospective cancellation of GLO Interio’s GST registration because the show cause notice alleging non‑payment of tax, interest or penalty did not specify the period of default, the quantum of dues, or even indicate that retrospective cancellation was proposed. The Court held that, although retrospective cancellation is legally permissible, the taxpayer must be put on clear notice of the default period and alleged dues; a vague notice denies a real opportunity of hearing and violates natural justice, so the cancellation order and the appellate order were quashed, the department was permitted to issue a fresh, proper notice, and the petitioner was saddled with ₹10,000 in costs for delay.

Ignoring Earlier HC Rulings, Revenue Cannot Insist on 10% TDS u/s 197 Without Showing Change in Facts: Delhi HC in SFDC Ireland Case

SFDC IRELAND LIMITED vs COMMISSIONER OF INCOME TAX INTERNATIONALTAXATION 3 NEW DELHI & ANR

CITATION : 2026 TAXSCAN (HC) 260

The Delhi High Court held that the Income Tax Department cannot insist on a 10% TDS rate under Section 197 for SFDC Ireland Limited when there is no change in facts and earlier High Court orders have already directed a nil‑rate certificate for the same assessee. SFDC Ireland, an Irish tax resident supplying cloud‑based CRM software to Indian customers through Salesforce India, has no office, employees or permanent establishment in India, and in prior years similar higher‑rate certificates had been quashed and replaced with nil‑rate certificates.

The Bench of Justices Dinesh Mehta and Vinod Kumar rejected the department’s arguments that each year is independent and that filing forms through a power‑of‑attorney holder in India makes the company resident, holding that such filing does not alter non‑resident status, nor did the department show any new fact or PE in India. Finding that the impugned order gave no substantive reasoning and labelled the 10% rate as merely an “interim arrangement,” the Court set aside both the order and the Section 197 certificate and directed issuance of a nil‑rate certificate for the relevant year and for future years as well, unless there is a demonstrable change in the factual position.

VAT Refund Delayed for Over 15 Years Entitles Interest from 2009: Delhi HC Directs Payment to Leather Traders

FAIR DEAL LEATHER SUPPLIERS vs THE VALUE ADDED TAX OFFICER

CITATION : 2026 TAXSCAN (HC) 261

The Delhi High Court held that leather traders Fair Deal Leather Suppliers and Nand Leather Co. were entitled to interest on a VAT refund that was delayed for over 15 years, and directed that interest be paid from 25 June 2009 until the actual refund date in January 2025. The Court noted that the refund of ₹2,87,538 became due within 60 days of filing the return for the quarter ending 31 March 2009, that there was no proof the ex parte rejection order had been properly served or uploaded, and that the prolonged delay was attributable to departmental lapses, so statutory interest at 6% per annum under the DVAT Act had to be paid within 12 weeks.

Kerala HC Quashes Building Tax Demand on Toyota Dealership, Directs State to Decide Exemption Claim

M/S VPK MOTORS PVT vs STATE OF KERALA

CITATION : 2026 TAXSCAN (HC) 262

The Kerala High Court held that the building tax assessment on VPK Motors Pvt. Ltd., which runs a Toyota dealership with showroom, workshop and service centre, was invalid because the authorities themselves decided the exemption question instead of mandatorily referring it to the State Government once an exemption claim was raised under Section 3(1)(b) of the Kerala Building Tax Act. The Court noted that the Tahsildar had assessed tax of about ₹31.5 lakh and both the appellate and revisional authorities rejected the exemption on merits, even though the revisional authority itself acknowledged that only the Government could decide it, contrary to Section 3(2), which requires the assessing/revisional authority to refer the exemption issue to the Government without adjudicating it.

Justice Ziyad Rahman A.A therefore quashed the assessment, appellate and revisional orders and directed the State Government to decide the pending exemption application afresh, after giving the dealership an opportunity of hearing and calling for necessary reports, particularly on whether the building is used “principally” as a workshop/factory as required by Section 3(1)(b).

