Tax Weekly Round-Up: November 10 - November 16, 2025
Kapil Dhyani
17 Nov 2025 7:55 PM IST
SUPREME COURTSupreme Court Issues Notice On Patanjali Foods' Rs 2.97 Crore Excise Duty Refund AppealCase Title: Patanjali Foods Ltd. v. Commissioner of Central Excise and Service TaxCase Number: Civil Appeal Diary No(s). 57088/2025The Supreme Court has recently issued notice in an appeal filed by Patanjali Foods Limited (formerly Ruchi Soya Industries Ltd.) seeking a refund of Rs 2.97...
SUPREME COURT
Supreme Court Issues Notice On Patanjali Foods' Rs 2.97 Crore Excise Duty Refund Appeal
Case Title: Patanjali Foods Ltd. v. Commissioner of Central Excise and Service Tax
Case Number: Civil Appeal Diary No(s). 57088/2025
The Supreme Court has recently issued notice in an appeal filed by Patanjali Foods Limited (formerly Ruchi Soya Industries Ltd.) seeking a refund of Rs 2.97 crore charged by the tax department in connection with an excise duty dispute.
A Division Bench of Justice Pamidighantam Sri Narasimha and Justice Atul S Chandurkar issued notice on both the main appeal and the application seeking condonation of delay.
Transfer Of Title In Immovable Property Doesn't Attract Service Tax : Supreme Court
Case : Commissioner of Service Tax v M/s Elegant Developers
The Supreme Court has clarified that an activity which merely involves the transfer of title in immovable property by way of sale cannot be treated as a “service” under the Finance Act, 1994. Consequently, such transactions lie outside the ambit of service tax.
A bench comprising Justices JB Pardiwala and Sandeep Mehta delivered the verdict while dismissing an appeal filed by the Commissioner of Service Tax, New Delhi against M/s Elegant Developers, a partnership firm based in Allahabad. The Revenue had challenged a 2019 decision of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) which had set aside a tax demand of over Rs 10 crore against the firm.
Cause Title: LIPI BOILERS LTD. vs. THE COMMISSIONER OF CENTRAL EXCISE, AURANGABAD
The Supreme Court on Monday (November 10) dismissed the Revenue Department's excise duty demand against a company that had manufactured and erected a large boiler at a customer's site, holding that the full contract value could not be subjected to central excise duty. The Court clarified that parts bought out externally and supplied to the customer for assembly, but not actually used by the manufacturer, would not attract excise duty.
“we arrive at the finding that the final product that emerges as a result of performing the obligations under the contract, does not constitute excisable goods under the Act, 1944. Consequently, the base value of the boiler on which excise duty is to be levied, cannot be equated with the total contract price. Therefore, the price of the bought out parts cannot be included in the value of the boiler for the purpose of computing central excise duty under the Act, 1944.”, observed a bench of Justices JB Pardiwala and Sandeep Mehta while allowing the company's appeal against the CESTAT order which upheld the Revenue's demand for additional excise duty on bought out item.
Supreme Court Upholds View That Eden Gardens Not A 'Public Place' For Levy Of Advertisement Tax
Case Title: THE KOLKATA MUNICIPAL CORPORATION AND ANR. Versus THE CRICKET ASSOCIATION OF BENGAL AND ORS.
Case no.: SLP(C) No. 28566/2025
The Supreme Court dismissed a challenge to the Calcutta High Court order which held that Eden Gardens stadium was not a "public place" for the purpose of levying advertisement tax under the Kolkata Municipal Corporation Act.
A bench of Justices Vikram Nath and Sandeep Mehta heard the matter. Senior Advocate Jaideep Gupta appeared for petitioner-Kolkata Municipal Corporation. Senior Advocate Rajiv Shakdher appeared for respondents.
HIGH COURTS
Allahabad HC
CENVAT Rules Cannot Apply Retrospectively To Concluded MODVAT Proceedings: Allahabad High Court
Case Title: Modi Rubber Limited v. Union Of India And 2 Others
Case no.: WRIT TAX No. - 872 of 2021
Recently, the Allahabad High Court has held that where proceedings under the MODVAT (Modified Value Added Tax) Scheme had concluded prior to the introduction of the CENVAT (Central Value Added Tax) Rules, it would not be open to the revenue department to issue fresh notices against the assessee under the new scheme.
The bench of Justice Saumitra Dayal Singh and Justice Indrajeet Shukla held that, "The changed law did not make any specific provision to enable the revenue authorities to initiate a fresh proceedings, where earlier proceedings had already been initiated and concluded under the MODVAT scheme. Therefore, the revenue authority did not acquire the jurisdiction to issue the second Show Cause Notice dated 02.04.1998, on the issue that stood concluded by earlier order of the Tribunal dated 30.03.2000.”
