Top Stories Supreme Court & High Courts Weekly Round-up [Jan 11th to Jan 17th, 2025] A Round Up of the SC & HC Cases Reported at Taxscan Last Week By Sneha Sukumaran Mullakkal – On January 18, 2025 2:18 pm – 10 mins read This weekly round-up analytically summarizes the key stories related to the Supreme Court and High Court reported at Taxscan.in during the previous week 11th January 2025 to 17th  January 2025) Supreme Court directs Bail for Woman Charged for Non-Bailable Offence u/s 45(1), PMLA citing No Speedy Conclusion of Trial SHASHI BALA @ SHASHI BALA SINGH vs DIRECTORATE OF ENFORCEMENT CITATION: 2025 TAXSCAN (SC) 106 The Supreme Court of India recently directed a Special Court to grant bail to a woman charged for non-bailable and cognizable offence, observing that the rigours of Section 45(1)(ii) of the Prevention of Money Laundering Act, 2002 ( PMLA Act ) shall not stand effectuated in the matter wherein there is no seemingly near-end of the trial process.

Furthermore, observing that there is no possibility of the trial to conclude in the near future owing to the long list of witnesses yet to be examined, the Court directed the appellant to be produced before the Special Court within one week wherein the Special Court shall grant bail to the accused on the fulfilment of appropriate terms and conditions. Read More: https://www.taxscan.in/supreme-court-directs-bail-for-woman-charged-for-non-bailable-offence-u-s-451-pmla-citing-no-speedy-conclusion-of-trial/480401/ Reduction in Share Capital of Subsidiary Amounts to Asset Transfer u/s 2(47), Income Tax Act: Supreme Court PRINCIPAL COMMISSIONER OF INCOME TAX-4 & ANR. vs M/S. JUPITER CAPITAL PVT. LTD. CITATION: 2025 TAXSCAN (SC) 103 The Supreme Court of India, in a recent judgment, has held that the reduction in share capital of a subsidiary company and the resultant proportional reduction in the shareholding of the assessee fall within the purview of the term “sale, exchange or relinquishment of the asset” under Section 2(47) of the Income Tax Act, 1961.

The Court held that reduction in share capital significantly impacts the rights of shareholders and thus qualifies as a transfer. This decision provides much required clarity on the tax implications of share capital reduction and strengthens the interpretation of Section 2(47) of the Income Tax Act. Increased Tax Demand against Coca Cola without Intimating Enhancement: Orissa HC quashes Order M/s. Hindustan Coca-Cola Beverages Pvt. Ltd. vs The Commissioner, CT and GST CITATION: 2025 TAXSCAN (HC) 131 The Orissa High Court has quashed the increased tax demand against Coca Cola as the enhancement was without proper intimation to assessee. It was found that the petitioner was entitled to a notice of hearing if the rectification resulted in an increase in the amount of interest. The judgment further stated that the petitioner was entitled to a notice of hearing if the rectification resulted in an increase in the amount of interest. The clause does not support the idea that aggregate demand will stay the same. The court set aside the impugned rectification order and quashed the same.

BH Series Vehicles Taxable as per State Motor Vehicle Tax Acts: Kerala High Court HARISH KUMAR K.P vs UNION OF INDIA CITATION: 2025 TAXSCAN (HC) 133 The Kerala High Court recently granted relief to Petitioners owning the relatively new ‘BH series’ registered vehicles, holding that they are liable to be taxed as per the provisions of the Kerala Motor Vehicle Taxation Act, 1976 as per the principles of the Central Motor Vehicle (Twentieth Amendment) Rules, 2021. However, Justice D.K. Singh clarified that while the states are not obliged to implement the rate of tax as per the Central Rules, the State Governments may only levy taxes as per the principles prescribed under sub-rules (1) and (3) of Rule 51B of the Central Motor Vehicle (Twentieth Amendment) Rules 2021. Orissa HC set aside Exparte order u/s 73 of OGST Act made after Filing of Delayed Reply to SCN M/s. M.P. Jay Jagannath Transport, Kendujhar vs State Tax Officer, CT and GST Circle, Keonjhar and others CITATION: 2025 TAXSCAN (HC) 135 The Orissa High Court set aside exparte order passed under section  73 of Orissa Goods and Service Tax (OGST) Act, 2017 made after filing a delayed reply to Show Cause Notice issued.

