Tax Monthly Digest: February 2025
Kapil Dhyani
2 March 2025 9:40 AM
SUPREME COURTIncome Tax Act | Offence Committed Before Show-Cause Notice Compoundable As Covered By 'First Offence' In Compounding Guidelines: Supreme CourtCase title: VINUBHAI MOHANLAL DOBARIA Vs CHIEF COMMISSIONER OF INCOME TAXCase no.: SPECIAL LEAVE PETITION (C) NO. 20519 OF 2024The Supreme Court on January 7 set aside the Gujarat High Court's judgment dated March 21, 2017, through which...
SUPREME COURT
Case title: VINUBHAI MOHANLAL DOBARIA Vs CHIEF COMMISSIONER OF INCOME TAX
Case no.: SPECIAL LEAVE PETITION (C) NO. 20519 OF 2024
The Supreme Court on January 7 set aside the Gujarat High Court's judgment dated March 21, 2017, through which the rejection to the compounding application of the Appellant for the assessment year 2013-2014, for having filed the belated income tax return, was upheld on the ground that only for the "first offence" compounding of offence is possible. Since the Appellant had filed delayed income tax for 2011-2012 and his compounding application was accepted, it now cannot be accepted.
However, the Supreme Court observed that the "first offence" is the offence committed prior to the show cause notice, which was the case here for both years.
Case Name: THE STATE OF MAHARASHTRA & ORS. V. PRISM CEMENT LIMITED & ANR.
Case no.: CIVIL APPEAL NO.13928 OF 2015
The Supreme Court yesterday (on February 12) held that though after the amendment of Section 8(5) of the Central Sales Tax Act, the State Government's right to grant exemption from tax has ceased to exist, the amendment is prospective. Thus, it would not apply to the cases where an absolute exemption has already been granted.
The amended Act nowhere stipulates that rights previously accrued stand nullified or all previous exemptions stand cancelled or revoked., the Bench of Justices P.S. Narasimha and Pankaj Mithal said.
Case Name: K KRISHNAMURTHY VERSUS THE DEPUTY COMMISSIONER OF INCOME TAX.
Case no.: CIVIL APPEAL NO. 2411 OF 2025
The Supreme Court, while determining a tax matter, observed that the undisclosed income, under Section 271AAA(1) of the Income Tax Act, surrendered by the assessee during the search, is not sufficient to levy the penalty.
Case Title: COMMISSIONER OF INCOME TAX EXEMPTIONS VERSUS M/S INTERNATIONAL HEALTH CARE EDUCATION AND RESEARCH INSTITUTE
Case no.: SPECIAL LEAVE PETITION (CIVIL) Diary No. 19528/2018
The Supreme Court reiterated that when a charitable trust registers under Section 12-AA of the Income Tax Act (“Act”) for income tax exemptions (under Sections 10 and 11), the tax authorities should check if the charity's proposed activities match its charitable goals, as stated in the Ananda Social case.
The Court, however, clarified that mere registration under Section 12-AA would not entitle a charitable trust to claim exemption under Sections 10 and 11 respectively of the Act, 1961, and the authorities can decline the grant of exemption if the materials produced by the trust does not seem convincing for grant of exemption.
Benefit Of Input Tax Credit Can't Be Reduced Without Statutory Sanction : Supreme Court
Case Title – State of Punjab & Ors. v. Trishala Alloys Pvt. Ltd.
Case no. – Civil Appeal No. 2212 of 2024
The Supreme Court recently held that Rule 21(8) of the Punjab Value Added Tax Rules, 2005, which was notified on January 25, 2014, could not be applied to transactions before April 1, 2014, as the enabling amendment to Section 13 of the parent statute, the Punjab Value Added Tax Act, 2005, was effective from that date.
This means businesses that bought goods at a higher tax rate before this date are not subject to the limitation imposed by Rule 21(8) when claiming ITC, even if the tax rate was later lowered.
Case Name: M/S HCC-SEW-MEIL-AAG JV v. ASSISTANT COMMISSIONER OF STATE TAX & ORS.
Case no.: Petition for Special Leave to Appeal (C) No.4240/2025
The Supreme Court is to decide whether the time limit for adjudicating show cause notice and passing an order can be extended by the issuance of notifications under Section 168-A of the GST Act. This provision empowers the Government to issue notification for extending the time limit prescribed under the Act which cannot be complied with due to force majeure.
“The issue that falls for the consideration of this Court is whether the time limit for adjudication of show cause notice and passing order under Section 73 of the GST Act and SGST Act (Telangana GST Act) for financial year 2019-2020 could have been extended by issuing the Notifications in question under Section 168-A of the GST Act.,” remarked the Bench of Justices J.B. Pardiwala and R. Mahadevan.
BNSS/CrPC Provisions On Rights Of Arrested Persons Applicable To GST & Customs Acts : Supreme Court
Case Title: Radhika Agarwal v. Union of India and Ors.
Case no.: W.P.(Crl.) No. 336/2018 (and connected matters)
The Supreme Court on Thursday(February 27) delivered a significant ruling on the powers of arrest under the Goods and Services Tax Act and the Customs Act.
The Court held that the provisions of the Code of Criminal Procedure (now Bharatiya Nagarik Suraksha Sanhita) on the rights of accused persons are equally applicable to the arrests made both under the Customs Act and the GST Act.
Case Title: Radhika Agarwal v. Union of India and Ors.
Case no.: W.P.(Crl.) No. 336/2018 (and connected matters)
The Supreme Court on Thursday (February 27) observed that there was some merit in the allegation that tax officials coerce assesses to pay the Goods and Services Tax with the threat of arrest. This observation was made by the Court on the basis of data.
The Court said that if any person is feeling coerced to pay GST, they can approach the writ court for refund of the tax paid by them under coercion. The Court also said that the officers who indulge in such coercion must be dealt with departmentally.
Case Title: Radhika Agarwal v. Union of India and Ors.
