Tax Monthly Digest: January 2025
Kapil Dhyani
9 Feb 2025 6:00 AM
SUPREME COURTMotor Accident Claims - Tax Returns Can Be Accepted To Determine Income Only If They Are Appropriately Produced : Supreme CourtCase name: New India Assurance Co. Ltd. V. Sonigra Juhi Uttamchand.Case no.: SLP (C) No. 30491 of 2018The Supreme Court, recently (on January 02), while deciding a motor accident compensation claim case, observed that monthly income could be fixed...
SUPREME COURT
Case name: New India Assurance Co. Ltd. V. Sonigra Juhi Uttamchand.
Case no.: SLP (C) No. 30491 of 2018
The Supreme Court, recently (on January 02), while deciding a motor accident compensation claim case, observed that monthly income could be fixed after taking into account the tax returns. However, the details of tax payment must be properly brought into evidence to enable the Tribunal/Court to calculate the income.
The Bench of Justices C.T Ravikumar and Sanjay Karol were deciding a batch of appeals preferred both by the insurer and the claimant. While the claimant prayed for the enhancement of compensation, the insurer pleaded for the reduction.
Reduction In Share Capital Amounts To Transfer Of Capital Asset Under Income Tax Act : Supreme Court
Case Name: PRINCIPAL COMMISSIONER OF INCOME TAX-4 & ANR v. M/S. JUPITER CAPITAL PVT. LTD.
Case no.: SPECIAL LEAVE PETITION NO. 63 OF 2025
The Supreme Court (recently on January 02) reiterated that reduction in share capital is covered under Section 2(47) of the Income Tax Act, 1961, which talks about transfer of a capital asset. It explained that such reduction would come under the expression “sale, exchange or relinquishment of the asset” used in the provision.
The Bench of Justices J.B. Pardiwala and R. Mahadevan said that this provision provides an inclusive definition of transfer, covering relinquishment of an asset or extinguishment of any right.
The Supreme Court on Wednesday flagged a recurring problem in GST matters whereby genuine purchasers who paid Goods and Services Tax (GST) face issues because their suppliers raised fictitious bills to evade crediting the GST to the department.
The Court orally wondered how could the purchaser be held liable for the incorrect GST registration of the suppliers when they have genuinely made purchases and paid the money, including the GST amount.
Case Title: Bharat Petroleum Corporation Ltd. versus Commissioner of Central Excise Nashik Commissionerate (and connected matters)
Case no.: CIVIL APPEAL NO. 5642 OF 2009
In a significant relief for Oil Marketing Companies (OMCs), the Supreme Court ruled (Jan. 20) that prices under the MoU for inter-supply of petroleum products, designed to ensure smooth nationwide distribution, do not constitute "transaction value" and are exempt from excise duty due to their non-commercial nature.
The Court emphasised that the inter-supply arrangement was not solely price-driven but aimed at facilitating seamless distribution, rendering it ineligible for excise duty.
'Badly Drafted Petition' : Supreme Court Dismisses PIL Challenging TDS System Of Income Tax Act
Case title: Ashwini Upadhyay v Union of India
Case no.: W.P.(C) No. 20/2025
The Supreme Court today (January 24) refused to entertain a Public Interest Litigation challenging the provisions of the Income Tax Act which impose an obligation on private employers to deduct tax at source (TDS) on the salaries paid by them.
A bench comprising Chief Justice of India Sanjiv Khanna and Justice Sanjay Kumar said that the petition filed by BJP leader Ashwini Upadhyay was "badly drafted" and asked him to approach the High Court.
HIGH COURTS
Allahabad HC
Case Title: M/S Akriti Food Industry Llp v. State Of UP And 3 Others
Case no.: [WRIT TAX No. - 2070 of 2024]
While directing that the order under Section 73 of the Goods and Service Tax Act, 2017 uploaded in the “Additional Notices and Tabs” on the GST portal be treated as the show cause notice, the Allahabad High Court observed,
“If in a decision making procedure adopted by the authority is de hors the provisions of the act or rules framed thereunder, it is liable to be rendered as flawed one.”
Case Title: Ravish Rastogi v. Union Of India Thru. Secy. Ministry Of Finance New Delhi And 3 Others
Case no.: WRIT TAX No. - 359 of 2024
The Lucknow Bench of the Allahabad High Court has sought state response on the question of maintainability of proceedings under Section 148A(b) of the Income Tax Act initiated prior to 01.09.2024, if at all, would be saved after enforcement of the Finance (No.2) Act, 2024 w.e.f. 01.09.2024 especially in view of sub-Section- (4) of Section 152 of the Income Tax Act, 1961 which has been inserted by the said Finance (No.2) Act, 2024.
Andhra Pradesh HC
Case Title: Sterling And Wilson Private Limited v. The Joint Commissioner and Others
Case Number: WRIT PETITION NO: 20096/2020
The Andhra Pradesh High Court stated that the supply of solar generating power station is a composite supply and it would not amount to a works contract. Also, it is a moveable property and attracted 5% GST.
The Division Bench of Justices R Raghunandan Rao and Maheswara Rao Kuncheam observed that “a 'works contract' is also a composite supply. However, there could be a 'composite supply', which does not fall within the ambit of 'works contract'….. The distinction between 'works contract' and a 'composite supply' would be whether the end product handed over to the contractee, is moveable or immoveable property.”
Case title: M/s. Mohan Spintex India Limited v. Commercial Tax Officer and Others
Case no.: WRIT PETITION NOs: 7158/2018,10587/2016, 2514/2020, 6480/2020, 6597/2020, 3111/2021, 40351/2022, 40354/2022, 23960/2023 & 29854 of 2024
A Division Bench of the Andhra Pradesh High Court has placed a matter regarding the interpretation of Rule 12(10) of the Central Sale Tax (R&T) Rules before the Chief Justice for reference to a Full Bench.
