Top Stories Annual Digest 2024: Supreme Court and High Court Cases on Taxation [Part 8] A Round-Up of all the Supreme Court and High Court Tax Decisions in 2024 By Manu Sharma – On December 16, 2024 12:33 pm – 25 mins read This annual round-up analytically summarizes the key Direct and Indirect Tax Judgments of the Supreme Court and all High Courts of India reported at Taxscan.in during 2024. Absence of Figures in substantiated by Accounts Maintained: Kerala HC confirms Demand of Luxury Tax BETHSAIDA HERMITAGE & TOURISM (P) LTD vs STATE TAX OFFICER (LT) CITATION:   2024 TAXSCAN (HC) 358 A Division Bench of the Kerala High Court confirmed demand of luxury tax in the absence of figures substantiated by accounts maintained by the assessee, Bethsaida Hermitage & Tourism (P) Ltd. A Division Bench of Dr Justice AK Jayasankaran Nambiar and Dr Justice Kauser Edappagath observed that “It is based on the submissions of the assessee himself and the figures declared by the assessee that the said turnover was subjected to tax under the Kerala Tax on Luxuries Act.

In the absence of any figures substantiated by the accounts maintained by the assessee, produced at any stage before the authorities below, we see no reason to doubt the correctness of the decision of the Tribunal confirming the demand of tax under the said head.” “We are of the view that if the petitioner has any grievance regarding the correctness of the said order of the assessing authority, to the extent it does not adhere to the directions of the Tribunal in the order, it is for him to agitate the same before the appellate authority, on merits. Thus, without prejudice to the last-mentioned liberty reserved to the petitioner, we dismiss this OP ( TAX ) as devoid of merit.” Deletion of Addition on Submission of Proper Cash Book: SC dismisses SLP filed by Income Tax Dept PR. COMMISSIONER OF INCOME TAX GANDHINAGAR vs OM SHREE NAGRAJ GINNING FACTORY CITATION:   2024 TAXSCAN (SC) 168 The Supreme Court of India dismissed a special leave petition ( SLP ) filed by the Income Tax Department in the challenge regarding the deletion of addition on submission of proper cash book. The SLP arose out of impugned final judgment and order dated 27-11-2017 in ITA No. 923/2017 passed by the High Court of Gujarat at Ahmedabad. A Two Judge Bench of the Supreme Court of Justice Pamidighantam Sri Narasimha and Justice Aravind Kumar observed that “Delay in the matters is condoned.

Having heard the counsel for the petitioner(s), we are not inclined to interfere. Hence, the special leave petitions are dismissed.” Notice of Assessment Order Communicated via Email: Kerala HC dismisses Writ Petition The Kerala High Court dismissed a writ petition as notice of assessment order communicated via email given to the Income Tax Department for communication purposes. The present writ petition has been filed by the petitioner who is an assessee under the provisions of the Income Tax Act, 1961. Against the assessment orders for the assessment years 2011-12 to 2014-15, the petitioner had filed appeals. A Single Bench of Justice Dinesh Kumar Singh observed that “The petitioner had received the communications in respect of the appeal against the assessment order for the assessment year 2017-18 on the e-mail ‘middleeast132@gmail.com’ and petitioner has also submitted response to the communication sent by the Department.”

“Therefore, I am of the view that when the petitioner himself has given multiple e-mail ids and petitioner has responded to the notice issued on e-mail id ‘middleeast132@gmail.com’ on which the several communications for hearing of the appeal were issued, I find the stand of the petitioner not tenable and, therefore, the writ petition is dismissed” the Bench noted. Section 64 A of Sale of Goods Act is not Applicable to Anti Profiteering Provisions in CGST Act: Delhi HC RECKITT BENCKISER INDIA PRIVATE LIMITED vs UNION OF INDIA CITATION:   2024 TAXSCAN (HC) 354 A division bench of the Delhi High Court has held that Section 64A of Sale of Goods Act has no applicability to the obligation under Section 171 of the Central Goods and Services ( CGST ) Act. The assessee(s) contended that the levy of penalty and interest cannot be ordered in the absence of corresponding specific substantive provisions under the CGST Act. They submitted that the consequences of the breach of Section 171 of CGST Act should have been provided for in the first instance in the CGST Act itself and such wide and uncontrolled powers could not have been conferred on National Anti-profiteering Authority(NAA) under Rules 127 and 133 of CGST Rules, 2017.

The assessee further contended that they were deserving of tax exemption under provisions of section 64 A of Sale of Goods Act. The bench further observed that tax reduction is given by sacrificing tax revenue and hence the Governments are legally competent to direct the suppliers to pass on the benefit of such tax reduction to the consumers after its notification. Any contract made in violation of public policy of passing on the benefit would be void. Allegation of Forged Form 15CA/CB Certificate does not amount to Money Laundering Offence: Delhi HC grants Anticipatory Bail to CA AMIT AGGARWAL vs DIRECTORATE OF ENFORCEMENT CITATION:   2024 TAXSCAN (HC) 352 The Delhi High Court granted anticipatory bail to a Chartered Accountant ( CA ) and observed that the allegation of forged Form 15CA/CB Certificate does not amount to a Money Laundering Offence. The applicant filed the bail application under section 438 of The Code of Criminal Procedure, 1973 ( the Code ) for the grant of anticipatory bail registered under sections 3 and 4 of The Prevention of Money Laundering Act, 2002 ( PMLA ). The counsel for the petitioner argued that the twin conditions as per section 45 of PMLA are not applicable as the petitioner is a sick and infirm person and has already undergone repeated kidney surgeries and requires constant medical supervision and primarily relied upon Kewal Krishan Kumar ( supra ).