The court decided as above as the assessee submitted some of the documents like GSTR 9 and GSTR 9C before the time prescribed. Considering the circumstance, the division bench of Justice Arindam Sinha And Justice M.S. Sahoo set aside the  impugned order and stated that the petitioner will communicate certified copy of the order to opposite party no.2 by 24th January, 2025 and obtain date of personal hearing. GST Order passed against Deceased Person Non Est in Law: Madras HC Robin John vs The State Tax Officer CITATION: 2025 TAXSCAN (HC) 139 In a recent ruling, the Maduari bench of Madras High Court has ruled that the Goods and Services Tax ( GST ) demand order passed against the deceased person is ‘Non Est in Law’. While quashing the order, the court granted the GST authorities the liberty to initiate appropriate proceedings against the legal heirs of the deceased, in accordance with the law. The court did not impose any costs on the parties and closed all connected miscellaneous petitions. Signature Forgery in Form F Filed with Counter Statement: Madras HC releases VAT Liability of deceased Person and his Representatives D.Sekar VS The Assistant Commissioner (State Tax) CITATION: 2025 TAXSCAN (HC) 138 The Madras High Court has set aside a VAT liability imposed on a deceased individual and his representatives, stating the submission of forged signatures by the estranged son-in law in Form F with the counter statement. Justice C. Saravanan allowed the writ petition, releasing the petitioner and his legal representatives from the VAT liability.

However, it left the door open for the Commercial Tax Department to pursue recovery from the petitioner’s estranged son-in-law under the Tamil Nadu VAT Act, 2006, and the Central Sales Tax Act, 1956. Limitation for TRAN-1 Declaration u/r 117 CGST is Mandatory and Not Directory: Rajasthan HC Dharnia Motors vs Union Of India CITATION: 2025 TAXSCAN (HC) 137 In a recent matter, the Rajasthan High Court reaffirmed the mandatory nature of the time and manner for claiming transitional credit under Rule 117 of the Central Goods and Services Tax (CGST) Rules, 2017. In light of the observations, the Rajasthan High Court dismissed the petition, reaffirming that non-compliance with the prescribed time and manner under Rule 117 disqualifies a trader or dealer from claiming transitional credit. Non-Furnishing of Approval u/s 151 to Assessee: Bombay HC quashes Income Tax Reassessment Imperial Consultants and Securities Ltd. VS Deputy Commissioner of Income Tax CITATION: 2025 TAXSCAN (HC) 140 The Bombay High Court recently halted Income Tax Reassessment Proceedings against a petitioner, observing that no copy of approval under Section 151 of the Income Tax Act, 1961 for reopening assessment had been served upon the Assessee. Granting relief to the Petitioner, the Bench reiterated that the duty of the Revenue to demonstrate that escapement of income occurred due to failure of the Assessee to disclose relevant details to warrant reassessment; here, a mere change of opinion cannot call for reassessment as per the procedural safeguards of Section 147 of the Income Tax Act, 1961.

GST Officer Prematurely Recovers Demand and Freezes Bank Account Despite Pending Appeal: Madras HC directs Refund M/s.Vadivel Coco Tech Private Limited vs The State Tax Officer CITATION: 2025 TAXSCAN (HC) 141 In a recent ruling, the Madurai Bench of the Madras High Court directed the State Tax Officer to refund an amount prematurely debited, criticizing the freezing of the petitioner’s bank account despite the pending appeal. The court directed the respondent to refund the amount within two weeks without requiring the petitioner to file a separate request. The court disposed of the writ petition allowing the petitioner to pursue their appeal with the appellate authority. No Disqualification of Village Panchayat Member merely on Non-Payment and Arrears of Tax: Bombay HC Shaikh Wahed Yakub VS The Additional Commissioner CITATION: 2025 TAXSCAN (HC) 142 The Bombay High Court recently granted relief to a village panchayat member, observing that no disqualification under Section 41(1)(h) of the Maharashtra Village Panchayats Act, 1959 may be initiated on the grounds of non-payment and arrears of Grampanchayat Taxes. Referring to the failure of the Petitioner to adequately prove the proper service of notice as per manner and mode of service or bill or writ under Section 129 of the Central Goods and Services Act, 2017, the Bench upheld the orders by the Collector and Commissioner therein and dismissed the Writ Petition. Relief to Shapoorji Pallonji: Andhra Pradesh HC remands GST matter seeking Refund of TDS in Electronic Cash Ledger Shapoorji Pallonji And Company Private Limited vs Union Of India and Others CITATION: 2025 TAXSCAN (HC) 144 The Andhra Pradesh High Court recently granted relief to Shapoorji Pallonji Group, directing the remand of a Goods and Services Tax ( GST ) dispute regarding the refund of Tax Deducted at Source ( TDS ) amounts deposited in the Electronic Credit Ledger.

