Top Stories Annual Digest 2024: Supreme Court and High Court Cases on Taxation [Part 4] 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 By Manu Sharma – On December 10, 2024 7:31 pm – 22 mins read 75% Gross Profit Earned from Indian Operations: Delhi HC upholds Direction of the AO to Adopt Attribution Rate of Revenue THE COMMISSIONER OF INCOME TAX vs TRAVELPORT GLOBAL DISTRIBUTION SYSTEMS B.V 2024 TAXSCAN (HC) 192 Delhi High Court upheld the direction of the Assessing Officer ( AO ) to adopt the attribution rate of revenue as 75% gross profit earned from Indian operations. A Division Bench comprising observed that “The coordinate bench in AY 2006-07, while dealing with ITA 301/2022, has sustained the said conclusion and gone on to hold that no substantial question of law arose for its consideration. It is this decision which was affirmed by the Supreme Court with the dismissal of the SLP, as noted hereinabove. Given this position, we are of the opinion that no substantial question of law arises for our consideration.”

Functional Dissimilarity between Companies and Assessee: Delhi HC upholds Order of ITAT Directing Exclusion of Comparables THE PR. COMMISSIONER OF INCOME TAX -4 vs HONEYWELL INTERNATIONAL ( INDIA) PVT. LTD. Delhi High Court upheld the order of the Income Tax Appellate Tribunal (ITAT) directing the exclusion of comparables as there was functional dissimilarity between the companies and the assessee. A Division Bench comprising Justices Rajiv Shakdher and Girish Kathpalia observed that “Having heard the counsel for the parties and perused the record, we may note that insofar as each of the comparables are concerned, the Tribunal has indeed reached a conclusion, albeit on facts, that there is functional dissimilarity between the respondent/assessee and the comparables. The finding of fact with regard to each of the comparables has been returned in the following paragraphs of the impugned order.” No Notice on Seizure of Goods u/s 110 (1) of Customs Act: Delhi HC directs Customs Dept to Release Seized Goods M/S SYM COMPANY vs PR. COMMISSIONER 2024 TAXSCAN (HC) 194 Delhi High Court directed the Customs Department to release the seized goods as no notice was served regarding the seizure of goods under Section 110(1) of the Customs Act, 1962. A Division Bench of Justices Sanjeev Sachdeva and Ravinder Dudeja observed that “In view thereof, the petition is disposed of directing the respondents to release the goods seized under the Bills of Entries No. 2143897 dated 05.10.2022 and 2994766 dated 21.10.2022 under seizure memorandum bearing DIN 20221274NE0000007961, within a period of one week from today.” Penalty u/s 27(4)  not Invokable in Absence of Findings of Wrong Availment of ITC: Madras HC T.V.Sundram Iyengar and Sons Limited vs The Assistant Commissioner (ST) Madras High Court has held that a 300% Penalty by invoking Section 27(2) of the Tamil Nadu Value Added Tax Act, 2006 (TNVAT) cannot be imposed when there are no findings regarding wrong availment of Input Tax Credit (ITC). A Single bench of Justice S Srimathy held that invoking section 27(4) read with 27(2) penalty cannot be imposed.

