Tax Monthly Digest: May 2025
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.
Case Title: C.T. KOCHOUSEPH VERSUS STATE OF KERALA AND ANOTHER ETC., CIVIL APPEAL NOS. 941 – 945 OF 2004 (and connected cases)
Citation : 2025 LiveLaw (SC) 554
The Supreme Court recently upheld the constitutional validity of Section 5A of the Kerala General Sales Tax Act, 1963 and Section 7A of the Tamil Nadu General Sales Tax Act, 1959.
“The challenge to the constitutional validity must be rejected on the basis of the ratio elucidated by this Court in Kandaswami (supra), Hotel Balaji (supra) and Devi Dass (supra)…Hotel Balaji (supra) specifically upholds the constitutionality of the impugned provisions, disagreeing with the opinion/ratio expressed in Goodyear (supra)”, said a bench of CJI Sanjiv Khanna and Justices Sanjay Kumar, R Mahadevan.
Case title: Case Title: Shital Fibers Limited versus Commissioner of Income Tax (and connected cases)
Case no.: CIVIL APPEAL NO.14318 OF 2015
Answering a reference, the Supreme Court held that deductions under Sections 80-IA/80-IB of the Income Tax Act need not reduce the gross total income before computing deductions under other provisions like Section 80-HH for export profits.
The bench comprising Justices Abhay S Oka, Ahsanuddin Amanullah and AG Masih delivered the verdict while answering a reference after a matter was referred to the larger bench due to split verdict in Assistant Commissioner of Income Tax v. Micro Labs Limited (2015) on the issue of whether deductions claimed under Section 80-IA/80-IB (for industrial profits in certain categories) and Section 80-HHC (for export profits) could be cumulatively allowed.
Supreme Court Upholds Kerala’s Luxury Tax On Cable TV As Constitutionally Valid
Case Title: THE STATE OF KERALA AND ANR. Versus ASIANET SATELLITE COMMUNICATIONS LTD. AND ORS.
Case no.: CIVIL APPEAL NO.9301 OF 2013
The Supreme Court today (May 22) upheld the constitutional validity of the Kerala luxury tax and allowed Kerala’s appeal, affirming the state’s power to tax cable TV services under Entry 62 of List II (State List) as “luxury.”
The Court clarified that the service tax imposed by the Finance Act on broadcasting services under Entry 97 of List I (Union List) does not conflict with state taxes on entertainment, and therefore, no constitutional overlap exists between central and state levies.
Case Title: THE STATE OF KERALA AND ANR. Versus ASIANET SATELLITE COMMUNICATIONS LTD. AND ORS. (and connect cases)
Case no.: CIVIL APPEAL NO.9301 OF 2013
While upholding the State’s authority to impose entertainment tax on broadcasting services like cable TV, digital streaming, and OTT platforms, the Supreme Court held that both the Centre and the State are empowered to levy service tax and entertainment tax, respectively, on assessees such as cable operators and entertainment service providers.
The bench of Justices BV Nagarathna and N Kotiswar Singh held that broadcasting constitutes a form of communication, while entertainment falls under the category of luxuries as outlined in Entry 62 of List II. Applying the doctrine of pith and substance, it reasoned that entertainment can be delivered through means of communication, making broadcasting merely incidental to it. As such, it does not directly encroach upon matters within the Union List. Consequently, both taxes function within their respective constitutional spheres, allowing the Centre and the State to concurrently impose service tax and entertainment tax on the activities undertaken by an assessee.
Case Title: M/S PATANJALI FOODS LIMITED (FORMERLY KNOWN AS M/S RUCHI SOYA INDUSTRIES LTD.) VERSUS UNION OF INDIA & ORS.
Case no.: CIVIL APPEAL NOS. 3833-3835 OF 2025
The Supreme Court has held that Section 27 of the Customs Act, which requires a person seeking refund of duty to show that the burden was not passed on to the customer, is not applicable when refund is sought of a wrongly invoked bank guarantee.
This is because encashment of bank guarantees by the Customs Department cannot be treated as payment of customs duty. Hence, neither Section 27 nor the doctrine of unjust enrichment is applicable.
Circular Clarifying Previous Notifications On Fiscal Duty Has Retrospective Effect : Supreme Court
Case Title: M/S SURAJ IMPEX (INDIA) PVT. LTD. VERSUS UNION OF INDIA & ORS.