Income Tax Reassessment Jurisdiction Fails Without Fresh Material: SC Upholds Gujarat HC in GTPL Hathway Case

GTPL HATHWAY LIMITED vs DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 2(1)(1)

CITATION : 2026 TAXSCAN (HC) 263

The Supreme Court upheld the Gujarat High Court’s decision quashing reassessment proceedings against GTPL Hathway Ltd. for AY 2017‑18, reaffirming that reassessment jurisdiction under Section 147/148 fails in the absence of any fresh tangible material coming to light after completion of a scrutiny assessment. The Assessing Officer had sought to reopen the already‑completed Section 143(3) assessment solely on the basis of the same balance sheet, tax audit report, computation of income and explanations that were on record earlier, including issues such as lease payments, neutralised forex differences and depreciation on goodwill, without pointing to any new information or material.

The Gujarat High Court held that this amounted to a pure change of opinion, which is impermissible, and specifically noted that the disallowance of depreciation on goodwill flows from a later statutory amendment effective 01.04.2021 and cannot be retro‑fitted as a ground to reopen AY 2017‑18. It therefore set aside the Section 148 notice dated 27.03.2021 and the consequential reassessment proceedings. The Revenue’s challenge to this order by way of Special Leave Petition was dismissed by the Supreme Court, which, after hearing the department and perusing the record, found no reason to interfere, thereby confirming that reassessment without fresh material lacks jurisdictional foundation.

No Reassessment if Income Already Taxed at Highest Rate: Delhi HC Dismisses Revenue’s Appeal in Client Code Modification Case

PR. COMMISSIONER OF INCOME TAX vs ATUL GOEL

CITATION : 2026 TAXSCAN (HC) 264

The Delhi High Court held that reassessment proceedings cannot be sustained where the income in question has already been fully disclosed by the assessee and taxed at the highest applicable rate, even if there are subsequent allegations such as client code modification. In the case of Atul Goel, reassessment was initiated on the basis of generic SFIO information about client code modification, but the assessee had already offered the disputed income to tax at 30%, and both the CIT(A) and ITAT found there was no escapement of income and that the reasons recorded by the Assessing Officer did not even correctly identify the broker or any specific transactions.

The Court endorsed those findings, noting that reassessment jurisdiction requires tangible material indicating income has escaped assessment, which was absent here, and that reopening on vague, error‑ridden reasons with no revenue leakage amounts to a mere change of opinion and lack of application of mind. On that basis, it dismissed the Revenue’s appeal and upheld the orders of the CIT(A) and ITAT, reiterating that where income is already taxed at the maximum rate, a further reassessment on the same income is unwarranted.

Deposit of ₹5 Crore Cannot Convert Non-Bailable GST Offence into Bailable, but Bail can be Granted: Rajasthan HC

Union Of India vs Arun Jindal S/o Shri Ashok Kumar Jindal

CITATION : 2026 TAXSCAN (HC) 265

The Rajasthan High Court held that the deposit of ₹5 crore by an accused in a GST evasion case does not and cannot alter the statutory character of the alleged offence from cognizable and non‑bailable to bailable or compoundable. The Court clarified that under Section 132 of the CGST Act, where the alleged tax evasion exceeds ₹5 crore, the offence remains cognizable and non‑bailable, and under Section 138, such an offence is non‑compoundable irrespective of any partial payment; therefore, the trial court’s reasoning that the deposit brought the case within a bailable/compoundable framework was erroneous.

Nonetheless, the High Court declined to cancel the bail already granted to the respondent‑accused. Taking into account that co‑accused had been granted bail by superior courts, that the respondent had in fact deposited ₹5 crore in compliance with the earlier bail order, that the maximum prescribed sentence is five years’ imprisonment, and that there were no allegations of absconding, witness intimidation or misuse of liberty, the Court concluded that the bail could be sustained on its own merits and dismissed the Union of India’s application for cancellation.

GST SCN Issued Only via Portal After Registration Cancellation Violates Natural Justice: Allahabad HC

Suman Overseas vs U.O.I.