Moreover, the penalty cannot be imposed automatically. Some criminalities ought to be in existence to impose penalty and the framing of proof required for imposition of penalty is different from and much higher than i.e., required for framing the best Judgment demand assessment. The Court quashed the impugned order. Madras HC directs to Verify Certificate of Origin to Validate Import of Areca Nut M/s.Radha Industries vs Commissioner of Customs 2024 TAXSCAN (HC) 206 Madras High Court directed to verify the certificate of origin to validate the import of areca nut. It should be recognized that areca nuts have a limited shelf-life and the risk of contamination and deterioration of goods increases over time. A single bench of Justice Senthil kumar Ramamoorthy observed that if the respondents are directed to complete the verification process expeditiously and by enabling clearance against a bond if verification is not completed within the specified time limit. The first respondent was directed to conclude the verification within a maximum period of thirty days from the date of receipt of a copy of this order.  If the certificate is found to be genuine upon such verification, the goods shall be released without insisting on payment of duty.  On the other hand, if the certificate is found to be not genuine, it is open to the respondents to take further action by law. GST Registration Cannot be Cancelled Retrospectively solely for Non-Filing of GSTR For Some Period: Delhi HC RAJNI GUPTA PROPRIETOR OF GUPTA SALES CORPORATION vs PRINCIPAL COMMISSIONER STATE GST AND ANR 2024 TAXSCAN (HC) 207 Delhi High Court, while disposing of the writ petition, clarified the cancellation of Goods and Services Tax ( GST ) registration cannot be implemented retrospectively solely on the grounds of the taxpayer not filing the GST Returns ( GSTR ) for a certain period. The court highlighted the potential consequences of retrospective cancellation, affecting the input tax credit of the taxpayer’s customers. While refraining from delving into this aspect, the court suggested that the proper officer must consider such consequences before retrospectively cancelling GST registration. Importantly, the show cause notice on 01.09.2020 did not alert the petitioner to the possibility of retrospective cancellation, denying them the opportunity to object. Considering the above circumstances, the bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja modified the cancellation order, specifying that it shall take effect from 25.02.2019—the date of the petitioner’s initial application for registration cancellation. The ruling also clarified that authorities are not precluded from pursuing recovery of taxes, penalties, or interest in accordance with the law. Allegations of wrongful claim of ITC: Delhi HC directs to Expeditiously Pass Order M/S SHIV ENTERPRISES vs PRINCIPAL COMMISSIONER OF DEPARTMENT OF TRADE AND TAXES 2024 TAXSCAN (HC) 205 Delhi High Court directed the Appellate authority to expeditiously pass an order on allegations of wrongful claim of Input Tax Credit ( ITC ). The Goods and Service Tax (GST) registration was cancelled on the grounds of issuance of input tax credit without underlying sales of goods and services. A division bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja directed the Respondents to process the application expeditiously and pass appropriate orders on the same in accordance with law within six weeks from today.

Madras HC Quashes Order Cancelling GST Registration Passed Without Providing Opportunity to Hearing Mr.V.S.K. Traders & Services vs The Assistant Commissioner (ST) 2024 TAXSCAN (HC) 202 Madras High Court quashed the order cancelling Goods and Service Tax ( GST ) registration without providing an opportunity for a hearing. The respondents were directed to issue a fresh show cause notice under law within three weeks. In a single judge verdict Justice Senthilkumar Ramamoorthy observed that the whole process has been undertaken mechanically.  Since such an impugned order has resulted in great prejudice to the petitioner without the petitioner being provided a reasonable opportunity to respond, the impugned order calls for interference. The Court allowed the writ petition by quashing the order cancelling the petitioner’s GST registration. Relief to Lenovo: Madras HC directs to Refund GST Amount within 30 Days M/s.Lenovo (India) Pvt. Ltd vs The Joint Commissioner of GST 2024 TAXSCAN (HC) 203 The Madras High Court directed to Refund of the goods and service tax ( GST ) amount within 30 days. In a single judge verdict Justice Senthilkumar Ramamoorthy allowed writ petitions and the second respondent was directed to issue refund to the petitioner within a period of thirty days from the date of receipt of a copy of the order.  These matters are listed today “for compliance”. Delay occurred by Income Tax Dept to Refund Tax even After Assessee Requested to Enable SWIFT code and IBAN: Madras HC directs to Refund Within 2 Months Coda Global LLC vs The Deputy Commissioner of Income Tax 2024 TAXSCAN (HC) 197 Madras High Court directed to allow the refund within Two Months. The Income tax department delayed refunding tax even after the assessee requested to enable the SWIFT code and IBAN. A single bench of Justice Senthilkumar Ramamoorthy held that “If the delay is not attributable to the assessee, Section 244A provides for a refund at the rate of ½% per month or 6% per annum. The petitioner has provided a calculation memo in which credit has been given for interest already paid for the period running from 01.04.2021 to 31.03.2022. As regards the period subsequent thereto, the documents on record indicate that the petitioner endeavoured to input the SWIFT code and IBAN in April 2022. Therefore, the petitioner is entitled to interest for the period from 01.05.2022 until the date of receipt of refund.”