Case no.: SLP (C) Nos. 26178-79 OF 2016
The Supreme Court recently held that a circular/notification issued by the revenue department, clarifying or explaining a fiscal regulation, has to be given retrospective effect.
In the facts of the case at hand, the Court held that a Circular dated 17.09.2010 issued by the Central Board of Excise and Customs (CBEC) had to be given retrospective effect as it clarified certain previous notifications on customs duty.
HIGH COURTS
Andhra Pradesh HC
Sale Of Liquid Carbon Dioxide Is Liable To Be Taxed At 5%: Andhra Pradesh High Court
Case Title: Punjab Carbonic (p) Ltd. v. The Commercial Tax Officer and Others
Case Number: WRIT PETITION NO: 12529/2024
The Andhra Pradesh High Court stated that the sale of liquid carbon dioxide is liable to be taxed at 5%.
The Bench consists of Justices R Raghunandan Rao and K Manmadha Rao were addressing the issue of whether purified liquid Carbon Dioxide gas falls in the unclassified category of goods i.e., Schedule-V to the VAT Act, and is liable to be taxed @ 14.5% instead of 5%.
Bombay HC
Bombay High Court Quashes NBW Issued Against Actor Arjun Rampal Over 2019 Tax Evasion Case
Case Title: Arjun Amarjeet Rampal vs Income Tax Department
Case no.: Writ Petition 2579 of 2025
The Bombay High Court recently quashed and set aside a ‘non-bailable warrant’ issued by the Ballard Pier Magistrate Court in the city against Bollywood actor Arjun Rampal in a 2019 Income Tax evasion case.
Vacation Court judge Justice Advait Sethna noted that the order passed by the Additional Chief Metropolitan Magistrate Court in Ballard Pier was ‘cryptic’ and passed ‘without application of mind’ as the non-bailable warrant was issued in a case pertaining to a ‘bailable offence.’
Calcutta HC
Calcutta High Court Upholds Quashing Of ₹7.29 Crore Penalty Imposed On Dissolved HUF
Case title: Principal Commissioner Of Income Tax-9, Kolkata Vs. Chandravadan Desai (HUF)
Case no.: ITAT/274/2024
The Calcutta High Court has upheld the quashing of penalty proceedings initiated against a dissolved Hindu Joint Family. A division bench of Chief Justice T.S. Sivagnanam and Justice Chaitali Chatterjee (Das) upheld the ITAT order which had relied on a Supreme Court ruling to declare the penalty action void-ab-initio.
The Top Court had in CIT vs. Maruti Suzuki India Limited held that notice and/or consequent order issued in the name of a non-existent person renders the entire proceedings and all consequent actions to be a nullity in the eye of law.
Case title: The Principal Commissioner Of Income Tax Central 1, Kolkata v. Wise Investment Private Limited
Case no.: ITAT/238/2024
The Calcutta High Court has made it clear that the Delhi High Court decisions in NR Portfolio and Navodaya Castles will hold no value where an assessee-company establishes the identity of its shares subscribers, creditworthiness of the share subscribers and genuineness of the transactions.
In CIT v. NR Portfolio Private Limited (2014) and in CITA v. Navodaya Castles Private Limited (2014), the Delhi High Court had held that mere production of incorporation details, PAN Nos. or the fact that third persons or company had filed income tax details in case of a private limited company may not be sufficient when surrounding and attending facts predicate a cover up. These facts indicate and reflect proper paperwork or documentation but genuineness, creditworthiness, identity are deeper and obtrusive.
Excise Duty Under Sugar Cess Act Can Be Claimed As CENVAT Credit: Calcutta High Court
Case Title: Commissioner of CGST & Central Excise, Kolkata South, GST Bhawan v. M/s Diamond Beverages Pvt. Ltd.
Case Number: CEXA/9/2020
The Calcutta High Court stated that excise duty under sugar tax act can be claimed as CENVAT credit.
The Bench consists of Chief Justice T.S. Sivagnanam and Justice Chaitali Chatterjee (Das) was addressing the issue of whether payment of duty under Sugar Cess Act, 1982 can be claimed as Cenvat Credit when the Cenvat Credit Rules does not provide payment of cess under the Sugar Cess Act, 1982 as not being eligible under Rule 3 of the said Rules.