The question that arose before the coordinate bench was whether akin to Form C (Form of Declaration) and F (Form of declaration to be issued by the transferee); Form H (Certificate of Export that relieves from payment of VAT/CST) can also be filed after the sales tax assessment proceedings have been completed.
Calcutta HC
Service Tax Liability Cannot Be Fastened On Implementation Of Govt Projects: Calcutta High Court
Case title: Commissioner Of Service Tax Kolkata Vs M/S Electrosteel Castings Limited
Case no.: CEXA/56/2024
The Calcutta High Court has held that construction of canals/ pipelines/ conduits to support irrigation, water supply or for sewerage disposal, when provided to the Government, cannot be exigible to service tax.
A division bench of Chief Justice TS Sivagnanam and Justice Hiranmay Bhattacharyya relied on two Circulars issued by the Central Board of Indirect Taxes and Customs to observe, “Even in case of works contract, if the nature of the activities is such that they are excluded from the purview of commercial or industrial construction services, or erection, commissioning or installation services, then they would generally remain excluded from this taxable service as well. These circulars are sufficient indication to hold that when the Government projects are being implemented, the service tax liability cannot be fastened.”
Chhattisgarh HC
Case title: Deepak Agrawal & Ors. v. Property Tax Assessment Officer & Ors.
Case no.: WPT No. 159 of 2024
The Chhattisgarh High Court has held that it cannot exercise writ jurisdiction against an order by the District Judge, which is the Appellate Authority under the Municipal Corporation Act 1956, upholding imposition of property tax.
In doing so, single judge Justice Narendra Kumar Vyas cited Section 149 of the Act which prescribes that the Appellate Authority is amenable to revisional jurisdiction of the High Court.
Delhi HC
Case title: Chegg India Pvt Ltd v. UoI & Ors.
Case no.: W.P.(C) 1062/2024
The Delhi High Court has held that delay in filing certified copy of impugned order in an appeal preferred by Assessee under Section 107 of the Central Goods and Services Tax Act, 2017 would not render the appeal time-barred, if it was filed online within prescribed time. A division bench of Justices Prathiba M. Singh and Amit Sharma reasoned,
“the condition to physically file the certified copy of the impugned decision/order is not mandatory…where the certified copy was submitted with a delay, may be condoned if the online filing was completed within the prescribed limitation period. Ultimately, what is to be borne in mind is the fact that online filing was within limitation…In most Courts and Tribunals, online filing and electronic filing is now prescribed mode and the Courts are moving towards technologically advance systems. It would be retrograde to opine that online filing, which was complete in all respects, including electronic copy of the order, is not valid filing.”
Case title: Shri Balaji Enterprises v. Additional Director General New Delhi & Ors.
Case no.: W.P.(C) 11207/2023
The Delhi High Court has cautioned the Customs Authorities against keeping show-cause notices pending in call-book only to take them up after several years, leaving the assessee in lurch.
A division bench of Justices Prathiba M. Singh and Amit Sharma observed that in the absence of any “glaring impossibility”, such an approach of the authorities would not be permissible. In the case at hand, Petitioner challenged the delay of almost eight years in adjudication of the show-cause notice issued to it in 2015.
Case title: Sumit Bharana v. UoI
Case no.: W.P.(C) 16701/2024
The Delhi High Court has held that co-accused are entitled to apply separately for compounding of offences committed by a Company or a Hindu Undivided Family under the Income Tax Act, 1961.
A division bench of Acting Chief Justice Vibhu Bakhru and Justice Tushar Rao Gedela ruled that the co-accused need not await filing of application for compounding by the company or the HUF.
Case title: S A N Garments Manufacturing Private Limited v. Pr Commissioner Of Income Tax 7 And Anr
Case no.: W.P.(C) 932/2024
The Delhi High Court has reiterated that a designated authority under the Direct Tax Vivad Se Vishwas Act, 2020 cannot reopen an assessment after a final certificate is issued under Section 5 of the Act and all disputes with regard to the 'tax arrear' stand concluded.
A division bench of Acting Chief Justice Vibhu Bakhru and Justice Tushar Rao Gedela observed, “once a declarant is issued a certificate (Form No.5) in terms of Section 5 of the DTVSV Act, and the declarant deposits the determined amount, the Designated Authority is proscribed from initiating any action or proceedings in respect of 'tax arrear'. The dispute stands settled.”
Case title: M/S G.S Industries v. Commissioner Of Central Tax And Gst, Delhi (West)
Case no.: W.P.(C) 13149/2024
The Delhi High Court has made it clear that a Commissioner under the Central Goods and Services Tax Act 2017 cannot, in purported exercise of its powers under Section 107(2), sit in appeal over an order passed by the Appellate Authority.
A division bench of Justices Yashwant Varma and Dharmesh Sharma ruled, “The Commissioner, while seeking to review an order passed under the Act and in purported exercise of powers vested by Section 107(2), cannot possibly sit over and above an order passed by the appellate authority.”
Case title: The Pr. Commissioner Of Income Tax - Central -1 v. Capital Power Systems Ltd.
Case no.: ITA 501/2024
The Delhi High Court has held that Section 150 of the Income Tax Act, 1961 can be invoked for reassessment only to give effect to a 'conclusive finding' by an appellate authority regarding escapement of income by an assessee.
A division bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma observed that invocation of the provision requires a “strict and cautious application” of the terms 'findings' and 'direction' to prevent the reopening of assessments based on findings or directions that are only incidental, tangential, or beyond statutory authority.
Case title: Bonanza Enterprises v. The Assistant Commissioner Of Customs & Anr.
Case no.: W.P.(C) 7510/2024
The Delhi High Court recently called upon the Customs Department to make use of Section 153(c) of the Customs Act, 1962 which empowers it to serve notices through email. A division bench of Justices Prathiba M. Singh and Amit Sharma said such an approach will prevent delay and non-appearances, leading to expeditious disposal of matters.