The court disposed of the writ petition by directing the respondents through the Central Processing Centre to pay interest on the sum of Rs.2,27,20,180/- at the rate specified in Section 244-A of the Income Tax Act from 01.05.2022 to 05.10.2023. TRAN Credit not allowed as Assessee Registered under KVAT cannot avail ITC under CGST: Kerala HC directs to File Statutory Appeal GOODYEAR INDIA LIMITED vs THE STATE TAX OFFICER The Kerala High Court directed to file a statutory appeal in a case where the TRAN Credit was not allowed as the assessee registered under Kerala Value Added Tax (KVAT) cannot avail of Input Tax Credit (ITC) under CGST Central Goods and Services Tax Act/State Goods and Services Tax Act, 2017. Justice Dinesh Kumar Singh disposed of the writ petition with liberty to the petitioner to file an appeal under Section 107 of the CGST/SGST Act before the appellate authority. The judge observed that the petitioner has the remedy of statutory appeal under the provisions of the CGST/SGST Act. Considering the availability of an alternate remedy of statutory appeal. Merely because Books of Account were available to AO not Reason for Triggering Reassessment Proceedings: Delhi HC KUEHNE+NAGEL PVT. LTD vs ADDL. COMMISSIONER OF INCOME-TAX 2024 TAXSCAN (HC) 195 Delhi High Court observed that merely because books of account were available to the Assessing Officer (AO) is not valid reason for triggering reassessment proceedings. A Division Bench comprising Justices Rajiv Shakdher and Girish Kathpalia observed that “In our view, this is a case which involves a change of opinion notwithstanding the provision referred to by the AO in his reasons to believe recorded on 05.02.2019. The arguments advanced by Mr Singh that merely because books of account were made available to the AO and he could have discovered material evidence had he been diligent could not be the reason for not triggering reassessment proceedings against the petitioner, does not find favour with us.” Insolvency Proceedings pending against Amrapali Group: Delhi HC directs Income Tax Dept to approach Court for Revival PR. COMMISSIONER OF INCOME TAX vs AMRAPALI SILICON CITY PVT. LTD 2024 TAXSCAN (HC) 193 Delhi High Court directed the Income Tax Department to approach the Court for revival as the insolvency proceedings are pending against Amrapali Group. A Division Bench comprising Justices Rajiv Shakdher and Girish Kathpalia observed that “Since more than one year has passed without definite information, we are inclined to close the instant appeals, with liberty to the appellant/revenue to approach the court for revival, albeit as per law, as and when they obtain clarity in the above-captioned matters.

Consequently, the pending applications concerning condonation of delay in re-filing the appeal (i.e., CM APPL. 60497/2023 in ITA 646/2023) shall stand closed.” Proposal of Cancellation of GST Registration due to non-compliance of GST Act: Delhi HC sets aside order Cancelling GST Retrospectively M/S EEN EEN SALES CORPORATION vs ASSISTANT COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX The Delhi High Court set aside the order cancelling the Goods and Service Tax( GST )registration due to non-compliance with the GST Act, 2017. The show cause notice or order is invalid as it doesn’t show the reason for cancellation. A division bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja set aside the show cause notice dated 03.08.2023 and the order of cancellation dated 15.09.2023. The GST registration of the petitioner is restored to its original number.  The petitioner shall file the requisite returns following the law. Addition of Rs. 23 Crores Without any Evidence: Madras HC quashes Addition of Income u/s 68 of Income Tax Act Sohan Raj Khanted Guvanthraj vs Commissioner of Income Tax 2024 TAXSCAN (HC) 200 Madras High Court quashed the addition of Rs. 23 Crores under section 68 of the Income Tax Act, 1961 as it was added without any evidence. The Court remanded the matter for reconsideration by the appellate authority. The Single bench of Justice Senthilkumar Ramamoorthy allowed the petition by quashing the impugned order and remanded the matter for reconsideration by the appellate authority. After providing a reasonable opportunity to the petitioner, the appellate authority is directed to dispose of the appeal by a reasoned order within a maximum period of four weeks from the date of receipt of a copy of the order. The petitioner is directed to extend full cooperation to ensure that the appeal is disposed of within the time limit specified above. GST Registration Cancellation Shall be Effective from Date of Show-Cause Notice: Delhi HC VARYAM DASS KHURANA (D) THROUGH LR SANDEEP KUMAR KHURANA vs COMMISSIONER OF GST 2024 TAXSCAN (HC) 208 Delhi High Court, while disposing the writ petition, has declared that the cancellation of Goods and Services Tax (GST) registration will be effective from the date of the Show Cause Notice (SCN).