Case no.: W.P.(Crl.) No. 336/2018 (and connected matters)
The Supreme Court has overruled its previous decisions which held that anticipatory bail applications were not maintainable with respect to offences under the Goods and Services Tax Act.
A three-judge bench comprising Chief Justice of India Sanjiv Khanna, Justice MM Sundresh and Justice Bela Trivedi overruled the two-judge bench judgments in State of Gujarat v. Choodamani Parmeshwaran Iyer and Another and Bharat Bhushan v. Director General of GST Intelligence, Nagpur Zonal Unit Through Its Investigating officer which held that a person summoned under the GST Act cannot file anticipatory bail application and that the only remedy was to file a writ petition under Article 226 of the Constitution.
Case Title: Radhika Agarwal v. Union of India and Ors.
Case no.: W.P.(Crl.) No. 336/2018 (and connected matters)
An arrest under the Goods and Services Act cannot be carried out merely on the basis of suspicion, the Supreme Court stated. Such an arrest cannot be carried out merely to investigate if a cognizable and non-bailable offence has been committed.
The Court held that the arrest must proceed on the belief supported by reasons relying on material that the conditions specified in sub-section (5) of Section 132 are satisfied. This means that there has to be a satisfaction that a cognizable and non-bailable offence has been committed.
Case Title: Radhika Agarwal v. Union of India and Ors.
Case no.: W.P.(Crl.) No. 336/2018 (and connected matters)
Dealing with a challenge to penal provisions of the Customs Act, the Supreme Court today observed that 'customs officers' are not 'police officers' and that they must satisfy a higher threshold of "reasons to believe" before arresting an accused.
A bench of CJI Sanjiv Khanna and Justices MM Sundresh, Bela M Trivedi made the observation while delivering verdict in a batch of 279 petitions challenging the penal provisions in the Customs Act, CGST/SGST Act, etc. as non-compatible with the CrPC and the Constitution.
Supreme Court Upholds Constitutionality Of GST Act Provisions On Arrest & Summons
Case Title: Radhika Agarwal v. Union of India and Ors.
Case no.: W.P.(Crl.) No. 336/2018 (and connected matters)
The Supreme Court has upheld the Constitutional validity of Sections 69 and 70 of the Goods and Services Tax Act, which provide for the power to arrest and the power to summon. The Constitutionality of these provisions were challenged on the ground that the Parliament lacked the legislative competence to enact them.
The petitioners argued that Article 246-A of the Constitution, while conferring legislative powers on Parliament and State Legislatures to levy and collect GST, does not explicitly authorize the violations thereof to be made criminal offences. Referring to Entry 93 of List I to the Seventh Schedule, it was submitted that the Parliament can enact criminal provisions only for the matters in List I. It was further argued that the power to summon, arrest and prosecute are not ancillary and incidental to the power of levying GST and therefore, are beyond the legislative competence of the Parliament under Article 246-A of the Constitution.
HIGH COURTS
Andhra Pradesh HC
Case title: M/s. The Cotton Corporation Of India v. Assistant Commissioner St Auditfac and Others
Case no.: WRIT PETITION NO: 1463/2025
The Andhra Pradesh High Court has held that the time permit set out under 73(2) of the AP GST Act for issuance of show cause notice in relation to alleged short payment of tax, etc. is mandatory in nature.
A division bench of Justices R Raghunandan Rao and Harinath N. added that any violation of that time period cannot be condoned and would render the show cause notice otiose.
Case title: Chakkas Enterprises vs. The Chief Commissioner Of State Taxes and Others
Case no.: W.P.NO: 30501/2023 & W.P.No. 16819/2024
The Andhra Pradesh High Court has held that pleadings relating to suppression of material facts, in an assessment order are the sine qua non for invoking section 21(5); by way of which limitation for filing an assessment order is extended to 6 years from 4 years.
"There is nowhere any mention of suppression of facts, much less, wilful suppression of facts, resulting in wilful evasion of tax, which is the sine qua non, for invoking Section 21(5) of the Act. In such circumstances, the provisions of Section 21(5) of the Act would not be applicable and the period of limitation would be four years, as set out under Section 21(4) of the Act," held Justice R. Raghunandan Rao and Justice Harinath N.
Case Title: Tirumala Balaji Marbles And Granites v. The Assistant Commissioner St and Others
Case Number: WRIT PETITION NO: 1200/2025
The Andhra Pradesh High Court stated that GST registration can't be refused merely because the assessee belongs to another State.
“Though the apprehension of the respondents may not be misplaced, it would not mean that registration can be refused on a ground, which is not available under the Statute or the Rules. There do not appear to be any restriction for persons outside the State to come into the State of Andhra Pradesh and seek registration under the APGST Act,” stated the Division Bench of Justices R Raghunandan Rao and Harinath N.
Delay Of Two Days In Issuing GST Notice Can't Be Condoned: Andhra Pradesh High Court
Case Title: M/s The Cotton Corporation of India v. Assistant Commissioner (ST) (Audit) (FAC)
Case Number: W.P.No.1463 of 2025
The Andhra Pradesh High Court stated that delay of two days in issuing the GST notice cannot be condoned.
The Division Bench of Justices R. Raghunandan Rao and Harinath N. observed that “the time permit set out under 73(2) of the Act is mandatory and any violation of that time period cannot be condoned, and would render the show cause notice otiose.”
Bombay HC
Case Title: City Corporation Limited v. Assistant Commissioner of Income Tax Circle
Case Number: WRIT PETITION NO. 6076 OF 2023
The Bombay High Court stated that notice issued to a non-existing entity post-merger is a substantive illegality and not some procedural violation.
“we cannot condone the fundamental error in issuing the impugned notices against a non-existing company despite full knowledge of the merger. The impugned notices, which are non-est cannot be treated as “good” as urged on behalf of the department” stated the Division Bench of Justices M.S. Sonak and Jitendra Jain.
Case Title: The Board of Control for Cricket in India v. The Assistant Commissioner of Income Tax
Case Number: INCOME TAX APPEAL NO.1041 OF 2012
The Bombay High Court stated that ITAT cannot overstep its authority by deciding on merits when it has already concluded an appeal was not maintainable.
