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. Demand of Income Tax made on Interstate Spices Dealer based on High-Value Transaction: Kerala HC upholds Order which allows to seek Statutory Remedy SHAJU PACHELIL PATHROSE vs ASSISTANT COMMISSIONER OF INCOME TAX CITATION: 2024 TAXSCAN (HC) 302 The Kerala High Court upheld the single judge’s decision, which granted the petitioner specified time to seek statutory remedy under the Income Tax Act, 1961, regarding the challenge against the demand of income tax made on interstate spice dealers based on high-value transactions. Shaju Pachelil Pathrose, the petitioner, challenged the judgment, stating that the assessing officer issued two show cause notices within a short period, but the petitioner failed to respond.

The court affirmed the dismissal of the writ petition, allowing the petitioner to file a statutory appeal within fifteen days before the appellate authority. Additionally, the court extended the time for filing the appeal and directed the consideration of the stay application within two months. Notice of Cancellation of GST Registration Does Not Mention Fraud or Suppression: Delhi HC sets aside Order Cancelling GST Registration M/S MAA JHANDEWALI TRADERS vs PRINCIPAL COMMISSIONER OF GOODS AND SERVICE TAX NORTH DELHI The Delhi High Court overturned the cancellation of Goods and Service Tax (GST) registration for M/S Maa Jhandewali Traders, stating that the show cause notice leading to the cancellation lacked specific details regarding fraud or suppression.

The petitioner argued that the notice did not mention any specifics of alleged fraud, misstatement, or suppression, and did not disclose the name or designation of the issuing officer. Despite the petitioner’s response to the notice, the court found it inadequate considering the reasons for cancellation. Thus, the division bench, comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja, nullified the cancellation order and granted one week to submit a detailed response, with the authority required to dispose of the matter within 30 days thereafter. Eligibility for Exemption from payment of income tax u/s 10(46A) of Income Tax Act: Kerala HC directs to decide appeal within 4 months KERALA CO-OPERATIVE DEPOSIT GUARANTEE FUND BOARD vs COMMISSIONER OF INCOME TAX CITATION: 2024 TAXSCAN (HC) 327 The Kerala High Court has instructed the authorities to make a decision on the appeal concerning the eligibility for income tax exemption under Section 10(46A) of the Income Tax Act, 1961, within four months.

The petitioner, Kerala Co-operative Deposit Guarantee Fund Board, filed for exemption under Section 10(46A) but faced a delay in the decision-making process despite submitting the application in June 2018. The Standing Counsel for the Income Tax Department assured that the Central Board of Direct Taxes (CBDT) has initiated the review process and promised a prompt decision. Acknowledging these assurances, Justice Dinesh Kumar Kumar directed the authorities to decide on the petitioner’s application within four months, leading to the disposal of the writ petition. Expired GST E-Way Bill Pre-Detention, No Intention to Evade Tax: Allahabad HC orders Refund of Tax and Penalty Amount M/s GLOBE PANEL INDUSTRIES INDIA PVT. LTD vs STATE OF U.P. AND OTHERS CITATION: 2024 TAXSCAN (HC) 331 The Allahabad High Court overturned a penalty imposed on M/s Globe Panel Industries India Private Ltd for presenting a Goods and Services Tax (GST) E-way bill that had expired ten days prior during detention. Justice Shekhar B. Saraf noted a technical violation but emphasized the authorities’ failure to establish any intent to evade tax. Despite arguments from the petitioner’s counsel citing evidence of vehicle breakdown and proper documentation, the authorities upheld the penalty.

However, the court ruled that the mere technical violation, without evidence of tax evasion intent, cannot justify the penalty under Section 129(3) of the UPGST Act. Quashing the impugned orders, the court directed the respondents to refund the tax and penalty within four weeks. Allahabad HC upholds Deletion of Income Tax addition u/s 68 of Income Tax Act as Assessee Proves Genuineness of Transaction M/S Paswara Papers Ltd. vs Manu Ghildyal CITATION:   2024 TAXSCAN (HC) 324 The Allahabad High Court upheld the deletion of Income Tax Addition under section 68 of the Income Tax Act, 1961, as the assessee demonstrated the genuineness of the transaction. Counsel for the Union of India-Revenue and the assessee appeared, with the revenue challenging the ITAT’s order.