The bench, consisting of Justice Vibhu Bhakru and Justice Amit Mahajan, directed that the order cancelling the registration would take effect from 18.05.2020, the date of the Show-Cause notice. This decision aligned with the petitioner’s claim that no business activities occurred thereafter. The court further clarified that this order did not preclude authorities from pursuing tax recovery or addressing statutory violations if any were found. Additionally, the ruling explicitly stated that it did not express an opinion on whether the petitioner was the legal heir or had any rights in the business of late Varyam Dass Khurana. Seized Foreign Currency: Delhi HC directs Customs Commissioner to release amount after realising Redemption Fine and Penalty OGULJEREN HAJYYEVA vs COMMISSIONER OF CUSTOMS 2024 TAXSCAN (HC) 210 Delhi High Court directed the Customs Commissioner to release amount after realising redemption fine and penalty on seizure of foreign currency. A Division Bench comprising Justice Ravinder Dudeja and Justice Sanjeev Sachdeva observed that “In view of the above, we find no justification for not releasing the money in terms of the Order-in-Original dated 28.01.2020. Petition is allowed with a direction to the respondent to release the remaining amount after realizing the redemption fine and penalty from the seized foreign currency within a period of two weeks from today” the Bench concluded. Fake PAN Card websites pose national level threat: Bombay HC directs to take down Scam Websites in Copyright Suit by UTIITSL  Bombay High Court has directed the Registrar of Domains to take down scam websites offering fake Permanent Account Number (PAN) Cards in a copyright infringement case by UTI Infrastructure Technology And Services Limited (UTIITSL). The Bombay High Court reportedly issued an ex-parte interim injunction after being convinced that the defendants’ conduct, involving illegal acts, infringed upon the plaintiff’s statutory rights under Common Law. The court found that both identified and unidentified entities engaged in fraudulent activities by imitating the plaintiff and its marks, leading to copyright infringement and passing off marks.The court directed specific defendants to remove unauthorized domains and websites. Additionally, it reportedly instructed the police and Cyber Crime Departments to provide necessary assistance in executing the interim order. Seizure of Vehicle without Notice, Transporting Goods affects Civil Rights of Transporter as Truck is Capital Asset of Transporter: Allahabad HC Akbar Ali Transport Services vs State of U.P. and Another 2024 TAXSCAN (HC) 213 Allahabad High Court held that the seizure of vehicle without notice transporting goods affects civil rights of transporter as truck is the capital asset of transporter. A Division Bench of Justice Saumitra Dayal Singh and Justice Manjive Shukla noted that “By virtue of the statutory law, the petitioner may not be entitled to release of the truck unless he deposits Rs. One lakh as provided under proviso-1 of Section 129 (6) of the Act.

In such facts, it appears that the petitioner is entitled to one opportunity of hearing before the authority to furnish his explanation and to establish the fact that there was no connivance of the petitioner or no active role played by the petitioner in the illegality that are attributed to the dealer viz-a-viz the goods being transported on the truck in question. At present, the penalty order does not appear to bring out any conduct of the petitioner as may indicate or establish collusion between the petitioner and the importing dealer M/s Royal India Enterprises.” The Bench held that the Truck being the valuable property and a capital asset of the transporter which is utilised to generate revenue/ income, we perceive valuable civil right of the petitioner having being adversely affected exparte and also provided certain conditions for the release of the vehicle. Erroneous Levy of GST on Course Fees: Delhi HC directs NBE to Refund collected Tax Amount ASSOCIATION OF DIPLOMATE OF NATIONAL BOARD DOCTORS & ANR vs NATIONAL MEDICAL COMMISSION & ORS. 2024 TAXSCAN (HC) 212 The Delhi High Court has directed the National Board of Examinations ( NBE ) to refund the Goods and Services Tax ( GST ) collected from candidates, citing the erroneous imposition of GST on course fees. The Delhi High Court Division Bench of Justices Vibhu Bakhru and Amit Mahajan observed that no further orders are required to be passed  in this regard except to restrain NBE from collecting any further GST pursuant to the said notification. The bench also urged the concerned GST authorities to process such applications as expeditiously as possible. The concerned hospitals, on receipt of the fund from the GST authorities, shall take immediate steps to refund the same to the candidates from whom the GST was collected. Industrial Units not to be Discriminated for Budgetary Support Based Turnover: Gauhati HC SHREE BALAJI ENTERPRISE vs UNION OF INDIA 2024 TAXSCAN (HC) 211 Gauhati High Court recently observed that industrial units not to be discriminated for budgetary support-based turnover. A Single Bench of Justice Soumitra Saikia observed that

