Top Stories Supreme Court & High Courts Weekly Round-up By Varsha Chandran – On October 27, 2024 10:37 am – 18 mins read This weekly roundup analytically summarizes the key stories related to the Supreme Court and High Court reported at Taxscan.in from October 20th, 2024, to October 26th, 2024. No Power to Seize Currency under GST Act, reaffirms Supreme Court COMMISSIONER OF CGST vs DEEPAK KHANDELWAL CITATION:   2024 TAXSCAN (SC) 276 In a significant legal development, the Supreme Court has dismissed the Special Leave Petition ( SLP ) filed by the department regarding the authority of the proper officer to seize currency under Section 67(2) of the Central Goods and Services Tax ( CGST ) Act, 2017. Following this ruling, the department filed an SLP with the Supreme Court, seeking to overturn the High Court’s decision. However, the Supreme Court concluded that there was no valid basis for interference with the lower court’s judgment, stating, “No case for interference is made out in exercise of our jurisdiction under Article 136 of the Constitution of India.” This ruling clarifies the limitation on powers of the proper officer when it comes to search and seizure under the Central Goods and Services Tax Act, 2017. “You are Treating the Judicial Staff as if they are Your Subordinates”: SC rebukes Finance Ministry for Asking DRTs to Collect Data SUPERWHIZZ PROFESSIONALS PRIVATE LIMITED vs UNION OF INDIA & ORS CITATION:   2024 TAXSCAN (SC) 277 In a recent hearing of Superwhizz Professionals Private Limited, the Supreme Court expressed strong disapproval of the Finance Ministry’s directive to collect data by the Debts Recovery Tribunals ( DRT ). During the hearing on 21st October 2024, Justice Oka noted that the court’s involvement was important because, without it, the problematic practices might have continued without any control. The matter was listed on 22nd November 2024 tentatively. Parliament does not have Legislative Competence to Enact a Law taking control of Intoxicating Liquor Industry: Supreme Court State of U.P. & Ors vs Lalta Prasad Vaish and sons CITATION:   2024 TAXSCAN (SC) 278 The Supreme Court, on Wednesday, ruled that ‘industrial alcohol’ falls within the scope of ‘intoxicating liquor’ as defined under Entry 8 of List II (State List) of the Constitution, thus affirming the States’ authority to regulate it in the case State of Uttar Pradesh and Ors. v. Lalta Prasad Vaish. While acknowledging potential overlaps between the two entries, the Court stressed the need for a broad interpretation of legislative lists to avoid redundancy, ultimately holding that intoxicating liquor under Entry 8 includes all alcohols, not just those for consumption. The ruling overturned the 1990 judgment in Synthetics & Chemicals Ltd. v. State of Uttar Pradesh, which had restricted ‘intoxicating liquor’ to potable alcohol, thereby allowing States to tax industrial alcohol. The Court stated that the term “intoxicating liquor” encompasses any alcohol that could pose a threat to public health The decision also revisited the 2007 State of UP v. Lalta Prasad Vaish judgment, which had referred the issue to a larger bench, leading to this landmark ruling. During hearings, the States argued that regulating industrial alcohol is vital in the post-GST regime, with implications for public health monitoring. ED Officer accused of Bribery allowed to Leave Tamil Nadu to Meet Relatives by Supreme Court DIRECTORATE OF ENFORCEMENT vs THE STATE OF TAMIL NADU CITATION:   2024 TAXSCAN (SC) 279 In a recent ruling, the Supreme Court of India permitted an Enforcement Directorate ( ED ) officer accused of bribery to temporarily leave Tamil Nadu and travel to Madhya Pradesh to meet his relatives.

