Tax Monthly Digest: April 2025

SUPREME COURTDealers Cannot Claim Input Tax Credit For Purchases Linked To Exempt Sales Under UPVAT Act : Supreme CourtCase Title: NEHA ENTERPRISES VERSUS COMMISSIONER, COMMERCIAL TAX, LUCKNOW, UTTAR PRADESHCase no.: CIVIL APPEAL NO. 6553 OF 2016Emphasizing that tax statutes must be strictly construed with statutory language taking precedence over policy intent, the Supreme Court, in a...

GST Inspection Not Legally Sustainable Without Compliance With S.67 Of CGST Act & S.100 CrPC: Patna HC Quashes ₹88.64 Lakh Tax Demand

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. According to Section 67 of BGST/CGST Act, 2017, an inspection to...

GST Dept Expected To Empathetically Consider Assessees' Requests To Adjourn Personal Hearing On Medical Grounds: Delhi High Court

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...

Rule 86A CGST Rules | Credit Ledger Can't Be Blocked For More Than One Year : Delhi High Court

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...

Jharkhand HC Quashes ITAT Relief To Assessee For Relying On Overruled Precedent In TDS Default Case, Remands Matter For Fresh Adjudication

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...

Delhi High Court Denies Relief To Firm Allegedly Involved In ₹550 Crore GST Fraud, Questions Its Conduct Before Dept

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.A demand of over ₹550 crores has been raised from various firms including...

S.10(26) IT Act | Gauhati HC Upholds Refund Of Income Tax Deducted From Scheduled Tribe Officer's Salary, Says He Was Entitled To Exemption

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...

Customs Act Grants Unfettered Investigative Powers Where Infraction Is Suspected: Patna High Court

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.Presiding over the case, 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...

Customs Act | Engineering Services Fees Having Direct Nexus With Import Of Goods Fall Within Assessable Customs Value : Supreme Court

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...

GST | Bail Should Be Normally Granted For Offences Under S 132 CGST Act Unless Extraordinary Circumstances Exists : Supreme Court

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...

Directors Not Personally Liable For Non-Fulfilment Of Company's Export Obligations Unless Specific Role Is Alleged: Delhi HC

The Delhi High Court has held that unless specific allegations which discuss the role of a director in the export performance are made, there is no question of finding the director personally liable for non-fulfilment of export obligations by the company.Justice Tara Vitasta Ganju relied on Santanu Ray vs. Union of India where the Supreme Court discussed vicarious liability of directors. In...

Once Goods Are Verified And Found To Be Correct In MOV-04, Department Can't Be Permitted To Change Stand Later: Allahabad High Court

The Allahabad High Court has held that when the authority on verification has mentioned the details of the goods found and verified the correctness of the invoices and the goods in transit, it cannot be permitted to change the stand later and say that the goods were not in accordance with the invoice. Justice Piyush Agrawal held “Once on the verification report i.e. MOV-04, the...