Tax News & Updates

The Court held that the petitioner had been given adequate opportunity of hearing and its grievances mainly concerned merits and appreciation of evidence. A consolidated SCN for multiple financial years was not, by itself, jurisdictionally invalid; limitation issues could be examined in appeal. Since an effective statutory remedy u/s 107 was available, the writ petition was dismissed, with liberty to file an appeal.

The Bombay HC held that the proceedings had attained finality to the extent of the demand dropped, notwithstanding IBMs proposed appeal against the balance demand. IBM was entitled to a Rs. 3.14 crore refund, representing the 10% pre-deposit attributable to the demand set aside. The Court quashed the rejection order and directed refund within six weeks, holding that retention of the pre-deposit was unauthorized.

Supplier default or non-reflection in GSTR-2A could not automatically deny ITC to a bona fide purchaser absent collusion. Mechanical invocation of section 74 to overcome limitation was without jurisdiction. OIO and recovery notice were quashed, and the matter was remanded for fresh adjudication.

The Court held that FD interest is revenue income and cannot be treated as corpus u/s 11(1)(d) without a specific written direction from the donor that such interest should form part of the corpus. The Court rejected the diversion by overriding title argument, holding that interest accrued to the trust and any subsequent transfer or use for SHGs constituted application of income. The Court held that treatment in an earlier assessment year did not prevent taxation in the current year and therefore dismissed the appeal, affirming the addition of Rs. 94.67 lakh.

The Court held that fixing the hearing before expiry of the reply period was an empty formality and violated natural justice. The appellate order was set aside considering the serious impact of cancellation on the petitioners livelihood. The petitioner was permitted to apply for revocation of cancellation within three weeks, without rejection solely on limitation.

The Madras HC held that the amended Section 16(5) had changed the applicable timeline for claiming ITC. Since the ITC denial was based solely on the earlier time-bar u/s 16(4), the rejection was unsustainable. The Court partly set aside the order to the extent of the ITC denial on account of belated filing.

The Court held that a notice u/s 148 issued to a deceased assessee is invalid where the legal representative has not submitted to jurisdiction without objection. As the legal representative had promptly objected and had not participated in the assessment proceedings, the reassessment could not be sustained. The Court quashed the reassessment proceedings and demand, while permitting fresh proceedings against the legal representative if legally permissible u/s 159.

The Kerala HC quashed the consolidated SCN and its summary, holding that a composite notice covering multiple financial years was impermissible. The authorities were granted liberty to issue separate SCNs for each relevant assessment year. The period from issuance of the composite SCN until receipt of the certified copy of the judgment was excluded while computing limitation for fresh proceedings; other contentions were kept open.

The Delhi HC held that the right of appeal is a substantive right and the lis commenced with issuance of the SCN on 25.06.2025. Since the SCN preceded 01.10.2025, the unamended Section 107(6) governed the appeals; hence, the subsequent 10% penalty pre-deposit requirement did not apply. The Appellate Authority was directed to entertain the appeals without insisting on the 10% pre-deposit, subject to payment of any admitted amount u/s 107(6)(a).

The Court held that after cancellation of registration, the petitioner was not obligated to check the GST portal, and the notice should have been served through an alternative mode. Mere uploading of the SCN on the portal was held to be inadequate service, resulting in violation of natural justice. The demand order was quashed and set aside, with liberty to the Department to issue a fresh notice and proceed in accordance with law.

The Court held that reopening after four years was invalid because the assessee had fully and truly disclosed all material facts during the original assessment. The Court held that Section 2(22)(e) was not applicable since the assessee was not a registered shareholder of the payer company and the common shareholders interest was only 4.60%. The HC quashed the Section 148 notice, reassessment order and consequential demand notice.

The Gujarat HC held that failure to intimate the date, time and venue of personal hearing and failure to provide the required hearing opportunities violated Section 75 and principles of natural justice. The Court also held that the unreasoned and non-speaking order, which failed to consider the reply and documents, was legally unsustainable. The impugned order was quashed and set aside, and the matter was remanded to the jurisdictional officer for fresh adjudication after providing a proper opportunity of hearing.

The Court held that the refund could not be withheld merely because the Revenue had filed an appeal that remained unlisted, particularly when the refund had been sanctioned in 2022. Since the petitioner was an established cement manufacturing company and not a fly-by-night operator, the Court directed the Revenue to release the refund. The refund was ordered to be released within six weeks, subject to the petitioner furnishing an undertaking to redeposit the amount if the Revenues appeal ultimately succeeded.

The Court held that electronic filing of Form 3CLA within the due date for filing the return of income constituted compliance with Rule 6(7A)(c). The rejection of the Form 3CL applications as delayed was therefore unsustainable, and the impugned order was set aside. The prescribed authority was directed to decide the applications on the merits and determine the eligible expenditure for deduction u/s 35(2AB).

The HC held that satisfaction u/s 153C must be recorded at one of the permissible stages and, where recorded after completion of the searched persons assessment, it must be recorded immediately thereafter. The Court found that the substantial delay in recording satisfaction was contrary to the principles laid down in CIT v. Calcutta Knitwears and CBDT Circular No. 24/2015 and quashed the Section 153C notice. The SC dismissed the Revenues SLP, finding no good ground to interfere with the HCs order. Thus, the assessee succeeded.

The Tribunal deleted the addition, holding that the assessee had established the genuineness of the share transactions through supporting documentary evidence. The HC upheld the Tribunals order, finding no substantial question of law arising from the Tribunals decision. The SC dismissed the Revenues SLP, finding no good ground to interfere with the HCs order; hence, the relief to the assessee was sustained.

The Punjab & Haryana HC held that mere uploading of an SCN on the GST portal does not amount to valid service unless its receipt is acknowledged or the assessee files a reply. Where an SCN was only uploaded, and an ex parte order was passed, the proceedings were restored to the SCN stage, allowing the assessee an opportunity to reply and be heard. The Court held that portal-only service does not trigger the limitation period for appeal. The retrospective amendment did not change this position because the GST Rules did not specifically permit service of SCNs/orders merely by portal upload.

The Calcutta HC set aside the cancellation order, subject to the petitioner filing all pending returns and paying the applicable tax, interest, fine, penalty and late fees. The petitioner was directed to complete the compliance within six weeks from receipt of the server copy of the order, following which the GST registration would be restored. The authorities were directed to open the GST portal within two weeks to enable filing of returns and payment of dues; failure to comply within six weeks would result in dismissal of the writ petition.

The SC held that Section 16(2)(c) is constitutionally valid and there was no basis to read down the provision. It held that ITC is a statutory concession subject to conditions, and the GST framework specifically provides for re-availment of reversed ITC after the supplier discharges the tax liability. The Court affirmed the Gujarat HCs judgment and dismissed the SLPs, upholding the provision in favour of the Revenue.

Since ownership was not established, Ratul could not seek release as owner u/s 129(1)(a). Being perishable goods, he could nevertheless seek release under the alternate mechanism of Section 129(1)(b). The direction compelling him to participate in the auction was unsustainable; he was permitted to approach the authority for release of the goods.