The court affirmed the ITAT’s decision, noting the absence of credible material to prove the transaction’s genuineness. The assessee disclosed details of the jewellers and established payment through banking channels. The court emphasized the lack of inquiry from the jeweller by the assessing authority and upheld the Tribunal’s findings based on evidence, concluding that no substantial question of law arose. A writ of Certiorari Can be Issued in Case an Interior Tribunal has Exceeded its Jurisdiction or Has not acted in accordance with law: Allahabad HC   M/s FALGUNI STEELS vs STATE OF U.P. AND OTHERS CITATION:  2024 TAXSCAN (HC) 319 The Allahabad High Court ruled that a writ of certiorari can be issued if an inferior tribunal exceeds its jurisdiction or does not act in accordance with the law, subsequently quashing the order in the case of M/s Falguni Steels. The petitioner, an authorized dealer of Steel Authority of India Ltd., challenged the order passed by the Assistant Commissioner, Commercial Tax, regarding alleged contravention of the UPGST Act, 2017 during the transportation of goods. Despite technical errors in generating e-Way Bills, the court found that the authorities exceeded their jurisdiction and did not follow essential legal procedures, thus warranting the issuance of a writ of certiorari. Justice Shekhar B. Saraf observed that the impugned orders resulted from the authorities’ exceeding their jurisdiction, leading to the quashing and setting aside of the order.

Commissioner Fails to Appreciate Finding that Exporters were not in existence on Date of Export: Delhi HC quashes Penalty NAMAN GUPTA vs COMMISSIONER OF CUSTOMS AIRPORT AND GENERAL CITATION: 2024 TAXSCAN (HC) 321 The Delhi High Court nullified a penalty imposed under the Customs Broker Licensing Regulation, 2018 (CBLR, 2018), as the commissioner overlooked that the exporters were not existent at the time of export. M/s Falguni Steels, the petitioner, contested the revocation of their Custom Broker License and the penalty imposed by the Assistant Commissioner, Commercial Tax, arguing that the exporters involved were non-existent entities. Despite the findings of the Inquiry Officer, the Court found no evidence that the Customs Broker failed to comply with the provisions of the CBLR, 2018. The Court ruled that the Customs Broker cannot be held accountable for the actions of non-existent exporters and quashed the impugned order. Property Seized by ED Must be Returned if PMLA Investigation Exceeds 365 Days: Delhi HC  MR MAHENDER KUMAR KHANDELWAL vs DIRECTORATE OF ENFORCEMENT CITATION: 2024 TAXSCAN (HC) 333 The Delhi High Court recently ruled that property seized by the Enforcement Directorate (ED) must be returned if the investigation under the Prevention of Money Laundering Act, 2002 (PMLA) exceeds 365 days. This decision came after a petitioner, who was not named as an accused or investigated by the Central Bureau of Investigation (CBI) for over a year, sought the return of seized documents and properties.

The petitioner’s counsel argued against the ED’s reliance on Section 8(3) of the PMLA, stating that no court order stayed the investigation, and the seizure occurred after the ED was restrained from taking coercive action. The court, under Justice Navin Chawla, ruled that the seizure automatically lapses if no proceedings arise within 365 days, directing the ED to return the seized items to the petitioner promptly. Order of Assessment and demand of Building Tax pending before Deputy Tahsildar: Kerala HC dismisses writ petition PHILIP K.P vs DEPUTY TAHSILDAR (BT) AND ASSESSING AUTHORITY UNDER THE BUILDING TAX ACT CITATION:   2024 TAXSCAN (HC) 328 The Kerala High Court dismissed a writ petition contesting an assessment and demand of Building Tax pending before the Deputy Tahsildar. The petitioner submitted a rectification application in response to the demand notice, which had been pending since January 23, 2017. The court instructed the deputy tahsildar to review and decide on the rectification application within two weeks. The interim order granted in connection with the writ petition would remain effective for the same duration. Justice Dinesh Kumar Singh concluded the case, dismissing any pending interlocutory applications. Income Tax Deduction on Excise Duty does not Amount to Double Deduction: Bombay HC Johnson and Johnson Ltd vs The Deputy Commissioner of Income Tax CITATION: 2024 TAXSCAN (HC) 334