CITATION : 2026 TAXSCAN (HC) 266

The Allahabad High Court (Lucknow Bench) held that where a taxpayer’s GST registration has already been cancelled, a show cause notice issued only by uploading it on the GST portal does not constitute valid service and violates principles of natural justice. In the case of M/s Suman Overseas, whose registration was cancelled on 30.11.2018, the Court found that the subsequent SCN dated 25.12.2023, served solely through the portal without email or registered post, was improperly served, quashed the scrutiny and consequential orders passed under Section 61 CGST, and directed the authorities to re‑initiate proceedings only after serving notice through permissible alternative modes and affording the petitioner a proper opportunity of hearing.

Calcutta HC Remands GST ITC Dispute to Appellate Authority after Customs Clarifies Manual Bills of Entry Issue

M/s. Amar Iron Udyog Pvt. Ltd. & Anr vs Union of India & Ors

CITATION : 2026 TAXSCAN (HC) 267

The Calcutta High Court set aside an ex parte appellate order that had confirmed GST demand on M/s Amar Iron Udyog Pvt. Ltd. for alleged excess availment of ITC on imports and remanded the matter to the appellate authority for fresh adjudication. The Court noted that the finding of “excess ITC on imports” rested on non‑production of IGST payment proof; after the Court called for a Customs report, Customs clarified that the eight relevant bills of entry were processed manually, IGST had in fact been paid and goods cleared, but “Out of Charge” details were not contemporaneously captured in ICES so the IGST did not initially appear on the GST portal, and that this defect had since been rectified, leading the Court to direct reconsideration on this issue in light of the Customs affidavit.

On the second issue, reversal of ITC because suppliers had not filed returns, the Court observed that the appellate order was ex parte and the petitioners had not satisfactorily explained their absence before the appellate authority. Justice Om Narayan Rai therefore allowed that issue also to be re‑examined by the appellate authority, but made such reconsideration conditional on the petitioner paying costs of ₹15,000 to the High Court Legal Services Committee, Calcutta; with these directions, the writ petition and connected application were disposed of.

GST Detention Dispute Involving Factual Issues Dismissed as Premature, Allahabad HC Cites Alternate Remedy

M/S Lymer Enterprises vs State of U.P. and Another

CITATION : 2026 TAXSCAN (HC) 268

The Allahabad High Court declined to interfere, at the writ stage, with GST detention and penalty orders passed in Form GST MOV‑09 against M/s Lymer Enterprises on the ground that the dispute turned on contested factual questions better left to the statutory appellate forum. The Bench (Justice Saumitra Dayal Singh and Justice Indrajeet Shukla) noted that the petitioner had an efficacious alternative remedy of appeal under the GST Act, that they had not even replied to the show cause notice, and that the precedents cited (such as Mz Momin Products) were fact‑specific orders and not binding propositions, and therefore dismissed the writ petition as premature without examining the merits of the detention.

Delhi HC Declines Reinstatement to Income Tax Employee Who Opted for Voluntary Retirement Despite Disability Claim

TILAK RAJ SINGH vs UNION OF INDIA

CITATION : 2026 TAXSCAN (HC) 269

The Delhi High Court held that an Income Tax Department employee who had sought and obtained voluntary retirement under Rule 48‑A of the CCS (Pension) Rules, 1972, could not later invoke Section 47 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 to claim reinstatement. The Court observed that Section 47 bars termination, reduction in rank or discrimination on account of disability, but does not apply where an employee voluntarily chooses to retire, and further clarified that the Supreme Court’s decision in Bhagwan Dass v. Punjab State Electricity Board, relied on by the petitioner, did not concern voluntary retirement, thereby affirming the Central Administrative Tribunal’s refusal to order reinstatement and dismissing the writ petition.

