Tax Weekly Round-Up: January 20 - January 26, 2025

SUPREME COURTSupreme Court Sets Aside Excise Duty Demand On Oil Marketing Companies For Inter-Supply Of Petroleum ProductsCase Title: Bharat Petroleum Corporation Ltd. versus Commissioner of Central Excise Nashik Commissionerate (and connected matters)Case no.: CIVIL APPEAL NO. 5642 OF 2009In a significant relief for Oil Marketing Companies (OMCs), the Supreme Court ruled (Jan. 20) that prices under the MoU for inter-supply of petroleum products, designed to ensure smooth nationwide distribution, do not constitute "transaction value" and are exempt from excise duty due to their non-commercial nature.The Court emphasised that the inter-supply arrangement was not solely price-driven but aimed at facilitating seamless distribution, rendering it ineligible for excise duty.'Badly Drafted Petition' : Supreme Court Dismisses PIL Challenging TDS System Of Income Tax ActCase title: Ashwini Upadhyay v Union of IndiaCase no.: W.P.(C) No. 20/2025The Supreme Court today (January 24) refused to entertain a Public Interest Litigation challenging the provisions of the Income Tax Act which impose an obligation on private employers to deduct tax at source (TDS) on the salaries paid by them.A bench comprising Chief Justice of India Sanjiv Khanna and Justice Sanjay Kumar said that the petition filed by BJP leader Ashwini Upadhyay was "badly drafted" and asked him to approach the High CourtHIGH COURTSDelhi HCTrader Cannot Accept Settlement Commission's Order U/S 127C Of Customs Act 'In Parts': Delhi High CourtCase title: KBS Industries Ltd & Anr. v. The Customs Central Excise And Service Tax Settlement Commission Principal Bench New Delhi & OrsCase no.: W.P.(C) 10505/2024The Delhi High Court has held that an order passed by the Settlement Commission under Section 127C of the Customs Act, 1962 is in the nature of a 'settlement' and cannot be accepted by a trader only in part. A division bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma observed, “Given the nature of the order passed under Section 127C of the Act – which is in the nature of a settlement – it would not be permissible to dissect the same and accept that parts of the order which are favourable to the applicant while rejecting the other directions which are not. The order of Settlement Commission must be accepted in entirety.”Customs Dept Cannot Run Parallel Proceedings By Passing Penalty Order While Challenge To SCN Is Pending Before Court: Delhi HCCase title: Vijay Enterprises & Anr v. The Principal Commissioner Of Customs & AnrCase no.: W.P.(C) 5809/2024The Delhi High Court has set aside a final order of penalty passed by the Customs Department against a paper trader for alleged undervaluation of imported goods, stating that the same was passed during pendency of challenge to the show cause notice (SCN) issued to the trader.A division bench of Justices Prathiba M. Singh and Dharmesh Sharma observed, “passing of the impugned Order-in-Original while the impugned SCN was under challenge before this Court would amount to initiation of parallel proceedings rendering the scrutiny of the Court as infructuous.”Once Court Orders Release Of Bank Guarantee Furnished By Trader, Customs Dept Can't Hold Back Compliance And Direct Adjustment In Demand Order: Delhi HCCase title: M/S Om Gems And Jewellery v. Deputy Commissioner Of Customs (Import) Air Cargo Complex Nscbi Airport & Ors.Case no.: W.P.(C) 6218/2024The Delhi High Court has made it clear that once a court of law directs the Customs Department to release the bank guarantee furnished by a trader, the Department cannot turn around and say that the amount will be adjusted towards the final demand order. A division bench of Justices Prathiba M. Singh and Dharmesh Sharma observed, “the Division Bench judgment had to be complied with and the Customs Department could not hold back compliance thereof by directing adjustment in the final order. Such a course of action would not be permissible.”Rates Charged By Power Distribution Companies, State Board For Electricity Can Be Considered To Determine Its Market: Delhi HCCase title: Principal Commissioner Of Income Tax – 1, New Delhi v. DCM Shriram Ltd.Case no: ITA 566/2023The Delhi High Court has held that the rate at which power is supplied by the State Electricity Board (SEB) or the Power Distribution Companies is an appropriate metric for determining market price of electricity.A division bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma further held that rate at which electricity is sold on the Indian Energy Exchange (IEX) platform is not a 'comparable' and should not be considered to determine market value of the power supplied by the Assessee to its industrial units.Gauhati HCS.69 CGST Act | Commissioner Must Specify Necessity Of Arrest In Addition To 'Reasons To Believe' That Assessee Committed Offence: Gauhati HCCase title: Dharmendra Agarwal v. The Union Of India And 2 Ors.Case no.: WP(C)/6963/2024The Gauhati High Court...

Tax Weekly Round-Up: January 20 - January 26, 2025

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