The Bombay High Court ruled that income tax deduction on excise duty does not constitute double deduction. In a case where the Income Tax Appellate Tribunal (ITAT) found that allowing a certain deduction would result in double deduction, the court disagreed, citing a judgment by the Apex Court reversing a similar decision by the Calcutta High Court. The court examined the excise duty amounting to Rs. 2,08,08,346/-, noting that it was transferred to a prepaid account and added to the closing stock of finished products, leaving a sum of Rs. 60,99,426/- in the account. The court emphasised that the excise duty paid and included in the closing stock must be claimed separately as a deduction, as per Section 43B of the Income Tax Act, ensuring that the entire excise duty paid in the relevant year is claimed appropriately. ‘Finality of Decision and Non – Arbitrability’ Clause In GCC Does Not Imply an Arbitration Agreement: Bombay HC Kalpataru Projects International Ltd vs Municipal Corporation of Greater CITATION: 2024 TAXSCAN (HC) 338 The Bombay High Court dismissed an application seeking the appointment of an arbitrator, ruling that the ‘Finality of Decision and Non – Arbitrability’ clause in the General Conditions of Contract (GCC) does not constitute an arbitration agreement. The case involved Kalpataru Projects International Ltd filing an application under Section 11 of the Arbitration and Conciliation Act, 1996 regarding a construction project for the Ghatkopar-Mankhurd Link Road Flyover. Despite disputes arising during and after the project’s completion, the court held that the clause in the contract did not indicate the parties’ intention to resolve disputes through arbitration, thereby rejecting the application. Classification Entry No.109  Not Include Granite Stone and not Taxable @14.5%: Allahabad HC The Commissioner, Commercial Tax vs M/S Neha Sharma CITATION: 2024 TAXSCAN (HC) 336 The Allahabad High Court, in a ruling on a revision petition, affirmed that granite stone is not taxable under entry no.109 of the tax schedule, which covers items like sand, gitti, and stone ballast. The court upheld the Tribunal’s view that unprocessed stones fall under this entry, while processed ones do not. Rejecting the revenue’s argument that granite should be taxed at a higher rate due to its value, the court pointed out that the legislative intent was clear from the absence of granite in the notification. It emphasised that if the legislature intended to include granite, it would have explicitly mentioned it. The judgment highlighted that the exclusion of glazed stone from the entry supports the interpretation that unprocessed stones like granite are covered.

Thus, the court dismissed the revision petition and upheld the Tribunal’s decision. Assessment Order u/s 148 A(b) passed without affording Reasonable Opportunity To be Heard: Kerala HC Upheld Order Quashing Assessment Order THE INCOME TAX OFFICER, WARD-2 vs ASAMANNOOR SERVICE CO-OPERATIVE BANK LTD CITATION:2024 TAXSCAN (HC) 339 The Kerala High Court, affirming a single judge’s decision, dismissed the petition challenging an Assessment order under Section 148A(b) of the Income Tax Act, 1961, which was quashed due to lack of opportunity for the petitioner to be heard. Asamannoor Service Co-Operative Bank Ltd, the assessee, contested the order and subsequent notice issued for reassessment, arguing they were not given a chance to present their case despite replying to the initial notice. The court concurred with the single judge’s finding that failure to provide a personal hearing violated natural justice, leading to the quashing of the order and notice. Further, noted amendments made this requirement less stringent, indicating a simplification of the process, and ultimately dismissed the petition. No Interest allowed along with Refund u/s 42 of VAT Act: Delhi HC directs to Decide Leviability of Interest BLUE STAR LIMITED vs COMMISSIONER OF DELHI VALUE ADDED TAX CITATION:

2024 TAXSCAN (HC) 323 The Delhi High Court directed the respondents to address the issue of interest payable along with a refund under Section 42 of the Delhi Value Added Tax Act, 2004. Blue Star Limited sought a refund of Rs. 28,36,313/- along with interest under Section 42 of the Act. While the respondents allowed the refund, they indicated “Nil” interest in the refund order. The court, comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja, disposed of the petition with a directive for the respondents to provide a reasoned order explaining why interest is not payable. If deemed payable, it must be disbursed within two weeks; if not, the petitioner can pursue further legal remedies. Assessee Failed to respond on Notice issued u/s 25 of KVAT Act: Kerala HC dismisses Writ Petition AJI THOMAS vs THE STATE TAX OFFICER CITATION: 2024 TAXSCAN (HC) 326 The Kerala High Court dismissed a writ petition filed by Aji Thomas challenging an assessment order under the Kerala Value Added Tax Act, 2003 (KVAT) for the assessment year 2016-2017.

Despite being issued notices and ample opportunities to respond, the petitioner failed to cooperate or file any objections. The State Tax Officer proceeded with the assessment based on available evidence, proposing a taxable turnover and levying tax accordingly. The Government Pleader argued that the petitioner had sufficient opportunity to present their case but failed to do so, making the petition non-maintainable. Justice Dinesh Kumar Singh held that the court cannot review the assessment order’s merits as it lacks appellate jurisdiction, ultimately dismissing the writ petition. Bona Fide Banking Business in Mauritius Exempt from Income Tax in India: Bombay HC grants Relief to HSBC Bank Commissioner of Income Tax (IT)-2 vs M/s. HSBC Bank (Mauritius) Ltd. CITATION: 2024 TAXSCAN (HC) 332 The Bombay High Court provided significant relief to HSBC Bank, affirming that genuine banking activities in Mauritius are exempt from Indian income tax. The respondent, a Mauritian Limited Liability Company and Foreign Institutional Investor licensed by SEBI, earned interest income on securities in India, which it claimed as exempt under the Indo-Mauritius DTAA.