Impugned Communication restricting F-Card Holder’s Practice has been Issued without Authority under Law: Madras HC Sets Aside Customs Restriction

M/s.Winwin Logistics (India) Pvt. Ltd. vs The Superintendent of Customs

CITATION : 2026 TAXSCAN (HC) 270

The Madras High Court held that Customs had no legal authority to restrict an F‑card holder from representing a company for a customs broker licence outside the jurisdiction where he had passed the F‑card examination. The case arose from a communication returning M/s Winwin Logistics (India) Pvt. Ltd.’s customs broker licence application, in which paragraph 6 stated that since the authorised signatory passed the F‑card exam in Coimbatore, he could not apply in Chennai under Regulation 4(2) of the Customs Brokers Licensing Regulations, 2018.

Justice Abdul Quddhose observed that neither the Customs Act nor the CBLR, 2018 impose any territorial restriction limiting an F‑card holder’s practice to the commissionerate where the exam was cleared. The impugned communication, to that extent, effectively barred the F‑card holder from representing the petitioner before Chennai Customs without any statutory backing. Holding that such a limitation was imposed without authority of law, the Court set aside paragraph 6 of the communication dated 17.10.2025 while recording the petitioner’s undertaking to cure the other defects (paras 1–5), and disposed of the writ petition on that basis.

Orissa HC grants bail to accused in Rs. 85cr GST Fraud on Rs. 5L bond

Pravash Chandra Mishra vs Union of India (CGST)

CITATION : 2026 TAXSCAN (HC) 271

The Orissa High Court granted bail to an accused in a GST fraud case involving alleged wrongful availment of input tax credit of about ₹85 crore, despite the seriousness of the charge, on a personal bond of ₹5 lakh with sureties. The Court noted that the offences under Sections 132(1)(b), 132(1)(c), 132(1)(f), read with 132(1)(i) and 132(5) of the CGST Act are triable by a Magistrate and carry a maximum sentence of five years, that the accused had been in judicial custody since 22 August 2025 and a complaint had already been filed, and that there was no material suggesting his involvement in any other similar offences; applying the presumption of innocence and finding further custody unnecessary at this stage, it allowed the bail application subject to usual conditions.

Income Tax Return Figures Alone Insufficient for GST Demand: Madras HC Orders Forensic Verification

M/s. K.N.Raj Constructions vs The State Tax Officer

CITATION : 2026 TAXSCAN (HC) 272

The Madras High Court held that figures declared in Income Tax returns, by themselves, are insufficient to sustain a GST demand where there is a stark mismatch with actual receipts and GST returns, and ordered a forensic verification of the assessee’s records. In K.N. Raj Construction’s case, the Court noted the large gap between ₹26.89 crore reported in GST returns and ₹166.93 crore declared for Income Tax purposes (with bank receipts of only about ₹27.89 crore), accepted that the inflated IT turnover might have been shown only for tender qualification, directed the GST audit wing to conduct a detailed forensic examination of physical and electronic records within three months, required the assessee’s full cooperation, and ordered a pre‑deposit of ₹30 lakh upon which the bank attachment would stand lifted.

Lack of Signature Makes GST Order Invalid and Unserved: AP HC directs Fresh Notice Excluding Certain Time for Limitation

THAMMISETTY VENKATA SRINIVASULU vs THE ASSISTANT COMMISSIONER OF STATETAX

CITATION : 2026 TAXSCAN (HC) 273

The Andhra Pradesh High Court held that a GST assessment order issued in Form GST DRC‑07 without the proper officer’s signature, whether manual or digital, is invalid in law and cannot be treated as having been served at all. The Division Bench (Justices R. Raghunandan Rao and T.C.D. Sekhar) noted prior precedents (including A.V. Bhanoji Row, SRK Enterprises and SRS Traders) to reaffirm that signature is a mandatory requirement, not a mere procedural formality, and that such a defect is not curable under Sections 160 or 169 of the CGST Act, which deal with procedural irregularities and modes of service.