Case Title: M/S Pilcon Infrastructure Pvt. Ltd. v. State of U.P. & Anr.
Case no.: WRIT TAX No. - 4654 of 2025
The Allahabad High Court has held that while acting under Rule 86A of the UPGST Rules, authorities must record 'reason to believe' in 'writing'. It held that not doing so would be contrary to the purpose of the Rule.
“It may not forgotten, granting ITC and maintaining its chain is the soul of a successful GST regime. Therefore, any doubt or suspicion alone may not lead an action by the authorities to block the ITC of the assessee and disrupt the entire value addition chain and consequentially tax payments without fulfulling statutory tax requirements, without fulfilling the mandatory requirement of law - to record 'reasons to believe', 'in writing',” held the division bench comprising Justice Saumitra Dayal Singh and Justice Indrajeet Shukla.
Case Title: M/s Smm Infratech Private Limited v. State of U.P.
Case no.: WRIT TAX No. - 1121 of 2025
Recently, the Lucknow Bench of the Allahabad High Court has held that under the UPGST Act, a lien cannot be created on the assessee's bank account an year subsequent to the payment of taxes.
“It is clear that these liens have been created after more than a year of the petitioner having paid his taxes. Furthermore, the deeming fiction under Section 62(2) of the Uttar Pradesh Goods and Services Tax Act, 2017 would apply, and any further demands should have been withdrawn by the authorities,” held the division bench comprising Justice Shekhar B. Saraf and Justice Prashant Kumar.
Bombay HC
Case No. : Sales Tax Reference NO. 09 OF 2011
The Bombay High Court on Wednesday held that manufacturers cannot claim full sales tax set-off on furnace oil used in producing goods that are partly sold within Maharashtra and partly transferred to branches outside the state, ruling that a 6% reduction must apply under Rule 41D(3)(a) of the Bombay Sales Tax Rules, 1959.
The Division Bench comprising of Justice M.S. Sonak and Justice Advait M. Sethna, on applicability of Rule 41D of the Sales Tax Act to furnace oil, endorses the view of Larger Bench of the Tribunal in case of Pudumjee Pulp to state that “the logical corollary would be to apply the provisions of Rule 41D(3)(a) of the Sales Tax Rules as it stands, without reading it down, on the purchase of furnace oil in proportion to the finished goods despatched to the branches of Borosil.”
Calcutta HC
Case Name: Tata Steel Limited (formerly Tata Steel BSL Limited) vs. UOI
Case No.: WPA 20381 of 2024
The Calcutta High Court has upheld the disallowance of ₹165 crores of CENVAT credit on steel structures, parts, accessories, and cement as confirmed earlier by the Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).
Justice Raja Basu Chowdhury, on the issue of abatement of the appeals, dismissed the grounds of challenge relating to (i) abatement of appeals before the CESTAT, and (ii) the Tribunal's jurisdiction to adjudicate the issue after the Corporate Insolvency of the assessee's erstwhile entity, Tata Steel Bhushan Steel Limited. Citing Rule 22 of the CESTAT (Procedure) Rules, 1982, the Court held that the CESTAT had become functus officio.
Delhi HC
Case Title: Techsync v. The Superintendent of Customs SIIB ACC Imports and Ors.
Case Number: W.P.(C) 3542/2025
The Delhi High Court has directed the CBIC (Central Board of Indirect Taxes and Customs) to conduct inter-ministerial consultation in respect of coming up with a uniform policy permitting or prohibiting the import of products declared as 'body massagers' or sex toys.
The bench opined that the question as to whether any product is obscene or not cannot, obviously, be left at the discretion of the Commissioner of Customs and other individual officials in the absence of uniform guidelines for consistent practice in this regard.
Case title: M/s Vedanta Ltd v. ACIT Delhi
Case no.: W.P.(C) 16378/2025
In granting relief to Vedanta Limited, the Delhi High Court has set aside an order of the the Income Tax Department for initiation of reassessment action against the Copper manufacturer, over alleged fraudulent availment of Input tax credit worth over ₹424 Crore.
A division bench of Justices Prathiba M. Singh and Shail Jain observed that the GST Department had already closed the case. “Closing of the proceedings by the GST Department would have an impact and bearing on the Section 148A proceedings and, therefore, this Court is of the opinion that the impugned order deserves to be set aside, and the matter deserves to be remanded for reconsideration, in view of the GST order dated 11th July, 2025,” the judges said.
