Tax Weekly Round-Up: April 28 - May 04, 2025
Kapil Dhyani
5 May 2025 9:15 PM IST
SUPREME COURTCentral Excise Tariff Act | Test Reports Justifying Reclassification Must Be Disclosed to Manufacturer : Supreme CourtCase Title: M/S OSWAL PETROCHEMICALS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, MUMBAI – IICase no.: CIVIL APPEAL NOS. 129-130 OF 2011The Supreme Court ruled that when a test report forms the basis for reclassification of the petrochemical products, necessitating...
SUPREME COURT
Case Title: M/S OSWAL PETROCHEMICALS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, MUMBAI – II
Case no.: CIVIL APPEAL NOS. 129-130 OF 2011
The Supreme Court ruled that when a test report forms the basis for reclassification of the petrochemical products, necessitating a higher duty, than the copy of such test reports ought to be furnished to the manufacturer-taxpayer.
The bench of Justices Abhay S. Oka and Ujjal Bhuyan set aside the ₹2.15 crore central excise duty demand against M/s Oswal Petrochemicals Ltd., holding that the revenue authorities had violated principles of natural justice by failing to share key evidence—such as the test report used to justify the reclassification of the petrochemicals, which led to the higher duty.
Case : Vineet Jain vs Union of India
Case no.: CRIMINAL APPEAL NO.2269 OF 2025
The Supreme Court recently expressed surprise at the High Court and the Magistrate Court denying bail to a person accused of committing offences under Section 132 of the Central Goods and Services Tax Act.
The Court observed that in cases like this, bail should normally be granted. The offences alleged against the appellant were under Clauses (c), (f) and (h) of Section 132(1) of the Central Goods and Services Tax Act, 2017. The maximum sentence is of 5 years with fine.
Case Title: M/S. COAL INDIA LIMITED VERSUS COMMISSIONER OF CUSTOMS (PORT), CUSTOMS HOUSE, KOLKATA
Case no.: CIVIL APPEAL NO. 8028 OF 2010
The Supreme Court yesterday (May 1) ruled that engineering and technical service fees paid by the importer must be included in the assessable value of imported spare parts under the Customs Act, 1962.
The bench of Justices Abhay S. Oka and Ujjal Bhuyan upheld that the 8% technical and engineering fee charged to the appellant(Coal India) should be included in the assessable value for determining customs duty.
HIGH COURTS
Allahabad HC
Claims Of GST Department Are Barred Once Resolution Plan Is Approved: Allahabad High Court
Case Title: M/S Arena Superstructures Private Limited v. Union Of India And 4 Others
Case no.: WRIT TAX No. - 1716 of 2025
Relying on the judgments of the Supreme Court in Vaibhav Goyal & Another Vs. Deputy Commissioner of Income Tax & Another, the Allahabad High Court has held that the claims of Goods and Service Tax Department are barred after the aproval of resolution plan by the National Company Law Tribunal.
The bench of Justice Shekhar B. Saraf and Justice Dr. Yogendra Kumar Srivastava held, “In view of the above law laid down by the Supreme Court, we are of the view that the principle is crystal clear that once Resolution Plan has been approved by the NCLT, all other creditors are barred from raising their claims subsequently, as the same would disrupt the entire resolution process. The Supreme Court has categorically held the same as indicated above.”
Mandatory To Fill Part B Of E-Way Bill In Transactions After April 2018: Allahabad High Court
Case Title: M/S B M Computers v. Commissioner Commercial Taxes And 2 Others
Case no.: WRIT TAX No. - 1559 of 2024
Recently, the Allahabad High Court has held that it is mandatory for the assesee to download the complete E-way Bill including Part-B of the E-way Bill for transactions after April 2018. Distinguishing the earlier judgment of the High Court in M/s. Varun Beverages Limited vs. State of U.P. and 2 others, M/s. Falguni Steels vs. State of U.P. and others, and others, Justice Rohit Ranjan Agarwal held,
“Reliance placed upon the judgments is distinguishable in the facts of the present case as in those cases, the transaction was prior to April, 2018 where the benefit was given to those assesses. It is mandatory on the part of the seller to download the complete e-way bill once the goods are put in transit. Only downloading Part A of e-way bill and non filling of Part B would not absolve the liability under the Act.”