The Division Bench of Justices M.S. Sonak and Jitendra Jain observed that “Once the ITAT concluded that the Appeal before it against the impugned communication/order was not “maintainable”, there was no question of the ITAT evaluating the impugned communication/order on its merits or making any observations or recording any findings regarding its validity or otherwise. Therefore, such observations and findings are without jurisdiction and should not have been made.”
Case title: Oxford University Press v. DCIT, Int. Tax Circle 3 (2)(2) & Ors.
Case no.: WRIT PETITION NO.1894 OF 2022
The Bombay High Court has made it clear that merely because the tax rate which is applicable on an assessee changes in future assessment years (AYs), is not a ground to initiate reassessment action against it for previous AYs, unless the 'jurisdictional parameters' of Section 148 of the Income Tax Act, 1961 are fulfilled.
A division bench of Justices MS Sonak and Jitendra Jain thus quashed the reassessment order passed against Oxford University Press, merely because its tax status was changed from 'resident' to 'non-resident', making it subject to a 40% tax rate instead of 30%.
Case title: Vijay Shrinivasrao Kulkarni v. ITAT Pune Bench & Ors.
Case no.: WRIT PETITION NO. 17572 OF 2024
The Bombay High Court has disapproved of the Income Tax Appellate Tribunal dismissing the appeal against an ex-parte order passed against a former employee of Pfizer Healthcare without providing him an opportunity of hearing.
Stating that ITAT cannot “perpetuate” the ex-parte order, a division bench of Justices GS Kulkarni and Advait M. Sethna directed the Tribunal to hear the employee de novo, so far as his prayer for the grant of exemption under section 89 of the Income Tax Act, 1961 is concerned.
Calcutta HC
Case title: Principal Commissioner Of Income Tax 13 Kolkata Vs Champalal Omprakash
Case no.: ITAT/5/2025
The Calcutta High Court recently upheld an ITAT order deleting the addition of over ₹4 crore made to the income of an assessee under the Income Tax Act, 1961 in reassessment action.
A division bench of Chief Justice TS Sivagnanam and Justice Bivas Pattanayak held that the Assessing Officer had erred in not disposing of the written objection submitted by the assessee against the reopening of the assessment.
Delhi HC
Case title: Pr. Commissioner Of Income Tax -21 v. M/S.Remfry & Sagar
Case no.: ITA 199/2017
The Delhi High Court has held that the fees paid by IPR law firm Remfry & Sagar to acquire the goodwill vested in a company run by the family members of its deceased founder, is a business expense deductible under Section 37 of the Income Tax Act.
A division bench of Justices Yashwant Varma and Ravinder Dudeja observed, “the primary, nay, sole purpose for incurring expenditure towards license fee was to use the words “Remfry & Sagar” and derive benefit of the goodwill attached to it. The appellant do not dispute that Dr. Sagar had validly acquired the goodwill and that the same constituted a valuable asset which was transferable.”
Case title: M/S Vishal Video And Appliances Pvt Ltd v. Commissioner Of Customs Acc(Import)
Case no.: CUSAA 9/2025
The Delhi High Court has asked the Customs Department, the Central GST Department, the Directorate of Revenue Intelligence (DRI), Directorate of General GST Intelligence (DGGI) to make sure that counsel representing them on advance service are instructed properly.
A bench of Justices Prathiba M. Singh and Dharmesh Sharma ordered the Commissioner of Customs to prepare an SOP as to the manner in which the Department shall ensure that instructions are given to the nominated Counsels in the matter when advance copies are served.
Case title: Property Plus Realtors v. Union Of India & Ors
Case no.: W.P.(C) 17371/2024
The Delhi High Court has held that the date of the assessment order, wherein an Assessing Officer recommended separate penalty proceedings against the assessee under Section 271DA of the Income Tax Act, 1961 for accepting more than ₹2 lakh in cash, is not relevant for determining the limitation period under Section 275(1)(c).
A division bench of Acting Chief Justice Vibhu Bakhru and Justice Tushar Rao Gedela said a plain reading of Section 275(1)(c) indicates that the time limit for completion of the action for imposition of penalty is to be reckoned from: (a) the end of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated are completed; or (b) six months from the end of the month in which action for imposition of penalty is initiated, whichever expires later.
Case title: M/S SMEC India (P.) Ltd. v. Principal Commissioner Of Income Tax – 8
Case no.: W.P.(C) 9969/2019
The Delhi High Court has held that an application for revision under Section 264 of the Income Tax Act, 1961 can be preferred by an assessee who makes suo motu disallowance in its Return of Income (RoI/ ITR), under a bonafide yet mistaken belief that the same was liable to be offered for taxation.
A division bench of Justices Yashwant Varma and Harish Vaidyanathan Shankar added that the assessee cannot be denied relief merely on the ground that the application was moved without amending the RoI.
Case title: The Commissioner Of Income Tax - International Taxation -1 v. Adobe Systems Software Ireland Ltd
Case no.: ITA 474/2023
The Delhi High Court has upheld an order of the Income Tax Appellate Tribunal to the effect that Adobe Systems India Pvt. Ltd is not a dependent agent permanent establishment (DAPE) of Adobe Systems Software Ireland Ltd.
In doing so, a division bench of Justices Yashwant Varma and Harish Vaidyanathan Shankar affirmed that no further attribution of profit can be made as Adobe India was remunerated at arm's length.
Case title: Kanwaljeet Kaur v. Assistant Commissioner Of Income Tax Circle (34) 1 Delhi & Ors. and batch
Case no.: W.P.(C) 3908/2023
The Delhi High Court has interpreted the Supreme Court's decision in Union of India v. Rajeev Bansal to elucidate the time period surviving under Section 149 of the Income Tax Act, 1961 for issuing reassessment notices.
A division bench of Justices Yashwant Varma and Harish Vaidyanathan Shankar concluded that the period between 20 March 2020 to 30 June 2021 would be excluded from limitation, in view of Section 3(1) of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.