The Assessing Officer disputed this, arguing that the bank should have a banking license from the RBI to qualify for exemption. However, the court clarified that under the agreement, exemption applies as long as the bank conducts bona fide banking activities in Mauritius, regardless of whether it operates in India. Cancellation of GST refund without affording opportunity for hearing: Allahabad HC remands matter Kec International Limited vs Union Of India And 3 Others CITATION: 2024 TAXSCAN (HC) 340 The Allahabad High Court, in a recent ruling, granted relief to the petitioner, Kec International Limited, by allowing their writ petition against the cancellation of a Goods and Service Tax (GST) refund without providing an opportunity for a hearing. The petitioner’s counsel argued that the revenue authority denied the petitioner’s adjournment request, leading to the cancellation of the refund without a hearing, violating Section 75(4) of the Act, 2017. Despite the suggestion to pursue the statutory appeal, the court acknowledged the petitioner’s right to be heard before adverse action and concluded that the denial of this right rendered the alternate remedy inapplicable.

The division bench, comprising Chief Justice Satish Chandra Sharma and Justice Tushar Rao Gedela, observed that the cancellation lacked a hearing opportunity and thus ruled in favor of the petitioner. No Unjust Enrichment and Passing Burden of Customs Duty arise when goods are in use: Calcutta HC COMMISSIONER OF CUSTOMS (PORT), KOLKATA vs DREDGING CORPORATION OF INDIA LIMITED CITATION: 2024 TAXSCAN (HC) 318 The Calcutta High Court upheld a decision concerning the refund of customs duty, stating that the principle of unjust enrichment doesn’t apply when goods are in use. The case involved M/s Dredging Corporation of India Limited, which purchased a dredger and related equipment from a Dutch firm. The customs authorities provisionally assessed the goods and later denied the refund claimed by the assessee, alleging that the duty incidence had been passed on to others.

The tribunal ruled in favour of the assessee, prompting the revenue to appeal. However, the High Court affirmed the tribunal’s decision, emphasising that the burden of customs duty does not arise when goods are in use, thus dismissing the appeal. GST on Expat Salaries: Bombay HC grants Interim Relief to Mercedes Benz in Salary Secondment Issue Mercedes Benz India Private Ltd. vs The Union of India and Ors CITATION: 2024 TAXSCAN (HC) 341 The Bombay High Court granted a temporary stay on the demand for Goods and Services Tax (GST) dues related to expatriate salary payments by Mercedes-Benz, aligning with the NOS case precedent. The stay, issued by Justices G.S. Kulkarni and Firdosh Phiroze Pooniwalla, is effective until the next hearing, with the Revenue department instructed to submit a counter affidavit within two weeks. The decision references a CBIC instruction emphasising a comprehensive examination of circumstances before applying the NOS ratio and dismisses reliance on previous judgments lacking reasoned analysis.

The stay was granted due to the contention that the CBIC circular was not considered in the impugned order, and a comparative position was presented showing the petitioner’s independence from the NOS case decision. Kerala HC Division Bench stays Coercive Income Tax Recovery Measures During Pendency of Appeal and Stay Petition CHALAKKAL ANTONY JOSE VALLOOR vs THE ADDITIONAL/ JOINT/ DEPUTY/ ASSISTANT COMMISSIONER OF INCOME TAX/ INCOME-TAX OFFICER CITATION: 2024 TAXSCAN (HC) 342 A Division Bench of the Kerala High Court has stayed coercive proceedings related to an Income Tax Demand while considering the pendency of an appeal and stay petition before the authorities. The High Court directed an expedited decision on the stay application in an earlier Single Bench order. Despite the Single Judge’s refusal to grant a stay on recovery proceedings, the Division Bench, comprising Justice A K Jayasankaran Nambiar and Justice Kauser Edappagath, emphasized the necessity of a stay during the pendency of such petitions, modifying the judgment accordingly to keep recovery proceedings in abeyance until the disposal of the stay petition or appeal, whichever comes first. Mere Reference of dispute to Arbitration does not Preclude High Court from Examining Issue of Stamp Duty in a Writ Petition: Delhi HC MRS VINNU GOEL vs DEPUTY COMMISSIONER STAMP REGISTRATION & ORS CITATION:  2024 TAXSCAN (HC) 325 The Delhi High Court ruled that arbitration referral doesn’t bar it from scrutinizing stamp duty in a writ petition.