“In the opinion of this Court, the provision itself makes it clear that notices can be sent by email…The Customs Department ought to in future follow a system by which in addition to notices by speed post, registered post or courier, notices are also sent on the email address which is provided on the letterhead of the Petitioner or any authorised person. This would avoid substantial delay and matters proceeding ex-parte as has happened in the present case,” it said.
Case title: ATS Township Pvt Ltd v. Assistant Commissioner Of Income Tax Circle 1(1) Delhi & Ors
Case no.: W.P.(C) 13790/2024
The Delhi High Court has held that the provision under Section 153C of the Income Tax Act, 1961 for the Assessing officer of a searched person to record 'satisfaction' and handover documents regarding undisclosed income of another person cannot be substituted by merely uploading such information on the Department's insight portal.
A division bench of Acting Chief Justice Vibhu Bakhru and Justice Tushar Rao Gedela observed, “Uploading of information by the investigation wing of the Income Tax department would not be a substitute for recording of a satisfaction note by the AO of a searched person and handing over the assets, books of accounts or other material to the AO of the person other than the searched person for the purpose of initiation of proceedings under Section 153C of the Act.”
Case title: Abhishek Bansal v. Income Tax Officer, Ward 58(3), Delhi
Case no.: W.P.(C) 17300/2024
The Delhi High Court has made it clear that merely producing transaction documents to establish that payments were made to an entity is not sufficient to defend the allegations of accommodation entries.
A division bench of Acting Chief Justice Vibhu Bakhru and Justice Tushar Rao Gedela observed, “The documents provided by the petitioner would establish that the payments had been made to Shri Ajay Gupta through banking channels. However, the same does not address the allegation of purchases reflected were accommodation entries…In the present case, the petitioner was required to clearly show the movement of goods to establish that the goods had in fact moved from Shri Ajay Gupta to the petitioner. However, it does not appear that any such information was provided by the petitioner to the AO.”
Case title: Late Sh. Lal Chand Verma Through His Legal Heir v. Union Of India & Anr.
Case no.: W.P.(C) 8184/2023
The Delhi High Court has held that Section 159 of the Income Tax Act can be invoked to proceed against the legal representative of an assessee, only in cases where the reassessment notice was issued to the assessee during his lifetime, not after.
Division bench of Justices Yashwant Varma and Dharmesh Sharma noted that “Section 159 of the Act is applicable when proceedings are initiated and pending against an assessee during their lifetime, and the legal representative assumes responsibility after the assessee's death. This was not the factual scenario in the present case; therefore, Section 159 of the Act is not applicable here.”
Case title: Amar Singh And Sons Tree Nuts LLP v. The Superintendent Of Customs, Epm, Import & Ors.
Case no.: W.P.(C) 149/2025
Based on a circular issued by the Finance Ministry, the Delhi High Court has affirmed that the Customs Department cannot encash the bank guarantee furnished by a trader, whose import/export transactions are in dispute, if the latter has made a pre-deposit with his appeal against the demand and penalty.
A division bench of Justices Prathiba M. Singh and Dharmesh Sharma observed, “A perusal of the Circular and the clauses extracted above would show that no coercive measures can be taken against the Appellant during the period when the limitation for filing of the appeal has not expired. In addition, if the pre-deposit has already been made the remaining amount cannot be recovered by encashment of the bank guarantee.”
Case title: Gautam Thadani v. Director Income Tax (Investigation) And Anr.
Case no.: W.P.(C) 10960/2016
The Delhi High Court has held that the delay in issuing requisition under Section 132A of the Income Tax Act, 1961, can be condoned if the same is explained by the Authority concerned.
A division bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma observed, “...there has been some delay in issuance of the impugned requisition, however, the Income Tax Department has explained that the said delay was on account of investigations conducted by it. In the given circumstances, we are unable to accept that the impugned requisition is liable to be rejected on the ground of delay. ”
Case title: Sonansh Creations Pvt Ltd. v. Assistant Commissioner Of Income Tax And Anr.
Case no.: W.P.(C) 12316/2022
The Delhi High Court has turned down the contention that an Assessing Officer, at the stage of passing an order under Section 148A(d) of the Income Tax Act, 1961 for initiation of reassessment proceedings, is not required to form any opinion as to the genuineness or veracity of the information available against an assessee.
A division bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma observed, “As is clear from the plain language of Section 148A(d) of the Act, the AO has to decide whether it is a fit case for issuance of notice under Section 148 of the Act. This decision would require the AO to take a view in respect of the material available and form an opinion whether there are grounds to believe that the assessee's income has escaped assessment.”
Case title: Sonansh Creations Pvt Ltd. v. Assistant Commissioner Of Income Tax And Anr.
Case no.: W.P.(C) 12316/2022
The Delhi High Court has made it clear that merely because notice under Section 148A(b) of the Income Tax Act, 1961 is issued in the name of an amalgamating company which had ceased to exist, subsequent notice issued under Section 148A(d) in the name of merged entity cannot be declared invalid.
A division bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma held, “The nature of proceedings under Section 148A of the Act is to enable the AO to form an opinion whether it is a fit case for issuance of notice under Section 148 of the Act. Given the nature of the proceedings under Section 148A of the Act, we are unable to accept that issuance of a notice under Section 148A(b) of the Act in the name of an entity, which had since amalgamated with the petitioner, would be fatal to the AO assuming jurisdiction by issuance of notice under Section 148 of the Act in the name of the petitioner.”
Case title: Sonansh Creations Pvt. Ltd. v. Assistant Commissioner Of Income Tax And Anr.
Case no.: W.P.(C) No.17570/2022
The Delhi High Court has held that an Assessing Officer is required to be satisfied that accommodation entries as alleged in show cause notice under Section 148A(b) of the Income Tax Act 1961 exist, particularly where the assessee produces its accounts.
In doing so, a division bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma heavily relied on its recent ruling in Sonansh Creations Pvt Ltd. v. Assistant Commissioner Of Income Tax And Anr. where it was held that to initiate reassessment proceedings under the Act, the AO must conduct an enquiry with respect to the information that suggests escapement of income, to ascertain its correctness.