Case Title: M/s Hari Shanker Transport v. Commissioner of Commercial Tax U.P. Lucknow and another
Case no.: WRIT TAX No. - 606 of 2025
The Allahabad High Court has held that order under Section 75(6) of the Goods and Service Tax Act, 2017 must be self-contained and mere reference to previous show cause notices is not sufficient.
The bench of Chief Justice Arun Bhansali and Justice Kshitij Shailendra held, “The manner of passing of order dated 27.04.2024 falls foul of the requirements of Section 75(6) of the Act, which requires that 'the proper officer, in his order shall set out the relevant facts and the basis of his decision', the statutory requirements for passing an order by setting out relevant facts and basis for the decision are totally missing from the order dated 27.04.2024.”
Case Title: M/S Maa Kamakhya Trader v. Additional Commissioner Grade 2 And Another
Case no.: WRIT TAX No. - 1386 of 2023
The Allahabad High Court has held that when the authority on verification has mentioned the details of the goods found and verified the correctness of the invoices and the goods in transit, it cannot be permitted to change the stand later and say that the goods were not in accordance with the invoice.
Justice Piyush Agrawal held “Once on the verification report i.e. MOV-04, the items are fed by the officer concerned, after due verification, the authorities cannot be permitted to completely change its stand or further permitted to supplement by different reasons or grounds, which were not taken or mentioned while preparing the physical verification report in MOV-04.”
Andhra Pradesh HC
Case title: Ravindra Muthavarapu v. The Superintendent Of Central Tax and Others
Case no.: WRIT PETITION Nos.17995, 17997, 18001, 18018, 18019 & 18024 of 2024
The Andhra Pradesh High Court has held that Section 88 of the Central Goods and Services Tax Act 2017 cannot be used by the Excise Department to recover its dues from the directors of a liquidated company. Section 88(3) states that the tax, interest or penalty of a private company, which has been wondup can be recovered from the directors of the company, subject to certain conditions, when such tax, penalty and interest is determined under the CGST Act.
A division bench of Justice R Raghunandan Rao and Dr Justice K Manmadha Rao observed, “This can only mean that tax, penalty or interest which had been determined under the CGST Act, alone can be recovered from the directors of private company which are under liquidation, subject to the condition set out in Section 88(3) of the CGST Act.”
Bombay HC
Case Title: Macrotech Developers Limited vs Dy Commissioner of Income Tax
Case Number: Writ Petition No. 2545 of 2016
Finding that the Petitioner had failed to disclose all material facts necessary for assessment of tax, the Bombay High Court ruled that the circuitous movement of funds through various companies located in tax havens had not been disclosed in the course of the original proceedings. The High Court therefore confirmed the reopening proceedings initiated against the petitioner.
A division bench of Justice Jitendra Jain and Justice M.S Sonak observed that “if based on subsequent information, there is a prima-facie material suggesting that the transaction of loan is nothing but the undisclosed funds of the Petitioner routed through various tax havens companies in the form of loan then the disclosure made in the course of the original assessment proceedings cannot be treated as full and true material disclosure for the purpose of the assessment”.
Delhi HC
Case title: M/S L-1 Identity Solutions Operating Company Private Limited v. Assistant Commissioner Of Income Tax, Central Circle – 25
Case no.: W.P.(C) 4845/2025
The Delhi High Court has held that an Assessing Officer cannot add income that allegedly escaped assessment in different previous years, to meet the threshold of ₹50 lakh prescribed under Section 149(1)(b) of the Income Tax Act 1961 for initiating reassessment action after lapse of three years.
A division bench of Justices Vibhu Bakhru and Tejas Karia in the facts of the case observed, “the AO has erred in proceeding on the basis that it was open for the AO to issue a notice under Section 148 of the Act bearing in mind the cumulative income that has escaped assessment in respect of FYs 2016-17, 2017-18 and 2018-19. It is impermissible for the AO to add income which is alleged to have escaped assessment for different previous years for determining the threshold figure of ₹50 lakhs as specified under Section 149(1)(b) of the Act.”
Case title: M/S. Vallabh Textiles v. Additional Commissioner Central Tax GST, Delhi East And Ors
Case no.: W.P.(C) 4576/2025
While dealing with a case under the Central Goods & Services Tax Act 2017, the Delhi High Court has held that though cross-examination can be granted in certain proceedings if it is deemed appropriate, the right to cross-examine cannot be an unfettered right.