The Supreme Court Bench of “Having heard learned counsel for the applicant/petitioner as  well as learned senior counsel for the State, the order dated 20.03.2024 is modified/clarified to the extent that the petitioner is permitted to visit the State of Madhya Pradesh to meet his family members/relatives upto 09.11.2024. However, if there is any date fixed by the Trial Court before 09.11.2024, the petitioner shall remain present before the Trial Court on the date fixed.” The matter will be heard next by the Supreme Court on November 27, 2024​. Service Tax Not Separately Payable on Interchange Fee as Tax has been paid on Merchant Discount Rate: Supreme Court rules in Citibank Case COMMISSIONER OF GST AND CENTRAL EXCISE vs M/S CITIBANK N.A. CITATION:   2024 TAXSCAN (SC) 280 The Supreme Court, in the matter of Citibank NA, clarified that service tax is not separately payable on the interchange fee when tax has already been paid on the Merchant Discount Rate ( MDR ). The bench ruled in favor of Citibank, affirming that service tax already paid on the full MDR suffices, dismissing the Revenue’s contentions, and disposing the matter for pending appeals and applications. CBDT Circular on Monetary Limits in Filing Appeal/SLP Not Applicable on International Tax Appeal Involving DTAA: Punjab & Haryana HC COMMISSIONER OF INCOME TAX vs PERFETTI VAN MELLE ICT B.V CITATION:   2024 TAXSCAN (HC) 2178 In a recent case, the Punjab and Haryana High Court has held that the circular issued by the Central Board Of Direct Taxes (CBDT) prescribing monetary limits to file appeal/SLP is not applicable on international tax appeal involving the provisions of Double Taxation Avoidance Treaty (DTAA) While dismissing the department’s appeal , the court held that the case does not falling within exception to clause l(ii) of para 3.1 which is only with respect to litigation arising out of disputes related to TDS/TCS matters in both domestic and international taxation charges, wherein disputes relating to appeals of international taxation charges with the applicability of provisions of Double Taxation Avoidance Agreement would fall. Urvashi Dhugga appeared for the appellant and Deepak Chopra appeared for the respondent. Rectification Order is invalid if it Fails to provide Reasons in exercise of Rectification Power: Kerala HC KRISHNA AGENCIES vs THE SUPERINTENDENT CITATION:   2024 TAXSCAN (HC) 2179 In a significant case, the Kerala High Court stated that rectification order is not sustainable if it does not provide any reason justifying the exercise of power of rectification. It was observed that the personal hearing notice does not indicate that any reason justifying the exercise of power of rectification was pointed out to the assessee. The bench quashed both the notice and the rectification order. Aji V. Dev, H. Abdul Lathief and Alan Priyadarshi Dev appeared for the petitioner. The respondent was represented by P.R. Sreejith. Saving of Non-Bonded Cargo from Damage by Storage in Bonded Tanks: Bombay HC upholds Restoration of Customs Warehousing Permission Commissioner of Customs vs Ganesh Benzoplast Limited CITATION:   2024 TAXSCAN (HC) 2180 A Division Bench of the Bombay High Court upheld the restoration of customs warehousing permission to Ganesh Benzoplast Limited.

In dismissing the customs department’s appeal, the Bombay High Court underscored that there was no substantial question of law arising in the case, and it upheld CESTAT’s order that relieved Ganesh Benzoplast of penalties and allowed the restoration of its customs warehousing permissions. This ruling highlights the court’s acknowledgment of practical business necessities and the importance of adhering to safety procedures in warehousing operations. It also sets a precedent for handling similar disputes concerning bonded warehouses and customs permissions. Notice issued u/s 148A(B) of Income Tax Act against dissolved Firm Is Invalid: Gujarat HC NATHALAL HEMABHAI PATEL vs INCOME TAX OFFICER CITATION:   2024 TAXSCAN (HC) 2181 In a recent