Referring to Rule 26(3) of the CGST Rules, 2017, the Court held that a notice or order without signature does not amount to proper service, so limitation cannot begin to run from an unsigned order; consequently, the objection that the writ was time‑barred could not be sustained. The Bench therefore set aside the unsigned assessment order and directed the department to issue a fresh, properly authenticated order after giving reasonable opportunity of hearing, clarifying that the period between the defective assessment order and the taxpayer’s receipt of the High Court’s judgment would stand excluded while computing limitation for any fresh proceedings.

GST Portal Service Valid Even after Cancellation of Registration: AP HC Rejects Appeal Filed After One Year

M/S. A.R. STEELS vs THE DEPUTY ASSISTANT COMMISSIONER STL

CITATION : 2026 TAXSCAN (HC) 274

The Andhra Pradesh High Court held that service of GST notices and assessment orders through the GST portal remains valid even after cancellation of registration, particularly for periods when the registration was active. In the case of M/s A.R. Steels, the Court noted that the assessee had participated in prior inspection and audit, offered no satisfactory explanation for waiting about one year to challenge the assessment dated 11 November 2024, and that cancellation of registration did not prevent access to the portal for earlier tax periods; treating portal upload as proper service and applying its earlier rulings that “portal ignorance” cannot justify reopening settled assessments, the Bench dismissed the writ petition as barred by delay and found no procedural infirmity in the assessment.

Rajasthan HC Declines to Interfere with ₹5.45 Crore GST Demand Citing Alternative Appellate Remedy

M/s Ishwar Singh vs State Of Rajasthan

CITATION : 2026 TAXSCAN (HC) 275

The Rajasthan High Court declined to exercise writ jurisdiction against a GST demand of ₹5.45 crore raised ex parte on M/s Ishwar Singh and Associates Construction Pvt. Ltd., holding that the assessee must pursue the statutory appellate remedy under Section 107 of the GST Act. The Court noted that the show cause notice, reminder, adjudication order and Form GST DRC‑07 were all uploaded on the GST portal, that service via portal is a recognised mode even after cancellation of registration, and that questions about adequacy of service and denial of personal hearing can appropriately be examined by the appellate authority; it therefore dismissed the writ petitions as not maintainable while granting liberty to file appeal.

GST Summons Are Only for Inquiry, Not Initiation of Proceedings; Delhi HC Refuses to Quash DGGI Summons at Investigation Stage

NAVEEN vs DIRECTORATE GENERAL OF GOODS AND SERVICES TAX

CITATION : 2026 TAXSCAN (HC) 276

The Delhi High Court held that summons issued by the Directorate General of GST Intelligence under Section 70 of the CGST Act are investigative tools meant only for conducting an inquiry and do not, by themselves, amount to initiation of adjudicatory or prosecution proceedings against the noticees. In the petition filed by bidi traders Naveen and Suraj Kumar, the Court (Justice Neena Bansal Krishna) noted that the department was at the stage of collecting information, documents and evidence pursuant to search and seizure, that sufficient statutory safeguards exist before any arrest can be made under the GST law, and that mere apprehension of arrest or allegations of harassment are not grounds to quash summons at this preliminary stage; it therefore dismissed the writ petition as premature and refused to interfere with the ongoing investigation.

J&K HC sets aside S. 63 GST Assessment Passed against Registered Entity Treated as Unregistered

M/s DRF Infra Builders Pvt. Ltd. vs UT of J&K Th.

CITATION : 2026 TAXSCAN (HC) 277

The Jammu & Kashmir and Ladakh High Court set aside a GST assessment that had been wrongly made under Section 63 (best‑judgment assessment of “unregistered” persons) against a dealer who was, in fact, a registered taxpayer. The Court noted that the very show cause notice carried the petitioner’s valid GSTIN, yet the assessing officer proceeded under Section 63 on a temporary ID, treated the entity as unregistered, and passed the assessment without affording a proper opportunity of hearing, after which the appellate authority rejected a manually filed appeal as time‑barred.

