Karnataka High Court Asks Centre To Consider Digitally Verifiable Bank Guarantees With Tamper-Proof QR Codes To Prevent Fraud

The Karnataka High Court has suggested some measures for the Union Ministry of Finance to take into consideration while evolving a comprehensive and standardised system for verification of bank guarantees furnished during the tendering process or otherwise, so as to prevent frauds.The court was informed by the Government that it has taken cognisance of the issue of wider systemic vulnerability...

Mandatory Pre-Deposit For Customs Appeal Cannot Be Waived For Financially Sound Appellant: Karnataka High Court

The Karnataka High Court has held that the mandatory pre-deposit required to pursue a customs appeal cannot be waived for a financially sound appellant/importer. In a recently uploaded order pronounced on November 7, 2025, Justice M. Nagaprasanna said the pre-deposit under Section 129-E of the Customs Act does not deny access to justice. “It is a statutory discipline that applies uniformly...

Karnataka High Court Asks Centre To Consider Cashless CGHS Treatment For Emergencies, Critical Care Cases

The Karnataka High Court recently directed the Union of India to examine and consider, at the appropriate administrative level, the feasibility and phased implementation of a cashless medical treatment mechanism under the Central Government Health Scheme, particularly for emergency and critical care. A single judge, Suraj Govindaraj said, “A cashless treatment mechanism, particularly...

IGST | Marketing & Technical Support Services To Foreign Parent Qualify As Export Of Services, Not Intermediary: Karnataka High Court

The Karnataka High Court held that marketing and technical support services provided by the assessee to its foreign parent qualify as export of services under the IGST Act (Integrated Goods and Services Tax) and do not constitute intermediary services. Justice S.R. Krishna Kumar noted that the place of supply of these services is outside India, satisfying all conditions for export of...

Custodial Interrogation Not Mandatory For GST Offences Punishable Up to 5 Years: Karnataka High Court Grants Bail In ₹31 Cr Tax Evasion Case

The Karnataka High Court held that custodial interrogation is not mandatory in GST offences punishable with imprisonment up to five years, even though such offences are economic in nature. The bench further stated that the prescribed punishment under the CGST (Central Goods and Services Tax) Act must be considered while determining the gravity of the offence.Justice Shivashankar...

Flavoured Milk Is Not 'Beverage'; Taxable At 5% GST: Karnataka High Court Provides Relief To Dodla Dairy

The Karnataka High Court held that flavoured milk qualifies as a dairy product under Tariff Heading 0402 and not as a 'beverage' under Tariff Heading 2202. Consequently, GST at 5% will be applicable on flavoured milk instead of 12%. Justice S.R. Krishna Kumar examined the classification of the flavoured milk under the GST, considering whether it falls under Tariff...

No GST On Liquidated Damages For Breach Of Contract: Karnataka High Court Quashes SCN

The Karnataka High Court held that liquidated damages recovered for breach or delay in contractual obligations are compensatory in nature and do not constitute consideration for any supply under GST. Justice S.R. Krishna Kumar examined whether the amount paid as compensation by the Lending Service Provider (LSP) to the assessee constituted 'liquidated damages' and whether such amount...

Order Deciding Director's Authority Is Not An Arbitral Or Interim Award, Not Open To Section 34 Challenge: Karnataka High Court

The Karnataka High Court has held that an order passed by an arbitral tribunal deciding a preliminary or a factual issue such as whether the directors were authorised to execute agreements does not amount to an arbitral award or an interim award and therefore cannot be challenged under section 34 of the Arbitration and Conciliation Act, 1996 ("Arbitration Act"). A Division...

Non-Signatory Developer Can Be Impleaded In Arbitration If Conduct Shows Intent To Be Bound: Karnataka High Court

The Karnataka High Court has refused to interfere with an arbitral tribunal's decision impleading a non signatory company in arbitration proceedings holding that where conduct, agreements and commercial involvement of a party demonstrates clear intent to be bound by the arbitration agreement, the Group of Companies would apply. A Division Bench of Justice Jayant Banerji and Justice...

IGST Not Leviable On Clinical Observation Studies Provided To Foreign Recipients: Karnataka High Court

The Karnataka High Court held that IGST (Integrated Goods and Services Tax) is not leviable on clinic observation studies for foreign recipients, as such services qualify as export of services with the recipient located outside India. Justice S.R. Krishna Kumar stated that having regard to the specific observations made in the 37th GST Council Meeting, whereby it was resolved to...

Karnataka High Court Annual TAX Digest 2025

Direct TaxProceedings Initiated Against Income Tax Assessee After His Death Cannot Be Continued Against Legal Representative: Karnataka HCCase Title: The Income Tax Officer & ANR Preeti VCase No:WRIT APPEAL NO. 1407 OF 2024The Karnataka High Court has said proceedings initiated against an Income Tax Assessee by issuing notice after his demise cannot be continued against his/her...

“Article 21 Rights Flow From Discharge Of Fundamental Duties”: Karnataka High Court Refuses Bail In 2020 Bengaluru Riots Case

The Karnataka High Court, while refusing bail to an accused in the 2020 Bengaluru Riots case, observed that, “The appellant is seeking bail on the ground that his fundamental right to liberty under Article 21 of the Constitution is violated. He gets that right when he adheres to his fundamental duties encapsulated in Article 51A of the Constitution.”A Division Bench comprising Justice...