The medical records/documents submitted by the petitioner reflect that the petitioner is suffering from various ailments including renal problem which requires constant medical treatment. Dr Justice Sudhir Kumar Jain observed that including incriminating material against the petitioner which are the statements made by co-accused/witness under section 50 of PMLA and the fact that their evidentiary value can be tested at the stage of trial, no generation of “proceeds of crime‟ from criminal activity and the petitioner being a sick and infirm person. Further held that “The petitioner, in case of arrest, shall be released on bail on furnishing personal bond in the sum of Rs.1,00,000/- with one surety of the like amount to the satisfaction of the concerned Investigating Officer or any other authorized person under certain conditions.” AO cannot Re-open Assessment to Remedy Error Resulting from Oversight in Assessment Proceeding: Bombay HC Emkay Global Financial Services Limited vs Assistant Commissioner of Income Tax CITATION:   2024 TAXSCAN (HC) 351 In a recent decision, the Bombay High Court observed that the Assessing Officer ( AO ) cannot re-open assessment to remedy error resulting from oversight in assessment proceeding. The petitioner had filed on 29th September 2015, its return of income for AY 2015-16. Petitioner declared income of ‘Nil’.

An assessment under Section 143(3) of the Income Tax Act was made and an assessment order dated 14th December 2017 came to be passed determining Petitioner’s total income at Rs.58,96,900/-. The petitioner thereafter received the impugned notice dated 31st March 2021. Petitioner filed its objections vide letter dated 6th January 2021. Petitioner’s objections came to be rejected by the impugned order dated 25th March 2022. A Division Bench comprising Justice Kamal Khata and Justice KR Shriram observed that “A bare perusal of the reasons recorded would show that there has been no failure on the part of Petitioner to truly and fully disclose material facts. Therefore, it is absolutely clear that the entire basis for forming a reason to believe there was escapement of income is from the records filed by Petitioner with return of income.” “Once all the primary facts are before him, he requires no further assistance by way of disclosure. It is for him to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn.

If from primary facts, more inferences than one could be drawn, it would not be possible to say that the assessee should have drawn any particular inference and communicated it to the assessing authority” the Court held. Default committed by Supplier: Gauhati HC stays SCN seeking Reversal of ITC SURYA BUSINESS PRIVATE LIMITED vs THE STATE OF ASSAM CITATION:   2024 TAXSCAN (HC) 350 The Gauhati High Court stayed the operation of a show cause notice ( SCN ) seeking reversal of input tax credit ( ITC ) as there was default committed by the supplier. The petitioner in this writ petition has challenged a Show Cause Notice dated 11.01.2024 issued under Section 73[1] read with Section 50 of the Assam GST Act, 2017, whereby the petitioner was called up to show cause within 30 [ thirty ] days from the date of receipt of Show Cause Notice as to why an amount of Rs. 27,25,503/- [ SGST Rs. 11,26,329.00, CGST Rs. 11,26,329.00 and IGST Rs. 4,72,845.00 ] should not be recovered from the petitioner being the Input Tax Credit [ ITC ] excess claimed for the period: 2018-2019 plus interest and penalty. A Single Bench of Justice Manish Choudhury observed that “The matter would require further examination. As sought by the counsel for the parties, list the case on 22.02.2024.

Having regard to the submissions of the learned counsel for the petitioner, it is observed that the respondents shall not act upon the impugned Show Cause Notice dated 11.01.2024 till the next date of listing.” Relief to Console Shipping Services India: Delhi HC allows Demand of Interest M/S CONSOLE SHIPPING SERVICES INDIA PVT. LTD vs UNION OF INDIA THROUGH SECRETARY CITATION:   2024 TAXSCAN (HC) 311 A two judge bench of the Delhi High Court allowed the demand of interest on the delayed carry forward of CENVAT credit towards assessee by Revenue. The bench instructed revenue to take necessary steps to pay the delayed carry forward of CENVAT credit in compliance with the law. The two judge bench comprising Sanjeev Sachdeva and Ravinder Dudeja Instructed the Revenue to take necessary steps to pay delayed carry forward of CENVAT credit in compliance with the law.

The assessee was represented by N K Sharma. Revenue was represented by Ruchir Mishra, Mukesh Kumar Tiwari and Reba Jena Mishra. GST Refund Rejected without considering Submissions: Delhi HC sets GST Order which found to be Cryptic GS EXIM INTERNATIONAL LLP vs COMMISSIONER, CENTRAL EXCISE / (GST) APPEALS CITATION:   2024 TAXSCAN (HC) 362 The Delhi High Court set aside the order rejecting the Goods and Service Tax (GST) refund which was made Without Considering Submissions. It was observed that the order is cryptic as the reasoning does not emanate from the order and there is no specific consideration of the factual matrix or the contentions of the petitioner. A division bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja observed that the order is cryptic the reasoning does not emanate from the order and there is no specific consideration of the factual matrix or the contentions of the petitioner in the Order-in Appeal.