Further, the period between the date of issuance of the impugned reassessment notices (if falling between 20 March 2020 to 30 June 2021) up to the date of the decision rendered by the Supreme Court in Ashish Agarwal case (04 May 2022), would also be excluded, in light of third proviso to Section 149(1). The bench added that the third period which is liable to be excluded is the time for furnishing objections by the assessee.
Case title: The Commissioner Of Income Tax - International Taxation -3 v. Standard Chartered Grindlays Ltd
Case no.: ITA 388/2019
The Delhi High Court has held that the limit prescribed under Section 36(1)(iv) of the Income Tax Act 1961, on deductions that an employer can seek for contributions made towards superannuation funds, applies only at the stage of setting up the fund or making ordinary annual payments.
A division bench of Justices Yashwant Varma and Harish Vaidyanathan Shankar said any contribution made additionally in discharge of an overarching obligation would not be rendered as a disallowable expense.
Case title: Ram Balram Buildhome Pvt. Ltd. v. Income Tax Officer And Anr.
Case no.: W.P.(C) 16232/2024
The Delhi High Court has made it clear that Section 149 of the Income Tax Act, which prescribes a limitation period for initiating reassessment against an assessee, is not an enabling provision but rather a proscription on the Assessing Officer's powers.
A division bench of Acting Chief Justice Vibhu Bakhru and Justice Tushar Rao Gedela observed, “The opening sentence of Section 149(1) of the Act clearly indicates that the time limit as prescribed under Section 149(1) of the Act is a hard stop. Therefore, the procedure that is required to be completed for issuance of notice under Section 148 of the Act is required to be completed prior to the expiry of the time limit as prescribed under Section 149(1) of the Act. Such time limit cannot be breached…There is no ambiguity in this regard given the construct of Section 149(1) of the Act, which is not in the nature of enabling provision but a provision that proscribes an action.”
Case title: Rocktek Infra Services Pvt. Ltd. v. Principal Commissioner Of Customs (Import)
Case no.: W.P.(C) 12489/2024
The Delhi High Court has held that the imposition and severity of conditions imposed by the Customs Department for permitting provisional release of seized goods is “discretionary” in nature.
In doing so, a division bench of Justices Prathiba M. Singh and Dharmesh Sharma scaled down the alleged onerous condition imposed on an importer, for executing a Bank Guarantee of 130% of the deferential duty.
Case title: Sushil Aggarwal v. Principal Commissioner Of Customs and connected matter
Case no.: CUSAA 35/2025
The Delhi High Court has made it clear that a person facing charges under the Customs Act, 1962 does not have an unfettered right under Section 138B, to cross-examine the informant or person making incriminatory statements. Section 138(B) of the Customs Act of 1962 deals with the admissibility of statements made during customs proceedings.
A division bench of Justices Prathiba M. Singh and Dharmesh Sharma relied on Kanungo & Co. v. Collector of Customs, Calcutta and Others (1983) where a Coordinate bench of the High Court observed that if any information is received from a statutory authority and an adjudicating process is initiated, there is nothing in law which compels the information provider to be involved in the judicial proceedings or warrant him/her for cross examination.
Case title: M/S Addichem Speciallity LLP v. Special Commissioner I, Department Of Trade And Taxes And Anr and batch
Case no.: W.P.(C) 14279/2024
The Delhi High Court has held that since Section 107 of the Central Goods and Services Tax Act, 2017 prescribes an “independent regime” to determine the limitation period for filing statutory appeals, the provision for condonation of delay under Section 5 of the Limitation Act stands excluded.
A division bench of Justices Yashwant Varma and Dharmesh Sharma observed, “The facility to seek condonation can be resorted provided the legislation does not construct an independent regime with respect to an appeal being preferred. Once it is found that the legislation incorporates a provision which creates a special period of limitation and proscribes the same being entertained after a terminal date, the general provisions of the Limitation Act would cease to apply.”
Case title: Aon Consulting Pvt. Ltd. (Successor Entity Of Aon Services (I) Pvt. Ltd. v. Principal Commissioner Of Income Tax – 1 And Ors.
Case no.: ITA 244/2024
The Delhi High Court has made it clear that a dispute with respect to arm's length price in a transfer pricing can be resolved under Mutual Agreement Procedure (MAP) only by consent and negotiations between contracting parties.
A division bench of Justices Vibhu Bakhru and Swarana Kanta Sharma observed that such a resolution cannot be imposed in a contested case, where there is no consensus.
Case title: Principal Commissioner Of Income Tax - 1 v. M/S Chemester Food Industries Pvt. Ltd
Case no.: ITA 113/2024
The Delhi High Court has reiterated that only such High Court within whose jurisdiction the Assessing Officer passing an impugned assessment order is situated would have the jurisdiction to entertain an appeal under Section 260A of the Income Tax Act, 1961.
The division bench of Justices Vibhu Bakhru and Tushar Rao Gedela agreed with the assessee, stating that since the appeal before it emanates from an assessment order issued by the AO in Amritsar, it does not have territorial jurisdiction.
Case title: Amit Kumar v. The Commissioner Of Customs
Case no.: W.P.(C) 15973/2024
The Delhi High Court recently ordered the Customs authorities to release a traveller's gold worth over ₹14 lakh and other branded articles like iPhone, PlayStation, etc. over the authority's failure to issue him a show cause notice.
The Department on the other hand contended that an oral SCN was given to the Petitioner, who also signed an undertaking that he does not want a written SCN or even a personal hearing. The High Court observed that such signing of a standard form of waiver by the Petitioner would not be in compliance with the principles of natural justice, inasmuch as, the waiver under Section 124 has to be “conscious” and “informed”.
Case title: Commissioner Of Income Tax v. Benetton India Pvt. Ltd.
Case no.: ITA 472/2018
The Delhi High Court has held that a Transfer Pricing Officer cannot compute the arm's length price of an assessee's international transactions as nil, merely because despite the services availed from such transactions, the assessee incurred a loss in business.