“Under such circumstances when the avowed object of the budgetary support scheme is to provide financial support to those industries who were eligible to avail benefits under the NEIIPP, the exclusion of the petitioner units on the classification that they did not pay Central Excise Duty either because their annual turnovers were below the threshold limit of 1.5 crores or that they had produced items which were already exempted is based on fiction and cannot be permitted to be a ground to deny the benefits of budgetary support scheme. Such classification cannot be held to be a reasonable classification as it fails to achieve the object for which the classification is made, namely providing financial support to those industries availing benefits under the NEIIPP.” Non receipt of deficiency Memo: Delhi HC directs to expedite adjudication of GST Refund TRUTH FASHION vs COMMISSIONER OF DELHI GOODS AND SERVICES TAX ACT 2024 TAXSCAN (HC) 214 Delhi High Court directed to expedite adjudication of GST refund as the deficiency memo was not received. A Division Bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja observed that “In view of the above, the petition is disposed of granting liberty to the petitioner to approach this Court afresh in case need so arises. 6. Keeping in view the fact that the application for refund was submitted on 08.10.2023 for the subject period, respondents are directed to expedite the adjudication of the application and endeavour to disposed it of within four weeks from today.” Unable to Claim ITC due to Defect in Return Filed: Madras HC directs to approach Statutory Authority Peter Tyres vs The Assistant Commissioner of CGST 2024 TAXSCAN (HC) 198 Madras High Court directed to approach the statutory appellate authority as the assessee was unable to Claim Input Tax Credit ( ITC ) due to a defect in the return filed. The court refused to entertain the writ petition in light of the statutory remedy available to the petitioner. The single bench of Justice Senthilkumar Ramamoorthy refused to exercise discretionary jurisdiction and entertain the writ petition in light of the statutory remedy available to the petitioner. The Court directed the petitioner to avail the statutory remedy. Most appropriate method for determining ALP: Delhi HC remits matter to Commissioner of Income Tax BOMBARDIER TRANSPORTATION INDIA vs DEPUTY COMMISSIONER OF INCOME TAX 2024 TAXSCAN (HC) 217 Delhi High Court remitted matter to the Commissioner of Income Tax to determine the most appropriate method for determining the arm length price (ALP). A Division Bench comprising Justices Rajiv Shakdher and Girish Kathpalia observed that “Having heard the counsel for the parties, according to us, this appeal can be disposed of with the consent of learned counsel for the parties, with the following directions.

The matter is remitted to the CIT(A) for examination of the issues set forth hereafter: (i) Whether or not the appellant/assessee recovered from its AE a price higher than that which the AE received from DMRC against the supply of bogies/wagons. (ii) The comparables against which ALP should be benchmarked. (iii) Whether, in the facts and circumstances obtaining in the AY in issue, i.e., AY 2011-12, requires the usage of CUP Method for determining ALP as against TNM Method, as held by this court in its order dated 09.04.2018 passed in ITA No.223/2018.” No Reopening of Assessment under Income Tax Act when Reasons cited was inspired from Change of Opinion of AO: Madras HC M/s. BNY Mellon Technology Private Limited vs Assistant Commissioner of Income Tax 2024 TAXSCAN (HC) 215 Madras High Court observed that no reopening of Assessment under Income Tax Act, 1961 can be made when the reasons cited was inspired from change of opinion of the Assessing Officer ( AO ). A Single Bench of Justice observed that “The reasons given for re-opening of the Assessment along with a notice issued under Section 143(2) read with Section 147 of the Income Tax Act, 1961 on 05.05.2021 is also based on the Profit and Loss Account. Thus, there is no scope for re-opening of the assessment which was completed on 28.09.2018 under Section 143(3) read with section 92CA(3) and Section 144C(8) of the Income Tax Act. Clearly, the reasons given for re-opening of the assessment is inspired from change of opinion.” Delhi HC directs Commissioner Trade and Taxes to Refund Rs 15 lakhs to Sight Sound Electronics SIGHT SOUND ELECTRONICS (I) PVT LTD vs COMMISSIONER, TRADE & TAXES & ORS 2024 TAXSCAN (HC) 216 Delhi High Court directed the Commissioner of Trade and Taxes to refund Rs 15 lakhs to Sight Sound Electronics. The refund order was issued in the name of Sight Sound Electronics whereas the complete name of Petitioner is Sight Sound Electronics (1) Pvt Ltd. The counsel for respondents under instructions submitted that the amount is under process and shall be duly refunded to the Petitioner within a period of two weeks from today. A Division Bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja observed that “In view of above, the petition is disposed of directing the respondents to refund the amount of Rs 15,86,956/- along with interest to Petitioner in accordance with law within a period of two weeks from today.”