The Court set aside the appeal and restored the record of the Appellate Authority. The Appellate Authority shall decide the appeal afresh and pass a speaking order after giving an opportunity for personal hearing to the petitioner. Multiple Email IDs used for ITR and Appeal Filing, Alleged Communication Failure by Appellate Authority: Kerala HC dismisses Writ Petition MR. SHAM BASHEER vs THE COMMISSIONER OF INCOME TAX CITATION:   2024 TAXSCAN (HC) 359 The Kerala High Court dismissed the writ petition after determining that the petitioner’s stand was not valid. The petitioner utilized multiple email IDs for submitting Income Tax Returns ( ITR ) and appeals, alleging that the appellate authority did not provide a hearing opportunity and neglected to communicate the order to the petitioner. The petitioner, an assessee under the Income Tax Act, 1961, filed a writ petition challenging assessment orders for the years 2011-12 to 2014-15. Alleging a lack of opportunity for a hearing and non-receipt of communication from the appellate authority, the petitioner sought redress. Justice Dinesh Kumar Singh, while rendering judgment, noted that that when the petitioner himself has given multiple email ids and petitioner has responded to the notice issued on e-mail id ‘middleeast132@gmail.com’ on which the several communications for hearing of the appeal were issued and the bench found that the stand of the petitioner is not tenable and, therefore, the writ petition was dismissed. GST Refund Rejected without considering Submissions:

Delhi HC sets GST Order which found to be Cryptic GS EXIM INTERNATIONAL LLP vs COMMISSIONER, CENTRAL EXCISE / (GST) APPEALS CITATION:   2024 TAXSCAN (HC) 362 The Delhi High Court set aside the order rejecting the Goods and Service Tax (GST) refund which was made Without Considering Submissions. It was observed that the order is cryptic as the reasoning does not emanate from the order and there is no specific consideration of the factual matrix or the contentions of the petitioner. A division bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja observed that the order is cryptic the reasoning does not emanate from the order and there is no specific consideration of the factual matrix or the contentions of the petitioner in the Order-in Appeal. The Court set aside the appeal and restored the record of the Appellate Authority.

The Appellate Authority shall decide the appeal afresh and pass a speaking order after giving an opportunity for personal hearing to the petitioner. DVAT Registration Credentials Misused by Third Person for availment ITC under GST Act: Delhi HC Stays SCN AAKASH GUPTA vs COMMISSIONER OF DELHI GOODS AND SERVICES TAX & ORS. CITATION:  2024 TAXSCAN (HC) 361 The Delhi High Court stayed the Show Cause Notice ( SCN ), involving allegations of wrongful use of Delhi Value Added Tax ( DVAT ) credentials for availing Input Tax Credit ( ITC ) under the Central Goods and Services Act ( CGST ), 2017 by third person. The petitioner, Aakash Gupta has challenged a Show Cause Notice dated 27.02.2023, asserting that they never applied for migration to the GST Scheme but were accused of availing ITC. Considering the request submitted by the Respondent No. 3’s counsel,  the bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja adjourned further proceedings on the Show Cause Notice until 21.02.2024.

During this period, the proceedings on the Notice will remain stayed, allowing both parties to gather and present necessary evidence. Software Firms that Purchase Computer Software from Foreign Software Suppliers exempted from Deducting TDS: SC dismisses SLP COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION 2Petitioner(s) vs MICROSOFT CORPORATION CITATION:   2024 TAXSCAN (SC) 170 The Supreme Court of India dismissed a special leave petition ( SLP ) in the challenge regarding the judgment on software firms that purchase computer software from foreign software suppliers exempted from deducting TDS. The Court noted that the issue raised by the Revenue in the present special leave petition is covered against them vide judgment dated 02.03.2021 in the case of Engineering Analysis Centre of Excellence Private Limited vs. The Commissioner of Income Tax & Anr. A Two-Judge Bench of Justice Sanjiv Khanna and Justice Dipankar Datta observed that “Recording the aforesaid, the special leave petition is dismissed, as the same is covered by the said decision of this Court. In case the review petition on the issue raised in the present special leave petition is allowed, it will be open to the petitioner(s) to get the present special leave petitions revived.”

Monetary Limits for Filing of Income Tax Appeals by Department: SC dismisses Revenue Appeal w.r.t low Tax Effect COMMISSIONER OF INCOME TAX vs JAGSON INTERNATIONAL LTD 2024 TAXSCAN (SC) 173 The Supreme Court while observing the monetary limits for filing of income tax appeals by the department dismissed the revenue appeal with respect to the low tax effect. The aforementioned appeal, filed by the revenue concerning the case involving Jagson International Ltd., saw Senior Counsel Mr. Arijit Prasad representing the appellant(s). Mr. Prasad suggested that “considering the low tax effect, as per the Notification dated 08.08.2019 at Instruction No.17 of 2019, these appeals could be resolved.” The division bench of the supreme court comprising B.V. Nagarathna and  Sanjay Kumar  dismissed the revenue appeal with respect to the low tax effect. Constitutional Validity of GST Anti Profiteering Provisions: Supreme Court issues Notice to Centre The Supreme Court issued a notice to the central government on Monday, seeking a response in a case challenging the constitutional validity of anti-profiteering provisions under the Goods and Services Tax Act.