A division bench of Justices Vibhu Bakhru and Swarana Kanta Sharma observed that the TPO cannot weigh the ALP on the basis of financial benefits or commercial expediency of the transactions in question.
Case title: Commissioner Of Income Tax v. Benetton India Pvt. Ltd.
Case no.: ITA 472/2018
The Delhi High Court has made it clear that the role of a Transfer Pricing Officer is to conduct a transfer pricing analysis and determine the arm's length price of an assessee's international transaction and the TPO cannot act as an Assessing Officer to probe the legitimacy of such transactions.
A division bench of Justices Vibhu Bakhru and Swarana Kanta Sharma observed, “It is necessary to bear in mind that there is a distinction between the functions of a TPO and an AO. The TPO is required to conduct a transfer pricing analysis to determine the ALP. It is not the TPO's function to determine whether, in fact, there is any service from which the Assessee derived any benefit. The question whether any expenditure has been incurred by the Assessee for earning revenue is a matter, which is required to be determined by the AO.”
Case title: M/S Aims Retail Services Private Limited v. Union Of India & Ors. and batch
Case no.: W.P.(C) 9461/2023 and batch
The Delhi High Court has held that merely unlocking/ activating a new mobile phone by disabling the “regional lock” which is put by original equipment manufacturers to restrict usage to a specific geographical location, does not make the mobile phone a “used” good.
A division bench of Justices Prathiba M. Singh and Dharmesh Sharma thus held that exporters of such mobile phones will also be eligible to claim duty drawbacks.
Case title: Gor Sharian v. The Commissioner Of Customs
Case no.: W.P.(C) 1807/2025
The Delhi High Court has held that the Customs Department must ensure that the intimation of disposal of detained or confiscated property is given to the concerned party both via email as also the mobile number.
A division bench of Justices Prathiba M. Singh and Dharmesh Sharma reasoned this will ensure that a party who succeeded in Court or Tribunal against the detention of the property is not deprived of their properties.
Case title: Principal Commissioner, Central Tax Commissionerate, Gst Delhi West v. M/S Alkarma
Case no.: SERTA 3/2025
The Delhi High Court has made it clear that if a show cause notice is quashed by a higher authority on one issue, it doesn't mean that other issues raised in the SCN are not liable to be adjudicated.
The observation was made by the bench of Justices Prathiba M. Singh and Dharmesh Sharma in a case where the SCN was quashed by another division bench of the High Court so far as the issue relating to duty on free supply of materials was concerned. However, the CESTAT proceeded to discharge the entire SCN.
The Delhi High Court has held that Fee for Technical Services (FTS) as contained under Section 9(1)(vii) of the Income Tax Act, 1961 is concerned with the transfer of 'distinctive', 'specialized' knowledge, skill, expertise and know-how by a service provider.
A division bench of Justices Yashwant Varma and Harish Vaidyanathan Shankar thus observed that assistance provided by the assessee-respondent with respect to rules and regulations for clearance of customs frontiers is not 'specialised knowledge' to make the service 'FTS'.
Case title: Vivo Mobile India Private Limited v. Assistant Commissioner Of Income Tax & Anr.
Case no.: W.P.(C) 1662/2025
The Delhi High Court has made it clear that after the closure of assessment proceedings, the Assessing Officer becomes 'functus officio' and to re-confer jurisdiction upon the AO to initiate re-assessment proceedings, relevant incriminating material ought to be put to the assessee.
A division bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela made the observation while dealing with a writ petition filed by Vivo Mobiles, assailing the reassessment proceedings initiated against it under Section 148A(d) of the Income Tax Act, 1961.
Case title: Tilak Raj Singh v. Union Of India And Ors
Case no.: W.P.(C) 772/2018
The Delhi High Court has made it clear that in terms of the Central Civil Services (Leave Travel Concession) Rules, 1988 an employee cannot change travel destination midway through the journey and if due to some unavoidable circumstance it has been changed, the same has to be a destination which is en route.
In the case at hand, LTC was originally sought for travel to Trivandrum, which was subsequently changed to Goa, via Mumbai. However, the petitioner decided midway to change his destination to certain hill stations in Uttarakhand.
Case title: Mohamed Shamiuddeen v. Commissioner Of Customs & Ors.
Case no.: W.P.(C) 2030/2025
The Delhi High Court has reiterated that authorities making a traveller waive show cause notice before confiscation of goods, etc. under Section 124 of the Customs Act 1962, on a mere proforma, is not lawful.
A division bench of Justices Prathiba M. Singh and Dharmesh Sharma thus granted relief to a permanent resident of Hong Kong, whose Rolex wristwatch valued at ₹30,29,400/- was confiscated by the Customs Department at the airport.
Case title: SFDC Ireland Limited v. Commissioner Of Income Tax & Another
Case no.: W.P.(C) 12847/2024
The Delhi High Court has made it clear that before rejecting an assessee's application under Section 197 of the Income Tax Act 1961 for nil TDS or deduction of tax at a lower rate, the assessing officer must form a prima facie opinion regarding the assessee's taxability in India.
Section 197(1) of the Act enables an assessee to make an application for a certificate requiring the deduction of tax at a lower rate or no deduction at all if the Assessing Officer is satisfied that the total income of the recipient justifies such nil deduction or deduction at a lower rate.
Case title: Maruti Suzuki India Ltd v. Deputy Commissioner Of Income Tax
Case no.: W.P.(C) 9786/2016
The Delhi High Court has quashed the reassessment action initiated by the Income Tax Department against car manufacturer Maruti Suzuki India Ltd for alleged escapement of income in the Assessment Year 2009-10.
A division bench of Justices Yashwant Varma and Ravinder Dudeja observed that the company had made full and true disclosure of all facts in the course of the assessment and the Department did not have jurisdiction to reopen the assessment under Sections 147/148 of the Income Tax Act, 1961.