GST refund pertains to Fourth Quarter Assessment Year: Delhi HC grants Interest at 6% per annum SAFFRON ART PRIVATE LIMITED vs COMMISSIONER OF TRADE AND TAXES & ANR. 2024 TAXSCAN (HC) 218 Delhi High Court granted interest at 6% per annum as the GST refund pertains to fourth quarter Assessment Year. A Division Bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja observed that “In view of the above, petition is allowed. The respondents are directed to process the application for refund of the petitioner in accordance with law within two weeks and in case the refund is payable the same shall be paid. Since the refund pertains to the fourth quarter of 2014-15, petitioner shall also be entitled to statutory interest @ 6% per annum from the date the amount is found to be due and payable”. Non mentioning of retrospective GST cancellation in SCN: Delhi HC sets aside assessment order SHREE BALAJI TRANSPORT vs THE COMMISSIONER OF CENTRAL TAX APPEALS 2024 TAXSCAN (HC) 220 Delhi High Court has set aside an assessment order, citing the non-mentioning of retrospective Goods and Service Tax (GST) cancellation in the Show Cause Notice (SCN). The two member  bench comprising Justice Sanjiv Sach Deva and Justice Ravindar Dudeja concluded that deeming the proceedings vitiated due to lack of reason and clarity, set aside the impugned order and the subsequent order in appeal dated 24.08.2023. The petitioner’s GST registration was reinstated. The court emphasized that neither the show cause notice nor the order qualified as a valid cancellation, and relegating the petitioner to an appeal served no purpose. The court highlighted Section 29(2) of the Central Goods and Services Tax Act, 2017, empowering the proper officer to cancel the registration from a retrospective date based on specific circumstances. The court emphasized that such cancellations should not be mechanical and subjective, requiring objective criteria. The failure to furnish returns for a certain period should not automatically warrant retrospective cancellation. Assessment order set aside and the subsequent order in appeal dated 24.08.2023.

The petitioner’s GST registration was reinstated. Transactions concerning Mutual Funds are in nature of Investment and not motivated by trade: Delhi HC COMMISSIONER OF INCOME TAX- 18 vs WIG INVESTMENT 2024 TAXSCAN (HC) 209 Delhi High Court in an appeal preferred by the Principal Commissioner of Income Tax observed that the Transactions concerning mutual funds are in nature of investment and not motivated by trade. A Division Bench comprising Justice Rajiv Shakdher and Girish Kathpalia observed that “The CIT( A ) and the Tribunal, after appreciating the material on record, have concluded that the transactions concerning mutual funds were in the nature of investment and not motivated by trade. In this context, the CIT( A ) and the Tribunal, among other things, looked at the transactions from the following prism: quantum of trade, value, purpose, the period for which mutual funds were held, and how disclosure had been made in the books of accounts/financial statements Google-CCI Dispute: Supreme Court to Hear Rs. 1338 Cr Fine Case on April 30 The Supreme Court declared its intention to initiate hearings on April 30, 2024, for the cross-appeals filed by Google and the Competition Commission of India (CCI) in relation to the antitrust case. The legal battle stems from the CCI’s imposition of a ₹1,337.76-crore fine on Google in October 2022, citing antitrust violations associated with its Android mobile operating system. The regulatory body emphasised fair access for all market players and highlighted concerns about Google’s dominance in online search restricting entry for competing applications. The NCLAT’s partial confirmation of the CCI’s ruling in March 2023 prompted both parties to appeal certain aspects, setting the stage for the upcoming hearings in the Supreme Court. ITR Filed without Regular Balance Sheet and Profit & Loss Account is Defective, not invalid; AO holds Responsibility for Notifying Defects: Supreme Court M/S MANGALAM PUBLICATIONS vs COMMISSIONER OF INCOME TAX 2024 TAXSCAN (SC) 149 The Supreme Court clarified that Income Tax Returns (ITRs) lacking a regular balance sheet and profit and loss account may be considered defective but are not necessarily invalid. The ruling, issued by the bench comprising Justice B.V. Nagarathna and Justice Ujjal Bhuyan, overturned the Kerala High Court’s previous decision and upheld the order of the Income Tax Appellate Tribunal (ITAT). The bench emphasised that unless the assessing officer exercises its discretion, considering the returns as defective cannot be justified.