A three-judge bench, led by Chief Justice of India DY Chandrachud, has agreed to hear the appeal arising out of an order of the Delhi High Court that upheld the constitutional validity of these provisions. The High Court acknowledged the possibility of instances where there might be arbitrary exercises of power under the anti-profiteering mechanism. However, it emphasized that the remedy for such cases is to set aside the order on its merits rather than striking down the provision itself, which vests such power in the authority. Formation of Trust for Compliance of CSR Requirements not Reason for Denying Registration u/s 12AA of Income Tax Act: SC condones Delay of 265 Days THE COMMISSIONER OF INCOME TAX vs MADHAV HELPING HANDS FOUNDATION 2024 TAXSCAN (SC) 174 The Supreme Court condoned delay of 265 days in the challenge regarding the judgment that the formation of trust for compliance of corporate social responsibility ( CSR ) requirements not reason for denying registration under Section 12AA of the Income Tax Act, 1961. The Punjab and Haryana High Court in The Commissioner of Income Tax ( Exemptions ) Chandigarh Vs. M/s. Nanak Chand Jain Charitable Trust, Gharaunda, Karnal upheld the order of the Income Tax Appellate Tribunal ( ITAT ) observed that “While hearing an appeal filed by M/s Nanak Chand Jain Charitable Trust, Delhi bench of Income Tax Appellate Tribunal ( ITAT ), last week, held that the registration under section 12AA of the Income Tax Act 1961 cannot be denied to a trust when it is created for the purpose of carrying out Corporate Social Responsibility ( CSR ) activities.”

Challenge on Disallowance u/s 14A of Income Tax Act to be restricted to exempt Income Earned: SC Condones delay in SLP filed by Income Tax Dept THE PR. COMMISSIONER OF INCOME TAX vs GMR ENTERPRISES PVT. LTD 2024 TAXSCAN (SC) 175 The Supreme Court condoned delay in special leave petition ( SLP ) filed by Income Tax Department in the matter regarding a challenge on disallowance under Section 14A of the Income Tax Act, 1961 to be restricted to exempt income earned.The SLP arose out of the impugned final judgment and order dated 13-03-2023 in ITA No. 175/2022 passed by the High Court of Karnataka at Bengaluru. A Two-Judge Bench of Justice Abhay S Oka and Justice Ujjal Bhuyan observed that “Application seeking exemption from filing certified copy of the impugned order is allowed. Delay condoned. Issue notice.” Time Limit on GST Input Tax Credit u/s 16(4) CGST Act: Supreme Court issues Notice to Revenue The Supreme Court of India has taken up the challenge to the time limit imposed for availing Goods and Services Tax ( GST ) Input Tax Credit ( ITC ) under Section 16(4) of the Central Goods and Services Tax Act, 2017. The Supreme Court admitted the Special Leave Petitions and issued notices to the respondents, signaling the initiation of a thorough judicial examination of the issue. Alongside admitting the SLPs, the Supreme Court has issued notice on the interim reliefs as well.

Software Firms that Purchase Computer Software from Foreign Software Suppliers exempted from Deducting TDS: SC dismisses SLP COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION 2Petitioner(s) vs MICROSOFT CORPORATION 2024 TAXSCAN (SC) 170 The Supreme Court of India dismissed a special leave petition ( SLP ) in the challenge regarding the judgment on software firms that purchase computer software from foreign software suppliers exempted from deducting TDS. A Two-Judge Bench of Justice Sanjiv Khanna and Justice Dipankar Datta observed that “Recording the aforesaid, the special leave petition is dismissed, as the same is covered by the said decision of this Court. In case the review petition on the issue raised in the present special leave petition is allowed, it will be open to the petitioner(s) to get the present special leave petitions revived.” Deletion of Addition on Submission of Proper Cash Book: SC dismisses SLP filed by Income Tax Dept PR. COMMISSIONER OF INCOME TAX GANDHINAGAR vs OM SHREE NAGRAJ GINNING FACTORY 2024 TAXSCAN (SC) 168 The Supreme Court of India dismissed a special leave petition ( SLP ) filed by the Income Tax Department in the challenge regarding the deletion of addition on submission of proper cash book. A Two Judge Bench of the Supreme Court of Justice Pamidighantam Sri Narasimha and Justice Aravind Kumar observed that “Delay in the matters is condoned. Having heard the counsel for the petitioner(s), we are not inclined to interfere. Hence, the special leave petitions are dismissed.” Claim submitted by RP under CIRP with Proof cannot be Overlooked on mere submission in Wrong Form:

Supreme Court GREATER NOIDA INDUSTRIAL DEVELOPMENT AUTHORITY vs PRABHJIT SINGH SONI & ANR 2024 TAXSCAN (SC) 172 The Supreme Court held that the claim submitted by the Resolution Professional ( RP ) under the Corporate Insolvency Resolution Process ( CIRP ) with proof cannot be overlooked on mere submission in the wrong form. Setting aside the aforesaid findings, the Bench Comprising Chief Justice DY Chandrachud and Justice JB Pardiwala and Justice Manoj Misra observed that the Form in which a claim is to be submitted is directory in nature, and the claim cannot be rejected just because it was submitted in different form. Supreme Court dismisses Appeal of Income Tax Department on ground of Low Tax Effect COMMISSIONER OF INCOME TAX vs JAGSON INTERNATIONAL LTD 2024 TAXSCAN (SC) 173 A two-judge bench of the Supreme Court dismissed the appeal on the ground of low tax effect as being covered by the Circular No. 17 of 2019 issued by the Department of Revenue, Ministry of Finance. The two-judge bench of the Supreme Court comprising Justice B V Nagarathna and Justice Sanjay Kumar Court bench comprising dismissed the appeal on the ground of low tax effect Variable Licence Fee paid annually by Telecommunication Companies to DOT is Capital Expenditure: SC dismisses Review Petition BHARTI HEXACOM LTD vs COMMISSIONER OF INCOME TAX 2024 TAXSCAN (SC) 176 The Supreme Court dismissed a review petition, challenging the judgment wherein it was held that variable licence fee paid annually by telecommunication companies to DOT is capital expenditure.