Mrs. Vinnu Goel filed a suit against Defendants 1-3, seeking to void a Memorandum of Understanding (MOU) and partition properties. Respondents 2 & 3 filed a Section 8 application under the Arbitration & Conciliation Act for arbitration based on the MOU. The petitioner argued the MOU necessitated stamping under the Indian Stamp Act. Justice Subramonium Prasad permitted the petitioner to approach the Chief Controlling Revenue Authority to determine stamp duty, asserting the Court’s jurisdiction in the matter despite the possibility of the Arbitral Tribunal conducting a similar assessment. The Court directed the Revenue Authority to independently assess without influence from the writ petition’s observations. No objection to draft assessment order filed by assessing authority is palpably wrong:

Kerala HC sets aside assessment order  ASSEENA BEEGAM MOHAMED ALI vs DEPUTY COMMISSIONER OF INCOME TAX CITATION: 2024 TAXSCAN (HC) 330 The Kerala High Court nullified an assessment order due to the assessing authority’s failure to acknowledge objections to the draft assessment order. The petitioner, a non-resident Indian, filed objections to the draft assessment order before the Dispute Resolution Panel, but the assessing authority erroneously claimed no objections were filed. The Court deemed this claim inaccurate and directed a fresh assessment order, considering the objections submitted to the Panel. Thus, the writ petition was granted in favour of the petitioner. No Draft Assessment Order prepared as contemplated u/s 144 B of Income Tax Act and copy of draft Assessment Order not furnished: Kerala HC sets aside Assessment Order SUJATHA REVIKUMAR vs JOINT COMMISSIONER OF INCOME TAX CITATION: 2024 TAXSCAN (HC) 329 The Kerala High Court has invalidated an assessment order due to the absence of a mandated draft assessment order under Section 144B of the Income Tax Act, 1961, and the failure to provide a copy of said draft order.

The petitioner, engaged in money lending against gold ornaments, faced challenges in the assessment year 2021-22, reporting substantial losses due to fraudulent activities by staff members. Despite undergoing assessment under the National Faceless Assessment system, serious procedural concerns arose, alleging a violation of Section 144B.  Justice T.R.Ravi directed the respondents to issue new assessment orders, ensuring strict adherence to Section 144B’s procedures. Sales Tax Subsidy/Incentive Is Capital Receipt: Delhi HC COMMISSIONER OF INCOME TAX-IV vs INDO RAMA TEXTILES LTD. CITATION: 2024 TAXSCAN (HC) 322 The Delhi High Court has affirmed the Income Tax Appellate Tribunal’s decision, ruling that sales tax subsidies/incentives are capital receipts. The case involved M/s Indo Rama Textiles Ltd, where the central issue was determining the nature of the benefit received under the “Dispersal of Industries Package of Incentives, 1993” scheme by the Government of Maharashtra. Despite arguments linking the incentives to production, the court emphasised the scheme’s objective of dispersing industries and noted the absence of provisions for investment in fixed assets or establishing new units. Consequently, the court concluded that the financial assistance constituted a revenue receipt, supporting the ITAT’s decision. Different View Taken by Arbitrator not a ground to set aside Award: Telangana HC NILE LTD vs SRI GURDIP SINGH CITATION:  2024 TAXSCAN (HC) 343 The Telangana High Court upheld a decision stating that a differing opinion by the arbitrator does not warrant setting aside the award.

The case involved a dispute over the supply of Lead Antimony Alloy Wire, where the arbitrator partially allowed the petitioner’s claim. However, the arbitrator rejected the balance amount, noting that the petitioner had collected back the rejected material as per the supply order’s terms. Despite the appellant’s contention that the arbitrator and lower court failed to consider their claim properly, the court affirmed the award, finding no grounds to set it aside. Consequently, the court dismissed the appeal. GST Registration Cancelled Retrospectively Without Valid Reason: Delhi HC Modifies GST Order PREM ENTERPRISES vs COMMISSIONER OF DELHI GOODS AND SERVICES TAX AND SERVICES TAX CITATION: 2024 TAXSCAN (HC) 345 The Delhi High Court intervened in a case regarding the retrospective cancellation of Goods and Service Tax (GST) registration by modifying the order.

Prem Enterprises, a partnership firm engaged in manufacturing and trading sanitary goods, had its GST registration cancelled retrospectively from 10.07.2017. Despite the petitioner’s attempts to provide details, their application for cancellation was rejected twice. The court noted that the show cause notice lacked a cogent reason for retrospective cancellation and that the petitioner had no opportunity to object to it. Highlighting that registration cannot be cancelled retrospectively without valid reasons, the court modified the cancellation order to be effective from 30.06.2020, aligning with the date when the petitioner ceased business operations. Second Extension of Time Period for SCN Issuance u/s 73 of GST Act: Allahabad HC lists with Lead Case Graziano Trasmissioni Ms Rki India Limited And Another vs Union Of India And 3 Others CITATION: 2024 TAXSCAN (HC) 347 The Allahabad High Court has stayed the impugned order issued by GST authorities on 29th December 2023 and linked the case with the lead case M/s Graziano Trasmissioni, filed by M/s Rki India Limited and Another challenging the validity of GST provisions. The issue revolves around the second extension of the time period prescribed for issuing show cause notices under Section 73(10) of the GST Act, 2017.