case, the Gujarat High Court held that notice issued under section 148A(b) of the Income Tax Act, 19861 against dissolved firms is not valid. Section 148A(b) of the Income Tax Act, 1961, provides that the assessing officer must issue a notice to the taxpayer, providing information and adverse material suggesting that income has escaped assessment. The bench viewed that  the issuance of notice in name of the dissolved firm, the impugned notice and the order would not be tenable more particularly, when the assessee has in reply to the notice issued under Section 148A(b) of the Act. The court allowed  the petition and quashed the notice and order. GST DRC-01 issued for Wrong Assessment Year: Madras HC quashes Assessment Order Tvl.Suresh Sethu vs The Assistant Commissioner CITATION:   2024 TAXSCAN (HC) 2182 Recently,  the Madras High Court quashed an assessment order passed under the Tamil Nadu Goods and Services Tax ( TNGST ) Act, 2017, as GST DRC – 01 notice was issued for the wrong assessment year. The Court directed the petitioner to file a consolidated reply within 30 days, after which the respondent must pass a fresh order on merits within three months. It was also clarified that if the petitioner fails to submit a reply within the stipulated time, the authorities are free to proceed with the case as if the writ petition had been dismissed. GST Recovery and Hearing Notices ignored: Madras HC orders 25% Pre-Deposit from Cash Ledger for Fresh Consideration Tv.Sornam Medicals vs The Commissioner of Commercial Taxes CITATION:   2024 TAXSCAN (HC) 2183 In a matter of ignorance of the Goods and Services Tax ( GST ) recovery notices and the hearing notices, the Madras High Court has ordered the pre-deposit of 25% from the Electronic Cash Ledger ( ECL ) for the fresh consideration. The court also made it clear that failure to deposit the amount or submit the reply would result in the respondent proceeding as if the writ petition had been dismissed. The petitioner was assured a personal hearing before the final order was issued. GST ITC on Leasing Building for Schools: Madhya Pradesh HC Directs to file Appeal relying Safari Retreats Case CHIRANTAN ENTERPRISES LLP vs COMMISSIONER CGST AND CENTRAL EXCISE CITATION:   2024 TAXSCAN (HC) 2184 With regards to an issue of availing Input Tax Credit ( ITC ) under Goods and Services Tax ( GST ) on leasing the building for the schools, the Madhya Pradesh High Court directed file appeal before the appellate authority relying on law laid down by Supreme Court in the Safari Retreats Case.

Justices Vivek Rusia and Binod Kumar Dwivedi noted that in the Safari Retreats case, the Supreme Court had held that if a building, such as a mall or other commercial premises, qualifies as a “plant,” then ITC could be claimed for the goods and services used in its construction. The Court emphasised that each case requires a factual determination of whether the property meets the functionality test of being considered a plant. No GST proceedings u/s 130 shall be initiated for Excess Stock Detected during GST Inspection, Rules Allahabad HC M/S Kanha Detergent Pvt Ltd vs Additional Commissioner Grade-2 And Another CITATION:   2024 TAXSCAN (HC) 2185 Recently, the Allahabad High Court ruled that the proceedings under Section 130 of the Goods and Services Tax ( GST ) Act cannot be initiated for the excess stock detected during the inspection under Section 67 of Central GST Act. Consequently, the High Court quashed both the orders issued by the first appellate authority and the adjudicating officer, ruling that excess stock findings during the inspection do not automatically lead to the application of Section 130 proceedings AO is “Prescribed Income Tax Authority” to issue Notices u/s 143(2) and 142(1): Delhi HC AMBIENCE TOWERS PRIVATE LIMITED vs ASSISTANT COMMISSIONER OF INCOME TAX CITATION:   2024 TAXSCAN (HC) 2186 The Delhi High Court recently dismissed a petition challenging Notices issued by the Assistant Commissioner of Income Tax under Sections 143(2) and 142(1) of the Income Tax Act, 1961, affirming the stature of an Assessing Officer ( AO ) as a “Prescribed Income Tax Authority” authorized to issue the above-mentioned Notices under the Act and Rules therein. The two-member Bench of the Delhi High Court constituted by Justice Vibhu Bakhru and Justice Swarana Kanta Sharma observed the lack of merit in the Petitioner’s contention rebuking the jurisdiction exercisable by the Respondent. Rule 12E of Income Tax Rules does not confine CBDT’s powers to only authorize NFAC Officers for purposes u/s 142(1):