Case title: Rohit Kumar v. Income Tax Officer Ward 54 (1), Delhi
Case no.: W.P.(C) 2830/2022
The Delhi High Court observed that absence of a formal notice under Section 148A of the Income Tax Act, 1961 was not fatal to reassessment proceedings initiated in the twilight zone when the inquiry provisions were introduced by the Finance Act, 2021.
A division bench of Justices Yashwant Varma and Dharmesh Sharma noted that the Department had provided an opportunity to the petitioner-assessee to question the assumption of jurisdiction under Section 148, which was the “underlying principle” of Section 148A.
Case title: Central Electricity Regulatory Commission v. The Additional Director Directorate General Of Gst Intelligence (Dggi) & Anr
Case no.: W.P.(C) 10680/2024 and connected matters
The Delhi High Court has made it clear that amounts received by the Electricity Regulatory Commissions under the heads of filing fee, tariff fee, license fee, annual registration fee and miscellaneous fee are not exigible to tax.
A division bench of Justices Yashwant Varma and Dharmesh Sharma thus allowed the petitions filed by the Central Electricity Regulatory Commission as well as the Delhi Electricity Regulatory Commission against the show cause notices issued to them by the GST Department. It observed, “We find ourselves unable to accept, affirm or even fathom the conclusion that regulation of tariff, inter-State transmission of electricity or the issuance of license would be liable to be construed as activities undertaken or functions discharged in the furtherance of business.
Case title: Rohit Kumar v. Income Tax Officer Ward 54 (1), Delhi
Case no.: W.P.(C) 2830/2022
The Delhi High Court has held that the benchmark of minimum Rs. 50 lakh income escapement prescribed under Section 149 of the Income Tax Act, 1961 must be met at the very initiation of reassessment proceedings.
A division bench of Justices Yashwant Varma and Dharmesh Sharma observed, “Additions ultimately made in the course of reassessment would not validate the initiation of proceedings if founded on income of INR 46,17,000/- having escaped assessment and thus evidently below the threshold of INR 50 lakhs.”
Case title: The Pr. Commissioner Of Income Tax - International Taxation -3 v. Samsung Electronics Co. Ltd.
Case no.: ITA 1029/2018
The Delhi High Court has held that Samsung India Electronics Pvt. Ltd (SIEL), a wholly owned subsidiary of South Korea-based Samsung Electronics Co. is not its 'Permanent Establishment' (PE) in India, hence not exigible to tax here.
A division bench of Justices Yashwant Varma and Harish Vaidyanathan Shankar agreed with ITAT's findings that the secondment of employees by Samsung Korea was merely with the objective of facilitating the activities of SIEL, not its own.
Case title: Qamar Jahan v. Union Of India, Represented By Secretary, Ministry Of Finance & Ors.
Case no.: W.P.(C) 198/2025
The Delhi High Court has urged the Central government as well as the Customs department to review the Baggage Rules, 2016 which regulate the amount of gold or gold jewellery that can be carried by a person travelling to India by air.
A division bench of Justices Prathiba M. Singh and Dharmesh Sharma observed, “While, there is no doubt that any illegal smuggling of gold deserves to be curbed, at the same time, bona-fidely and genuine tourists/travellers, including people from Indian Origin such as the OCI Cardholders, PIOs etc., could be travelling for social engagements in India or social events such as marriages etc., with gold, which could be of a much higher value than the permissible limits.
Case title: Divine Infracon Pvt Ltd v. Pr Commissioner Of Income Tax 3
Case no.: ITA 426/2024
The Delhi High Court recently said aside an order passed by the Income Tax Appellate Tribunal, deciding grounds that did not arise from the impugned order passed by the Commissioner of Income Tax (Appeals).
A division bench of Acting Chief Justice Vibhu Bakhru and Justice Tushar Rao Gedela observed, “The Assessee's challenge to the addition of ₹4,30,00,000/- under Section 68 of the Act had remained unaddressed by the learned CIT(A) but had been affirmed by the learned ITAT, without the same arising from the order passed by the learned CIT(A). The learned ITAT has clearly erred in entering into the said controversy without the learned CIT(A) rendering any finding on merits in regard to the petitioner's appeal.”
Case title: Pr. Commissioner Of Income Tax- 9 v. M/S Tata Power Delhi Distribution Ltd. (Formerly Known As M/S North Delhi Power Limited)
Case no.: ITA 687/2019
The Delhi High Court has held that Section 115JB of the Income Tax Act, 1961, as it stood prior to its amendment by virtue of Finance Act, 2012, would be inapplicable to an electricity generation company.
A division bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma thus dismissed the Department's appeals against Tata Power Delhi Distribution Limited, a joint venture of Tata Power with the Delhi government for purposes of power generation and distribution of electricity in two districts of Delhi.
Case title: Rohit Kumar v. Income Tax Officer Ward 54 (1), Delhi
Case no.: W.P.(C) 2830/2022
The Delhi High Court has held that the Supreme Court's decision in Union of India and Ors. vs. Rajeev Bansal (2024) did not affirm the authority of a Joint Commissioner to grant approval under Section 151 of the Income Tax Act, 1961 for initiation of reassessment proceedings.
A division bench of Justices Yashwant Varma and Dharmesh Sharma observed that the Supreme Court in the Rajeev Bansal case “merely alluded to the time frames within which approval under Section 151 of the could be sought for and obtained.”
Case title: Pr. Commissioner Of Income Tax-7 v. Delhi Vedanta Ltd.
Case no.: ITA 88/2022
The Delhi High Court on Friday declined the Income Tax Department's appeal to treat as 'curable', the error committed in naming the relevant entity while issuing reassessment notices. A division bench of Justices Yashwant Varma and Dharmesh Sharma refused to grant the benefit which the Supreme Court had given to the Department in Sky Light Hospitality LLP v. Assistant commissioner of Income-tax (2018).