The court, noting the sustainability of the second extension, granted all respondents six weeks to submit counter affidavits and ordered the petitioners to file rejoinders within two weeks thereafter. The hearing for the lead case has been scheduled for March 11, 2024, with several other related cases consolidated for expedited resolution. Adv. Pragya Pandey and Adv. Anurag Mishra represented the petitioners, while A.S.G.I., S.S.C. appeared on behalf of Union Of India And 3 Others. Redemption of Goods Denied based on Limitation Period u/s 125 of Customs Act: Delhi HC directs to Release Seized Currency OGULJEREN HAJYYEVA vs COMMISSIONER OF CUSTOMS CITATION:   2024 TAXSCAN (HC) 346 The Delhi High Court directed the release of seized currency, ruling that there was no justification for the respondent’s claim that the payment was not made and the redemption option had lapsed. The petitioner, Oguljeren Hajyyeva, a foreign national from Turkmenistan, had USD 18,500 seized at the airport under the Customs Act, 1962. Despite being allowed redemption upon payment of a fine, due to COVID-19 lockdown and subsequent restrictions, she couldn’t fulfill the process. The court observed that as the currency was already with the department, the petitioner’s deemed payment had been made, rendering the respondent’s action unsustainable. The court ordered the release of the remaining amount within two weeks. Bunching of SCN is against spirit of provisions of Section 73 of GST Act: Madras HC Titan Company Ltd. vs The Joint Commissioner of GST CITATION: 2024 TAXSCAN (HC) 316 The Madras High Court noted that the bunching of show cause notices (SCN) goes against the spirit of Section 73 of the Central Goods and Service Tax Act, 2017 (CGST Act). Senior Counsel N.L. Rajah, representing the petitioner, argued that issuing show cause notices for five assessment years in one go violates Section 73, which pertains to determination of tax due for each financial year separately. On the contrary, the Senior Standing Counsel for the respondents contended that there is no prohibition on issuing bunching of show cause notices under Section 73. Justice Krishanan Ramaswamy, in a single bench ruling, found fault in issuing bunching of notices and ordered their quashing, though the petitioner had requested for splitting them up.

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. Redemption of Goods Denied based on Limitation Period u/s 125 of Customs Act: Delhi HC directs to Release Seized Currency  OGULJEREN HAJYYEVA vs COMMISSIONER OF CUSTOMS CITATION:   2024 TAXSCAN (HC) 346 The Delhi High Court directed to release of the seized currency as there is no justification in the respondent’s holding that the payment has not been made and the option has lapsed. The respondents denied the redemption of goods by stating that the petitioner did not avail of the option within the prescribed period of three months or even 120 days as directed under Section 125 of the Customs Act, 1962. A division bench comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja observed that “Since the currency was already lying with the department and only the balance amount was to be released after adjusting the redemption fine and penalty, no further option was to be exercised by the petitioner.” Second Extension of Time Period for SCN Issuance u/s 73 of GST Act: Allahabad HC lists with Lead Case Graziano Trasmissioni Ms Rki India Limited And Another vs Union Of India And 3 Others CITATION:   2024 TAXSCAN (HC) 347 The Allahabad High Court, while staying the impugned order issued by the Goods and Services Tax ( GST ) authorities on 29.12.2023 has connected and listed the present matter with the lead case M/s Graziano Trasmissioni.

The bench of Justice Manjive Shukla and Justice S.D. Singh ordered that “ Connect and list thereafter alongwith Writ-Tax No. 1256 of 2023. For reasons contained in the order passed in the lead case and subsequent orders passed in other cases where similar orders are under challenge, till the next date of listing, effect and operation of the impugned order dated 29.12.2023 shall remain stayed.” GST Registration Cancelled Retrospectively Without Valid Reason: Delhi HC Modifies GST Order PREM ENTERPRISES vs COMMISSIONER OF DELHI GOODS AND SERVICES TAX AND SERVICES TAX CITATION:   2024 TAXSCAN (HC) 345 The Delhi High Court modified the order cancelling Goods and Service Tax ( GST ) Registration retrospectively without a valid reason. The court observed that a taxpayer’s registration can be cancelled with retrospective effect only where such consequences are intended and warranted. A division bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja observed that the taxpayer’s registration can be cancelled with retrospective effect only where such consequences are intended and warranted. The Court modified the order of cancellation to the extent that the same shall operate with effect from 30.06.2020, i.e., the date on which the petitioner discontinued the business.