The review petition arose out of the impugned final judgment and order dated 16-10-2023 in C.A. No.11128/2016 passed by the Supreme Court of India. A Two-Judge Bench of Justice BV Nagarathna and Justice Ujjal Bhuyan observed that “Application for oral hearing is rejected. The Review Petition is dismissed in terms of the signed order.” Restriction to Travel Abroad based on Charge Sheet under Customs Act: Delhi HC directs to Expedite Hearing on Release of Passport for Pursing Studies Abroad AMAN JAIN vs CUSTOMS 2024 TAXSCAN (HC) 403 The Delhi High Court directed the special judge to expedite the hearing on an application seeking the release of passport concerning the urgency of traveling abroad to pursue studies. The petitioner was restricted from traveling abroad based on the charge sheet filed under the Customs Act, 1962. Justice Navin Chawla disposed of the petition by setting aside the Impugned Order passed by the Special Judge. However, the petitioner is granted liberty to file a fresh application before the  Special Judge to seek release of his passport. Gold Dore Bars Found to be Restricted or Prohibited at Time of Import can still be Subject to Provisional Release: Delhi HC Dismisses Customs Appeal  PRINCIPAL COMMISSIONER OF CUSTOMS vs TASHA GOLD PVT. LTD 2024 TAXSCAN (HC) 370 The Delhi High Court dismissed the writ petition as the issue on the provisional release of confiscated gold dore bars is factual and cannot be decided by the High Court. The Court upheld the observation of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) that even if the goods are found to be restricted or prohibited at the time of import would still be subject to provisional release, would not amount to expression of opinion and is held to be restricted.

A division bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja found that the issue is purely factual and no substantial question of law arises for consideration. The Court dismissed the appeal. Delhi HC directs Release of passport surrendered before custom department involved in NDPS crime to pursue higher studies in Canada AMAN JAIN vs CUSTOMS 2024 TAXSCAN (HC) 369 The Delhi High Court, allowed application for release passport which was surrendered before custom department in Narcotic Drugs Psychotropic Substances ( NDPS )crime for pursue higher studies in canada The bench observed that the “Special Judge seems to have simply accepted the submission of the learned counsel for the respondent, who was appearing therein, that as the brother of the petitioner has made various communications with drugs traffickers located outside India, the petitioner may hamper the investigation, however, as claimed by the  counsel for the petitioner, no material in this regard was placed before the Special Judge.”

After analyzing the facts and arguments of both parties, a single  bench of Justice Navin Chawla allowed the Bail application directed to release the passport surrendered before the customs department involved in Narcotic Drugs Psychotropic Substances ( NDPS ) crime to pursue higher studies in Canada. E-filing of GST Appeals: No Requirement to Upload Self-Certified Copy u/r 108, rules Allahabad HC VISIBLE ALPHA SOLUTIONS INDIA PRIVATE LIMITED vs COMMISSIONER, CGST APPEALS 2024 TAXSCAN (HC) 371 The Allahabad High Court, in a recent ruling, has provided significant clarity on the electronic filing of appeals under Section 107 of the Central Goods and Services Tax Act, 2017, coupled with the provisions outlined in Rule 108 of the Central Goods and Services Tax Rules, 2017. Justice Shekhar B. Saraf, presiding over the case, provided a thorough analysis in the court’s ruling. The judge highlighted that upon reviewing the impugned order, it was evident that the appeal was electronically filed within the stipulated three-month period as per Section 107. Importantly, the judge emphasized a literal interpretation of the first proviso to Rule 108, concluding that the first and second provisos would not apply in this scenario. Govt of India can Assign SFIO an Ongoing Investigation u/s 210 of Companies Act, 2013 for further Probe:

Karnataka HC EXALOGIC SOLUTIONS PRIVATE LIMITED vs THE DIRECTOR, SERIOUS FRAUD INVESTIGATION OFFICE 2024 TAXSCAN (HC) 372 A Karnataka High Court Single Bench delivered a significant blow to Exalogic, a corporate entity where the Daughter of Kerala CM serves as a director. The court ruled that initiation of an investigation under Section 210 of the Companies Act 2013 doesn’t strip the Government of India of its authority to assign the probe to the Serious Fraud Investigation Office ( SFIO ) under Section 212 of the Companies Act. The Karnataka High Court highlighted that Section 210 permits either interim or final reports and affirmed the government’s right to entrust the investigation to the SFIO based on emerging information during the Section 210 investigation. Self-Certified Copy of Order under Challenge not Required for appeals filed Electronically u/r 108 of CGST Rules: Allahabad HC VISIBLE ALPHA SOLUTIONS INDIA PRIVATE LIMITED vs COMMISSIONER, CGST APPEALS 2024 TAXSCAN (HC) 371 In a major ruling the Allahabad High Court observed that self-certified copy of order under challenge not required for appeals filed electronically under Rule 108 of the Central Goods and Services Tax Rules, 2017 (CGST Rules).