Acceding to the Petitioner’s submissions, the Division Bench of Justice R Raghunandan Rao and Justice Maheswara Rao Kuncheam set aside the Order-in-Appeal and the Order-In-Original passed by the precursory appellate authorities and remanded the matter to the Respondents for reconsideration in light of Circular No.166/22/2021-GST within a period of 3 months from the present Order. Nullity: Madras HC quashes GST Assessment Order against Deceased Lakshmi Periyasamy vs State Tax Officer CITATION: 2025 TAXSCAN (HC) 143 In a significant judgment, the Madras High Court quashed a Goods and Services Tax ( GST ) assessment order issued against a deceased individual, on the grounds of being null and void.

The Madras High Court thus invalidated the Goods and Services Tax ( GST ) assessment order against a deceased individual, emphasizing jurisdictional flaws and ensuring compliance with legal procedures for legal heirs. Lack of Reasoning, Non-Consideration of Reply and Non-Application of Mind: Delhi HC remands GST SCN HOLY LAND MARKETING PRIVATE LIMITED vs SALES TAX OFFICER CLASS II/AVATO WARD 205 ZONE 11 CITATION: 2025 TAXSCAN (HC) 145 The Delhi High Court recently remanded a Show-Cause Notice (SCN) pertaining to Goods and Services Tax (GST), observing that the Respondent Sales Tax Officer had passed the impugned order without proper reasoning, non-application of mind, and abstained from considering the reply filed by the taxpayer.

Remarking lack of reasoning, non-consideration of the reply and non-application of mind in passing the impugned order dated 31st August, 2024, the Delhi High Court remanded the Show-Cause Notice for fresh consideration in light of the replies filed by the Petitioner, while directing that the matter be assigned to a different Proper Officer who shall be required to meritoriously adjudicate the SCN within a period of two months after providing the Petitioner an opportunity of hearing. Uttarakhand HC rejects Bail Plea of Dark Web Drug Trafficking accused in Money Laundering Case Banmeet Singh vs Directorate of Enforcement CITATION: 2025 TAXSCAN (HC) 148 The Uttarakhand High Court, on January 7, 2025, dismissed the bail application of Banmeet Singh, who faces charges of money laundering and drug trafficking under the Prevention of Money Laundering Act, 2002.

The court refrained from making any determinations on whether the word “elsewhere” in the U.S. plea agreement extended to India but maintained that such issues would be scrutinized in subsequent legal proceedings. Gains from Excluded Capital Assets not included as Book Profits u/s 115JB Not Liable to be included as Income: Delhi HC THE PR COMMISSIONER OF INCOME TAX-4 NEW DELHI vs M/S HESPERA REALITY PVT. LTD CITATION: 2025 TAXSCAN (HC) 147 The Delhi High Court recently held that gains accrued from capital assets entitled to statutory exemption that have not been included to ‘book profits’ under Section 115JB of the Income Tax Act, 1961 are to be included to taxable income. Noting that Section 10(38) cannot be read in the reverse to mean that if the gains are not included as book profits under Section 115JB of the Act, the same are liable to be included as income for the purposes of assessment to tax under the normal provisions. Consequently, the Delhi High Court rejected the appeal of the Revenue, finding no fault with the decisions of the CIT(A) and ITAT. Right to Travel Abroad part of Right to Personal Liberty: Delhi HC allows Former Director to Travel Abroad ATUL PUNJ vs UNION OF INDIA & ORS CITATION: 2025 TAXSCAN (HC) 150 The High Court of Delhi ruled in favour of the petitioner and allowed the former director to travel abroad by recognising the right to travel abroad as a part of personal liberty subject to certain conditions.

Thus, Justice Sanjeev Narula permitted the petitioner to travel abroad for a period of 15 days and upheld his right to travel abroad under Article 21. No Levy survives Declaration of Invalidity: Delhi HC directs Refund of Service Tax on CIF of Ocean Freight TAVRUR OILS AND FATS PVT LTD vs COMMISSIONER CENTRAL GOODS CITATION: 2025 TAXSCAN (HC) 146 The Delhi High Court recently directed the Revenue to refund Service Tax paid on Ocean Freight as per the Cost, Insurance and Freight (CIF) Contract, observing that no levy may be ascribed following the declaration of invalidity of the service tax. Noting that the declaration of invalidity nullifies the levy, the Bench directed the authorities to process and refund the service tax paid by the petitioners along with applicable interest, reaffirming the supersedence of constitutional mandates against double taxation and unlawful levies GST Officers Render Unconditional Apology to Bombay HC for Arresting Alleged Tax Evader prior to Recording Statement Mishal J. Shah HUF vs State of Maharashtra CITATION: 2025 TAXSCAN (HC) 149 The Bombay High Court recently accepted an unconditional apology rendered by officers of the  Goods and Services Tax (GST) Department, in light of their arrest of the Petitioner while his opportunity to record statement had been scheduled at a later date.

