Tax Weekly Round-Up: April 07 - April 13, 2025
Kapil Dhyani
14 April 2025 6:30 PM IST
HIGH COURTSAllahabad HCNOIDA Authorities Deposited Party's Tax Under Wrong Head: Allahabad HC Directs Compensation To Assessee For Penalty Imposed U/S 73 Of GST ActCase Title: Surender Gupta vs. Appellate Authority State Gst / Additional Commissioner Grade-Ii And 2 OthersCase no.: WRIT TAX No. - 1892 of 2024Recently, the Allahabad High Court has directed the New Okhla Industrial...
HIGH COURTS
Allahabad HC
Case Title: Surender Gupta vs. Appellate Authority State Gst / Additional Commissioner Grade-Ii And 2 Others
Case no.: WRIT TAX No. - 1892 of 2024
Recently, the Allahabad High Court has directed the New Okhla Industrial Development Authority (NOIDA) to compensate the assesee Rs. Rs.19,22,778/- which was imposed on the assesee as tax and penalty in proceedings under Section 73 of the Goods and Service Tax Act, 2017.
Petitioner rented out his property in Gautam Budh Nagar(Noida). The rent received from the property was taxable under the GST Act. Petitioner duly deposited the one-time lease rent of Rs. 97,18,500/- and the tax of Rs.17,49,330/- with NOIDA. Petitioner pleaded that he filed his return under Section 39 of the GST Act. The tax deposited by the petitioner to NOIDA was not reflecting in the form GSTR-3B due to mistake on part of NOIDA.
Delhi HC
Delhi VAT | No Interest On Refund For Period Of Delay Attributable To Dealer: High Court
Case title: Lithium Urban Technologies Pvt. Ltd v. Commissioner Of Value Added Tax & Anr.
Case no.: W.P.(C) 4925/2023
The Delhi High Court has held that if the delay in granting refund to a dealer under the Delhi Value Added Tax Act, 2004 is attributable to the dealer itself, such period of delay shall be excluded for the purposes of awarding interest on refund. Section 38(3)(a)(ii) of DVAT Act stipulates a period of two months for refund of excess tax, penalty, etc., if the period for refund is a quarter.
A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta cited Explanation to Section 42(1) of the DVAT Act and observed, “If the delay in granting the refund is attributable to the said person (dealer), whether wholly or in part, the period of the delay attributable to him shall be excluded from the period for which the interest is payable.”
Case title: M/S Raj International v. Additional Commissioner Cgst Delhi West & Ors.
Case no.: W.P.(C) 4096/2025
The Delhi High Court has flagged the rise in number of GST related cases being filed before it and to ensure expeditious disposal of cases, particularly those arising out of procedural issues, has asked the Department to depute at least two officials from its litigation section.
A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta said these officials can coordinate with the various Commissionerates of the GST department and give instructions to the Department's counsels, in an expedited manner.
Case title: HVR Solar Private Limited v. Sales Tax Officer Class Ii Avato Ward 67 & Anr
Case no.: W.P.(C) 4506/2025
The Delhi High Court has held that in terms of proviso 3 to Section 161 of the Delhi Goods and Service Tax Act, 2017, an order rejecting the rectification application filed by an assessee cannot be passed without first hearing the assessee.
A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta further said that the hearing can be dispensed with only where the rectification application is allowed.
Case title: Shalender Kumar v. Commissioner Delhi West CGST Commissionerate & Ors
Case no.: W.P.(C) 3824/2025
The Delhi High Court has held that Section 54(11) of the Central Goods and Services Tax Act, 2017 prescribes twin conditions for Revenue holding back Refund due to an Assesseee, despite an order to that effect.
Section 54(11) of the Act would show that the refund can be held back on the satisfaction of the following two conditions – (i) when an order directing a refund is subject matter of a proceeding which is pending either in appeal or any other proceeding under the Act; and (ii) thereafter the Commissioner gives an opinion that the grant of refund is likely to adversely affect the revenue.