A Single Bench of Justice Shekhar B. Saraf observed that “Upon a perusal of the impugned order, it clearly appears that the appeal was electronically filed within the time permitted, that is, three months as per Section 107 of the Central Goods and Services Tax Act, 2017. Furthermore, the first and second proviso to Rule 108 of the CGST Rules would not apply, as is clear from the literal interpretation of the first proviso itself.” Government should collect Taxes like Honeybee, Without Disturbing Petals: Allahabad HC quashes Penalty Order against Hawkins Cookers M/S Hawkins Cookers Limited vs State Of U.P. And 2 Others 2024 TAXSCAN (HC) 376 The Allahabad High Court quashed penalty order against Hawkins Cookers, quoting the famous words from Chanakya’s Arthashastra that “Governments should collect taxes like a honeybee collects honey from a flower without disturbing its petals”. A Single Bench of Justice Shekhar B. Saraf observed that “In the present case, it is palpably clear that the goods were accompanied with the relevant invoices, bilty documents and the e-way bills. It is to be noted that the invoices and bilty documents also contain the correct address of the destination and only four out of eight of the e-way bills had the incorrect address. Even this incorrect address was the registered office of the petitioner.

In such a case, no presumption to evade tax arises at all. The mere technical error committed by the petitioner cannot result in imposition of such harsh penalty upon the petitioner.” Failure to File reply to SCN will not Take Away Right of Personal Hearing u/s 75(4) of UPGST Act: Allahabad HC Ms Atlas Cycles Haryana Ltd vs State of U.P 2024 TAXSCAN (HC) 375 The Allahabad High Court ruled that the failure to file reply to show cause notice ( SCN ) will not take away right of personal hearing under Section 75(4) of the Uttar Pradesh Goods and Service Tax Act, 2017 ( UPGST Act ). A Division Bench of Justices Manjive Shukla and S.D. Singh observed that “In that regard, it has also been stated that the petitioner’s business operations are lying closed since 2020. Therefore, for reasons of disruption of business operation, petitioner committed a mistake in not responding the notice, within time. In view of the above noted facts and reasons, we find no useful purpose may be served in keeping this petition pending or calling counter affidavit at this stage or to relegate the present petitioner to the forum of alternative remedy. The order impugned has been passed contrary to the mandatory procedure.

The deficiency of procedure is self apparent and critical to the out come of the proceedings.” Non Forwarding of Seized Material as early as possible is Violative of mandatory provision u/s 19 of PMLA Act: Punjab and Haryana HC Dilbag Singh @ Dilbag Sandhu vs Union of India and another 2024 TAXSCAN (HC) 380 The Punjab and Haryana High Court held that non-forwarding of seized material as early as possible is Violative of the mandatory provision under section 19 of the Prevention of Money Laundering Act, 2002 (PMLA Act, 2002). A single bench of Justice Vikas Bahl observed that there is total non-compliance of Section 19(2) since there is neither any reference to the compliance of the said provision in the application under Section 65 of the 2002 Act read with Section 167 CrPC filed by the respondent authorities seeking custody of the petitioners to the Directorate of Enforcement nor is there any such mention of its compliance in the grounds of arrest, in the personal search memo, arrest memo, arrest order or even panchnama. Kerala HC directs to open GST Portal for Filing Return based on Order from GST Appellate Authority J. KUMAR vs THE STATE TAX OFFICER 2024 TAXSCAN (HC) 377 The Kerala High Court directed the department to open the Good and Service Tax ( GST ) portal for filing returns based on an order from the GST appellate authority. Counsel for the petitioner submitted that despite the restoration of the registration by the Appellate Authority, the petitioner is not able to file his returns as the portal is still blocked.

The single bench comprising Justice Dinesh Kumar Singh directed the respondents to open the GST portal to the petitioner for filing his returns, within ten days. The court disposed of the writ petition. Reopening of assessment notice liable to be Quashed if Barred by Limitation Period u/s 149 of Income Tax Act: Jharkhand HC M/s. Sevensea Vincom Private Limited vs The Principal Commissioner of Income Tax 2024 TAXSCAN (HC) 374 In a recent decision, the Jharkhand High Court ruled that reopening of assessment notice liable to be quashed if barred by limitation period under Section 149 of the Income Tax Act, 1961. A Division Bench of Justices Rongon Mukhopadhyay and Deepak Roshan observed that “If we peruse to the exception which has been carved out by the Hon’ble Apex Court in Whirlpool Corporation, the instant writ application is maintainable as the order or the proceedings are wholly without jurisdiction, inasmuch as, notice under Section 148 of the Income Tax Act, 1961 is normally three years from the end of the relevant assessment year ( in this case A.Y 2016-17 ) and extendable beyond 3 years till 10 years provided the income which has escaped assessment is Rs. 50,00,000/- or more and the permission of the concerned authority is taken and in the instant case it is evident from the notice dated 30.05.2022, under Section 148 A (b) of the Income Tax Act, 1961, which clearly indicates that the alleged income, which has escaped assessment, is only Rs. 39,21, 450/-.”