It observed, “It was the conduct of the assessee in Sky Light which had convinced the Supreme Court to observe that the mistake would not render the order of assessment invalid and that it could be saved under Section 292B of the. The facts of the present case are clearly not akin to what prevailed in Sky Light.”
Case title: Grid Solutions OY (Ltd) v. Assistant Commissioner Of Income Tax International Taxation & Anr.
Case no.: W.P.(C) 1196/2022
The Delhi High Court has held that whether an entity is a Permanent Establishment (PE) of a foreign company or not is a “fact-specific” issue which must be examined separately for different tax periods.
A division bench of Justices Yashwant Varma and Harish Vaidyanathan Shankar observed, “The position of a PE being a facts-specific issue and thus liable to be examined against the backdrop of what obtained in a particular tax period…”
Case title: Kamal Envirotech Pvt. Ltd. v. Commissioner Of Gst And Anr
Case no.: W.P.(C) 12142/2022
The Delhi High Court has held that Section 129 of the Central Goods & Services Tax Act, 2017 which pertains to detention, seizure and release of goods while in transit cannot be invoked for imposing penalties for minor breaches, like incomplete e-way bill.
A division bench of Justices Yashwant Varma and Harish Vaidyanathan Shankar further held that Section 129 cannot, merely by virtue of its non-obstante clause, be construed to have an overriding effect on Section 126 which interdicts tax officers from imposing any penalty for minor breaches of tax regulations or procedural requirements.
Case title: Commissioner Of Customs Air Chennai-Vii Commissionerate v. M/S. Ingram Micro India Pvt. Ltd.
Case no.: CUSAA 38/2023
Coming to the rescue of an IT distribution company, the Delhi High Court has held that the import of Wireless Access Points (WAPs), which operate on MIMO technology, are exempt from Customs duty.
In doing so, the division bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma held that the word “and” used between 'MIMO and LTE Products', which are eligible for exemption under the relevant notification issued by the Centre, is disjunctive.
Case title: KBS Industries Ltd & Anr. v. The Customs Central Excise And Service Tax Settlement Commission Principal Bench New Delhi & Ors
Case no.: W.P.(C) 10505/2024
The Delhi High Court has held that an order passed by the Settlement Commission under Section 127C of the Customs Act, 1962 is in the nature of a 'settlement' and cannot be accepted by a trader only in part.
A division bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma observed, “Given the nature of the order passed under Section 127C of the Act – which is in the nature of a settlement – it would not be permissible to dissect the same and accept that parts of the order which are favourable to the applicant while rejecting the other directions which are not. The order of Settlement Commission must be accepted in entirety.”
Case title: Vijay Enterprises & Anr v. The Principal Commissioner Of Customs & Anr
Case no.: W.P.(C) 5809/2024
The Delhi High Court has set aside a final order of penalty passed by the Customs Department against a paper trader for alleged undervaluation of imported goods, stating that the same was passed during pendency of challenge to the show cause notice (SCN) issued to the trader.
A division bench of Justices Prathiba M. Singh and Dharmesh Sharma observed, “passing of the impugned Order-in-Original while the impugned SCN was under challenge before this Court would amount to initiation of parallel proceedings rendering the scrutiny of the Court as infructuous.”
Case title: M/S Om Gems And Jewellery v. Deputy Commissioner Of Customs (Import) Air Cargo Complex Nscbi Airport & Ors.
Case no.: W.P.(C) 6218/2024
The Delhi High Court has made it clear that once a court of law directs the Customs Department to release the bank guarantee furnished by a trader, the Department cannot turn around and say that the amount will be adjusted towards the final demand order.
A division bench of Justices Prathiba M. Singh and Dharmesh Sharma observed, “the Division Bench judgment had to be complied with and the Customs Department could not hold back compliance thereof by directing adjustment in the final order. Such a course of action would not be permissible.”
Case title: Principal Commissioner Of Income Tax – 1, New Delhi v. DCM Shriram Ltd.
Case no: ITA 566/2023
The Delhi High Court has held that the rate at which power is supplied by the State Electricity Board (SEB) or the Power Distribution Companies is an appropriate metric for determining market price of electricity.
A division bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma further held that rate at which electricity is sold on the Indian Energy Exchange (IEX) platform is not a 'comparable' and should not be considered to determine market value of the power supplied by the Assessee to its industrial units.
Case title: Abhinav Jindal v. Assistant Commissioner Of Income Tax Circle 52
Case no.: W.P.(C) 7405/2024
The Delhi High Court has held that if the Revenue issues a reassessment notice to an assessee under Section 148 of the Income Tax Act, 1961 without following due procedure, it cannot later issue fresh reassessment notice beyond the prescribed period, claiming that time spent on earlier litigation is to be excluded for the purposes of computing limitation.
A division bench of Acting Chief Justice Vibhu Bakhru and Justice Tushar Rao Gedela observed, “Notice issued under Section 148 of the Act in the earlier round was set aside on the ground that the AO had not followed the mandatory requirement of seeking an approval from the competent authority…The fact that the Revenue had not taken the steps in accordance with law cannot possibly be construed as a factor in favour of the Revenue for extending the limitation.”
Case title: Smt. Shivani Madan v. Pr. Commissioner Of Income Tax, Delhi-01 & Anr.
Case no.: ITA 573/2023
The Delhi High Court has held that where a property is held jointly but only one co-owner reaps the benefit of income from such property, the other co-owner cannot be held liable to pay tax merely by virtue of co-ownership.
A division bench of Justices Yashwant Varma and Harish Vaidyanathan Shankar observed, “the [Income Tax] Act fails to raise any presumption in law, of income necessarily arising or being liable to be assessed in the hands of an individual merely because it be a signatory to an instrument of conveyance. In our considered opinion, the question of taxability would necessarily have to be answered bearing in mind the individual who had in fact obtained benefits from the property.”