Chhattisgarh HC
Case Title: Sandeep Kaur Gill v. Union of India
Case Number: TAXC No. 98 of 2023
The Chhattisgarh High Court held that bona fide belief coupled with genuineness of transactions constitutes a reasonable cause under section 273B of the Income Tax Act for not invoking Section 271E of the Act.
The Division Bench of Justices Sanjay K. Agrawal and Deepak Kumar Tiwari referring to Section 273B of the Income Tax Act stated that the word ‘reasonable cause’ has not been defined in the Income Tax Act, 1961. Therefore, in the context of the penalty provisions, the words ‘reasonable cause’ would mean a cause which is beyond the control of the assessee.
Case Number: TAXC No. 56 of 2025
Case Title: Raj Kumar Bothra v. Deputy Commissioner Of Income Tax
The Chhattisgarh High Court has held that an Assessing Officer (AO) cannot apply Section 143(1)(a) of the Income Tax Act, 1961 (the 1961 Act), to disallow a claim where the issue involved, such as the deductibility of employees’ contributions to EPF/ESI under Section 36(1)(va), was pending consideration before the Supreme Court in Checkmate Services Pvt. Ltd. v. CIT [(2023) 6 SCC 451].
In this regard, a Division Bench of Justice Sanjay K. Agrawal and Justice Deepak Kumar Tiwari held, “…we are of the considered opinion that the Assessing Officer should not have resorted to the provisions contained under Section 143(1)(a) of the Act of 1961 and instead could have resorted to the provisions under Section 143(3) of the Act of 1961, as on the date of issuance of intimation order dated 16.12.2021 by the Assessing Officer, exercising power under Section 143(1)(a) of the Act of 1961, the subject issue was highly debatable and ultimately, that issue was resolved by their Lordships in the matter of Checkmate Services Pvt Ltd (supra) on a later date.”
Delhi HC
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.
Case title: Gurudas Mallik Thakur v. Commissioner Of Central Goods And Service Tax & Anr.
Case no.: W.P.(C) 5083/2025
The Delhi High Court has held that the penalty for GST evasion contemplated under Section 122(1A) of the Central Goods and Services Tax Act 2017, can be imposed on ‘any person’— whether taxable or non-taxable.
A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta thus differed from the Bombay High Court’s decision in Amit Manilal Haria V. The Joint Commissioner of CGST & CE & Ors. (2025) which held that Section 122(1A) cannot be invoked against an employee as he is not a ‘taxable’ person.
Case title: Sandeep Garg v. Sales Tax Officer Class II Avato Ward 66 Zone 4 Delhi
Case no.: W.P.(C) 5846/2025
The Delhi High Court has made it clear that an assessee cannot claim he was not granted an opportunity of hearing before an adverse order is passed, if he fails to check the GST portal for show cause notice and respond to the same.
A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta observed, “Since the Petitioner has not been diligent in checking the portal, no reply to the Show Cause Notice has been filed by the Petitioner. Thus the department cannot be blamed.”
Case title: M/S Mahesh Fabrinox Pvt. Ltd v. Union of India
Case no.: W.P.(C) 6006/2025
The Delhi High Court has criticized the “pattern” of persons, who either availed fraudulent Input Tax Credit or enabled the availment of fraudulent ITC, invoking Court’s writ jurisdiction to challenge orders imposing penalty under Section 74 of the Central Goods and Services Act 2017, on technical grounds.
A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta further observed, “This Court also takes note, with some consternation, that such large scale fraudulent availment of ITC without actual passing of goods or services may, if left unchecked, can lead to severe damage to the GST framework itself, which is meant to encourage legally entitled persons and businesses to avail of ITC and other similar facilities such as drawbacks etc.”
Case title: Mukesh Kumar Garg v. UoI
Case no.: W.P.(C) 5737/2025
The Delhi High Court has once again flagged concerns over rampant misuse of Section 16 of the Central Goods and Services Tax Act 2017 by traders, for wrongful availment of Input Tax Credit.
A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta observed that while the provision is meant to enable ease of doing business, it has been coming across many cases where this facility under Section 16 of the CGST Act has been misused by various individuals, firms, entities and companies to avail of ITC even when the output tax is not deposited or when the entities or individuals who had to deposit the output tax are themselves found to be not existent.