Case title: Ateesh Agarwal v. Union Of India And Ors
Case no.: W.P.(C) 2139/2025
The Delhi High Court has rejected the writ petition filed by a man, seeking an inquiry into the finances of his wife and her family who claimed to have paid him ₹2 crores dowry, in addition to spending crores of rupees on their wedding.
A division bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela observed that the complaint stemmed from a matrimonial feud and the man was unable to indicate the provision under which such a complaint was made to the Income Tax department.
CBDT Cannot Impose Limitations To Extinguish Rights Granted Under Income Tax Act: Delhi High Court
Case Title: Sun Pharmaceutical Industries Ltd. v. Income Tax Officer and Anr.
Case no.: W.P.(C) 8444/2018
Recently, the Delhi High Court held that Central Board of Direct Taxes (CBDT) cannot impose limitations to extinguish rights granted under Income Tax Act, 1961. The Court held that the wide powers granted to the CBDT are not for extinguishing a right that is conferred by the Act. Accordingly, the Court Circular No. 07/2007 dated 23 October 2007 issued by the CBDT to the be ultra vires the Income Tax Act.
Case title: The Commissioner Of Income Tax - International Taxation -2 v. Nokia Network OY
Case no.: ITA 785/2019
The Delhi High Court has held that a subsidiary or an entity which is substantially controlled by another entity in a contracting State does not by itself become a Permanent Establishment (PE) of that other entity.
Citing Article 5 of the India-Finland Double Taxation Treaty, a division bench of Justices Yashwant Varma and Ravinder Dudeja observed, “There is no general presumption in law that a subsidiary can never be acknowledged to be a PE. This since Article 5(8) itself merely states that the said factor alone shall not be determinative of the PE question. The covenant thus clearly obliges us to evaluate the facts based on the other provisions comprised in Article 5 of the DTAA.”
Case title: Daljeet Singh Gill v. Union Of India & Ors.
Case no.: W.P.(C) 4644/2021
The Delhi High Court recently granted relief to a trader whose application for availing the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 over service tax dues was declined by the GST Department “without providing any reason”.
A division bench of Justices Prathiba M. Singh and Dharmesh Sharma observed that in the absence of proof of service of notice upon the trader, prior to his making an application for dispute resolution, it cannot be presumed that any investigation was pending against him.
Case title: MR Makhinder Chopra Commissioner Of Customs New Delhi
Case no.: W.P.(C) 2049/2025
The Delhi High Court has held that the Baggage Rules 2016 which are framed under the Customs Act 1962 to ensure that every passenger entering India passes through a Customs check has limited application on foreign tourists coming to India.
While holding so, a division bench of Justices Prathiba M. Singh and Dharmesh Sharma ordered the release of a Russian national's gold chain, valued at about Rs. 7 lakhs, which was confiscated by the Customs Department when he arrived in India.
Case title: M/S Legacy Foods Pvt. Ltd. v. Deputy Commissioner Of Income Tax, & Anr.
Case no.: ITA 45/2023
The Delhi High Court has held that Section 80IC of the Income Tax Act, 1961, which contemplates tax incentives for enterprises operating in specific industries and locations in India, does not require such enterprises to enter into an agreement with the Government.
In doing so, a division bench of Justices Yashwant Varma and Harish Vaidyanathan Shankar distinguished the provision from Section 80IA, whereunder agreement with the Centre, State or local authority is a pre-condition for claiming deductions.
Case title: Monish Gajapati Raju Pusapati v. Assessment Unit Income Tax Department & Anr.
Case no.: W.P.(C) 2043/2025
The Delhi High Court has made it clear that Section 292B of the Income Tax Act, 1961 cannot be used to save an assessment order passed by overlooking errors apparent on face of the record. The provision provides that no notice or assessment or any proceedings can be deemed to be invalid merely for the reason of any mistake, defect or omission in such notice, assessment or other proceedings.
A division bench of Chief Justice Devender Kumar Upadhyay and Justice Tushar Rao Gedela said while the provision would save reassessment notice which inadvertently furnished to assessee information relating to some other individual instead of his own however, the subsequent reassessment order passed by overlooking such mistake cannot be condoned.
Gujarat HC
Case Title: M/S SHREENATHJI EXTRUCTION v/s UNION OF INDIA AND
Case no.: R/SCA/17685 of 2024
The Gujarat High Court recently issued notice on a plea challenging the validity of Section 75(2) CGST Act wherein if the concerned court or authority concludes that show cause notice issued under Section 74(1) to a person for tax evasion is unsustainable as the charges of fraud, wilful misstatement or suppression of facts aren't established, then the department shall determine the tax payable as if the notice was issued under Section 73(1).
For context, Section 73(1) states that where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised for "any reason, other than the reason of fraud or any wilful-misstatement or suppression of facts to evade tax", he shall serve notice on the person chargeable with such a tax, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty leviable under the provisions of this Act or the rules made thereunder.
Jharkhand HC
Case Title: M/s. Castrol India Limited v. The State of Jharkhand
Case Number: W.P.(T) No. 7098 of 2023
The Jharkhand High Court stated that retaining balance amount by department after the tax demand is reduced is violative of Article 14 & Article 265 of the constitution.
The Division Bench of Chief Justice M.S. Ramachandra Rao and Justice Deepak Roshan observed that the department cannot retain the amounts deposited by the assessee pursuant to condition imposed by the appellate authority for stay of the assessment order and contend that there is no necessity to refund the same.
Karnataka HC
Case Title: Rajkumar Agarwal v. Income Tax Department.
Case No: CRIMINAL PETITION NO. 201214 OF 2023 (482(Cr.PC)/528(BNSS)) C/W CRIMINAL PETITION NO. 201213 OF 2023 CRIMINAL PETITION NO. 201215 OF 2023 CRIMINAL PETITION NO. 201216 OF 2023
The Karnataka High Court has refused to quash prosecution initiated by the Income Tax Department against an assessee who had willfully failed to submit his income tax returns in time for the Assessment Years 2012- 13 to 2015-16 and thereby committed the alleged offence.