Delhi HC NGR CONSULTANTS PVT LTD. vs ASSISTANT COMMISSIONER OF INCOME TAX & ANR. CITATION:   2024 TAXSCAN (HC) 2187 The Delhi High Court recently dismissed a Petition citing that Rule 12E of the Income Tax Rules, 1962 does not mandate the Central Board of Direct Taxes ( CBDT ) to appoint only Officers from the National Faceless Assessment Centre ( NFAC ) as the ‘Prescribed Income Tax Authority’ for the purposes of Inquiry Before Assessment under Section 142(1) of the Income Tax Act, 1961 The Delhi High Court Bench constituted by Justice Vibhu Bakhru And Justice Swarana Kanta Sharma forbade the Petitioner’s argument that the power to issue Notice under Section 143(2) of the Income Tax Act, 1961 lies solely with the authorized Income Tax Officers of the NFAC besides the Assessing Officer, all while asserting that such argument does not sit right with Section 143(2) of the Act or Rule 12E of the allied Rules. In dismissal, the Court reaffirmed that once jurisdiction of an AO to issue notice under Section 143(2) of the Income Tax Act, 1961 has been accepted, then the AO cannot be faulted for undertaking proceedings to complete the Assessment. Failure of Dept to intimate Transfer of Case to Call Book and Delayed Adjudication: Bombay HC quashes Customs SCN The Great Eastern Shipping Company Ltd. vs Union of India Through the Secretary Department of Revenue CITATION:   2024 TAXSCAN (HC) 2188 In a landmark ruling, the Bombay High Court has quashed a show cause notice ( SCN ) issued by the Customs Department against the assessee citing a significant delay in adjudicating the case. The Bombay High Court ruled in favor of the assessee,

The Great Eastern Shipping Company, quashing the impugned show cause notice and reaffirming the need for timely adjudication of cases to uphold justice and procedural fairness in Customs matters. Mere Mentioning of Wrong VAT Provision does not invalidate Order if Authority has Proper Jurisdiction: Madras HC Gingee Agricultural Producers Co-operative Marketing Society vs e Appellate Deputy Commissioner CITATION:   2024 TAXSCAN (HC) 2189 In a recent ruling, the Madras High Court ruled that mere mentioning of a wrong value-added tax ( VAT ) Provision or non-mentioning of a provision does not invalidate an order if the court or statutory authority had the requisite jurisdiction to issue it. A single bench led by Justice C. Saravanan observed both side’s arguments. The court stated that mere typographical or procedural errors in legal notices do not invalidate them if the correct legal intent is clear and the authorities acted within their jurisdiction. This principle was backed by the Supreme Court’s Ruling in Ram Sunder Ram vs. Union of India. Consider Waiving Customs Duties and GST for Drugs: Delhi HC to Centre in Plea of Young Victims of Rare Diseases MASTER ARNESH SHAW vs UNION OF INDIA & ANR. CITATION:   2024 TAXSCAN (HC) 2190 The Delhi High Court has directed the Centre to consider waiving customs duties and GST on the import of medicines for rare diseases, specifically in a plea concerning young victims. The case is an important part of the ongoing discussions about the affordability and availability of treatments for conditions like Spinal Muscular Atrophy ( SMA ) and other rare diseases in India. The Single Bench of Justice Prathiba M Singh came from the due judicial recognition that these financial burdens significantly increase the cost of life-saving treatments for patients suffering from rare diseases.