Case title: Carol Infrastructure Private Limited v. Assistant Commissioner Of Income Tax, Central Circle 27, Delhi & Anr.
Case no.: W.P.(C) 3927/2025
The Delhi High Court made it clear that Section 153C of the Income Tax Act, 1961 “does not contemplate a hiatus” between handing over and receipt of information or documents pertaining to a non-searched entity.
A division bench of Justices Vibhu Bakhru and Tejas Karia observed, “The main body of Section 153C(1) of the Act and the proviso do not contemplate a hiatus between the handing over of the documents by the AO having jurisdiction over such person and receipt of the same by the AO having jurisdiction over person other than the searched person.”
Case title: The Pr. Commissioner Of Income Tax -Central -1 v. Sneh Lata Sawhney (and batch)
Case no.: ITA 758/2023
The Delhi High Court has made it clear that Clause (ix) of the Explanation to Section 153B of the Income Tax Act 1961 cannot be invoked to exclude the period of reference under the Indo-Swiss DTAA, if the reference itself is invalid.
A division bench of Justices Vibhu Bakhru and Tejas Karia observed, “On a plain reading of Clause (ix) of the Explanation to Section 153B of the Act, the exclusion of time taken for obtaining the information (or one year) for completion of the assessment under Section 153A of the Act is applicable only if a reference for exchange of information has to be made as per the Agreement under Section 90/90A of the Act. It is necessary that reference be made in terms of the agreement. In this case, the benefit of exclusion of time by virtue of Explanation (ix) of Section 153B of the Act would, thus, be available only if the reference was made in terms of IndoSwiss DTAA. However, as noted above, the request as made was not in terms of the Indo-Swiss DTAA. It was contrary to the limitations as expressly specified under Article 14 of the Amending Protocol.”
Case title: SDMC v. Moon Steeland General Industries Pvt. Ltd.
Case no.: W.P.(C) 9986/2021
The Delhi High Court has held that the scope of an ‘Industrial Building’ cannot be restricted merely to traditional notions of manufacturing involving tangible and physical goods.
Justice Purushaindra Kumar Kaurav rather held that an ‘Industrial Building’ encompasses IT sector businesses where non-material inputs such as data, digital content, or intellectual capital are subjected to systematic transformation or reconstitution into new intellectual property outputs, such as software, algorithms, digital products, or proprietary databases.
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.
Gujarat HC
Case Title: M/s Sopariwala Export Pvt. Ltd. v. Joint Commissioner, CGST and Central Excise & Ors.
Case Number: R/SPECIAL CIVIL APPLICATION NO. 6701 of 2023
The Gujarat High Court has referred a matter to the GST Council to decide on whether the compensation cess is leviable on goods supplied to merchant exporter.
The Division Bench of Justices Bhargav D. Karia and D.N. Ray observed that “…no notification is issued by the Central Government or State Government under the Compensation Cess Act and therefore, the assessee is made liable to pay Compensation Cess at normal rate i.e. 160% on the supply of goods to merchant exporters for export…”
Himachal Pradesh HC
Case Name: M/s Himalaya Wellness Company v/s Union of India & Ors.
Case No.: CWP No. 9239 of 2024
Himachal Pradesh High Court held that when a show cause notice is issued under Section 74 Of the Central Goods and Services Tax Act, the matter is still at a preliminary stage, and objections can’t be raised on the ground that it was issued with a preconceived notion or that it violates the principles of natural justice.
Justice Tarlok Singh Chauhan and Justice Sushil Kukreja: “Merely because the petitioner has been served with the show cause notice would not mean that the same has been issued with the pre-conceived mind and in violation of natural justice”.
No Equity In Taxation Law: Himachal Pradesh High Court On Tax Liability Of Auction Purchaser
Case Name: Arif Khan v/s State of H.P. & Ors.
Case No.: CWP No.1948 of 2024
Himachal Pradesh High Court held that an auction Purchaser is liable to pay the outstanding taxes on vehicles acquired through auction. It stated that there is no equity in taxation law and equity would only come into play in case there is no law operating in the field.
Justice Tarlok Singh Chauhan & Justice Sushil Kukreja: “It is more than settled that there is no equity in taxation law and further more equity would only come into play in case there is no law operating in the field. Here, there is already law operating in the field and therefore, equity has to yield before law. For, it is well settled that whenever conflict is between the law and equity, law would prevail”.
