Tax Weekly Round-Up: March 17 - March 23, 2025
Kapil Dhyani
24 March 2025 1:20 PM
HIGH COURTSAllahabad HCProceedings U/S 129 Of GST Act Are Summary Proceedings, Burden To Prove Actual Movement Of Goods Lies On Assesee: Allahabad High CourtCase Title: M/S Jaya Traders Through Its Proprietor Mr. Vishwanath Tiwari v. Additional Commissioner Grade-2 And Another Case no.: WRIT TAX No. - 1022 of 2021The Allahabad High Court has held that proceedings under section 129 of the GST...
HIGH COURTS
Allahabad HC
Case Title: M/S Jaya Traders Through Its Proprietor Mr. Vishwanath Tiwari v. Additional Commissioner Grade-2 And Another
Case no.: WRIT TAX No. - 1022 of 2021
The Allahabad High Court has held that proceedings under section 129 of the GST Act are summary proceedings where the burden to prove the actual physical movement of goods is on the assesee transporting the goods. It further held that authorities have the power to seize goods on grounds of undervaluation.
Justice Piyush Agrawal held, “Under the taxing statute, in the original proceeding or in the summary proceeding, the primary burden is to be discharged by the assessee by bringing on record the cogent material. The burden of proof is shifting to the department only in the re-assessment proceeding or subsequent proceeding not being the original proceeding. In other words, the assessee in the original proceeding is duty bound to bring the material on record in support of its claim but in the subsequent proceeding i.e. re-assessment proceedings, the burden shifts on the revenue.”
Delhi HC
Case title: M/S B Braun Medical India Pvt Ltd v. Union Of India & Ors.
Case no.: W.P.(C) 114/2025
The Delhi High Court recently came to the rescue of a Company engaged in the sale of various pharmaceutical products and medical devices, holding that it could not be denied Input Tax Credit on purchases merely because its supplier had mentioned a wrong GST number on the invoices.
In the facts of the case, a division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta observed, “The only basis for rejecting the ITC is the mention of the Bombay office GSTN instead of the Delhi office GSTN. Substantial loss would be caused to the Petitioner if the credit is not granted for such a small error on behalf of the supplier.”
Case title: Gopika Vennankot Govind v. Union Of India & Ors.
Case no.: W.P.(C) 2784/2025
The Delhi High Court has ordered the Customs Department to release the personal jewellery of a minor from UAE who had come to India to attend a relative's wedding.
A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta passed the direction after perusing a photograph, depicting that she used to wear the said pieces of jewelry since childhood. It observed, “This Court has now pronounced several orders/judgments, following various judgments of the Supreme Court and this Court, wherein it has been held clearly that if the gold items seized are personal jewellery, the same would not be liable to be confiscated.”
Case title: Muhammad Nazim v. Commissioner Of Customs & Ors.
Case no.: W.P.(C) 3042/2025
The Delhi High Court has asked the Customs Department to scrupulously comply with its “repeated” direction to serve notices, orders on an assessee under the Customs Act, 1962 via email.
Traditionally, correspondence related to any violation of the Act is made via post. However, with advent of technology and to avoid delays, Court had in Bonanza Enterprises vs. The Assistant Commissioner of Customs & Anr. (2024) called upon the Department to send notices via email, in addition to service by speed post, registered post or courier.
Case title: Mea Ame Pvt. Ltd. v. Deputy Commissioner, Customs (Preventive), New Delhi
Case no.: W.P.(C) 3200/2025
The Delhi High Court is set to examine the extent of jurisdiction which can be exercised by the Customs Department under the Prohibition of Electronic Cigarettes (Production, Manufacture, Import, Transport, Sale, Distribution, Storage and Advertisement) Act, 2019.
A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta have sought the authority's response on a private company's petition challenging seizure of its imported “empty atomizer devices” purportedly to be put to use for smoking de-addiction.
Case title: M/S Saha Traders Zonal Joint Director General Of Foreign Trade(Cla)
Case no.: W.P.(C) 7295/2021
The Delhi High Court recently quashed a Directorate General of Foreign Trade (DGFT) communication cancelling the license issued to a trader involved in import and export of goods, citing almost fifteen years delay in culminating the show cause notice.
Justice Sachin Datta cited Vos Technologies India Pvt. Ltd. v. The Principal Additional Director General & Anr. (2024) where the Delhi High Court had emphasized that matters which have the potential of casting financial liabilities of penal consequences, cannot be kept pending for years and decades together.
Case title: Pr. Commissioner Of Income Tax-1, Delhi v. D Light Energy P. Ltd.
Case no.: ITA 53/2025
The Delhi High Court has made it clear that where the distributor of an imported product makes no value addition to it before sale, Resale Price Method is the most appropriate method to determine the arm's length price in relation to its business with an Associated Enterprise.
