Weekly Round-Up of Tax Cases: May 15 To May 21

Supreme Court GST Council Recommendations Not Binding On Centre & States; Both Parliament & State Legislatures Can Legislate On GST : Supreme Court Case Title : Union of India and Anr versus M/s Mohit Minerals Through Director Citation : 2022 LiveLaw (SC) 500 In a significant verdict, the Supreme Court held that the recommendations of the GST council are not binding on the Union and the State Governments. A bench led by Justice DY Chandrachud held that the Parliament intended that the recommendations of the GST Council will have persuasive value. Importantly, the Court held that both the Parliament and the State Legislatures can equally legislate on matters of Goods and Service Tax. GST Council Has Unequal Voting Structure, Can Be An Avenue For Political Contestation : Supreme Court Case Title : Union of India and Anr versus M/s Mohit Minerals Through Director Citation : 2022 LiveLaw (SC) 500 While holding that the recommendations of the Goods and Services Tax(GST) Council are not binding on the Centre and the States, the Supreme Court has highlighted the unequal voting structure and the possibility of political contestations in the Council. The Court noted that the recommendations of the GST Council are not based on a unanimous decision but on a three-fourth majority of the members present and voting, where the Union's vote counts as one-third, while the States' votes have a weightage of two-thirds of the total votes cast. Delhi High Court Time Of 8 Hours To File Reply To Show Cause Notice, Not Reasonable: Delhi High Court Case Title: Rahul Biala Vs ITO Citation: 2022 LiveLaw (Del) 455 The Delhi High Court bench of Justice Manmohan and Justice Dinesh Kumar Sharma has held that the time of eight hours to file a reply to the show cause notice was neither reasonable nor effective. The assessee could not have provided relevant information and documents to establish his case in such a short period of time. AO & PCIT Failed To Consider Balance Of Convenience And Irreparable Injury While Deciding The Stay Application: Delhi High Court Case Title: Seven Seas Hospitality Private Limited Versus PCIT Citation: 2022 LiveLaw (Del) 467 The Delhi High Court bench of Justice Manmohan and Justice Dinesh Kumar Sharma has held that neither the Assessing Officer nor the Principal Commissioners of Income Tax (PCIT) have considered the three basic principles, i.e., the prima facie case, balance of convenience, and irreparable injury, while deciding the stay application. Delhi High Court Directs Designated Committee To Manually Process Payments Of Assessee Under SVLDR Scheme Case Title: SDB Infrastructure Pvt. Ltd. Versus Ministry of Finance Citation: 2022 LiveLaw (Del) 468 The Delhi High Court bench of Justice Rajiv Shakdher and Justice Poonam A. Bamba has directed the designated committee to manually process payments of an assessee under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS). Non Consideration Of Detailed Reply To Show Cause Notice Submitted After Stipulated Time, Delhi High Court Quashes Reassessment Order Case Title: Divya Capital One Private Limited Vs. ACIT Citation: 2022 LiveLaw (Del) 475 The Delhi High Court bench of Justice Manmohan and Justice Dinesh Kumar Sharma has quashed the reassessment order, alleging income of more than Rupees one lakh crore having escaped assessment on the grounds of violation of natural justice. Initiation Of Reassessment Proceedings By Income Tax Officer Without Jurisdiction: Delhi High Court Quashes The Proceedings Case Title: Indus Tower Ltd. Versus ITO Citation: 2022 LiveLaw (Del) 477 The Delhi High Court bench of Justice Manmohan and Justice Dinesh Kumar Sharma held that since the petitioner jurisdictional Assessing Officer is headquartered in Delhi, the income tax officer from Jaipur had no authority to send a notice proposing the beginning of reassessment proceedings. No Opportunity Of Personal Hearing Granted To Taxpayer: Delhi High Court Quashes Assessment Order Case Title: Omkar Nath Versus National Faceless Assessment Centre The Delhi High Court bench of Justice Rajiv Shakdher and Justice Talwant Singh has quashed the assessment order as an opportunity of personal hearing was not granted to the taxpayer. Bombay High Court Assessment Can't Be Reopened On Mere Change Of Opinion Of AO: Bombay High Court Case Title: Bhavani Gems Private Limited Versus Assistant Commissioner of Income Tax The Bombay High Court, while quashing the reassessment notice, held that the assessment could not be reopened on a mere change of opinion of the Assessing Officer (AO). The division bench of Justice K.R. Shriram and Justice N.R. Borkar observed that the reopening of assessment was merely on the basis of a change of opinion of the Assessing Officer from that held earlier during the course of assessment ...

Weekly Round-Up of Tax Cases: May 15 To May 21

Mariya Paliwala

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