A single judge, Justice S Vishwajith Shetty dismissed the petitions filed by Rajkumar Agarwal. It said, “Delay in filing of the income tax returns would not only result in payment of penalty, but it also results in prosecution as provided under Chapter 22 of the Act. Therefore, merely for the reason that petitioner has paid the penalty levied by the Competent Authority for the delay in filing of the returns, the same does not exonerate the petitioner from being prosecuted.”
Kerala HC
Case Title: The Kerala Film Exhibitors Federation v. State of Kerala
Case Number: WA NO. 2300 OF 2015
The Kerala High Court has stated that cess levied on cinema tickets under Section 3C Of Kerala Local Authorities Entertainment Tax Act is constitutionally Valid.
“Cess can also mean a tax levied for a special purpose or as an increment to the existing tax and, in given circumstances, a fee. In the case at hand, entertainment tax is already levied under the Act of 1961 and the Cess under Section 3C is an additional levy. Thus, the contention of the Assessee that under Entry 62 of List II of Schedule VII to the Constitution of India, only tax can be levied, and Cess cannot be levied is without merit” stated the Division Bench of Chief Justice Nitin Jamdar and Justice S. Manu.
Case Title: Centre C Edtech Private Limited v. The Intelligence Officer
Case Number: WA NO. 1934 OF 2024
The Kerala High Court stated that illegal cash seizure by GST Department and handing over to Income Tax Department is illegal under Section 132A of the Income Tax Act.
The Division Bench of Justices A.K. Jyasankaran Nambiar and Easwaran S. held that “Cash amount seized from the premises of the assessee cannot be retained either by the GST Department of the State or the Income Tax Department prior to a finalisation of respective proceedings initiated by them.”
Case Title: Joint Commissioner (Intelligence and Enforcement) v. M/s Lakshmi Mobile Accessories
Case Number: W.A.NO.258 OF 2025
The Kerala High Court stated that consolidated show cause notice involving multiple assessment years can be issued when common period of adjudication exists.
“Issuing a consolidated show cause notice covering various financial/assessment years would cause prejudice to an assessee who would not get the full period envisaged for adjudication under the Statute, if that period is circumscribed by the limitation period prescribed in relation to an earlier financial/assessment year” stated the Division Bench of Justices A.K. Jayasankaran Nambiar and Easwaran S.
Case Title: The Deputy Commissioner (Intelligence) v. Minimol Sabu
Case Number: WA NO. 238 OF 2025
The Kerala High Court stated that Article 226 cannot be invoked against a show cause notice issued under Section 74 of the CGST Act at preliminary stage.
“Article 226 of the Constitution of India is not meant to be used to break the resistance of the Revenue in this fashion. In exercise of such jurisdiction, the High Court is required to refrain from issuing directions to the authorities under the taxation statute to decide issues in stages or on a preliminary basis,” stated the Division Bench of Justices A.K. Jayasankaran Nambiar and Easwaran S.
Madras HC
Case Title: Thanushika v The Principal Commissioner of Customs (Chennai)
Case No: W.P.No.5005 of 2024
The Madras High Court has recently criticised a Seizing Officer attached to the office of the Principal Commissioner of Customs for seizing a gold “Mangalya Thali Kodi” (necklace) from a Srilankan citizen alleging that the same was against the Baggage Rules 2016.
The court observed that the quantity of jewellery worn by the petitioner was normal for a newly married person and that the officers, while conducting searches should respect the customs of every religion in the country. The court also noted that it was unfair on the part of the officer to remove the petitioner's thali and such act was intolerable.
Case Title: Tvl. Chennais Pet v. The State Tax Officer
Case Number: W.P.(MD)No.3995 of 2025
The Madras High Court stated that appeal can't be dismissed due to procedural delay, when assessee has complied statutory requirements including pre-deposit.
“The appeal should not be dismissed merely due to a procedural delay, especially when the petitioner has made an effort to comply with the statutory requirements, including the pre-deposit of 10% of the tax liability and additional payments towards the disputed tax amount” stated the bench of Justice Vivek Kumar Singh.
Case Title: M/s.United Breweries Limited v. The Joint Commissioner of GST and Central Excise (Appeals II)
Case No: W.P.No.14080 of 2021
The Madras High Court has recently observed that the supply of holographic stickers or excise labels by the Prohibition and Excise Department which is to be affixed on manufactured and bottles alcoholic liquor is a supply of “goods” simplicitor and not a supply of “service”.
The court thus ruled that such supply of holographic stickers would not be taxable under the GST enactments. Justice C Saravanan noted that the holographic sticker was a label and therefore a good within the meaning of Section 2(52) of the CGST Act and the supply of label by the department had to be construed as a supply of “goods” and not a supply of “service”.
Telangana HC
Case title: M/s Diwakar Road Lines vs. The Union Of India and Others
Case no.: WRIT PETITION NO: 19920/2020
A division bench of the Andhra Pradesh High Court has dismissed a writ petition filed by M/s Diwakar Road Lines challenging the rejection of an application to compound all previous service tax by way of a one-time settlement.
The bench held that even though the statute does not prescribe for the rejection of any application, the committee may reject an application when the documents relied upon are ingenuine.
TRIBUNALS
Case Title: Executive Engineer (Workshop) M.P. Power Appellant Transmission Co. Ltd. v. Commissioner (Appeals) Central Excise Customs & CGST
Case Number: Excise Appeal No.50329 of 2021
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has granted a refund along with interest, despite the absence of a statutory provision for interest under central excise laws at the relevant time.
The Bench of Binu Tamta (Judicial Member) and P.V. Subba Rao (Technical Member) has observed that “the amount collected by way of Central excise duty was illegal as the activity itself did not involve any manufacture and the same cannot be allowed to be retained by the Government.”
Case Title: M/s Secure Meters Ltd. v. Principal Commissioner of Customs (Imports)
Case Number: CUSTOMS APPEAL NO. 51041 OF 2020
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that imported communication modules function independently as parts of communication hubs, classifiable under CTI 8517 70 90.