Case title: Kemexel Ecommerce Pvt. Ltd. v. Sales Tax Officer Class Ii / Avato Ward 105, Zone 4, Delhi
Case no.: W.P.(C) 16555/2025
The Delhi High Court has made it clear that Section 61(2) of the Goods and Service Tax Act, 2017 bars further action against an assessee, including any demand under Section 73. For context, Section 61 empowers the proper officer to scrutinize the return furnished by the registered person and inform him of the discrepancies noticed. Sub-section (2) thereof provides that in case the explanation offered by the registered person is found to be acceptable, no further action shall be taken.
A division bench of Justices Prathiba M. Singh and Shail Jain observed that since Section 73, which pertains to determination and recovery of tax, does not have a non-obstante clause, it comes within purview of Section 61(2) and thus, issuance of demand on the same ground on which the explanation was in fact found acceptable previously, would not be tenable.
Informer Of GST Evasion Cannot Seek Reward As A Matter Of Right: Delhi High Court
Case title: XY v. Union of India
Case no.: W.P.(C) 15498/2025
The Delhi High Court has prima facie observed that an informer, who apprises the Department about evasion of goods and services tax by an entity, cannot seek reward for sharing such information as a matter of right.
A division bench of Justices Prathiba M. Singh and Shail Jain were of the prima facie view that no such right vests in any informer. “In the opinion of this Court, the grant of an award or a reward to an informer is a discretionary grant,” it said.
Case title: Santosh Kumar Suri v. Deputy Commissioner Of Income Tax
Case no.: W.P.(C) 15373/2025
The Delhi High Court recently criticized the Income Tax Department for an over 2-year delay in implementing an ITAT order, directing it to reconsider the demand raised against an assessee.
A division bench of Justices Prathiba M. Singh and aShail Jain observed that the Income Tax Department must implement judicial orders with “alacrity” however in this case, it woke up only after the assessee moved the High Court to seek enforcement of the ITAT order passed back in January 2023.
Case title: Gameloft Software Private Limited v. Assistant Commissioner Of Central Tax, Range 152 & Anr
Case no.: W.P.(C) 16315/2025
The Delhi High Court has called upon the Goods and Services Tax Department to expeditiously process the refund applications filed by registered persons/ entities.
A division bench of Justices Prathiba M. Singh and Shail Jain observed, “As per the statutorily prescribed procedure, the refund applications have to be dealt with in a particular manner within the prescribed timelines as per law…if there is delay by the Department in processing and granting refunds, it has a cascading adverse effect on the business of the tax payers as well.”
Communication On Email Address Is Sufficient Service Under Section 169 GST Act: Delhi High Court
Case title: M/s Mathur Polymers v. Union of India & Ors.
Case no.: W.P.(C) 2394/2025
The Delhi High Court has held that under Section 169(1)(c) of the Central Goods and Service Tax Act, 2017, a communication sent to an email address provided at the time of GST registration is adequate service of a decision, order, summons or notice or any other communication.
A division bench of Justices Prathiba M. Singh and Shail Jain observed, “With respect to Section169 of the Act, this Court has also taken a view recently in W.P. (C) 4374/2025 titled Rishi Enterprises through its Proprietor v. Additional Commissioner Central Tax Delhi, North & Anr. that communication on the email address is sufficient communication.”
Case title: Sunil Kumar Gupta v. Commissioner Of Customs
Case no.: W.P.(C) 16869/2025
The Delhi High Court has clarified that a traveller, whose goods are seized by the Customs, is not liable to pay a redemption fine or penalty for the release of goods if the Department failed to issue a show cause notice within the statutory timeframe.
A division bench of Justices Prathiba M. Singh and Madhu Jain observed, “It is the settled position in law, after Union of India &Anr. v. Jatin Ahuja (/2024) that without a SCN under Section 110 of the Customs Act, 1962, the goods of the Petitioner would be liable to be unconditionally released…In view of the above decision, the Petitioner is entitled to unconditional release of the goods subject to payment of applicable Customs Duty. No redemption fine or penalty would be liable to be paid by the Petitioner and no interest would be liable to be charged.”
Case title: Raj Kumar Gupta v. UoI
Case no.: W.P.(C) 15917/2025
The Delhi High Court recently slammed a trader, allegedly involved in clandestine manufacture of pan masala to evade tax and recovery of ₹70 lakh from his premises, for his failure to cooperate in the probe.