Concrete steps were also directed to be taken to encourage PSUs and pharmaceutical companies to increase their contribution to CSR in rare diseases. “Fair Tax Regime where No Assessee is Harassed is Equally Crucial”: Bombay HC imposes ₹ 20k Cost on Maharashtra VAT Dept for Natural Justice Violations Soremartec S. A,Luxembourg vs Magic Production Group SA CITATION:   2024 TAXSCAN (HC) 2191 The Bombay High Court, stressed the importance of a fair and transparent tax regime while imposing a cost of ₹20,000 on the Maharashtra VAT Department for violating the principles of natural justice. In conclusion, the court ruled in favour of the assessee and imposed a cost of ₹20,000 on the VAT Department for its failure to adhere to due process. The ruling serves as a reminder to tax authorities of their obligation to conduct assessments in a manner that is both legally sound and procedurally fair, ensuring that taxpayers are not subjected to undue harassment. End of the Rope: Delhi High Court grants Bail to PMLA Accused in Cattle Smuggling case after Long Incarceration SEHEGAL HOSSAIN vs DIRECTORATE OF ENFORCEMENT CITATION:

2024 TAXSCAN (HC) 2192 The Delhi High Court recently granted Bail to a person accused of smuggling cattle from India to Bangladesh after a jail term of 19 months undergone by the Accused. The Delhi High Court observed that the trial in the predicate crimes have not yet commenced and that the co-accused of the Applicant has already been granted bail in the same matter; in light of such observation the Court granted bail to the Applicant  subject to furnishing of personal bond of Rs.5,00,000/- among other travel restrictions and guidelines meted out to the accused. AO not at Fault in completing Income Tax Assessment once Jurisdiction to Issue Notice u/s 143(2) is Accepted: Delhi HC NUTAN GEHLOT vs ASSISTANT COMMISSIONER OF INCOME TAX CITATION:   2024 TAXSCAN (HC) 2193 Assessing Officer (AO) to complete a pending Income Tax Assessment, once the jurisdictional competence of the Officer to issue Notice under Section 143(2) of the Income Tax Act, 1961 is established. In light of the findings, the Delhi High Court dismissed the Petition while passing obiter that once the jurisdiction of the AO to issue a notice Section 143(2) of the Act has been accepted, the AO cannot be faulted for undertaking proceedings to complete the assessment. GST Appellate Authority must consider Grounds raised in Memorandum even while Considering Appeal Ex Parte: Patna HC Silverline vs The State of Bihar CITATION:   2024 TAXSCAN (HC) 2195 The Patna High Court ruled that the Goods and Services Tax ( GST ) appellate authority must consider the grounds raised in the memorandum even while considering the appeal ex parte. Thus, the bench of Chief Justice K. Vinod Chandran and Justice Partha Sarthy had set aside the GST order and directed the restoration of the appeal before the Appellate Authority. ‘Gloriously Silent’ on GST Act Violations: Delhi HC quashes Registration Cancellation SCN and Order AMIR MALIK vs COMMISSIONER OF GST, DELHI CITATION:

2024 TAXSCAN (HC) 2196 The Delhi High Court in a recent judgment quashed a Show-Cause Notice and Order signaling the cancellation of Petitioner’s Goods and Services Tax ( GST ) registration citing the inadequacy of the Show-Cause Notice and Order in rightly referencing the specific violations under the GST Act, 2017 that have been purported against the Petitioner. The Division Bench of the Delhi High Court composed by Justice Yashwant Varma and Justice Ravinder Dudeja observed that neither the Show-Cause Notice or the GST cancellation Order therein clearly assigned or recorded any substantive reasoning warranting the cancellation of the Petitioner’s GST registration. In light of the findings made, the Delhi High Court proceeded to allow the writ petition and quashed both, the impugned Show-Cause Notice and subsequent Order of GST Registration Cancellation therein. However, the Delhi High Court reaffirmed that the instant Order has been passed by the High Court without laying prejudice to the right of the respondents to contest the instant matter in accordance with the limits permissible by the law. Wrongful Mentioning of Duty Drawback Scheme, instead of AA Scheme: Kerala HC directs Company to Drawback