Case title: Anjali Pandey v. Union Of India And Ors
Case no.: W.P.(C) 10482/2024
The Delhi High Court has held that foreign nationals coming to India need not declare to the Customs Department their gold jewellery which they are carrying for bonafide personal use.
A division bench of Justices Prathiba M. Singh and Dharmesh Sharma further held that the Customs Department must make a distinction between 'jewellery' and 'personal jewellery', while seizing items for violation of the Baggage Rules, 2016 which are framed under the Customs Act, 1962.
Gauhati HC
Case title: Shri Shambhu Prasad v. The State Of Assam And Ors
Case no.: WP(C)/6807/2024
The Gauhati HIgh Court has held that the Show Cause Notice issued to an assessee under Section 73 of the Central Goods and Services Tax Act, 2017, the Statement issued along with the SCN as well as an Order passed under Section 73(9) must mandatorily be signed by the Proper Officer.
Justice Soumitra Saikia observed, “As it is the statutory mandate that it is only the Proper Officer who has the authority to issue Show Cause Notice and the Statement and pass the order, the authentication in the Show Cause Notice, Statement as well as the Order by the Proper Officer is a must and failure to do so, makes the Show Cause Notice, Statement and Order ineffective and redundant.”
Case title: Dharmendra Agarwal v. The Union Of India And 2 Ors.
Case no.: WP(C)/6963/2024
The Gauhati High Court has held that Section 69 of the Central Goods and Services Tax Act 2017, which confers power to arrest on a Commissioner under the Act, requires the authority to not only record 'reasons to believe' that an assessee committed the specified offence but also specify the necessity to arrest.
While dealing with a writ petition challenging Petitioner's arrest, Justice Soumitra Saikia observed, “The requirement under Sub-section (1) of Section 69 is to have “reasons to believe” that not only a person has committed any offence as specified but also as to why such person needs to be arrested.”
Gujarat HC
Case title: Infodesk India Pvt. Limited Versus The Union Of India & Ors
Case no.: R/SPECIAL CIVIL APPLICATION NO. 25609 of 2022
The Gujarat High Court has made it clear that where a subsidiary company provides goods or services to its parent company in its independent capacity, it cannot be said that such services fall under 'intermediary service' under Section 2(13) of the Integrated Goods and Service Tax Act, 2017.
The division bench of Justices Bhargav D. Karia and DN Ray observed, “it is apparent that the petitioner is required to assist the US entity in carrying on the business of providing information and consultancy in business of software development and for that purpose, the petitioner is required to set up consultations and meetings between globally based experts and globally based clients and to participate in any business of consultants, agents, sub-agents, liaison agents/liaison sub-agents for its parent company and foreign clients for such activities. The petitioner is also to provide advisory services for expansion of business, marketing, advertisement, publicity, personnel accounting to its parent company. Therefore, on conjoint reading of the scope of services to be provided by the petitioner, it cannot be said that the petitioner is only to work as an agent or a broker between parent company and its customers without supplying any goods or services on its own account.”
Himachal Pradesh HC
Case title: M/s Deluxe Enterprises v. Income Tax Officer
Case no.: ITA No. 23 of 2017 alongwith CWP No.6575 of 2014
The Himachal Pradesh High Court has elucidated the mandatory twin conditions for transfer of an assessee's case under Section 127 of the Income Tax Act, 1961, from one Assessing Officer to another.
A division bench of Justices Tarlok Singh Chauhan and Rakesh Kainthla observed, “The twin conditions to be complied with by the respondents for transferring the case of the appellant/petitioner from respondent No.4 to respondent No.5 are: (i) the assessee should have been given a reasonable opportunity of being heard and (ii) the reasons for transfer should have been recorded.”
Case title: M/s Bhushan Power & Steel Ltd. v. Assistant Excise & Taxation Commissioner and another
Case no.: Civil Revision No. 267 of 2017
The Himachal Pradesh High Court has held that the penalty provision couched in Section 16(7) of the HP Value Added Tax Act, 2005 cannot be invoked until the statutory authority is satisfied regarding the applicability of Section 16(4) of the Act.
Section 16(4) requires a registered dealer to pay the full amount of tax due from him into a Government Treasury before it furnishes the return. Failure to do so attracts a penalty under Section 16(7).
Jharkhand HC
Case Title: Satya Prakash Singh v. The State of Jharkhand
Case Number: A.B.A. No. 2096 of 2024
The Jharkhand High Court stated that an advocate is not liable to verify fake documents provided by a client for registration of a firm to evade tax.
The bench of Justice Anil Kumar Choudhary was dealing with a case where an advocate had moved a petition for anticipatory bail in a case registered under sections 406/420/468/471/120B of the Indian Penal Code and under Section 132 (1) (b)/131 (1) (e)/132 (1) (1) of Jharkhand Goods and Services Tax (JGST).
Karnataka HC
Case Title: M/s Vigneshwara Transport Company v. Additional Commissioner of Central Tax Bengaluru North-West Commissionerate
Case Number: WRIT PETITION NO.18305 OF 2023 (T-RES)
The Karnataka High Court held that when investigation is substantially completed by improper officer, show cause notice issued by proper officer u/s 74 of CGST Act is liable to be set aside.
The Bench of Justice M.I. Arun observed that “…substantial part of the investigation including search and seizure of the materials has been done by respondent no.2 who is not the proper Officer and under the circumstances, the said investigation, inspection, search and seizure in respect of the assessee herein has to be considered ab initio void…”
Case Title: The Income Tax Officer & ANR Preeti V
Case No:WRIT APPEAL NO. 1407 OF 2024
The Karnataka High Court has said proceedings initiated against an Income Tax Assessee by issuing notice after his demise cannot be continued against his/her legal representative.
A division bench of Justice Krishna S Dixit and Justice G Basavaraja said, “Had the proceedings been initiated against the Assessee during his lifetime, they could have continued against the legal representatives of the deceased Assessee.”