A division bench of Justices Prathiba M. Singh and Shail Jain in this backdrop upheld the GST Department's order, denying the Petitioner-trader's right to cross-examination. It observed, “the right to cross-examination is not an unfettered right…the non-filing of a reply to the SCN and the repeated adjournments which have been sought by the Petitioner…leaves no manner of doubt that the Petitioner has not co-operated with the Adjudicating Authority. The Petitioner's case, in the opinion of this Court, is prima facie not bona fide.”
Case title: Devender Singh v. Additional Commissioner, Central Goods And Services Tax, Delhi West
Case no.: W.P.(C) 16820/2025
The Delhi High Court has held that where fraudulent availment of tax by a fake firm comes to light, penalties can be imposed on the person behind the bogus operations.
A division bench of Justices Prathiba M. Singh and Madhu Jain observed, “When the expression 'taxable person' has to be interpreted, the 'taxable person', so long as it is an identified real person/entity it would be the said person/entity itself. However, in the case of fake, nonexistent and fraudulent firms, who do not have any real persons as partners or proprietors or even any incorporation, the 'taxable person' would be the person who has got such firms created and used the same for availment of ITC.”
Case title: M/S Shiva Enterprises v. Principal Commissioner, Department Of Trade And Taxes, GNCTD
Case no.: W.P.(C) 13977/2025
In an unusual turn of events at the Delhi High Court, an “innocuous” petition filed by a trader seeking cancellation of its GST registration unravelled fraudulent availment of Input Tax Credit worth lakhs.
A division bench of Justices Prathiba M. Singh and Shail Jain thus imposed a cost of ₹5 lakh on the trader, ₹2 lakh of which would go to the Delhi High Court Bar Association, ₹2 lakh to the GST Department and remaining ₹1 lakh to the Sales Tax Bar Association.
Case title: M/S Swarn Cosmetics (India) v. Union Of India & Ors.
Case no.: W.P.(C) 16532/2025
The Central Goods and Services Tax Department recently explained to the Delhi High Court the process its officers follow when uploading any show cause notice or order on the GST portal. The explanation was tendered in response to a plea filed before the Court, challenging the legality of a demand order on the ground that the impugned SCN and the impugned order were not duly signed either physically or digitally.
The Department now uses digital keys to upload orders on the GST Portal, and without the digital key of the concerned officer, the orders as well as the SCNs cannot be uploaded.
Case title: Toshniwal Electricals Pvt Ltd Through Its Director Mukund Maheshwari v. The Principal Commissioner Of Central Tax Delhi North & Ors.
Case no.: W.P.(C) 16455/2025
The Delhi High Court has held that the Courts must, while dealing with cases involving fraudulent availment of Input Tax Credit, balance the interest of trader with that of burden on State exchequer due to tax evasion.
A division bench of Justices Prathiba M. Singh and Shail Jain observed, “in cases involving fraudulent availment of ITC…there are complex transactions involved which require factual analysis and consideration of voluminous evidence, as also the detailed orders passed after investigation. In such cases, it would be necessary to consider the burden on the exchequer as also the nature of impact on the GST regime, and balance the same against the interest of the Petitioners, which is secured by availing the right to statutory appeal.”
Case title: BSNL v. Commissioner Of Customs
Case no.: CUSAA 166/2025
The Delhi High Court has allowed BSNL (Bharat Sanchar Nigam Limited) to belatedly challenge the Rs. 12,63,01,812/- imposed upon it by the Customs Department for misdeclaration of imported goods.
A division bench of Justices Prathiba M. Singh and Shail Jain noted that the public autonomous service provider showed no valid justification for the delay in approaching CESTAT however, “considering the fact that there was a voluntary declaration by B.S.N.L., prima facie there appears to be some merit in the contention of the B.S.N.L., that it is entitled to be heard on merits.”
Case title: C.H. Robinson Worldwide Freight India Private Limited v. Additional Commissioner, Cgst-Delhi-South & Ors.
Case no.: W.P.(C) 15508/2024
The Delhi High Court has held that the time limit set out under 73(2) of the Goods and Services Tax Act for issuance of show cause notice in relation to alleged short payment of tax, etc. is mandatory in nature, and cannot be excused on account of technical glitches on GST portal.
A division bench of Justices Prathiba M. Singh and Shail Jain thus quashed a SCN issued after the 3-month gap prescribed under the provision.
Case title: Mala Sahni Seth & Anr. v. Delhi Development Authority & Ors.
Case no.: W.P.(C) 16214/2025
The Delhi High Court has prima facie observed that the Delhi Development Authority cannot levy GST on conversion of property from leasehold to freehold.
A division bench of Justices Prathiba M. Singh and Shail Jain observed, “Prime facie, it clearly appears that conversion is nothing but a part of the process of sale of the immovable property by the DDA to purchasers and GST would not be liable to be charged on such conversion in terms of Section 7(2) of the CGST Act itself.”