The Division Bench of Justice B. P. Colabawalla  and Justice Firdosh P. Pooniwalla accepted the apologies tendered by the GST Authorities and discharged the SCN issued against them, while issuing caution to take strict care before any arrest is made, in order to ensure the letter of law. Delhi HC dismisses Application of “Transfer of Right to Use” of Goods under Central Sales and DVAT Act w/o Transfer of Effective Control and Possession Delhi HC dismisses Application of “Transfer of Right to Use” of Goods under Central Sales and DVAT Act w/o Transfer of Effective Control and Possession M/S PAWAN HANS LIMITED vs COMMISSIONER OF TRADE AND TAXES CITATION: 2025 TAXSCAN (HC) 152 The Delhi High Court recently ruled that no “transfer of right to use” of Goods shall stand effectuated under the provisions of the Central Sales Tax Act, 1956 ( CST Act ) and the Delhi Value Added Tax Act, 2004 ( DVAT Act ) without the transfer of effective control and possession, validating transfer of right to use goods as contemplated under Section 2(g)(vi) of the CST Act and Section 2(zc)(vi) of the DVAT Act. Accordingly, the Delhi High Court allowed the Appeals, setting aside the decision of the Tribunals, granting relief to the Assessee and effectively vitiating the applicability of VAT or sales tax since no “deemed sales” took place. Non-Satisfaction of PE Requirements by Western Union Liaison Office: Delhi HC dismisses Taxability Plea of Revenue DIRECTOR OF INCOME TAX INTN\\\’L vs WESTERN UNION FINANCIAL SERVICES CITATION: 2025 TAXSCAN (HC) 153 The Delhi High Court recently observed that a Liaison Office (LO) of Western Union does not satisfy the established requirements for considering the same to be a fixed place “permanent establishment” (PE). In light of the observations made, the Delhi High Court upheld the impugned decisions of the ITAT in holding that there was no DAPE established by Western Union and that the usage of software does not constitute the creation of a PE, dismissing the Revenue’s plea of taxability.

Madras HC axes Bank Account Attachment and Garnishee Proceedings for Tax Recovery on paying 25% of Disputed Taxes Tvl. Bhawar Life Style vs The State Tax Officer/Commercial Tax Officer CITATION: 2025 TAXSCAN (HC) 154 The Madras High Court recently granted relief to a Petitioner, holding that no attachment of bank account or garnishee proceedings may be undertaken against the Petitioner alleged to have averted tax liabilities, upon the payment of 25% of the disputed tax amount in question. The Bench clarified that if any recovery proceedings by means of attachment of Bank Account or Garnishee proceedings had been undertaken against the Petitioner, and were in-force at the time, the same would stand lifted/withdrawn upon the payment of the 25% disputed tax as directed by the High Court. Inability to find GST Adjudication Orders on Portal: Madras HC calls upon Phone Seller to Pay 25% of Disputed Tax Tvl. Bhawar Life Style vs The State Tax Officer/Commercial Tax Officer CITATION: 2025 TAXSCAN (HC) 154 The Madras High Court recently directed a Phone Seller who claimed to be unable to locate Goods and Services Tax ( GST ) adjudication Orders against him on the online Portal to pay out 25% of the disputed tax to further the assessment proceedings.

The Bench further stipulated that following the fulfilment of the set conditions, the impugned assessment order shall be treated as a show-cause notice to which Petitioner shall file their objections within 8 weeks from if any which may be adjudicated by the Respondent in accordance with Law. Cross Empowerment: Kerala HC upholds State GST Officers’ Authority to issue Notices under CGST Act PINNACLE VEHICLES AND SERVICES PRIVATE LIMITED vs JOINT COMMISSIONER CITATION: 2025 TAXSCAN (HC) 155 The Kerala High Court ruled in favor of State GST officers’ authority to issue notices under the Central Goods and Services Tax (CGST) Act, dismissing a petition that challenged their jurisdiction and scope of cross empowerment in GST laws.

The Kerala High Court dismissed the petition, ruling that the state officers had acted within their rights in issuing the show-cause notice. The bench also noted that the petitioner can still challenge the notice through legal channels. Flavored Milk falls under GST Tariff Heading 0402: Andhra Pradesh HC M/s. Sri Vijaya Visakha Milk Producers Company Ltd vs Asst. Commissioner Of Central Tax and Others CITATION: 2025 TAXSCAN (HC) 156 The Andhra Pradesh High Court, in a recent decision held that flavuored milk comes under GST Tariff Heading 0402 and deleted a tax evasion penalty. The bench, comprising Justice R. Raghunandan Rao and Justice Maheshwara Rao Kuncheam,  quashed the penalty that was levied against the petitioner and allowed the writ petition.