The Bench of Binu Tamta (Judicial Member) and P.V. Subba Rao (Technical Member) have observed that “since the communication modules were imported, they should be classified as such. The correct classification of the communication modules is CTI 8517 70 90.”
Case Title: Rallis India Limited v. C.C.E-Bharuch
Case Number: Service Appeal No 11894 of 2016 - SM
The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that the department cannot consider a refund claim unless it is specified under which notification and provision the same has been sought.
The Bench of Somesh Arora (Judicial) has observed that, “The lapse of non-filing of refund under proper notification separately for June 2013 cannot be termed as mere procedural lapse. The department cannot be expected to consider refund claim if it is not indicated to them as to under which notification and provisions same has been sought.”
Case Title: M/s Indus Towers Limited v. Commissioner of Central Excise, Central Goods and Service Tax, Gurugram
Case Number: Service Tax Appeal No. 60744 of 2023
The Chandigarh Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that adjustment of refund against a confirmed demand during the pendency of an appeal amounts to coercive recovery.
The amount adjusted from the total refund sanctioned to the assessee is refundable to the assessee at the rate of 12% per annum computed from the date of deposit till the date of its refund, stated the bench.
Two Or More Bills Of Entry Or Shipping Bills Cannot Be Taken Together And Assessed: CESTAT
Case Title: M/S Disha Realcon Pvt Ltd V. Commissioner of Customs Adjudication
Case Number: Customs Appeal No. 54710 of 2023
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that two or more bills of entry or shipping bills cannot be taken together and assessed.
The Bench of Dilip Gupta (President) and P. V. Subba Rao (Technical) has observed that, “Two or more Bills of Entry or Shipping Bills cannot be taken together and assessed. The only exception made in the law are the Project Imports under Project Import Regulations, 1986.”
Transaction Value Is Not The Only Basis For Assessment Of Duty: CESTAT
Case Title: M/s Mittal Appliances Limited V. The Commissioner of Customs
Case Number: Customs Appeal No. 51888 of 2021
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that the transaction value is not the only basis for assessment of the duty.
The Bench of Dilip Gupta (President) and P. V. Subba Rao (Technical) has observed that, “transaction value is not the only basis for assessment of the duty. The Valuation Rules and Section 14 of the Act provide for rejection of transaction value. When rejecting the transaction value, the customs officer does not modify the transaction value but only rejects it as the assessable value for determination of the duty.”
Case Title: M/s. Aglowmed Ltd. V. Commissioner Central Goods and Service Tax, Dehradun
Case Number: Excise Appeal No. 51902 of 2021
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that mere wrong availment of exemption notification does not mean that availment was done to evade payment of central excise duty.
The Bench of Dilip Gupta (President) and P. V. Subba Rao (Technical) has observed that, “Mere wrong availment of an Exemption Notification would not lead to a conclusion that it was with an intent to evade payment of central excise duty unless the department is able to not only allege but substantiate that the said suppression was deliberate with an intent to evade payment of central excise duty.”
Case Title: M/s Prestige Polymers Pvt. Ltd. V. The Commissioner of Customs
Case Number: Customs Appeal No. 51470 of 2019
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that if goods imported into an SEZ are not used for the authorised operations but are sold in Domestic Tariff Area, duty has to be paid.
The Bench of Dilip Gupta (President) and P. V. Subba Rao (Technical) has observed that, “if goods imported into an SEZ are not used for the authorised operations but are sold in Domestic Tariff Area, duty has to be paid. If duty is not paid or short paid and as a result a demand has to be raised, it must be done as per the Customs Act by the jurisdictional Customs Officers.”
Case Title: Svam Toyal Packaging Industries Pvt. Ltd. v. Principal Commissioner of Customs
Case Number: Customs Appeal No.50780 Of 2021
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that the Customs authorities cannot deny the benefit of Customs duty exemption under the notifications governing the Advance Licensing Scheme.
The Bench of Dr. Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) was addressing the issue of whether the goods imported by the assessee under AAs are permitted for duty free import under Advance Authorization Scheme.
Obligation Under CENVAT Credit Rules, 2004, Cannot Be Transferred To Recipient Of Credit: CESTAT
Case Title: Hindustan Coca-Cola Beverages Pvt Ltd V. The Commissioner of CGST & Customs
Case Number: Excise Appeal No. 85225 of 2020
The Mumbai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that the obligation under rule 3(1) of CENVAT Credit Rules, 2004 cannot be transferred to the recipient of credit under rule 7 of CENVAT Credit Rules, 2004.
The Bench of C J Mathew (Technical) has observed that, “the mechanism provided in rule 7 of CENVAT Credit Rules, 2004, governing the distribution of such credit, deems the credit so distributed to be eligible credit for the purpose of utilization. A harmonious reading of rule 3 and 4 of CENVAT Credit Rules, 2004 and the conditions prescribed in rule 7 alone would determine the extent of validity of the credit so distributed within the scheme of CENVAT Credit Rules, 2004.”
Assessee Not Eligible To Avail CENVAT Credit On Invoices Not In Their Name: CESTAT
Case Title: M/s Leel Electricals Ltd. v. Commissioner of CGST & Central Excise
Case Number: EXCISE APPEAL NO. 50277 of 2019
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that the assessee is not eligible to avail the CENVAT Credit on the basis of the invoices which were not in their name.
The Bench of Binu Tamta (Judicial Member) and Hemambika R. Priya (Technical Member) has observed that “it is necessary that the document contains all particulars as mentioned therein to avail the credit. The name of the consignee or service receiver on the invoice is the basic requirement for availing the CENVAT Credit.”
Case Title: M/s. Assam Gas Company Limited V. Commissioner of Central Excise & Service Tax
Case Number: Service Tax Appeal No. 75603 of 2015
The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that the reimbursements received by the assessee cannot be considered as 'consideration' towards any taxable service.
The Bench of Ashok Jindal (President) and K. Anpazhakan (Technical) has observed that, “the service rendered by the appellant is not for any other company but to themselves. Thus, there is no service provider and service receiver relationship exists in the transaction.”