Case title: GMG Tradelink Pvt. Ltd. v. Directorate General Of GST Intelligence HQ & Ors.
Case no.: W.P.(C) 16259/2025
The Delhi High Court recently refused to interfere with an order passed by the Principal Additional Director General, Directorate General of GST Intelligence (DGGI) provisionally attaching the bank accounts of a trader.
The provisional attachment was challenged on the ground of competency of the officer to pass such an order. Petitioner had argued that in terms of Section 83 of the Central Goods and Services Tax Act, 2017 only the GST Commissioner can order provisional attachment to protect revenue in certain cases.
Case Name: Puneet Batra vs. UOI & Ors.
Case No. : W.P.(C) 11021/2025
The Delhi High Court has issued notice in the application by the GST Department seeking the handing over of the parsed hard drives of the seized Central Processing Unit (CPU) of an advocate, which is in possession of the IT Officers of the Court, for further examination.
In doing so, the Court has instructed the presence of representatives from both sides, including a Court officer, and directed the submission of parsed data and hard drives to the Court.
Case title: M/S IMS Mercantiles Ltd v. Union Of India & Anr.
Case no.: W.P.(C) 15527/2025
The Delhi High Court recently criticised the GST Department for demanding tax on the total turnover of a company, despite figures of the actual sales being available with it.
A division bench of Justices Prathiba M. Singh and Shail Jain observed, “The Court finds a fundamental flaw in the approach of the Adjudicating Authority that, though the actual sales of the entire combo packs, on both B2B and B2C sales was available with the Adjudicating Authority, the GST is being demanded on the total turnover…The tax evasion, if any, is in respect of B2B and B2C sales. There is no reasoning given by the Adjudicating Authority, as to why GST is being sought to be levied on the total turnover.”
Case title: Sushil Sharma v. Commissioner Of Customs [Export]
Case no.: CUSAA 81/2019
The Delhi High Court recently refused to show any leniency to two employees of a Customs House Clearing Agent (CHA), found involved in smuggling of cigarettes worth Rs.3,40,74,000/-.
A division bench of Justices Prathiba M. Singh and Shail Jain observed that CHAs and their employees are responsible to ensure discharge of obligations under the Customs Brokers Licensing Regulations, 2018.
Case title: Varian Medical Systems International India Pvt. Ltd. v. Union Of India & Ors.
Case no.: W.P.(C) 1064/2025
The Delhi High Court has quashed the Show Cause Notice (SCN) issued to a company before conducting audit, holding that the authorities violated principles of natural justice by issuing the SCN before expiry of time granted to respond to the pre-SCN.
A Division Bench of Justices Prathiba M. Singh and Shail Jain observed, “the Petitioner was given time to file submissions till 28th November, 2024…However, surprisingly, the authority has decided to issue the SCN itself one day before the said day expires i.e. on 27th November, 2024 itself. Thus, this would be completely in violation of the principles of natural justice in terms of the pre-SCN itself. Accordingly, the SCN is set aside.”
Gujarat HC
Case Title: Cardiogy Ltd. & Anr. v. Commissioner of Commercial Tax & Anr.
Case Number: R/SPECIAL CIVIL APPLICATION NO. 16927 of 2011
The Gujarat High Court has held that the supply of medicines and implants by private hospitals to in-patients amounts to 'deemed sale' and is liable to VAT (Value Added Tax). The issue before the bench was whether the supply of medicines, stents, implants, consumables, etc., during the course of treatment of patients amounts to 'sale' as defined in section 2(23) of the VAT Act.
The bench, consisting of Justices Bhargav D. Karia and D.N. Ray, observed that after the 46th Amendment to the Constitution, the definition of “works contract” was widened and it is broad-based based taking within its fold every possible and conceivable contract involving transfer of property while providing services.
Karnataka HC
Case Title: Sri Mukesh Gupta v. The Deputy Commissioner of Income Tax
Case Number: ITA NO 283 OF 2022
The Karnataka High Court has held that a loan raised by mortgaging property and advancing to a company does not constitute business expenditure, and the interest is not deductible against salary income.
The bench opined that unless expenditure is incurred in the course of the business or professional service, the assessee is not entitled to a deduction, merely due to it being incurred on the amount borrowed and advanced to the company.
Case Name: Gunnam Infra Projects Private Limited
Case No. : WP(C) No.611 of 2025
The Karnataka High Court holds that payments made by assessee through Form GST DRC-03 at the time of search or pursuant to an investigation cannot be treated as 'voluntary payments' when amount was not determined through any formal assessment or adjudication.