Kerala HC
Case Title: Shish Jewels Private Limited v. The Intelligence Officer
Case Number: WP(C) NO. 40450 OF 2023
The Kerala High Court has held that interim release of goods can be ordered pending adjudication of notice under section 130 GST Act in lieu of fine.
The Bench of Justice Murali Purushothaman observed that “…the adjudication can be proceeded even if the goods are released pending adjudication. Even if confiscation is ordered, there is an option to the owner of the goods to pay fine in lieu of confiscation…”
GST Act | Notification Not Needed For Cross-Empowerment Of State Officials : Kerala High Court
Case : Pinnacle Vehicles and Services Pvt Ltd v. Joint Commissioner
Case no.: W.P(C).NO.25724 OF 2024
In a significant judgment having a wide impact on several pending cases, the Kerala High Court on Wednesday (January 15) ruled that separate notification is not necessary for the cross-empowerment of State officials under the Goods and Services Tax Act.
A division bench comprising Justice Dr AK Jayasankaran Nambiar and Justice S Easwaran delivered this significant judgment while answering a reference made to it by a single bench. It endorsed the prima facie view expressed by the single bench (Justice P Gopinath) that notification was not necessary for cross-empowerement.
Case Title: Cochin International Airport Ltd v. The Assistant Commissioner Of Income Tax
Case Number: ITA NO. 77 OF 2018
The Kerala High Court stated that the Income Tax Commissioner can exercise Revisional Jurisdiction under Section 263 of the Income Tax Act, 1961.
The Division Bench of Justices A.K. Jayasankaran Nambiar and Easwaran S. observed that “The role of the assessing officer under the Income Tax Act, 1961 is not only that of an adjudicator but also of an investigator and he cannot remain oblivious in the face of a claim without any enquiry.”
Case Title: Assistant Commissioner Of Income Tax v. Mohammed Salih
Case Number: WA NO. 1413 OF 2024
The Kerala High Court held that cash in bank account is a 'property' liable for provisional attachment under section 281B of the Income Tax Act.
The Division Bench of Justices Sathish Ninan and Shoba Annamma Eapen observed that “mere fact that Bank account is not explicitly provided under Section 281B of the Income Tax Act, unlike the GST Act, 2017 which specifically mentions the same, cannot lead to the conclusion that Bank account is not liable to be attached under Section 281 B of the Act.”
Madras HC
Case Title: Mark Studio India Private Limited v. Income Tax Officer and Others
Case No: W.P.Nos.25223 & 25227 of 2024
The Madras High Court recently clarified that both the Faceless Assessment Officer and Jurisdictional Assessment Officer have concurrent jurisdiction as far as assessment, re-assessment or re-computation under Section 147 of the Income Tax Act.
Justice Krishnan Ramasamy made it clear that for issuance of notice under Section 148 of the IT Act, the JAO had exclusive jurisdiction. The court added that in matters of international taxation, central Circle charges and search and seizure cases also, the JAO had exclusive jurisdiction and the FAO, in such cases, did not have jurisdiction to make assessment, re-assessment or re-computation.
What Constitutes Valid Service Of Notice U/S 169 Of CGST Act? Madras High Court Clarifies
Case Title: Udumalpet Sarvodaya Sangham v. The Authority
Case Number: W.P.(MD)Nos.26481
The Madras High Court interpreted Section 169 of Central Goods and Services Tax Act, 2017 and stated that Section 169 mandates a notice in person or by registered post or to the registered e-mail ID alternatively and on a failure or impracticability of adopting any of the aforesaid modes, then the State can, in addition, make a publication of such notices/ summons/ orders in the portal/ newspaper through the concerned officials.
The Bench of Justice K. Kumaresh Babu observed that “when the Statute had also mandated issuance of notice in person/ registered post/ e-mail, etc., the Rules cannot be limited to only serving it through electronic modes.”
GST Registration And Payment Of Tax After Inspection Is Not Voluntary Conduct: Madras High Court
Case Title: M/s.Annai Angammal Arakkattalai v. The Joint Commissioner or GST (Appeals), Coimbatore
Case Number: W.P.(MD)No.28502 of 2022
The Madras High Court stated that GST registration and payment of tax after inspection is not a voluntary conduct.
The Bench of Justice K. Kumaresh Babu observed that “there is a deliberate attempt to evade payment of tax by not registering himself under the Act and also issuing receipts as donation to the Trust. Only after the inspection they have agreed to pay the tax by registering themselves. This conduct cannot be said to be a voluntary conduct.”
Orissa HC
Case title: Binod Pattanayak v. Union of India
Case no.: CRLMC No.3284 of 2023
The Orissa High Court has refused to entertain a petition filed for quashing the offence under Sections 276(B) of the Income Tax Act, 1961, stating that the Petitioner-accused should have sought compounding of the offence.
Justice Sibo Sankar Mishra observed, “In the present regime, where the compounding of the offence is permissible, the jurisdiction of this Court under Section 482 Cr.P.C. may not be necessarily invoked by the petitioner. In that view of the matter, the petitioner may resort to the procedural remedy under Section 320 Cr.P.C. by relying upon the Circular dated 17.10.2024 and seek for compounding of the offences complained off against him by the Revenue.”
Telangana HC
Case title: M/s.Brunda Infra Pvt. Limited and Others. vs. The Additional Commissioner of Central Tax
Case no.: WRIT PETITION Nos.1154 OF 2024
The Telangana High Court has upheld the validity of a 2023 notification, issued by the GST Department post COVID-19 pandemic, for extending the limitation period prescribed for issuing notices under Section 73 of the Central Goods and Services Tax Act, 2017. A division bench of Justice Sujoy Paul and Dr. Justice G. Radha Rani also upheld a notification issued in 2022 for similar purpose. In doing so, it observed,
“In the manner statute i.e., Section 168A is worded, there is no cavil of doubt that the Law makers intended to give it a broader umbrella to bring within its shadow, such actions which could not be completed or complied with, due to force majeure…The COVID-19 Pandemic created extraordinary difficulties which could not have been anticipated, measured and solved with mathematical precision. Thus, hair-splitting in many aspects must be eschewed…While dealing with such an extraordinary crisis, Government's action must be viewed in a broad perspective.”