A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta observed, “The rationale behind setting aside an order/judgment on the grounds of non-provision of the right to cross-examine is to safeguard the affected party from being prejudiced due to non-providing of cross examination. Therefore, such reasoning presumes/implies the existence of prejudice. In other words, if the alleging party fails to prove any substantial prejudice caused to it due to such non-provision, it shall not have the inherent right to set aside such an order/judgment.”
Case title: Rajbir Singh v. Union Of India & Ors.
Case no.: W.P.(C) 4496/2025
The Delhi High Court has flagged the rampant misuse of the Central government's Duty Drawback Scheme by various exporters. The said duty drawbacks are claimed under Sections 74 and 75 of the Customs Act, 1962.
A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta however noted that the Scheme has become the subject of misuse by some traders/ exporters who make fraudulent exports merely with a view of availing the benefits under the scheme.
Case title: Ankit Khandelwal v. Income Tax Officer & Ors.
Case no.: W.P.(C) 297/2023
The Delhi High Court has held that when determining whether a reassessment action meets the ₹50 lakh threshold prescribed under Section 149 of the Income Tax Act 1961, the value of income that allegedly escaped assessment as determined by the Assessing Officer at Section 148A(d) stage is relevant.
A division bench of Justices Vibhu Bakhru and Tejas Karia clarified that the value alleged by the AO at Section 148A(b) stage, i.e. before considering the Assessee's stand, is not relevant for the purposes of threshold under Section 149.
Case title: Sukhbir S. Dagar v. Income Tax Officer, Ward 24(3)
Case no.: ITA 741/2023
The Delhi High Court has held that sanction for initiation of reassessment action against an assessee under the proviso to Section 151(1) of the Income Tax Act 1961, cannot be issued by the Joint Commissioner of Income Tax.
Section 151(1) contemplates issuance of sanction by JCIT for initiating reassessment action under Section 148 against an assessee who has already undergone scrutiny assessment. The proviso to Section 151(1) however adds that if the reassessment action is sought to be initiated after the expiry of four years from the end of the relevant assessment year, no such notice shall be issued unless the Chief Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer.
SCN Uploaded On 'Additional Notices' Tab Of GST Portal Not Proper: Delhi High Court
Case title: M/S Gmt Garments v. Union Of India & Ors.
Case no.: W.P.(C) 5304/2025
The Delhi High Court has made it clear that uploading of show cause notice by the GST department under the 'additional notices' tab on its portal is not proper as the assessee may miss it. The decision is a contrast to a coordinate bench decision rendered in July last year, holding that uploading of notices under the heading 'additional notices' amounts to sufficient service.
A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta held, Also Read - Delhi High Court Dismisses BSNL's Appeal U/S 37 Of A & C Act, Upholds Arbitral Award Of Rs. 43.52 Crore “the notice if uploaded on the additional notices tab of the portal, the same would not be proper in as much as the party would not have even acquired knowledge of the same.”
Case title: Anand Mehta v. Director General Of Foreign Trade
Case no.: W.P.(C) 5669/2014
The Delhi High Court has held that unless specific allegations which discuss the role of a director in the export performance are made, there is no question of finding the director personally liable for non-fulfilment of export obligations by the company.
Justice Tara Vitasta Ganju relied on Santanu Ray vs. Union of India where the Supreme Court discussed vicarious liability of directors.
Case title: M/S Montage Enterprises Private Limited (Through Its Authorized Representative Sanjay Kumar Singh) & Ors. v. Central Goods And Services Tax Delhi North & Ors.
Case no.: W.P.(C) 4774/2025
The Delhi High Court refused to entertain a writ petition filed by a Noida based firm allegedly involved in GST fraud of over Rs. 550 crores. In doing so, a division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta were unappreciative of the Petitioner's conduct in responding to the Department's proceedings.
The High Court said, “A perusal of the reply filed by the Petitioner, would show that the Petitioners all along had all the requisite information to reply to the SCN, however, it chose not to file the same for almost six months. It was only when the personal hearing notice was given, due to the imminent expiry of the limitation period for passing the order, that the Petitioners have chosen to file a reply. The Petitioner only then raised objections in respect of RUDs and non-grant of opportunity for cross-examination. The Petitioners have, clearly, not been diligent in this matter.”
Rule 86A CGST Rules | Credit Ledger Can't Be Blocked For More Than One Year : Delhi High Court
Case title: Shri Sai Ram Enterprises v. Pr. ADG, DGGI, Gurugram & Anr.