Amount & Obtain Receipt from Customs Dept. SHINE FLEXIBLE PRINTS AND PACKS PRIVATE LIMITED vs COMMISSIONER OF CUSTOMS CITATION:   2024 TAXSCAN (HC) 2197 In a recent case, the Kerala High Court has directed the company to drawback the amount along with interest and obtain receipt from the customs department. The appellant has wrongfully mentioned the shipping bills in the Duty Drawback Scheme, instead of the Advance Authorisation Scheme. The two member  bench of Justice A.K. Jayasankaran Nambiar and Justice Syam Kumar V.M. has held that the sole mistake committed by the appellant was that, in the shipping bills he had mentioned the Duty Drawback Scheme, instead of the Advance Authorisation Scheme, as the Scheme under which the exports were effected. Rajasthan HC Stays Order u/s 86A Blocking ITC without Giving any Opportunity of Hearing Lipika Tech Pvt vs The Deputy Commissioner (State Tax) CITATION:   2024 TAXSCAN (HC) 2198 In a recent case, the Rajasthan High Court stayed the order passed by Jurisdictional Range officer under section 86 A of the Central Goods and Service Tax (CGST) Act, 2017 of Blocking Input Tax Credit (ITC)without giving any opportunity of hearing. The bench comprising  Chief Justice Mr. Manindra Mohan Shrivastava and Justice Ganesh Ram Meena stayed the order whereby the respondents have blocked the ITC of Rs.6,62,776/- as uploaded in in the name of M/s Lipika Tech Private Limited for the period 01.08.2024 to 31.08.2024. Asst Commissioner ignored Direction in Appellate Order: P&H HC directs Commissioner to Take Strict Action against Insubordination In CGST Hierarchy M/s Proxima Steel Forge Pvt. Ltd vs Union of India and others CITATION:   2024 TAXSCAN (HC) 2199 In a  significant case, the Punjab and Haryana High Court directed to take strict action against insubordination in the Central Goods and Service Tax (CGST) hierarchy as the Asst Commissioner ignored the direction to hear the case on merits. It was found that the Assistant Commissioner overstepped his authority despite the Joint Commissioner’s directive to consider it on merits. The court set aside the order passed by the Assistant Commissioner and directed the Commissioner to appoint another officer to deal with the refund application of the assessee. J.S. Bedi appeared for the petitioner and  Ajay Kalra appeared for the respondent. Notice u/s 271(1)(c) of Income Tax Act Must Specify Reason for Penalty Imposition: J&K HC Pr. Commissioner of Income Tax vs J & K Power Development Corporation Limited CITATION:   2024 TAXSCAN (HC) 2200 In a recent case, the Jammu and Kashmir and Ladakh High Court has made it clear that notice to an assessee proposing imposition of penalty under section 271(1)(c) of the Income Tax Act, 1961 must specify reason for penalty imposition. It was held that it has to be mentioned whether the assessee is accused of ‘concealing’ his income or furnishing ‘incorrect’ income particulars. While the court dismissed the revenue’s appeal against ITAT order, given  liberty to proceed against the respondent afresh, as per law. Advocate Umar Rashid Wani  appeared for the  Revenue and Rashid Malik with Advocate Mohd Younis Hafiz  appeared for Respondent. Cross Examination by Excise Dept required only for Confirmation of Demand based Solely on Witness Statements: Madras HC Annai Poly Packs vs The Deputy Director CITATION:   2024 TAXSCAN (HC) 2201 In a recent ruling, the Madras High Court clarified that cross-examination in quasi-judicial proceedings is necessary only when witness statements serve as the exclusive basis for confirming excise duty demands. Mr.R.Venkataraman Senior Counsel for Mr. M. Jegadeesan and Mr. N. Dilip Kumar Senior Standing Counsel appeared for the petitioners and the respondents respectively. Clubbing Multiple Tax Periods In a Single Notice Is Impermissible under GST Act: Karnataka HC Quashes SCN M/S. VEREMAX TECHNOLOGIE SERVICES LIMITED vs THE ASSISTANT COMMISSIONER OF CENTRAL TAX CITATION:   2024 TAXSCAN (HC) 2202 In a significant case, the High Court Of Karnataka held that clubbing multiple tax periods in a single notice is impermissible under Central; Goods and Service Tax ( CGST ) Act, 2017 and quashed the show cause notice (SCN) issued. While allowing the petition , the Court quashed the impugned