Proceedings u/s 148 of Income Tax Act to decide whether Unaccounted Transactions and Alleged Escaped Income shall be Exempt: Kerala HC ST. JOHN THE BAPTIST CHURCH vs THE INCOME TAX OFFICER (EXEMPTION)   2024 TAXSCAN (HC) 379 The Kerala High Court observed that the question to be decided in proceedings under Section 148 of the Income Tax Act, 1961 is whether unaccounted transactions and alleged escaped income would merit exemption. A Division Bench of Dr Justice AK Jayasankaran Nambiar and Justice VG Arun observed that “In the appeal before us, it is the contention of K.N.Sreekumaran, the counsel for the appellant, that the alleged escaped income, even if taken into account, would not attract any tax liability since the appellant enjoys an exemption in terms of Section 12AA of the Income Tax Act. We note, however, that the exemption under Section 11 read with Section 12AA of the Income Tax Act is one that is subject to certain conditions, and the question to be decided in the proceedings under Section 148 of the Income Tax Act is essentially as to whether the unaccounted transactions and the alleged escaped income would merit an exemption or not.”

Remedy of Statutory Appeal is available against Assessment Orders u/s 107 of CGST Act: Kerala HC dismisses Writ Petition M/S SARATHY CARS PRIVATE LTD vs THE STATE TAX OFFICER 2024 TAXSCAN (HC) 381 The Kerala High Court dismissed a writ petition as remedy of statutory appeal is available against assessment orders under Section 107 of the Central Goods and Service Tax Act, 2017 (CGST Act). A Single Bench of Justice Dinesh Kumar Singh observed that “There is remedy of statutory appeal against the orders impugned in this writ petition under Section 107 of the CGST/SGST Act, 2017. Petitioner, instead of resorting to the statutory remedy of appeal has approached this Court under Article 227 of the Constitution of India.” Initiation of Penalty Proceedings u/s 271A of Income Tax Act: Kerala HC directs Income Tax Dept to consider Stay Petitio M/S. WEXCO HOMES PRIVATE LTD vs THE ASSISTANT COMMISSIONER OF INCOME TAX 2024 TAXSCAN (HC) 383 The Kerala High Court directed the Income Tax Department to consider tax petition in the matter regarding the initiation of penalty proceedings under Section 271A of the Income Tax Act, 1961. A Single Bench of Justice Dinesh Kumar Singh observed that “At this stage, the petitioner has filed the stay petition recently before the Appellate Authority.

However, the petitioner has approached this Court seeking a direction to stay the demand.” Delhi HC upholds TDS Deduction on EDC u/s 194C of Income Tax Act on Real Estate Projects PURI CONSTRUCTIONS PRIVATE LIMITED vs ADDITIONAL COMMISSIONER OF INCOME TAX 2024 TAXSCAN (HC) 384 The batch of writ petitions assailed the action initiated by the respondents predicated upon a purported failure on the part of the writ petitioners to deduct tax on payments made to the Haryana Shahari Vikas Pradhikaran1 ( earlier known as the Haryana Urban Development Authority, for short ―HUDA‖ ) under Section 194C of the Income Tax Act, 1961. A Division Bench of Justices Yashwant Varma and Purushaindra Kumar Kaurav observed that “We negative the challenge raised in these writ petitions insofar as the invocation of Section 194C of the Income Tax Act is concerned and hold that EDC payments would be covered thereunder. For reasons recorded in the body of this judgment, we also turn down the challenge to the Clarification issued by the Central Board of Direct Taxes dated 23 December 2017.” Remedy of filing Appeal is Available once Request for Exemption from Payment of Customs Duty has been Declined: Kerala HC AVT MCCORMICK INGREDIENTS PRIVATE LIMITED vs THE COMMISSIONER OF CUSTOMS 2024 TAXSCAN (HC) 387 The Kerala High Court observed that the remedy of filing appeal is available once request for exemption from payment of customs duty has been declined.

A Single Bench of Justice Dinesh Kumar Singh observed that “In view thereof, this Court does not find that this writ petition is to be entertained when the final order has been passed on 25.01.2024 against which the remedy of appeal is provided under the Customs Act, 1962. Orissa HC condones Delay in invoking Proviso to Rule 23 of CGST Rules on Payment of Tax, Penalty and Interest M/s. Bijaya Kumar Singha vs State Tax Officer, CT & GST 2024 TAXSCAN (HC) 388 The Orissa High Court condoned delay in invoking proviso to Rule 23 of the Central Goods and Services Tax Rules, 2017 ( CGST Rules ) on payment of tax, penalty and interest. A Division Bench of Chief Justice Dr BR Sarangi and Justice MS Raman observed that “In that view of the matter, the delay in Petitioner’s invoking the proviso to Rule 23 of the Central Goods and Services Tax Rules ( CGST Rules ) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc. due and complying with other formalities, the Petitioner’s application for revocation will be considered in accordance with law.” No Applicability of Limitation Period of 3 Years u/s 149 (1)(a) of Income Tax Act when Income Escaped Assessment is More than Rs.50 lakhs: Kerala HC DAVIES MANUEL vs INCOME TAX OFFICER 2024 TAXSCAN (HC) 389 A Single Bench of the Kerala High Court observed that there is no applicability of limitation period of 3 years under Section 149 (1)(a) of the Income Tax Act, 1961 when income escaped assessment is more than Rs.50 lakhs.