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.
Case Title: Jharkhand Private School Association vs. The State of Jharkhand
Case Number: W.P. (C) No. 5455 of 2019
The Jharkhand High Court has partly allowed a batch of writ petitions challenging the Jharkhand Right of Children to Free and Compulsory Education (First Amendment) Rules, 2019. The Court struck down as unconstitutional the provisions requiring private schools to pay application and inspection fees and to maintain a security deposit for recognition, holding that the State lacked legal authority under the Right of Children to Free and Compulsory Education Act, 2009. However, the Court upheld the rules relating to land ownership or long-term lease and minimum land area requirements for private schools.
Case Title: M/s Sri Ram Stone Works v. State of Jharkhand
Case Number: W.P. (T) No. 5535 of 2024
The Jharkhand High Court stated that sale of goods at concessional rates alone does not constitute a sham transaction.
The Division Bench of Chief Justice M.S. Ramachandra Rao and Justice Deepak Roshan observed that “notices under Section 61 have been issued to assessees and instead of pointing out discrepancies in the returns filed by assessees, the competent officer has embarked upon an exercise of comparing the price at which assessees have sold their stone-boulders/stone-chips with that of prevalent market price and, thereafter, accordingly, issued notices to assessees asking them to show cause as to why appropriate proceedings for recovery of tax and dues be not initiated against them.”
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.
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…”
Case Title: CTS Industries Limited vs. Directorate General of GST Intelligence
Case No. Case No.1898 of 2023
The Patna High Court has upheld a tax assessment order passed by the State GST Authority, clarifying that once a Proper Officer determines that input tax credit has been wrongfully availed or utilized due to fraud or suppression of facts, they are empowered to issue a notice under Section 74(1) of the CGST/BGST Act, 2017.
A Division Bench comprising Justice Rajeev Ranjan Prasad and Justice Sourendra Pandey held, “According to sub-section (1), wherever it appears to the Proper Officer that there is any wrongful availment of input tax credit or where the input tax credit has been utilized by reason of fraud or any willful statement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made or who has wrongly availed or utilized input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with the interest payable thereon under Section 50 and a penalty equivalent to the tax specified in the notice.”
Case Title: Siddartha Travels v. Principal Commissioner of CGST and Central Excise & Ors.
Case No.: Civil Writ Jurisdiction Case No. 13297 of 2024
The Patna High Court has recently upheld a service tax demand of ₹25.25 lakh against a travel agency, dismissing its defence that crucial business records had been lost in a fire. The Division Bench comprising Justice Rajeev Ranjan Prasad and Justice Ashok Kumar Pandey observed,
“this petitioner having surrendered his service tax registration had not disclosed the transactions in ST-3. The Taxing Authority were not aware of this, they were looking for cooperation on the part of the petitioner, they called for relevant information and records during investigation but the petitioner did not provide those information to the Taxing Authority. In such circumstance, if the Taxing Authority has taken a view that it is a case of suppression and the facts which have surfaced during investigation were not earlier known to them and they would not have come to know it if the investigation would not have taken place, cannot be found fault with.”
Uttarakhand HC
Case Title: M/s Sri Sai Vishwas Polymers v. Union of India and Another
Case Number: Writ Petition (MB) No. 103 of 2025
The Uttarakhand High Court stated that orders passed under omitted Rule 96(10) Of CGST Rule, 2017 post 8th Oct, 2024 is not valid.
The Division Bench of Chief Justice G. Narendar and Justice Alok Mahra stated that there was no scope for the department to pass any order by invoking the provisions of rule 96(10) of CGST Rule, 2017 after the same was omitted on 8th October, 2024 without a saving clause in favour of the pending proceeding.
TRIBUNALS
Case Title: Harvinder Kaur Malhotra v. Commissioner of Central GST & Central Excise, Jodhpur
Case Number: Service Tax Appeal No. 50731 Of 2019
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that service tax would be chargeable on the commission received by a Distributor from Amway on the products purchased by his sales group.