A Bench comprising of Justice M. Nagaprasanna, quashed deficiency memos issued by the Deputy Commissioner of Central Tax (Revenue) on two different dates rejecting refund sought by assessee. On this score, it was observed that “the petitioner is entitled for refund of the payments made in form DRC-03” as a deficiency memo cannot be issued when a refund application is complete in terms of Section 54 of the CGST Act, 2017 read with Rule 89 of the CGST Rules, 2017.
Kerala HC
Case Title: Vittal Sait Popat v. The Assistant Commissioner of Income Tax
Case Number: WP(C) NO. 4193 OF 2020
The Kerala High Court has held that disclosure of income and payment of tax under the Income Tax Act, 1961, does not preclude initiation of proceedings under the Prohibition of Benami Property Transactions Act, 1988.
Justice Ziyad Rahman A.A. agreed with the department that the fact that the assessees have disclosed the income in the return and the same was proceeded against under the provisions of the Income Tax Act, by itself, cannot be a reason to interfere with the proceedings under the Prohibition of Benami Property Transactions Act, 1988.
Madras HC
Case Title: M/s. Hinduja Foundries Ltd. v. The Assistant Commissioner of Income Tax
Case Number: TCA Nos.794 and 795 of 2016
The Madras High Court has held that depreciation on payment to State Industries Promotion Corporation of Tamil Nadu Limited (SIPCOT) for infrastructure development is not allowed, but the assessee is eligible for 5% annual revenue deduction.
Chief Justice Manindra Mohan Shrivastava and G. Arul Murugan were addressing the appeal pertaining to the claim of depreciation on the sum paid to the State Industries Promotion Corporation of Tamil Nadu Limited (SIPCOT) for the development of infrastructural facilities.
Case Title: M Divya vs The Senior Revenue Officer
Case Number: W.P.No.10194 of 2025
The Madras High Court has recently ruled that hostels providing accommodation to working men and women are residential properties and, therefore, property tax, water tax, and electricity charges cannot be levied at commercial rates.
The ruling came in response to petitions filed by hostel owners in Chennai and Coimbatore challenging Chennai municipal authorities and the Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB) for reclassifying their hostels from residential to commercial premises and demanding significantly higher taxes.
Punjab & Haryana HC
Case Title: M/s King Exports v. Commissioner of Income Tax, Ludhiana
Case Number: ITA-96-2012 (O&M)
The Punjab and Haryana High Court has held that re-assessment proceedings beyond four years are invalid when the original assessment has been finalised under Section 143(3) of the Income Tax Act. In case of an Assessment under Section 143(3) of the Income Tax Act, a scrutiny is carried out to confirm the correctness and genuineness of various claims, deductions, etc., made by the taxpayer in the return of income.
Justices Lisa Gill and Meenakshi I. Mehta stated that the assessing officer has the power to reopen, provided there is tangible material to come to the conclusion that there is escapement of income assessment. Assessment order under Section 143(3) of the Act is preceded by notice, inquiry and hearing under Section 142(1), (2) and (3), as well as under Section 143(2) of the Income Tax Act.
Rajasthan HC
Case Title: Nirmal Kumar Sharma v. Union Of India
Case Number: S.B. Criminal Miscellaneous (Petition) No. 1947/2025
The Rajasthan High Court has referred to a larger bench the question of whether arrest warrants can be converted to bailable warrants in serious economic offences under the provisions of the PMLA (Prevention of Money Laundering Act), Customs, CGST (Central Goods and Services Tax), as well as heinous offences punishable under Indian Penal Code/Bharatiya Nyaya Sanhita.
Justice Anoop Kumar Dhand stated that, “creation of fake/non-existing Firms with an intent to pass on fake ITC on the basis of alleged supply shown in fake invoices and thereby passing on fake ITC to various beneficiaries and thus evading tax in crores of rupees, which affects the economy of the nation, and the same would certainly fall within the purview of grave economic offences.”
Tripura HC
Case Title: R.G. Group vs. UOI & Ors.
Case Number: WP(C) No.611 of 2025
The Tripura High Court recently held that payment of a penalty under economic duress cannot be treated as a “voluntary” admission of liability, and tax authorities remain legally obligated to pass a final, reasoned order under the Tripura State GST Act, 2017.
The ruling came in the case of R G Group, a Tripura-based supplier of electrical goods, whose consignment was detained in July 2024 by GST enforcement officials over alleged expired E-Way bills and vehicle discrepancies.