Case no.: W.P.(C) 5438/2025
The Delhi High Court has ordered unblocking of an enterprise's Electronic Credit Ledger following the lapse of one year since its initial blocking.
In doing so, a division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta cited Rule 86A of the Central Goods and Services Tax Rules, 2017 which lays down the conditions of use of amount available in electronic credit ledger. It prescribes that the credit ledger of an assessee cannot be blocked beyond the period of one year.
Case title: M/s Jai Opticals v. GNCTD
Case no.: W.P.(C) 5300/2025
The Delhi High Court has observed that the Goods and Services Tax authorities are expected to empathetically consider an assessee's request for adjournment of personal hearing on medical grounds. A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta said the Department should not proceed to pass adverse orders in such matters.
The development comes in a petition filed by an optical firm, claiming that impugned order raising demand of approximately Rs.1.5 crores was passed by the Delhi GSt Department despite requesting for an adjournment of personal hearing on the ground that its proprietor suffered from a brain stroke and was not in a position for a hearing.
Case title: The Pr. Commissioner Of Income Tax - International Taxation -1 v. Bharti Airtel Ltd
Case no.: ITA 103/2025
The Delhi High Court has dismissed an appeal preferred by the Income Tax Department claiming that Bharti Airtel should have deducted TDS on payments made to overseas telecom service providers for bandwidth services.
A division bench of Justices Vibhu Bakhru and Tejas Karia relied on CIT v. Telstra Singapore Pte. Ltd. (2024) the High Court had held that where those availing services provided by a foreign telecom company were not accorded a right over the technology, infrastructure or any intellectual property, the agreements merely enabling availment of services cannot be construed as royalty taxable in India.
Gauhati HC
Case title: Union of India & Ors. v. Chyawan Prakash Meena
Case no.: Case No. : WA/342/2023
The Gauhati High Court has upheld a single-bench decision asking the Central government to refund the income tax deducted from the salary of a BSF Assistant Commandant belonging to the Scheduled Tribe community.
A division bench of Chief Justice Vijay Bishnoi and Justice N. Unni Krishnan Nair passed the direction in view of Section 10(26) of the Income Tax Act, 1961, which prescribes tax exemption to members of recognised Scheduled Tribe communities posted in specified areas.
Jharkhand HC
Case Title: The Commissioner of Income Tax, Jamshedpu vs M/s New Punjab Motor Transport
Case no.: Tax Appeal No. 26 of 2016
The Jharkhand High Court has quashed an order of the Income Tax Appellate Tribunal (ITAT), Circuit Bench, Ranchi, after finding that it was solely based on a precedent that had been overruled by the Supreme Court. The Tribunal had earlier deleted the entire addition made by the Assessing Officer under Section 40(a)(ia) of the Income Tax Act, 1961, on the ground that the payments in question had already been made.
The Division Bench comprising Justice Sujit Narayan Prasad and Justice Rajesh Kumar ruled that the Tribunal's reliance on the Allahabad High Court's decision in CIT v. Vector Shipping Services (P) Ltd. was no longer legally tenable in view of the Supreme Court's subsequent judgment in Palam Gas Service v. CIT.
Kerala HC
Case Title: M. M. Varghese v Assistant Director of Income Tax
Case No: WP(C) 19152 of 2024
The Kerala High Court on Friday (2ndMay) held that it need not interfere with the action of the Income Tax Department seizing Rs. 1 Crore Rupees from the bank account of CPI(M) Thrissur District Committee in the Bank of India branch in Thrissur The Income-Tax Department had in the days leading up to the 2024 Lok Sabha election, froze the bank account on the ground that there was a mismatch in the annual returns filed by the party. The petition challenging this action was filed by M. M. Varghese, the former Secretary of the District Committee.
“The pleadings and the materials placed for consideration do not indicate any malafides…..Hence, the satisfaction arrived at by the respondents to initiate the search and seizure under Section 132 of the Income Tax Act cannot be held to be perverse or legally untenable. Considering the scope of interference under 226 with a proceeding under 132 of the Act, this Court is of the view that the search and seizure proceedings initiated by the respondents do not warrant any interference at this juncture,” ordered Justice Bechu Kurian Thomas.
Madras HC
Case Title: Indian Bank v. The Commercial Tax Officer
Case Number: W.P.Nos.31572
The Madras High Court stated that provisions of Section 26E of the SARFAESI Act and Section 34 of the Recovery of Debts and Bankruptcy Act would prevail over the provisions of Section 24 of the Tamil Nadu General Sales Tax Act.