A Division Bench of Chief Justice Arun Palli and Justice Rajnesh Oswal therefore quashed both the original assessment order dated 22.12.2023 and the appellate order dated 15.10.2025 that had dismissed the appeal on limitation, and granted the petitioner fifteen days to respond to the show cause notice, directing the proper officer to pass a fresh, reasoned order after giving due hearing; this relief was made subject to the petitioner depositing 10% of the disputed tax demand, and the Court clarified that, given the consensual nature and peculiar facts, the order was not to operate as a binding precedent.

Ignoring GSTR-3B and GSTR-9 data is ‘Clear Abdication of Duty’: Calcutta HC set aside Appellate Order

Shine Pharmaceuticals Ltd. vs Joint Commissioner of Revenue

CITATION : 2026 TAXSCAN (HC) 278

The Calcutta High Court set aside both the original GST adjudication order and the appellate order against Shine Pharmaceuticals Ltd., holding that failure to look at GSTR-1, GSTR-3B and GSTR-9 data already available on the GST portal was a “clear abdication of duty.” The Court noted that the petitioner had shown, through figures drawn from statutory returns, that the ITC required to be reversed (about ₹1.74 crore on account of credit notes and place-of-supply discrepancies) was actually less than the ITC already reversed as reflected in GSTR-3B and GSTR-9, yet these figures were neither examined nor discussed in the appellate order.

Justice Om Narayan Rai emphasised that the Appellate Authority was duty-bound to verify such portal data while deciding the appeal, especially when the grounds regarding reversals were specifically raised, and that even the original adjudicating authority had failed to examine the available GSTR-3B and GSTR-9 records. Treating this non-consideration of readily available statutory data as an abdication of duty, the Court quashed both the appellate and original orders along with the consequential recovery proceedings.

GST Appeal Rejected for Delay despite High Court’s Direction to Not Insist upon Limitation: Madras HC directs Readjudication

Oasys Marketing Agency vs The Appellate Authority / Deputy Commissioner(CT)

CITATION : 2026 TAXSCAN (HC) 279

The Madras High Court set aside an order of the GST Appellate Authority which had rejected the appeal of Oasys Marketing Agency as time-barred, even though the High Court had earlier specifically directed that limitation should not be insisted upon if the appeal was filed within two weeks. In the earlier round, the Court had allowed the petitioner to file an appeal within that two-week window and clearly directed the appellate authority to entertain it without rejecting it on limitation, but the authority nevertheless dismissed the appeal solely on delay, without touching the merits.

Justice Krishnan Ramasamy held that this was contrary to the Court’s earlier directions, and therefore directed the appellate authority to hear the appeal afresh on its own merits and in accordance with law after giving adequate opportunity to the petitioner. The Court also directed the State tax authorities to defreeze the petitioner’s bank account, which had been attached in connection with the GST proceedings, once a copy of this order is produced.

Even Security Cheques Can Trigger Liability u/s138 NI Act: P&H HC Declines Interference at Summoning Stage

Aarti Trehan and another vs Super Oils

CITATION : 2026 TAXSCAN (HC) 280

The Punjab and Haryana High Court refused to quash a cheque‑bounce complaint under Section 138 NI Act at the summoning stage, holding that the accused’s defence that the cheques were only “security cheques,” that goods were defective, or that part‑payments had been made, all involved disputed questions of fact that cannot be examined in a petition under Section 482 CrPC. The Court noted that once issuance of the cheques and signatures are admitted, a statutory presumption under Section 139 NI Act arises that they were issued towards a legally enforceable debt or liability, and whether they were in fact security cheques or whether the liability amount matched the cheque value are matters for trial, not for quashing.

Relying on Supreme Court precedents such as Smt. Nagawwa v. Veeranna Shivalingappa Konjalgi, Abida, Sampelly Satyanarayana Rao and Rajeshbhai Muljibhai Patel, Justice Manisha Batra held that even a cheque given as security can attract liability under Section 138 if, on evidence, it is shown to be in discharge of a debt or liability at the time of presentation. As the Magistrate’s summoning order was based on preliminary evidence and disclosed a prima facie case, no ground was made out to interfere, and the petition by Aarti Trehan and another to quash the complaint filed by M/s Super Oils was dismissed.

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