TRIBUNALS
Case Title: Mahindra Holidays and Resorts India Ltd. v. Commissioner of GST & Central Excise
Case Number: Service Tax Appeal Nos. 40011 to 40014 of 2021
The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that the Non-Obstante Clause in Section 142(5) of the CGST Act (Central Goods and Services Tax Act, 2017) cannot override the limitation under Section 11B of the Central Excise Act.
Ajayan T.V. (Judicial Member) and M. Ajit Kumar (Technical Member) stated that section 142(5) does not refer to overriding any particular provision, and hence the non obstante clause has to be examined and given a restricted meaning limited to the context in which it is used.
Case Title: M/s Leakless Gasket India Pvt. Ltd. v. Commissioner of Customs
Case Number: CUSTOMS APPEAL NO. 55311 OF 2023
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that Twaron Para Aramid Pulp is classified as 'textile flock', hence, the importers are liable for a higher customs duty.
Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) were addressing the issue of whether the Twaron Para Aramid Pulp imported by the assessee was classified under Customs Tariff Item (CTI) 5601 22 00 or under CTI 5601 30 00.
Commission-Based Services To Foreign Clients As Agent Qualifies As 'Export Of Service': CESTAT
Case title: YKK India Private Limited vs. Commissioner of Central Excise, Goods & Service Tax, Rohtak
The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that commission-based services such as sales facilitation and regional support services provided by Indian counterparts to foreign companies qualified as 'export' and not as 'Business Auxiliary Services'.
The assessee was engaged in the manufacture and sale of zippers and parts thereof in India and to neighbouring foreign companies, including YKK Singapore located in Singapore. The Department conducted an audit for FY 2006–07 to 2010–11, which led to two show cause notices—one covering FY 2006–07 to 2010–11 and the other covering FY 2011–12. Consequently, a Service Tax demand totalling Rs. 68,59,980 and CENVAT Credit recovery of Rs. 13,08,503, along with interest and penalties, was confirmed under Sections 76, 77 and 78 of the Finance Act.
Case Name: Glenworth Estate Ltd.
Case No. : Service Tax Appeal No. 40031 of 2018
The Chennai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) set aside service tax demand on commission paid to foreign agents for sale of black tea, finding that 'essential characteristic' of agricultural produce is retained.
CESTAT Chennai clarified that black tea gets covered by the expression 'in relation to agriculture' appearing in Notification 14/2004-S.T. (as amended) dated September 10, 2004 observes that “Once the black tea is found to be agricultural produce, services provided by a commission agent for sale or purchase of agricultural produce is covered by the negative list…”
Case Title: Tower Vision India Private Limited v. Commissioner of Central Excise, Goods & Service Tax-Gurugram
Case Number: Service Tax Appeal No. 60109 of 2022
The Chandigarh Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the provisions of service tax under the Finance Act, 1994, do not extend to the State of Jammu & Kashmir, and accordingly set aside a service tax demand of Rs. 4 crores.
S.S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) opined that the provision of Chapter V of the Finance Act does not extend to J&K. Once the provisions of the Finance Act are not applicable in the State of J&K, then service tax cannot be demanded by resorting to POPS Rules, which cannot override the statutory provisions.
Case Title: Chennai Citi Centre Holdings (P) Ltd vs Commissioner of GST & Central Excise
Case Number: Service Tax Appeal No. 40364 of 2017
The Customs Excise and Service Tax Appellate Tribunal at Chennai on Friday held that a profit-sharing arrangement for managing a mall's parking facility does not amount to leasing of space and therefore is not liable to service tax.
The appeal was against an order of Commissioner of Service Tax that had upheld a service tax demand of over Rs 20 lakh, treating the parking arrangement between CCCHPL and SPIPL as leasing of space and therefore taxable.
Bharat Aluminium Entitled To CENVAT Credit On Mining Services Used For Bauxite Extraction: CESTAT
Case Title: The Commissioner, & Central Excise v. M/s Bharat Aluminium Co. Ltd.
Case Number: EXCISE APPEAL NO. 55659 OF 2023
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that Bharat Aluminium is entitled to CENVAT (Central Value Added Tax) Credit on mining services used for bauxite extraction.
Dilip Gupta (President) and P. Anjani Kumar (Technical Member) agreed with the Principal Commissioner that since mining services were used for the extraction of bauxite from the mines owned by BALCO, and this bauxite was sent to Vendanta for conversion into alumina, which is a basic raw material used in the manufacture of aluminium by BALCO, there is a direct nexus between extraction of bauxite from the mines and the production of aluminium.