The Division Bench of Justices Anita Sumanth and G. Arul Murugan observed that “in the juxtaposition of Section 26E of the SARFAESI Act with Section 34 of the RDB Act, it is Section 26E of the SARFAESI Act that will provide the necessary impetus for determining the priority of a charge of security interest in favour of the Financial Institution, as Section 34 of the RDB Act is, by comparison, only a general provision.”
Orissa HC
Lawyers Running Individual Practice Exempt From Levy Of GST, Service Tax: Orissa High Court
Case title: Shivananda Ray v. Principal Commissioner CGST and Central Excise. Bhubaneswar and Others
Case no.: W.P.(C) No.6592 of 2025
The Orissa High Court has reminded the GST and Service tax authorities not to harass practicing lawyers by issuing them notices for levy of GST or service tax. A Chief Justice Harish Tandon and Justice BP Routray thus quashed the notices issued to a Bhubaneswar based lawyer demanding service tax of Rs.2,14,600/- and penalty of Rs.2,34,600/- plus interest.
It observed, “in view of the admitted fact that the Petitioner is a practicing lawyer…the Department the Petitioner is exempted from levy of service tax for such income he derived from his legal service as a Lawyer.”
Patna HC
Customs Act Grants Unfettered Investigative Powers Where Infraction Is Suspected: Patna High Court
Case Title: Bishal Roadways Versus UOI
Case no.: Civil Writ Jurisdiction Case No.6201 of 2020
The Patna High Court has held in a recent judgement that the Customs Act, 1962 provides 'unfettered power' to investigate where there are reasons to believe that there has been infraction of its provisions.
Justice Mohit Kumar Shah, observed, “The investigation cannot be nipped in the bud and be prevented simply on the basis of certain technicalities. The Customs Act provides unfettered power to investigate where there are reasons to believe that there has been infraction of the provision of the Customs Act.”
Case Title: M/s Sri Sai Food Grain and Iron Stors vs The State of Bihar & Ors.
Civil Writ Jurisdiction Case No.13674 of 2024
The Patna High Court, while allowing a petition challenging a tax demand of ₹88,64,550.50, has observed that an inspection conducted under the BGST/CGST regime is legally unsustainable if not carried out in compliance with Section 67 of the BGST/CGST Act, 2017 read with Section 100 of the Code of Criminal Procedure, 1973.
A Division Bench comprising Justice P. B. Bajanthri and Justice Alok Kumar Sinha, stated, “Section 67 of BGST/CGST Act, 2017 specifically mandates an inspection to be conducted in accordance with the Code of Criminal Procedure. Section 100 of the Code of Criminal Procedure stipulates that there shall be two witnesses when the inspection is conducted… The inspection report, therefore, does not contain the names and signatures of two independent witnesses which is the mandatory requirement of Section 67 of the BGST/CGST Act, 2017… Clearly this appears to be an afterthought done with the motive to simply cover-up the lacuna…”
TRIBUNALS
Case Title: M/s Bhardwaj Construction and Electricals Versus Commissioner of CGST and, Service Tax, Excise and Customs
Case Number: Service Tax Appeal No. 50967 OF 2017
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that suppression or wilful concealment not attributable when the departmental authorities have differed themselves on the taxability of the services.
The Bench of Binu Tamta (Judicial) and P.V. Subba Rao (Technical) has observed that, “When the two departmental authorities have differed themselves on the taxability of the services under a specific category, no suppression or wilful concealment with intent to evade payment of duty can be attributed to the assessee.”
ITAT Rejects Revenue's Appeal Seeking To Make ₹63.21 Billion Addition To DLF's Income For AY 2017-18
Case title: DCIT v. DLF Limited
Case no.: I.T.A. Nos. 711/Del/2024
The Income Tax Appellate Tribunal at New Delhi has dismissed an appeal preferred by the Revenue against an order of the National Faceless Centre (CIT(A)), deleting aggregate ₹63,02,13,86,035 addition made to income of real estate giant DLF Limited on various counts, for the Assessment Year 2017-18.
In its 82-page judgement, the Tribunal also disposed of the company's appeal against confirmation of addition made by CIT(A) on account of unverified purchase transactions, by remitting the issue to the Assessing Officer to consider the same afresh.