TRIBUNALS
Case Title: TC Global India Pvt. Ltd. v. Additional Director General, DGCEI, New Delhi
Case Number: Service Tax Appeal No. 51355 of 2017
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that service tax is not payable on commission received from foreign universities for promoting and publicizing business in India.
The Bench of Dr. Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) has observed that “the assessee is held not liable to pay service tax with reference to foreign Consultancy Income i.e. the income received from foreign universities for promoting and publicizing their business in India.”
Case title: M/s. Samudera Shipping Line (India) Pvt. Ltd. v. Commissioner of Customs (Port)
Case no.: Customs Appeal No. 75641 of 2021
Stating that goods wrongly loaded by the steamer agent could not have been exported without clearance by the Customs officials themselves, the Customs, Excise & Service Tax Appellate Tribunal at Kolkata set aside the penalty imposed under Section 114 of the Customs Act, 1962.
Noting that the goods had been successfully exported and remittance against it had been received, the bench comprising Judicial Member R. Muralidhar and Technical Member K. Anpazhakan said the same could not have been possible without clearance by the Customs Department. Thus, the penalty imposed on Appellant would be bad in law.
Excise Duty Not Payable On 'Bagasse' Which Emerges As A Waste Product During Sugar Crushing: CESTAT
Case Title: M/s. Sakthi Sugars Ltd. v. Commissioner of GST and Central Excise
Case Number: Excise Appeal Nos. 40479 to 40482 of 2015
The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that excise duty is not payable on the Bagasse emerged as waste product during sugar crushing.
The Bench of Ajayan T.V. (Judicial Member) and Vasa Seshagiri Rao (Technical Member) has observed that Bagasse emerged only as a waste product during crushing of sugarcane during the manufacturing process and though marketable, duty could not be imposed on it as there was no manufacturing activity involved.
Case Title: Hyundai Motor India Ltd. v. Commissioner of Customs
Case Number: Customs Appeal No.40501 of 2024
The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that investigation report is not an appealable order and there is no statutory right for a hearing at the stage of preparation of investigation report.
The Bench of P. Dinesha (Judicial Member) and M. Ajit Kumar (Technical Member) has observed that “the assessee has also not demonstrated any real prejudice caused to them by the investigation report. Merely being disappointed or dissatisfied is not enough”.
Seized Gold Cannot Be Confiscated Just For Having An Invalid Letter Of Approval: CESTAT
Case Title: M/s Encee International NSEZ v. Commissioner of Customs, Noida
Case Number: Customs Appeal No.70692 of 2019
The Allahabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that seized gold cannot be confiscated just for having an invalid letter of approval.
There was a difference in the opinion between the P.K. Choudhary (Judicial Member) and Sanjiv Srivastava (Technical Member) on the issues involved in the case. Therefore, the matter was place before third member ie. S.S. Garg (Judicial Member) for determination of the same.
Case Title: M/s. Wellworth Project Developers Private Limited v. Commissioner of Commissioner of CGST
Case Number: Service Tax Appeal No. 50259 of 2024
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that the department cannot invoke the extended period of limitation merely because the returns were self-assessed.
The Bench of Justice Dilip Gupta (President) and P. V. Subba Rao (Technical Member) has observed that “Mere suppression of facts is not enough to invoke the extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act. The suppression has to be with an intent to evade payment of service tax and for this purpose the show cause notice must specifically allege why the asseessee has suppressed facts with intent to evade payment of service tax.”
Case Title: Deepak Pandey v. Commissioner of Service Tax
Case Number: Service Appeal No. 52346 of 2018
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that the prescribed time limit for filing a refund application cannot be disregarded merely because the tax was collected without legal authority.
The Bench of Justices Dilip Gupta (President) and P. V. Subba Rao (Technical) has observed that “the appellant cannot be permitted to claim a refund of service tax under sub-section (1) of section 102 and at the same time contend that the condition stipulated in sub-section (3) of section 102 of the Finance Act should be ignored.”
BUDGET STORIES
Union Finance Minister Nirmala Sitaraman in her budget speech announced proposals which effectively mean that there is no income tax payable for normal salaried income up to Rs 12 lakhs per annum.
She said that for taxpayers up to Rs12 lakhs of normal income, other than special rate incomes such as capital gains, tax rebate is being provided in such a manner that there is no tax payable by them.
New Income Tax Bill Will Be Introduced Next Week : Finance Minister
Union Finance Minister Nirmala Sitharaman announced in her budget speech on Saturday that a new income tax bill will be introduced next week.
She said that the new tax bill will be simpler and clearer compared to the present Income Tax Act 1967.
No TCS On Sale Of Goods; Changes To TDS/TCS Regime : Union Budget 2025 Proposals
With an aim to rationalise Deducted at Source (TDS) and Tax Collected at Source(TCS), the following measures have been introduced: "I propose to rationalise tax deduction at source by reducing the number of rates and thresholds above which TDS is deduced. Further, the threshold amount for tax deduction will be increased for better clarity and uniformity. The limit for a tax deduction on interest for senior citizens is being doubled from the present Rs.50,000 to 1 lac. Similarly, the annual limit of 2.40 lac rupees for TDS on rent has been increased to 6 lac rupees. This will reduce the number of transactions liable to TDS. Thus, benefitting small taxpayers receiving small pay."
Welfare Measures For Gig Workers, Jan Viswhwas Bill 2.0 : Union Budget 2025 Proposals
Government has decided to provide welfare security for gig workers in India. As per Sitharaman's budget speech, under the Social Security Scheme for the welfare of online platform workers, they will be provided with an identity card and registration at the e-Shram portal of the Ministry of Labour & Employment. The gig workers will also be provided with health care insurance under the Pradhan Mantri Jan Arogya Yojana.