A division bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela thus dismissed the appeal preferred by Revenue against a Solar products distributor, which imported goods from an Associated Enterprise (AE) for resale.
Case title: Pr. Commissioner Of Income Tax-1 v. M/S East Delhi Leasing Pvt. Ltd.
Case no.: ITA 61/2025
The Delhi High Court has made it clear that the principle of 'proof beyond reasonable doubt' cannot be made applicable to Section 148 of the Income Tax Act, 1961 which enables an assessing officer to open an assessment if he has 'reason to believe' that an assessee's income escaped assessment.
A division bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela observed, “It is trite that the concept of “proving beyond reasonable doubt” applies “strictu senso” to penal provisions/statutes. It is also trite that in taxing statutes, in particular, section 148 of the Act, the “reason to believe”, must be based on objective materials, and on a reasonable view.”
Case title: Amal Krishna v. Union Of India & Ors.
Case no.: W.P.(C) 2957/2025
The Delhi High Court has held that a non-resident Indian is fully entitled to the benefit provided to an “eligible passenger” under the Baggage Rules, 2016 for the purposes of Customs on arrival to India.
Eligible passenger was defined by the Finance Ministry via a Notification dated June 30, 2017, to mean a passenger of Indian origin or a passenger holding a valid Indian passport, coming to India after not less than six months of stay abroad. Baggage Rules allow duty-free clearance of certain items, including used household articles, professional equipment, and personal effects to eligible passengers.
Gauhati HC
Case Title: The Principal Commissioner of Income Tax v. Rohit Karan Jain
Case Number: ITA/5/2023
The Gauhati High Court stated that retracted statement cannot be termed as incriminating material and no addition can be made in respect of completed assessment.
The Commissioner of Income Tax (Appeals) and the ITAT were of the view that the said piece of evidence, i.e. retracted statement cannot be termed as incriminating material, noted the Division Bench of Chief Justice Vijay Bishnoi and Justice Kaushik Goswami.
Karnataka HC
Case Title: The PR. Commissioner of Income Tax
Case Number: INCOME TAX APPEAL NO. 425 OF 2023
The Karnataka High Court stated that fair market value of shares determined by statutory methods can't be rejected by the income tax department.
The Division Bench of Justices Krishna S Dixit and Ramachandra D. Huddar was addressing a case where the revenue has challenged the order passed by the Tribunal where the Tribunal held that the valuation report on DCF Method produced during assessment proceedings was a valid report justifying valuation of shares.
Case Title: The State Of Karnataka v. Tractor And Farm Equipment Limited
Case Number: STRP NO.26 OF 2023
The Karnataka High Court while laying down vital guidelines on Input Tax Credit stated that if the Assessee during the course of reassessment proceedings makes a claim for Input Tax Credit, the same cannot be disallowed only on the ground that the claim of the Assessee is disadvantageous to the State Exchequer.
The Division Bench of Justices Krishna S Dixit and G. Basavaraja observed that ordinarily, the claim for Input Tax Credit has to be made in the Return or Revised Return only. A claim otherwise is an exception and bona fide of the same has to be demonstrated.
Kerala HC
Case Title: M J George (Died) v. Deputy Commissioner of Income Tax
Case Number: ITA NO. 1 OF 2024
The Kerala High Court stated that burden of proof is on assessee to prove that he is entitled to capital gains tax exemption on sale of agricultural land.
The Division Bench of Justices A.K. Jayasankaran Nambiar and Easwaran S. observed that “it is significant in this regard to observe that the claim of the assessee, being for exemption from the levy of income tax as applicable to capital gains, the burden of proof was on the assessee to show that he was entitled to exemption by virtue of the land sold by him being in the nature of agricultural land.”
Case Title: Managing Partner, Vee Tee Logistics v. Joint Regional Transport Officer
Case Number: WA NO. 2129 OF 2024
The Kerala High Court stated that vehicles registered as goods carriage vehicles, could not be classified under a different head for the purposes of demanding one-time tax under the second proviso to Section 3(1) of the Kerala Motor Vehicles Taxation Act.
The Division Bench of Justices A.K. Jayasankaran Nambiar and Easwaran S. stated that “the department cannot alter their stand and classify the vehicles separately for the purposes of levy of one- time tax to the Kerala Motor Vehicles Taxation Act.”
Case Title: Keraleeyam Ayurvedic Resort v. The Commercial Tax Officer (Luxury Tax)
Case Number: WA NO. 709 OF 2018
The Kerala High Court stated that ayurvedic treatment is only incidental to facilities provided by assessee in a resort, hence liable to be taxed.
