Tax Cases Monthly Round-Up: January 2023

Indirect Taxes Supreme Court Sabka Vishwas Scheme : Supreme Court Grants Relief To Company Which Missed Deadline Due To IBC Moratorium Case Title: Shekhar Resorts Limited vs Union of India Citation : 2023 LiveLaw (SC) 15 No one can be expected to do the impossible, the Supreme Court remarked while granting relief to a company which could not avail the benefit of settlement of tax dues under “Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, due to moratorium imposed on it. Supreme Court Sets Aside Bail Condition To Deposit Rs 70 Lakhs In Case For Wrongfully Claiming ITC Case Title: Subhash Chauhan Versus UOI Citation: 2023 LiveLaw (SC) 61 The Supreme Court has overturned a bail condition imposed by the High Court that a person accused of illegally claiming Input Tax Credit must deposit Rs. 70 lakhs, the alleged amount of improperly claimed ITC. 'Premature For High Court To Opine On Tax Evasion' : Supreme Court Sets Aside HC Order Which Quashed Notice Under Section 130 CGST Act Case Title: State of Punjab Versus Shiv Enterprises Civil Appeal No. 359 of 2023 Citation : 2023 LiveLaw (SC) 56 Observing that it was "premature" on the part of the High Court to quash a show-cause notice issued under Section 130 of the Central Goods and Service Tax Act by invoking Article 226 jurisdiction, the Supreme Court recently set aside an order passed by the Punjab and Haryana High Court. The Supreme Court noted that there were allegations about evasion of tax and hence it was premature on the part of the High Court to opine anything on whether there was any evasion of the tax or not. The same was to be considered in an appropriate proceeding for which the notice under Section 130 of the Act was issued. Supreme Court Stays Madras High Court’s Order Directing Payment of Tax On Manufacture Of Water Borehole Drilling Rigs Case Title: M/s. Paranthaman Hydraulics and Equipments Versus State Of Tamil Nadu The Supreme Court has stayed the order passed by the Madras High Court directing the payment of a minimum 4% tax on the manufacturing of the water borehole drilling rigs. The division bench of Justice Krishna Murari and Justice C.T. Ravi Kumar has observed that tax at the rate of 4% has already been deposited by the petitioner. The direction in the order to pay another 4% shall remain in abeyance until the next date of listing. Delhi High Court Payment Of Tax And Penalty To Release Detained Goods Can’t Be Treated As “Admission” On The Part Of Assessee: Delhi High Court Case Title: Ram Prakash Chauhan Versus Commissioner of Delhi (GST) Citation: 2023 LiveLaw (Del) 78 The Delhi High Court has held that the payment of tax and penalty to release the detained goods shall not be treated as "admission" on the part of the assessee. The division bench of Justice Vibhu Bakhru and Justice Amit Mahajan has observed that the petitioner had paid the tax and penalty for the release of the goods and that the said payment was not voluntary. Neither the show-cause notice nor the order of demand clearly sets out the reason for imposing the tax liability as well as the penalty. CAAR Not Barred From Giving Ruling On The Ground Of Preliminary Exercise Being Done By Customs Officer: Delhi High Court Case Title: Directorate of Revenue Intelligence (Hqrs.) versus M/s Spraytec India Ltd Citation: 2023 LiveLaw (Del) 82 The Delhi High Court has ruled that merely because an officer of customs contemplates that a question may arise for consideration, does not mean that the question is “pending” consideration so as to bar the Customs Authority for Advance Ruling (CAAR) from deciding the issue in an application for advance ruling, under Clause (a) of the proviso to Section 28-I (2) of the Customs Act, 1962. No Provision In GST Act for Confiscating Currency From The Premises : Delhi High Court Case Title: Arvind Goyal CA Versus UOI Citation: 2023 LiveLaw (Del) 83 The Delhi High Court ruled that there is no provision in the GST Act that would allow for the forcible removal of currency from the premises of any person. The division bench of Justice Vibhu Bakhru and Justice Amit Mahajan has observed that the powers of search and seizure are draconian powers and must be exercised strictly in terms of the statute and only if the necessary conditions are satisfied. VAT Department Not To Initiate Coercive Measures Against PSU Pawan Hans: Delhi High Court Case Title: Pawan Hans Ltd. Versus Commissioner of Trade and Taxes Citation: 2023 LiveLaw (Del) 65 The Delhi High Court has granted a stay to helicopter charterer PSU Pawan Hans Ltd. against a VAT demand of Rs. 176 crores. The division bench of Justice Vibhu Bakhru and Justice Amit Mahajan has observed that the issue needs consideration and directed the VAT department not to initiate coercive measures for recovery of the VAT...

Tax Cases Monthly Round-Up: January 2023

Mariya Paliwala

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