Jharkhand HC
Jharkhand High Court Orders ₹1.23 Crore GST Refund To Tata Steel Over ITC On Compensation Cess
Case title: Tata Steel Ltd v. State of Jharkhand
Case no.: W.P. (T) No. 2900 of 2024
The Jharkhand High Court has ordered Rs. 1,23,22,617/- GST refund to Tata Steel, whose largest steel plant is situated in State's Jamshedpur city.
The amount represented Input Tax Credit (ITC) on Compensation Cess paid by the company under Section 8(2) of the Goods and Service Tax (Compensation to States) Act, 2017 for purchasing its key raw material- Coal.
Withholding Tax Refunds Without Justification Violates Section 55 Of JVAT Act: Jharkhand High Court
Case Title: M/s. Castrol India Limited vs The State of Jharkhand and ors
Case no.: W.P. (T) No. 7091 of 2023
The Jharkhand High Court has held that withholding tax refunds beyond the statutorily prescribed period without adequate justification, violates Section 55 of the Jharkhand Value Added Tax Act, 2005, and deprives the taxpayer of rightful dues.
The Court ruled that the refund must carry interest from the date the excess demand was determined, and non-allocation of funds by the State cannot override this obligation.
Karnataka HC
Value Of Land Under Works Contract Is Not Exigible To VAT: Karnataka High Court
Case Title: M/s Fortious Infradevelopers LLP V. The Additional Commissioner of Commercial Taxes
Case Number: SALES TAX APPEAL NO. 18 OF 2022
The Karnataka High Court stated that value of land under works contract is not exigible to VAT.
The Division Bench of Justices Krishna S Dixit and Ramachandra D. Huddar was addressing the issue of whether levying tax on receipt for land cost i.e., immovable property, which does not constitute consideration for works contract under Composition Scheme of KVAT is sustainable.
Kerala HC
Case Title: C.Y Cherian v. State of Kerala
Case Number: WP(C) NO. 13425 OF 2025
The Kerala High Court stated that once tax has been assessed, entire amount has to be paid, unless there are amnesty schemes.
“The assessee had even acquiesced into the order by paying the first instalment and thereafter he has turned around and now requests for acceptance of a portion of the amount in satisfaction of the entire tax assessed. Such a procedure is unheard in law. Once tax has been assessed, the entire amount has to be paid, unless there are amnesty schemes,” stated the bench of Justice Bechu Kurian Thomas.
Case : Indian Medical Association Kerala Branch vs Union of India
Case no.: W.A.NO.1659 OF 2024
In a significant judgment, the Kerala High Court has struck down the provisions of the Central Goods and Services Tax Act, 2017, which allowed the levy of GST on supply by clubs and associations to its members.
As per the 2021 amendment made to the CGST Act, the definition of "supply" was amended to include within its fold "activities or transactions, by a person, other than an individual, to its members or constituents or vice versa, for cash, deferred payment or other valuable consideration." Also, this amendment was given a retrospective effecf from 01.07.2017.
A bench comprising Justice Dr Jayasankaran Nambiar and Justice S Easwaran has declared these provisions to be unconstitutional. The bench reasoned that the provision went against the definition of "supply" given under Article 246A of the Constitution.
Case Title: M/s Anoor Dental College v. State of Kerala
Case Number: OT.REV NO. 4 OF 2025
The Kerala High Court held that college supplying food through canteen, though managed by educational trust, is liable for registration under KVAT Act.
The bench disagreed with the assessee that even if it is assumed that the sales in the canteen are found to be assessable under the provisions of the VAT, it falls within the threshold limit and therefore, the assessee cannot be compelled to take registration.
Madras HC
CENVAT Credit Can't Be Denied Merely On Non-Submission Of User Test Certificate: Madras High Court
Case Title: The Commissioner of CGST & Central Excise v. Kothari Sugars and Chemicals Ltd.
Case Number: W.A.(MD). Nos. 557 to 568 of 2024
The Madras High Court stated that user test certificate is not mandatory before adjudicating show cause notice.
The Division Bench of Justices R. Suresh Kumar and G. Arul Murugan opined that show cause notices cannot be adjudicated merely on the ground that the User Test Certificate has not been produced by the assessee.