Different View Taken by Arbitrator not a ground to set aside Award: Telangana HC NILE LTD vs SRI GURDIP SINGH CITATION:   2024 TAXSCAN (HC) 343 The Telangana High Court has held that a different view taken by the arbitrator is not a ground to set aside the award. It was viewed that the Arbitrator after considering all the aspects has passed the impugned Award, which was confirmed by the II Additional District & Sessions Judge.  A single bench of Justice M G Priyadarsini observed that the Arbitrator after considering all the aspects has passed the impugned Award, which was confirmed by the II Additional District & Sessions Judge, Rangareddy District at LB Nagar. The appellant failed to make out any of the grounds to set aside the impugned Award, which was confirmed by the II Additional District & Sessions Judge, Rangareddy District at LB Nagar.  The Court dismissed the appeal. Sales Tax Subsidy/Incentive Is Capital Receipt: Delhi HC COMMISSIONER OF INCOME TAX-IV vs INDO RAMA TEXTILES LTD. CITATION:   2024 TAXSCAN (HC) 322 The Delhi High Court has held that sales tax subsidy/incentive is a capital receipt and upheld the order of the Income Tax Appellate Tribunal ( ITAT ). The argument advanced on behalf of the appellant/revenue that a perusal of the 1993 Scheme would show that the incentives were tied in with production is untenable. A division bench of Justice Rajiv Shakdher and Justice Girish Kathpalia observed that the respondent/assessee was entitled to avail of sales tax subsidy/incentive under two eligibility certificates [ as amended ] for 14 years and 13 years & 11 months, respectively, subject to a maximum entitlement of 110% of capital investment made in setting up of the industrial units.

No Draft Assessment Order prepared as contemplated u/s 144 B of Income Tax Act and copy of draft Assessment Order not furnished: Kerala HC sets aside Assessment Order SUJATHA REVIKUMAR vs JOINT COMMISSIONER OF INCOME TAX CITATION:   2024 TAXSCAN (HC) 329 The Kerala High Court has set aside the assessment order as no draft assessment order was prepared as mandated under Section 144B of the Income Tax Act, 1961, and a copy of the draft assessment order was not provided. The single bench of Justice T.R.Ravi observed that respondents are granted permission to issue new assessment orders, provided they adhere strictly to the procedures outlined in Section 144B of the Income Tax Act, 1961. No objection to draft assessment order filed by assessing authority is palpably wrong:  Kerala HC sets aside assessment order ASSEENA BEEGAM MOHAMED ALI vs DEPUTY COMMISSIONER OF INCOME TAX CITATION:   2024 TAXSCAN (HC) 330 The Kerala High Court set aside the assessment order as it deemed the assessing authority’s failure to file objections to the draft assessment order palpably wrong. The Petitioner was a non-resident Indian and the petitioner was  an eligible assessee under Section 144B of the Income Tax Act for finalizing the assessment order. The petitioner filed return of her income for the assessment year 2014-15 on 13.08.2014 declaring the total income at Rs. 41,92,510/-.

The single bench of Justice Dinesh Kumar Singh observed that the challenged assessment order, wherein the assessing authority claimed that no objection to the draft assessment order was filed, was clearly erroneous. Such inaccurate findings rendered the assessment order flawed. Therefore, the bench hereby overturned the assessment order and sent the matter back to the assessing authority for reconsideration, taking into account the directions issued by the Dispute Resolution Panel in copy of order issued by the second respondent as regards copy of objection filed by the petitioner before the second respondent, dated 13.04.2022, and to issue a fresh assessment order in compliance with the law. Consequently, the current writ petition was granted in the aforementioned terms.