Importantly, throughout the three assessment years, the assessing officer did not declare any of the returns as defective. Extended Period of Limitation to Central Excise Dept for Recovery of Dues and Receiving Penalty: SC directs to Hear Parties M/S. FLOORATEX RUBBER & PLASTICS (P) LTD vs THE JOINT COMMISSIONER (GENERAL) 2024 TAXSCAN (SC) 150 The Supreme Court of India directed to hear the parties in a matter related to the extended period of limitation to the Central Excise Department for the recovery of dues and receiving penalty. A Two-Judge Bench comprising Justice BV Nagarathna and Justice Sanjay Karol observed that “In the circumstances, that portion of the order of the High Court declining to raise the substantial questions of law as sought for by the appellant-Revenue herein is setaside and the High Court is now requested to hear the parties by raising the substantial questions of law on the issue of extended period of limitation as well as on the issue of imposition of penalty. The High Court shall now consider the aforesaid aspect of the matter(s) on its own merits and dispose of the appeals filed by the appellant herein in accordance with law.” Tax effect less than Rupees Ten Lakhs: SC dismisses SLP filed by Income Tax Dept The Supreme Court of India dismissed the special leave petition (SLP) filed by the Income Tax Department as the tax effect less than rupees ten lakhs. A Two-Judge Bench comprising Justice Abhay S Oka and Justice Ujjal Bhuyan observed that “Considering this factual aspect, we decline to entertain this petition. Accordingly, the Special Leave Petition is dismissed. However, the question of law is kept open. Pending application, if any, also stands disposed.” Disposal of Revision Application by Additional Commissioner in Undue Haste: Jharkhand HC quashes Order State of Jharkhand vs M/s. Ram Kripal Singh Construction Pvt. Ltd 2024 TAXSCAN (HC) 225 The Jharkhand High Court quashed the orders on the ground that the disposal of revision application by the Additional Commissioner in undue haste.  A Division Bench comprising Justices Rongon Mukhopadhyay and Deepak Roshan observed that “It would be evident that Additional Commissioner of Commercial Taxes has acted in undue haste in disposing of the revision applications.

It is trite law that if an authority acts in undue haste, malice in law is to be presumed and his action is deemed to be mala fide.” Delhi HC sets aside CIC order to provide RTI on Tax Exemption allowed to PM CARES Fund CPIO vs GIRISH MITTAL 2024 TAXSCAN (HC) 229 The Delhi High Court set aside the Central Information Commission ( CIC ) order to provide right to information ( RTI ) on tax exemption allowed to PM CARES Fund. A Single Bench of Justice Subramonium Prasad observed that “In the present case, the question which arose was whether Section 138(2) of the Income Tax Act which also contains a non-obstante clause would override Section 22 of the RTI Act or not. In view of the fact that Section 138(1)(b) of the Income Tax Act mandates that information relating to an assessee can only be supplied subject to the satisfaction of Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be, it can be said that Section 138(2) of the Income Tax Act would prevail over Section 22 of the RTI Act.” Madras HC Rejects Indian Startups’ appeals on Google’s App Billing; Directs no delisting of applications for 3 weeks The Madras High Court rejected appeals filed by Indian startups contesting Google’s app billing policy, marking a notable development in the ongoing legal dispute. Despite the dismissal, the court has issued a directive to Google, instructing it to refrain from removing the mobile applications of these startups for a specific period of three weeks. The court underscored the comprehensive nature of remedies available under the Competition Act, surpassing those accessible through a civil court. This underlines the suggestion that challenges to the CCI’s orders should be directed to the National Company Law Appellate Tribunal, reflecting the intricacies of competition law. No Justification for attachment of properties in absence of Income tax liability: Kerala HC M.K. RAJENDRAN PILLAI vs ASSISTANT COMMISSIONER OF INCOME TAX 2024 TAXSCAN (HC) 234 The Kerala High Court held that “Once there is no tax liability on the petitioner for which the petitioner’s properties could be attached, there is no justification for keeping the attachment on the properties.” A Single bench of Justice Dinesh Kumar noted the respondents’ stance that there is no existing attachment order on the petitioner’s properties, allowing the petitioner the freedom to manage their properties as they see fit. Given the respondents’ explicit position in their statement, there is no basis for further proceedings in this writ petition. It was made clear that there is no attachment on the properties of the petitioner and consequently, disposed of the writ petition. Relief to Oxfam India: Delhi HC stays Income Tax Department’s Order cancelling Tax Exemption OXFAM INDIA vs PRINCIPAL COMMISSIONER OF INCOME TAX 2024 TAXSCAN (HC) 233 In a major relief to Oxfam India, the Delhi High Court stayed income tax department’s order cancelling tax exemption. A Division Bench of Justices Yashwant Varma and Purushaindra Kumar Kaurav observed that “In view of the aforesaid, we find that a substantial jurisdictional question which merits consideration stands raised.