Case Name: Agratas Energy Storage Solutions Private Limited
Case No.: Service Tax Appeal No. 42121 of 2016
The Gujarat Authority for Advance Ruling (AAR) has disallowed Input Tax Credit (ITC) of Goods and Services Tax (GST) paid on lease rental on all three counts viz. for constructing factory building on leased land as well as vacant portion of land and on repairs, maintenance and renovation of factory building.
The bench of Mr. Vishal Malani (Member- Central Tax) and MS. Sushma Vora (Member- State Tax) has ruled on ITC eligibility of GST paid on lease rental by dismissing the view of applicant that as leased land would not be used for factory construction for the whole period of lease, ITC would be admissible pre and post activity of construction. Gujarat AAR observed that “…. land has been given on lease specifically for construction of the factory…..purpose of land for industrial purpose, cannot be changed. Thus, the land being used for industrial construction…and any services specific to land is blocked….”.
Case Title: Navin Fluorine International Limited v. Commissioner, CGST and Central Excise
Case Number: EXCISE APPEAL NO. 51623 OF 2022
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that samples sent for research and development (R&D) and quality testing are not finished goods, and their dispatch to a laboratory cannot be treated as clandestine removal.
Justice Dilip Gupta (President) and P. Anjani Kumar (Technical Member) stated that the assessee cleared samples for testing purposes to its in-house facility at Surat in the State of Gujarat and had not cleared finished goods. It cannot, therefore, be said that the assessee was engaged in clandestine removal of goods.
Case Title: M/s. Oppo Mobiles India Pvt. Ltd. v. The Principal Commissioner of Customs (Import)
Case Number: CUSTOMS APPEAL NO. 51026 OF 2020
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that Oppo Mobiles is eligible for customs exemption on microphones & receivers used in PCBA (Printed Circuit Board Assembly) prior to 06.07.2019.
Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) opined that by virtue of the amendment Notification dated 06.07.2019, customs duty would also be leviable on microphones and receivers when imported into India, even if they are imported for the manufacture of PCBA of cellular mobile phones.
Case Name: Xiaomi Technology India Pvt. Ltd.
Case No.: Customs Appeal No. 40085/2024
The Chennai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held Xiaomi India liable for differential customs duties on royalties to Qualcomm and Beijing Xiaomi Mobile Software under various agreements for importing and selling Xiaomi-branded mobile phones and components.
The Bench comprising of Mr. M. Ajit Kumar (Technical Member) and Mr. P. Dinesha (Judicial Member) examined whether royalty payments were linked to imported goods and thus dutiable, concluded that “Royalties and License Fees paid by Xiaomi India are addable to the assessable value of the impugned goods as per Rule 10(1)(c) of the Customs Valuation Rules, 2007 and the differential duty is payable by Xiaomi India for the extended period”.
Case Name: Tulsyan NEC Ltd. vs. Commissioner of GST and Central Excise
Case No. : Service Tax Appeal No. 40031 of 2018
The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) set aside the denial of service tax credit distributed by the assessee, as an Input Service Distributor (ISD), to its unit. The Tribunal found that although invoices were issued in the name of the Branch Office, such invoices were “received” by the Head Office of the assessee, making it eligible to avail and distribute credit.
The Bench comprising Mr. M. Ajit Kumar (Technical Member) and Mr. Ajayan T.V. (Judicial Member), on a perusal of connected documents such as contractual letters, delivery/performance certificates, debit notes, ledger vouchers, bank payment details and other supporting documents, noted that there was a “lack of nexus” to indicate shell suppliers or circular payments.
Case Title: M/s. Hotel President Planet v. Principal Commissioner of CGST & Central Excise, Indore
Case Number: Service Tax Appeal No. 50157 of 2025
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that service tax is payable on free room nights and food discounts received in kind under a lease agreement with a hotel.
Dr. Rachna Gupta (Judicial Member) was examining whether the complementary nights extended by the lessee to the lessor, along with the respective food discount, are to be considered as part of the gross value/taxable value.
OTHER DEVELOPMENTS
DGFT Issues Guidelines On Refunds & ITC For Exports Affected By Erstwhile CGST Rule 96(10)
Directorate General of Foreign Trade (DGFT) has issued a policy circular regarding refund claim or Input Tax Credit by affected exporters, where eligible as well as on redemption of Advance Authorisations impacted by the erstwhile Rule 96(10) of the CGST Rules, 2017.
Rule 96(10) provided that a person cannot claim refund of Integrated Goods and Services Tax (IGST) paid on export of goods or services if exporter had availed benefit of specified exemption notifications under certain input benefits or exemptions Schemes on inward supplies (like under Advance Authorisation, Export Promotion Capital Goods, Export Oriented Unit schemes) and simultaneously claimed an IGST refund on the final exported product.