The Bench of Dr. Rachna Gupta (Judicial) and Hemambika R. Priya (Technical) observed that “the assessee is an individual, who cannot be faulted if she thought that she was only a dealer; a difference between the purchase price and the sale price or MRP is available to her and therefore, it cannot be said that there was an intention to evade service tax. The said issue arose only because Amway called such amount as ‘commission’ whereas the assessee simply sold the goods to the person who asked a product at a particular MRP…”
Case Title: M/s. Career Point Limited v. Commissioner of Central Goods & Service Tax, Excise and Customs, Udaipur
Case Number: Service Tax Appeal No. 52382 of 2019
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that subscription and redemption of liquid mutual fund units can’t be termed as “trading of goods”.
The Bench of Binu Tamta (Judicial Member) and Hemambika R. Priya (Technical Member) has observed that the activity of investment in mutual funds does not involve the presence of a service rendered by a service provider towards a recipient of service for some consideration. The activity undertaken would not amount to “service” in terms of Section 65B(44) of the Finance Act, 1994.
Case Title: M/s Oiles India Pvt. Ltd. v. Commissioner of Central Excise CGST
Case Number: Excise Appeal No.50314 of 2024
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that disputed amount paid under protest much after clearance of goods is not covered by unjust enrichment.
The Bench of Binu Tamta (Judicial Member) has observed that “once the supplies have already been made, any amount paid thereafter, as tax or deposit, the burden of such amount cannot be passed on to the assessee and, therefore, the test of unjust enrichment is not applicable.”
Case Title: M/s Sannam S-4 Management Services India Pvt. Ltd. v. The Commissioner of CGST
Case Number: Service Tax Appeal No.50666 of 2024
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that the consultancy services rendered by the assessee to the foreign university/foreign group entity do not fall under the category of “intermediary services” and the assessee are eligible for the benefit of “export of services”.
The Bench of Binu Tamta (Judicial Member) and (Technical Member) has observed that “it may also be appreciated that the final decision of admitting a student is that of the foreign university. The assessee on the other hand is acting in its independent capacity as a business promoter and does not act as an agent of the university. The fact that the assessee is rendering services on its own account, it cannot be treated as an “intermediary”. On the conclusion that assessee is not an “intermediary”, Rule 9 of POPS Rules will not be applicable and consequently Rule 3 would apply.”
Case Title: HIM Logistics Private Limited v. Commissioner of Customs Export (ICD TKD), New Delhi
Case Number: Customs Appeal No.53566 Of 2018
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that penalty can’t be imposed under Section 114AA Customs Act on customs broker merely for failing to physically verify the importer’s premises.
The Bench of Justice Dilip Gupta (President) and Hemambika R. Priya (Technical Member) has observed that “the allegations that the appellant did not physically verify the premises of the importer, are not sufficient to fasten the appellant with the penalty. It has not been established that the appellant handled this consignment with any malafide motive. It is essential to establish an intentional or deliberate act or omission and to the act of abetment for imposition of penalty under Section 114AA of the Customs Act.”
12% IGST Is Leviable On Imported ‘Lemoneez’ Drink: CESTAT
Case Title: M/s. Dabur India Limited v. Commissioner of Customs
Case Number: Customs Appeal No. 75364 of 2025
The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that 12% IGST is leviable on imported ‘Lemoneez’.
The Bench of Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) was addressing the issue of whether ‘Lemoneez’ is appropriately classifiable under residuary item 2106 90 19 as a soft drink concentrate [under miscellaneous edible preparations, not elsewhere specified], or under Tariff Item 2009 31 00 (juice of a single citrus fruit).
Case Title: M/s. Composite Impex v. The Principal Commissioner of Customs (Import)
Case Number: Customs Appeal No. 50955 of 2021
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that admissibility of printouts from seized electronic evidence requires certificate under Section 36B of the Central Excise Act.
The Bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical) has observed that, “that a printout generated from a secondary electronic evidence that has been seized, cannot be admitted in evidence unless the statutory conditions laid down in section 36B of the Central Excise Act are complied with.”
Other Developments
ITR Filing Due Date Extended From July 31 To September 15
The CBDT has decided to extend the due date of filing of ITRs, which are due for filing by 31st July 2025, to 15th September 2025.
“This extension will provide more time due to significant revisions in ITR forms, system development needs, and TDS credit reflections. This ensures a smoother and more accurate filing experience for everyone. Formal notification will follow,” the Income Tax department said in a post on X.