show cause notice issued by the respondent for the tax periods 2017-18, 2018-19, 2019-20 and 2020- 21.Sri. Shankare Gowda M.N. appeared for the petitioner and Sri. Unnikrishnan M appeared for the respondent. No Deemed Registration u/s 12AB for 6-Month Delay in Passing Refusal Order: Bombay HC The Commissioner of Income Tax-IV vs Dr. Kasliwal Medical Care & Research Foundation CITATION:   2024 TAXSCAN (HC) 2203 In a significant ruling, the Bombay High Court has clarified that charitable organizations cannot assume deemed registration under Section 12AB of the Income Tax Act, 1961, even if there is a substantial delay in the issuance of the registration order by tax authorities. The Bombay High Court Bench of Justice Firdosh P Pooniwalla and Justice G S Kulkarni rejected this plea, ruling that the law does not provide any scope for deemed registration under Section 12AB of the Income Tax Act, even in the case of a significant delay in processing the application. GST Notices Must Be Served through Alternative Means after Registration Cancellation, Just uploading on Portal Not Enough: Allahabad HC M/S Ahs Steels vs Commissioner Of State Taxes And Another CITATION:   2024 TAXSCAN (HC) 2204 In a recent ruling, the Allahabad High Court said that Goods and Services Tax ( GST ) notices must be served through alternative means once a taxpayer’s registration has been cancelled, and merely uploading the notice on the GST portal is insufficient. Justices Shekhar B. Saraf and Vipin Chandra Dixit found that the failure to serve the notice by alternative means violated the principles of natural justice, leading to the cancellation of the impugned order. Th bench directed the tax authorities to issue a fresh notice and proceed in accordance with the law. 9.5 Year Delay In SAD Refund: Bombay HC slaps 15k costs on Customs Dept, directs Payment of 6% Interest per annum M/s Ajay Industrial Corporation Ltd. vs Deputy Commissioner of Customs CITATION:   2024 TAXSCAN (HC) 2205 The Bombay High Court recently slapped a cost of Rs.15,000/- on the Deputy Commissioner of Customs, CRC-I and directed the Customs to pay interest to the Petitioner at the rate of 6% per annum on delayed refund of Special Additional Duty ( SAD ) in terms of Sections 27 and 27A of the Customs Act, 1962. The Court directed the Respondent to pay costs of Rs.15,000/- to the Petitioner while also warning the Customs Department that they would be liable to pay Interest at 8% per annum to the Petitioner if they failed to abide by the direction of the High Court. Personal Hearing Lapse in S. 74 GST Demand on B2C Sales Entry Error in GSTR 1: Madras HC quashes Order Kandasamy Sivaprakash vs The Assistant Commissioner (ST) CITATION:   2024 TAXSCAN (HC) 2206 The Madras High Court quashed a Goods and Services Tax ( GST ) demand order issued under Section 74, triggered by a mistaken entry of B2C sales in GSTR 1. It quashed the GST Assessment order on grounds that it lacked personal hearing and also remanded the matter on 10% pre-deposit at request of the Department pleader. The Assistant Commissioner ( ST ) was ordered to review the petitioner’s response, afford him a personal hearing, and issue a new order based on the merits of the case. Furthermore, since the assessment order had been quashed, the court ordered the immediate lifting of the bank account freeze, directing the bank to restore the petitioner’s access upon receiving proof of payment. Karnataka HC shuns Coercive Extraction of 2.5 Crores CGST by Intelligence Officer, orders Refund with Interest M/S. KESAR COLOUR CHEM INDUSTRIES vs THE INTELLIGENCE OFFICER CITATION:   2024 TAXSCAN (HC) 2207 In a notable ruling, the Karnataka High Court ordered refund of Rs.2.5 crores and accrued interest “extracted coercively” as payment towards Central Goods and Services Tax ( CGST ) by the Respondent Intelligence Officers. The Karnataka High Court ruled that the recovery of Rs.2.5 Crore by the Revenue is in contravention of Article 265 of the Constitution of India, ordering the same to be refunded to the Petitioner with due interest. SVLDR Scheme Applies to any SCNs for Penalty/Late Fee Regardless of Adjudication or Appeal: Gujarat HC rules in Favour of UltraTech ULTRATECH CEMENT LTD vs UNION OF INDIA & ORS CITATION:   2024 TAXSCAN (HC) 2208 In a ruling in favour of UltraTech Cements, the Gujarat High Court has held that Sabka Vishwas ( Legacy Dispute Resolution ) Scheme, 2019 ( SVLDRS ) is applicable to any show cause notice ( SCN ) for penalty/late fee, irrespective of whether it is under adjudication or appeal. The Court directed the respondent authorities to issue Form SVLDRS-4 to the Petitioner, within 12 weeks. Capital Invested to Purchase Shares of ‘Infrastructure Facility’ before June 1998 cannot be included in Total Income: Telangana HC THE COMMISSIONER OF INCOMEE TAXIII vs M/S.V.B.C.FERRO ALLOYS LTD CITATION:   2024 TAXSCAN (HC) 2209 The Telangana High Court in a recent case has held that the capital invested to purchase shares of ‘infrastructure facility’ before June 1998 cannot be included in total income. The Court viewed that Central Board of Direct Taxes ( CBDT ) press release has clarifyied that the exemptions available under Section 10(23G) will continue to govern the investments made prior to June 1998. A division bench of Justices Sujoy Paul and Namavarapu Rajeshwar Rao held that merely purchasing shares does not contribute to the income of the respondent/assessee. Since it does not count as income, no amount needs to be paid in taxes. Income Tax Recovery Proceedings cannot initiate  during Pendency of Appeals before CIT(A): Gujarat HC OM VISION INFRASPACE PRIVATE LIMITED vs INCOME TAX OFFICER CITATION:   2024 TAXSCAN (HC) 2210 In a significant ruling, the Gujarat High Court has held that Income tax recovery proceedings cannot initiate during pendency of appeals before Commissioner Of Income Tax ( Appeals ) ( CIT(A) ). The bench added that if the respondents department are not interested in resolution of the issue of pendency of the Appeals then no recovery should be made from the assessees during the pendency of the Appeals. While allowing the petition, the court  held that the petitioner is protected by restraining the department from taking any coercive action. K. Parikh, Ashutosh S. Dave Dhinal A. Shah  appeared for the petitioner and Karan Sanghani and  Mrs.Kalpana K. Raval  appeared for the respondent. Clubbing Multiple Tax Periods In a Single Notice Is Impermissible under GST Act: Karnataka HC Quashes SCN M/S. VEREMAX TECHNOLOGIE SERVICES LIMITED vs THE ASSISTANT COMMISSIONER OF CENTRAL TAX CITATION:   2024 TAXSCAN (HC) 2202 In a significant case, the High Court Of Karnataka held that clubbing multiple tax periods in a single notice is impermissible under Central; Goods and Service Tax ( CGST ) Act, 2017 and quashed the show cause notice (SCN) issued. The Court concluded that the show cause notices issued by the respondent are fundamentally flawed. The practice of issuing a single, consolidated show cause notice for multiple assessment years contravenes the provisions of the CGST Act and established legal precedents. Cotton Seed Oil Cake Supply for Cattle Feed Exempted from GST: Gujarat High Court DHARTI INDUSTRIES vs OFFICE OF COMMISSIONER (APPEAL) & ORS CITATION:   2024 TAXSCAN (HC) 2214 The Gujarat High Court has ruled that the supply of Cotton seed oil cake for the cattle feed is exempted from Goods and Services Tax ( GST ) as per the Notification 02/2027. Justices Bhargav D Karia and Justice Niral R Mehta ruled that the supply of cotton seed oil cake is exempt from GST as cattle feed, effective from July 1, 2017. The court quashed the earlier orders of the Adjudicating Authority and Appellate Authority, thereby upholding the right to exemption. To Read the full text of the Order CLICK HERE IGST on Ocean Freight cannot be Levied on FOB Transactions also: Gujarat HC Draws on Mohit Mineral’s Precedent in Ruling BLA COKE PVT. LTD vs UNION OF INDIA & ORS. CITATION:   2024 TAXSCAN (HC) 2215 The Gujarat High Court has held that Integrated Goods and Services Tax ( IGST ) on ocean freight cannot be levied on Free on Board ( FOB ) transactions also, drawing on decision with the precedent set in the Mohit Minerals Pvt. Ltd. case by the Supreme Court. Gujarat HC quashed the impugned recovery order from the GST authorities, allowing the petitioner’s claim for IGST refund and establishing a clear legal precedent against the levy of IGST on ocean freight for FOB transactions.

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