Case Title: Transasia Bio-Medicals Ltd. v. Union of India
Case Number: W.P.Nos.28380 & 28388 of 2018
The Madras High Court stated that goods imported exempted from basic customs duty, may still be subject to levy of additional duty under respective enactments.
“The goods imported, even though exempted from basic customs duty, may still be subject to levy of additional duty under the respective enactments and they would be so subject unless and until they are specifically exempted by the competent authority in exercise of the powers vested under those respective enactments from such additional duty” stated the bench comprising of Chief Justice K.R. Shriram and Justice Mohammed Shaffiq.
Rajasthan HC
Case Title: Giriraj Pugalia v Assistant Commissioner of Income Tax
Case no.: Civil Writ Petition No. 3152/2025
Rajasthan High Court denied interference with initiation of proceedings under Section 153C of the Income Tax Act, 1961 (“the Act”) that were alleged to be initiated merely based on certain WhatsApp Chats, observing that the information in the chats were completely corroborated by specific transactions and hence, the said chat could be considered to be falling under the definition of “other documents” under Section 153C.
The division bench of Justice Pushpendra Singh Bhati and Justice Chandra Prakash Shrimali ruled that the ambit of Section 153C was not to restrict the proceedings in relation to 'other person' arising out of Section 153A but to enable such invocation such that in case there was any connecting evidence which was specific and corroborated by facts, no escape was possible for such 'other person'.
Telangana HC
Case title: M/s. Andhra Fuels Private Limited vs. State of Andhra Pradesh
Case No: TAX REVISION CASES NOS.1, 3 AND 7 OF 2008
In a case pertaining to the taxation of Natural Gas, the Telangana High Court has held that Natural Gas shall fall under Entry 23 of 6th Schedule, under the category of petroleum gases, and not Entry 118. The different entries change the percentage of tax levied.
Justice Narsing Rao Nandikonda held that “This bench is of the firm opinion that the findings given by the Tribunal holding that the natural gas sold by the petitioner falls under entry 23 of 6th schedule is proper”.
TRIBUNALS
Case Title: Noorul Ayin Versus Commissioner of Customs
Case No: Defect Appeal No. 42151/2024
The Chennai Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has recently clarified that once the luggage/bag which accompanies an individual arriving from a domestic airport in India, during the aircrafts domestic run, is intercepted by the officers, there cannot be a presumption that it is covered under the Customs Act, 1962 and to which the Baggage Rules, 2016 can automatically apply.
The CESTAT therefore held that, “'baggage' under the Baggage Rules 2016, includes jewellery worn or concealed on the person of an individual arriving in India from abroad, and hence this Tribunal lacks the jurisdiction to entertain an appeal pertaining to 'any goods imported or exported as baggage' as per the exclusions carved out by the proviso to Section 129A(1) of the Customs Act, 1962”. (Para 14)
Case title: The Indian Hotels Company Limited v. Additional Commissioner of Income Tax Range 2(2), Mumba
Case no.: ITA No.5653/MUM/2011
The Mumbai Bench of the Income Tax Appellate Tribunal has granted relief to the Indian Hotels Company Ltd, which owns the Taj hotels chain and set aside an addition of ₹8,22,25,142/- made by the Assessing Officer to its declared income of ₹107,74,26,414/- for the AY 1998-99.
The Tribunal quashed the reopening basis the incorrect invocation of Clause (b) of Explanation 2 to Section 147 of the Act since the original assessment had already been completed u/s 143(3) of the Act in the case of the Assessee.
No CENVAT Credit On Training Of Employees Of GAIL By Training Institutes: CESTAT
Case Title: M/s Gail Training Institute Versus Commissioner, Central Excise and Service Tax, LTU
Case Number: Service Tax Appeal No. 50632 OF 2017
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that no CENVAT credit on training of employees of Gas Authority of India Ltd. (GAIL) by training institutes.
The Bench of Dilip Gupta (President) and P.V. Subba Rao (Technical) has observed that, “The term “coaching and training” must be “coaching and training” of the employees of the assessee. Merely because the bills were paid by the assessee, the services provided by way of coaching and training of employees of GAIL do not become input services of the assessee.”