Tax Weekly Round-Up: September 15 - September 21, 2025

SUPREME COURTSupreme Court Allows Customs Duty Exemption To LG Electronics For Smart Watch Import From KoreaCause Title: M/S L.G. ELECTRONICS INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMSThe Supreme Court recently granted relief to LG Electronics India from paying customs duty on imported 'G Watch W7' smartwatches from South Korea, holding that a certificate of origin from a country with which India has a full customs duty exemption agreement is sufficient to claim such exemption.A bench of Justice JB Pardiwala and Justice Sandeep Mehta heard the LG Electronics appeal against the Customs, Excise and Service Tax Appellate Tribunal (“CESTAT”) order, that declined LG's plea for seeking exemption from custom duty payment for imported watches reasoning that imported watches falls under CTH 8517 good's, which attracted a higher duty, and raised a demand along with penalties.In Tax Matters, Strict Letter Of Law Must Be Followed; No Tax Can Be Imposed By Inference Or Analogy : Supreme CourtCause Title: M/S. SHIV STEELS VERSUS THE STATE OF ASSAM & ORS.The Supreme Court observed that no tax can be imposed by inference or analogy when the taxing statutes do not authorize the imposition of tax. It added that tax authorities cannot bypass statutory limitation periods by administrative sanction.“In construing fiscal statutes and in determining the liability of a subject to tax one must have regard to the strict letter of law. If the revenue satisfies the court that the case falls strictly within the provisions of the law, the subject can be taxed. If, on the other hand, the case is not covered within the four corners of the provisions of the taxing statute, no tax can be imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter.”, the court observed.Customs Act | Provisional Release Of Seized Object Won't Extend Timelimit For Issuing Show Cause Notice In Pre-2018 Cases : Supreme CourtCase Title – Union of India & Ors. v. Jatin Ahuja and connected casesCase no. – Civil Appeal No. 3489 of 2024The Supreme Court recently upheld a Delhi High Court order directing release of an imported Maserati car seized by the Directorate of Revenue Intelligence (DRI), upholding the HC's view that failure to issue a show-cause notice within time prescribed under the Customs Act, 1962 entitles the person to release of the seized goods.A bench of Justice JB Pardiwala and Justice Sandeep Mehta further held that provisional release of seized goods under Section 110A of the Customs Act does not stop the operation of Section 110(2), which mandates issuance of a show-cause notice within six months of the seizure.Converting Imported Goods Into Distinct, Marketable Products Qualifies As 'Manufacture'; Attracts Excise Duty: Supreme CourtCause Title: M/S QUIPPO ENERGY LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE AHMEDABAD – IIThe Supreme Court on Friday (Sep.19) held that converting imported gas-generating sets (Gensets) into containerized “Power Packs” by placing them in steel containers and fitting them with essential components amounts to “manufacture” under the Central Excise Act, 1944, making the final product liable to excise duty.“The process of placing the Genset within the steel container and fitting that container with additional, integral components brings into existence a new, distinct, and marketable commodity. This process would thus amount to “manufacture” under Section 2(f)(i) of the Act, 1944. Consequently, the appellant is liable to pay excise duty on the goods manufactured.”, the court held.HIGH COURTSAllahabad HCOnce Actual Movement Of Goods Proved By Assessee Remains Unrebutted, Proceedings U/S 74 GST Act Are Unjustified: Allahabad High CourtCase Title: M/S Safecon Lifescience Private Limited Versus Additional Commissioner Grade 2 And AnotherCase no.: WRIT TAX No. - 389 of 2023The Allahabad High Court has recently held that when the actual movement of goods has been proved by the assesee and the same remains unrebutted by the authority, proceedings under Section 74 of Goods and Service Tax Act, 2017 are unjustified.Justice Piyush Agrawal held, “Once actual movement of goods as well as payment of tax by the respondent authorities have been proved by the petitioner to which no rebuttal has been brought on record at any stage, proceedings under section 74 of the Act cannot be justified.”Bombay HCS. 149 Income Tax Act | Reassessment Beyond Limitation Period Is Valid Where 'Bogus' Royalty Payments Exceed ₹50 Lakh: Bombay High CourtCase Title: Molbio Diagnostics Limited v. Assistant Commissioner of Income TaxCase Number: WRIT PETITION NO.142 OF 2025The Bombay High Court has stated that reassessment beyond 3 years is valid where bogus royalty expenses exceed Rs. 50 lakhs.Justices Bharati Dangre and Nivedita P. Mehta upheld the reassessment proceedings initiated beyond three years, in the present case, where the alleged bogus royalty...

Tax Weekly Round-Up: September 15 - September 21, 2025

Kapil Dhyani

Tags