The Court of Justice Dinesh Kumar Singh observed that “At the initial stage of enquiry of re-opening the assessment under Section 148A, the assessing authority has to satisfy itself that whether the income of the petitioner has escaped assessment and if the 3 years period has elapsed from the last date of relevant assessment year, whether the income which has escaped assessment is more than Rs.50,00,000/-. In the present case, income escaped assessment is allegedly more than Rs.50,00,000/- and therefore, the limitation period of 3 years provided under Section 149 (1)(a) has no applicability in the facts of the present case.” Setback for St. John The Baptist Church: Kerala HC refuses to intervene in proceeding initiated under Section 148 of Income Tax Act ST. JOHN THE BAPTIST CHURCH vs THE INCOME TAX OFFICER 2024 TAXSCAN (HC) 373 A division bench of the Kerala High Court has held that the exemption under Section 11 read with Section 12AA of the Income Tax Act is one that is subject to certain conditions, and the question to be decided in the proceedings under Section 148 of the Income Tax Act is essentially as to whether the unaccounted transactions and the alleged escaped income would merit an exemption or not. The bench observed that It is for the said examination on merits that the proceedings under Section 148 of the Income Tax Act have been initiated. The court refused to intervene with the proceedings initiated to ascertain the same.

The division bench comprising A.K.Jayasankaran Nambiar and V.G.Arun held that “ the exemption under Section 11 read with Section 12AA of the Income Tax Act is one that is subject to certain conditions, and the question to be decided in the proceedings under Section 148 of the Income Tax Act is essentially as to whether the unaccounted transactions and the alleged escaped income would merit an exemption or not. It is for the said examination on merits that the proceedings under Section 148 of the Income Tax Act have been initiated. At this stage, where what is impugned is Ext.P9 order under Section 148 A(d), we see no reason to interdict those proceedings at the instance of the appellant” Gujarat HC dismisses Writ Petition as on Failure to Prove no Satisfaction Note recorded by AO prior to Issuance of Notice u/s 153C of Income Tax Act SHYAMLAL RUPCHAND PARWANI vs THE ASSISTANT COMMISSIONER INCOME TAX 2024 TAXSCAN (HC) 390 The Gujarat High Court dismissed a writ petition as on failure to prove no satisfaction note recorded by the Assessing Officer ( AO ) prior to issuance of notice under Section 153C of the Income Tax Act, 1961. A Division Bench of Justices Sunita Agarwal and Aniruddha P Mayee observed that “Having noted the above submissions, we may record that it is not the case of the petitioner herein that no satisfaction note has been recorded independently by the Assessing Officer of the petitioner before proceeding under Section 153C of the Income Tax Act on receipt of the satisfaction note of the Assessing Officer of the searched person.

The copy of the satisfaction note though was not provided initially to the petitioner and the Assessing Officer has committed an error in forwarding the objection disposal order dated 02.12.2023 to the petitioner treating the communication dated 19.10.2023 as the communication of objection against the satisfaction note.” Order passed by PrCIT without considering Written Submissions: Kerala HC directs to pass Fresh Orders PORKULAM SERVICE CO-OPERATIVE BANK LIMITED vs PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX 2024 TAXSCAN (HC) 386 The Kerala High Court directed to pass fresh orders as the order was passed by the Principal Commissioner of Income Tax ( PrCIT ) without considering written submissions. A Single Bench of Justice Dinesh Kumar Singh observed that “The petitioner filed written submission on 03.11.2023. The impugned order has been passed without taking note of the fact that the petitioner had submitted written submission.

The order shows that neither the petitioner appeared in person nor submitted the written submission. Prima facie, the said finding is incorrect on the basis of the report.” Patna HC upholds order of Settlement Commission on Representation of Income Tax Dept and Existence of Rule 9 Report Principal Commissioner of Income Tax Central Patna vs The Union of India 2024 TAXSCAN (HC) 385  The Patna High Court upheld the order of the Settlement Commission on representation of Income Tax Dept and existence of Rule 9 Report. A Division Bench of Chief Justice K. Vinod Chandran and Justice Rajiv Roy observed that “It is specifically stated that the order under Section 245D(1) was passed on 24.11.2017 directing the application to be proceeded with. A report was called for from the Principal Commissioner of Income Tax under Section 245D(2B), which was received after the due date. Hence, Section 245D(2C) requires the application to be proceeded with in the absence of the report, which, as admitted in the supplementary counter affidavit, reached the Commission after the expiry of 30 days. Section 245D(3)(ii), however, requires an application referred to in sub-section (2D), allowed to be further proceeded with under that sub-section, to be proceeded with after calling for report from the Commissioner. The Rule 9 report with respect to the applicant was submitted by the office of the Commissioner, which has been dealt with by the Commission.” Clubbing of Income of Husband and Wife is to be decide by Appellate Authority: Kerala HC dismisses Writ Petition KUMARAN K.V vs STATE TAX OFFICER 2024 TAXSCAN (HC) 378 The Kerala High Court in a recent case held that the clubbing of income of husband and wife is to be decided by appellate authority and cannot be decided by the writ court.

The Court dismissed the appeal and upheld the order of the single judge.  The single judge of the High Court observed that the questions of whether these proprietorship concerns are the same and whether the turnover of these concerns could be clubbed together for assessment, etc., are disputed questions of fact, which cannot be adjudicated in a writ petition. Hence, the Single Judge dismissed the petition.