“the main activities of the assessee as per the brochures produced before the assessing officer, are canoeing, motor boat cruises, houseboat stay, trekking, Alleppey beach visit, coir factory visit, elephant ride, Kathakali, temple dance, dramas, Mohiniyattam and Kalaripayattu. Therefore, the main activities of the assessee are not running the hospital but providing a resort and other facilities and the Ayurvedic treatment is only incidental to that of the facilities” observed the Division Bench of Justices A.K. Jayasankaran Nambiar and Easwaran S.
Case Title: Sajeer A v. State of Kerala
Case Number: OT.REV NO. 3 OF 2024
The Kerala High Court stated that Joint Commissioner has jurisdiction to initiate proceedings under Section 56 of the KVAT Act against assessment order passed pursuant to remand.
The Division Bench of Justices A.K. Jayasankaran Nambiar and Easwaran S. observed that “when the fresh assessment order was passed consequence to the remand, the original assessment order ceased to exist in law and thereafter the only assessment order that survived for the purposes of exercise of the power of revisions under Section 56 was the subsequent order passed by the Assessing Authority.”
Case Title: The State of Kerala v. M/s Chowdhary Rubber & Chemicals Pvt. Ltd.
Case Number: O.T.REV. NO.106 OF 2021
The Kerala High Court stated that revenue cannot re-assess time barred assessment under KVAT Act based on CAG report. The Division Bench of Justices A.Y. Jayasankaran Nambiar and Easwaran S. observed,
“there cannot be an exercise of power under Section 25A of the KVAT Act beyond the period of limitation prescribed under Section 25(1) of the KVAT Act. In fact the provisions of Section 25A allude to this aspect when it refers to the satisfaction to be recorded by the Assessing Officer of the “lawfulness” of an audit objection.”
Madras HC
Case Title: Gillette Diversified Operations vs. Joint Commissioner of GST and Central Excise
Case Number: W.P.Nos.6524, 6527, 6531, 6537 and 6541 of 2022
Finding that the refund claim was filed within two years from the “relevant date” as defined in Explanation 2(a) to Section 54(14) of CGST Act , the Madras High Court recently clarified that a refund claim cannot be denied on the basis of retrospective operation of the Proviso to Rule 90(3) pf the CGST Rules.
The High Court clarified this upon finding that the refund claims filed in the portal on Sep 21, 2018, Oct 09, 2018 and Oct 10, 2018, were within two years from the date of exports made during July 2017, August 2017 and September 2017, in time in terms of Circular No. 79/53/2018-GST.
Sikkim HC
Case title: Dr. Doma T. Bhutia v. Union Of India & Another
Case no.: WP (PIL) No. 01/2025
The Sikkim High Court has upheld the constitutional validity of the definition 'Sikkimese' under the Income Tax Act, which was slightly expanded by way of an amendment in terms of the Finance Act, 2023.
A division bench of Chief Justice Biswanath Somadder and Justice Meenakshi Madan Rai upheld the vires of Explanation (v) contained under clause (26AAA) of section 10 of the Income Tax Act, 1961.
TRIBUNALS
Activity Of “Chilling Of Milk” Is A Service, Leviable To Service Tax: CESTAT
Case Title: M/s. Jai Durge Ice Factory v. Commissioner of CGST & Central Excise, Udaipur
Case Number: Service Tax Appeal No. 52965 of 2018 [DB]
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that activity of chilling of milk is leviable to service tax.
The Bench of Binu Tamta (Judicial Member) and P.V. Subba Rao (Technical Member) has observed that “the activity of chilling of milk during the post negative period amounts to rendering 'services' as defined in section 65B (44) and is therefore, leviable to service tax.”
Case Title: M/s. Raj Kumar Jain v. Commissioner of CGST & Central Excise – Jodhpur
Case Number: Service Tax Appeal No. 54671 of 2023
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that the advertising agency being a pure agent is not liable to pay service tax on amount payable to media companies on behalf of their clients.
The Bench of Dilip Gupta (President) and P. V. Subba Rao (Technical) has observed that, “The assessee has conceded about their liability to pay service tax on the amount of commission received by them while rendering the advertising agency service to the print media. However, still has contested the same on the ground of limitation.”
Case Title: M/s The Indure Private Limited v. The Commissioner of Service Tax
Case Number: Service Tax Appeal No. 51192 Of 2017
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that if an assessee fails to discharge his tax liability under the bonafide belief that tax did not need to be paid, no penalty is leviable.
The Bench of Dr. Rachna Gupta (Judicial) and Ms. Hemambika R. Priya (Technical) has observed that, “even if payment is made through CENVAT for GTA services, which is impermissible, it cannot be stated that the assessee had misstated or suppressed any information or evaded tax in as much as the details of the payment were available in the return.”