We also bear in mind the need to adopt a uniform and consistent approach insofar as interim orders are concerned. This since an identical challenge has been duly entertained by a coordinate Bench of this Court and interim protection accorded. The Court also bears in mind that pleadings in W.P.(C) 11270/2023 already stand completed and thus the issue can be decided finally on a short date.” Error Committed is Technical Nature and without any Intention to Evade Tax: Allahabad HC quashes Penalty u/s 129(3) of UPGST Act Roli Enterprises vs State Of U.P 2024 TAXSCAN (HC) 230 The Allahabad High Court quashed penalty under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 ( UPGST Act ) as the error committed was technical nature and without any intention to evade tax. A Single Bench of Justice Shekhar B. Saraf observed that “In the present case, the facts are quite similar to one in M/s Citykart Retail Pvt. Ltd.’s case ( supra ) and I see no reason why this Court should take a different view of the matter, as the invoice itself contained the details of the truck and the error committed by the petitioner was of a technical nature only and without any intention to evade tax. Once this fact has been substantiated, there was no requirement to levy penalty under Section 129(3) of the Act.” Ignorance of CA Certificate for Trade Payables for Tamil Nadu State: Madras HC quashes GST SCN on Entire ITC Balance for Reversal Ingram Micro India Pvt. Ltd vs State Tax Officer 2024 TAXSCAN (HC) 235 The Madras High Court Single Bench of Justice Senthilkumar Ramamoorthy recently quashed the Goods and Services Tax ( GST ) Show Cause Notice ( SCN ) on the entire Input Tax Credit ( ITC ) balance for reversal in ignorance of Certificate by CA for trade payables for the State of Tamil Nadu. Upon careful consideration, the Madras High Court observed that the assessing authority had not applied its mind before drawing conclusions. It was observed that, “The assessing authority has clearly not applied its mind before drawing the conclusions extracted above.” Gift Vouchers and Cards are Actionable Claims, GST Applicable on the Date of Redemption u/s 12(4)(b) of CGST Act: Madras HC Kalyan Jewellers India Ltd vs Union of India   2024 TAXSCAN (HC) 236 A Madras High Court Single Bench recently ruled that gift vouchers and gift cards qualify as actionable claims, and Goods and Services Tax (GST) is applicable on the date of redemption under Section 12(4)(b) of the Central Goods and Services Tax (CGST) Act. The Bench also held, “ On the other hand, if there is no supply ie. no transfer within in the meaning of Section 7(1-A) of the respective GST Enactments read with Sl.No.1( c) to the II Schedule to the respective GST Enactments, time of supply will get postponed to the actual time of redemption of the “voucher” to a future date of sale of merchandise or such goods when such Gift Voucher/Card is presented by the customer at the Counter of the petitioner.

The petitioner will be liable to tax on the date of redemption under Section 12(4)(b) of the respective GST Enactments.” No Limitation filing Application for Compounding of Offence contrary to Section 279(2) of Income Tax Act: Madras HC M/s.Jak Communications Private Limited vs The Chief Commissioner of Income Tax 2024 TAXSCAN (HC) 231 The Madras High Court observed that there is no limitation filing application for compounding of offence contrary to Section 279(2) of the Income Tax Act, 1961. A Single Bench of Justice C Saravanan observed that “There cannot be any restriction/limitation for filing application for compounding of offence contrary to Section 279(2) of the Income Tax Act, 1961. There is also no useful purpose in prosecuting an assessee who may otherwise deserve to compound the offence. This is also not a case where the petitioner has been convicted of the offence in E.O.C.C.Nos.193 and 194 of 2018 and had filed the applications for compounding of the offence thereafter under Section 279(2) of the Income Tax Act, 1961.” Penalty u/s 271E of Income Tax Act cannot be levied on Repayment of Loan in Absence of Cash Transaction: Madras HC Anamallais Bus Transports P Ltd vs The Principal Commissioner of Income Tax-1 2024 TAXSCAN (HC) 232 The Madras High Court observed that the penalty under Section 271E of the Income Tax Act, 1961 cannot be levied on repayment of loan in the absence of cash transaction. A Single Bench of Justice Krishnan Ramaswamy observed that “This Court, prima facie is of the view that the entire penalty proceedings passed under Section 271-E of the Act is liable to be set aside.

Accordingly, this Court directs the Appellate Authority concerned to to take the petitioner’s Appeal on file without insisting upon any pre-deposit and consider the issues that were discussed by this Court in this order and thereafter, shall dispose the appeal in accordance with law, within a period of eight (8) weeks from the date of receipt of a copy of this order.” Extended Time Limit available for Statutory Appeal: Kerala HC dismisses Writ challenging Constitutionality of Section 16(4) of GST Act TYRE INDIA SPARE INDIA vs STATE TAX OFFICER 2024 TAXSCAN (HC) 244 A Single Bench of the Kerala High Court has dismissed a constitutional challenge against Section 16(4) of the Goods and Services Tax Act (GST Act) as withdrawn. The petitioner is granted the liberty to approach the statutory authority to avail the benefit of the extended time limit for filing a statutory appeal. The Single Bench of Justice Dinesh Kumar Singh held that, “Considering the above submission of the learned Counsel for the petitioner, the present writ petition is dismissed as withdrawn with liberty as prayed above.