Gujarat HC validates Income Tax Search on Lawyer in Client Tax Evasion Case, Criticises Advocates’ Family Detention The Gujarat High Court has validated the legality of an Income Tax search conducted at the premises of a practising advocate with the aim of uncovering evidence of tax evasion by his clients. Following a petition filed by Advocate Maulik Sheth, whose office and residence underwent a four-day search by Income Tax officials, Justices Bhargav Karia and Niral Mehta ruled that the incriminating material seized from the lawyer could be used by the department against third parties, specifically the advocate’s clients, under certain circumstances Cancellation of GST refund without affording opportunity for hearing: Allahabad HC remands matter Kec International Limited vs Union Of India And 3 Others CITATION:   2024 TAXSCAN (HC) 340 In a recent case, the Allahabad High Court while allowing the writ petition filed by the petitioner observed that the revenue  canceled the  Goods and Service Tax ( GST ) refund without affording opportunity for hearing  the petitioner. The writ petition was filed by the petitioner Kec International Limited by challenging the order of canceling the GST refund granted earlier to the petitioner. The court observed that Section 75(4) of the Act, 2017 gives perfect right to the petitioner to be personally heard before any adverse order may be passed. Therefore the court determined that  “Since the statutorily incorporated right of natural justice has been violated for no good reason, we observe that alternate remedy that otherwise exists may not operate as a bar to entertain the present petition” After analyzing the facts and arguments of both parties, a division bench of Chief Justice Satish Chandra Sharma and Justice Tushar Rao Gedela allowed the writ petition and observed that  cancellation of Goods and Service Tax ( GST ) refund was without affording opportunity for hearing to the petitioner.

Non-Production of Original Tax Invoice from Registered Dealer and Reversal of ITC by VAT Dept not amounts to Double Taxation: Madras HC Thillai Agencies vs State of Tamil Nadu CITATION:   2024 TAXSCAN (HC) 335 In a significant ruling the Madras High Court observed that the non-production of original tax invoice from registered dealer and reversal of input tax credit ( ITC ) by the Value Added Tax ( VAT ) Department does not amount to double taxation. On 11.03.2009, the third respondent had issued a notice proposing to reverse the Input Tax Credit claimed by the petitioner to the tune of Rs.1,04,673/- for the month of September 2008 on the ground that the registration of the selling dealer was already cancelled. A Division Bench of Justices D Krishnakumar and R Vijayakumar observed that “Therefore, it is clear that when a registered dealer claims any benefit under Section 19 of TNVAT Act 2006, he has to strictly adhere to the condition laid down in the said section. In the present case, admittedly, the petitioner has not produced the original tax invoice from a registered dealer and therefore, he cannot complaining that the authorities are attempting to reverse the Input Tax Credit in his favour.” “In fact, the petitioner has effected purchase five months after cancellation of the registration of the selling dealer. Since the registration of the selling dealer had already been cancelled in April 2008, he would not have paid the tax. Therefore, the allegation of the petitioner that the notice issued by the respondent authorities for reversing the Input Tax Credit would amount to double taxation is not legally sustainable” the Court concluded. No Notice issued enquiring details of Unsecured Loan received from 5 Person, Income Tax Addition become invalid: Kerala HC remands matter for Readjudication NIRMALA TRUST vs ASSISTANT COMMISSIONER OF INCOME TAX CITATION:   2024 TAXSCAN (HC) 337 In a recent judgement, the High Court of Kerala remanded the matter of  Income tax addition for fresh adjudication as the revenue failed to issue a show cause notice enquiring about details of an unsecured loan received from 5 person. The Court found that unless and until the petitioner was put to notice, in respect of the transaction of the aforesaid 5 persons, he did not need to give any response in respect of the proposed additions.

The single bench of Justice Dinesh Kumar Singh disposed of the writ petition and the matter is remanded back to the assessing authority, to pass a fresh assessment order. The petitioner is directed to file his response / supporting documents in respect of the loan advanced by the 5 persons. The respondents are directed to activate the link with intimation to the petitioner to enable the petitioner to file his explanation in respect of these 5 transactions only. 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. Interpretation of Section 32(2) of Income Tax Act: SC disposes of SLP filed by Income Tax Dept PRINCIPAL COMMISSIONER OF INCOME TAX 2 vs GUJARAT LEASE FINANCE LTD CITATION:   2024 TAXSCAN (SC) 169 The Supreme Court of India disposes of the Special Leave Petition ( SLP ) filed by the Income Tax Department in the challenge regarding the interpretation of Section 32(2) of the Income Tax Act, 1961. The SLP arose out of impugned final judgment and order dated 05-02-2018 in ITA No. 46/2018 passed by the High Court of Gujarat at Ahmedabad.

A Two-Judge of the Supreme Court of Justice Pamidighantam Sri Narasimha and Justice Aravind Kumar observed that “In view of the order passed in PCIT vs. Petrofils Co-operative Ltd, the Special Leave Petitions are disposed of. Pending applications, if any, shall stand disposed of.” The provision for permitting depreciation is included in Section 32 of the Income Tax Act of 1961. This section is governed by Rule 5 of the Income Tax Rules, 1962. The Income Tax Act permits the deduction when the cost of the tangible or intangible asset utilised by the assessee decreases. The income-tax department determines the depreciation at the time of the deduction based on the asset’s life cycle cost, not the asset’s total cost.