Tax Monthly Digest: September 2025
Kapil Dhyani
3 Oct 2025 5:50 PM IST
SUPREME COURTCustoms Act | Electronic Evidence Admissible Without S.138C(4) Certificate If Assessee's S.108 Statement Admits Contents : Supreme CourtCause Title: ADDITIONAL DIRECTOR GENERAL ADJUDICATION, DIRECTORATE OF REVENUE INTELLIGENCE VERSUS SURESH KUMAR AND CO. IMPEX PVT. LTD. & ORS.The Supreme Court recently held that electronic evidence seized by the Directorate of...
SUPREME COURT
Cause Title: ADDITIONAL DIRECTOR GENERAL ADJUDICATION, DIRECTORATE OF REVENUE INTELLIGENCE VERSUS SURESH KUMAR AND CO. IMPEX PVT. LTD. & ORS.
The Supreme Court recently held that electronic evidence seized by the Directorate of Revenue Intelligence (“DRI”) can be admissible even without a certificate under Section 138C(4) of the Customs Act, if the assessees has acknowledged these the documents in the devices in their statements under Section 108 of the Customs Act.
The Court clarified that where obtaining such a certificate is impossible, and the Record of Proceedings has been duly acknowledged by the assessee, the evidence collected cannot be treated as inadmissible merely for want of the formal certificate. If there is due compliance otherwise, the electronic evidence can be admitted.
Supreme Court Allows Customs Duty Exemption To LG Electronics For Smart Watch Import From Korea
Cause Title: M/S L.G. ELECTRONICS INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS
The 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.
Cause 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.
Case Title – Union of India & Ors. v. Jatin Ahuja and connected cases
Case no. – Civil Appeal No. 3489 of 2024
The 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.
Cause Title: M/S QUIPPO ENERGY LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE AHMEDABAD – II
The 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.
Cause Title: UNION OF INDIA THROUGH SECRETARY & OTHER VERSUS M/S ADANI POWER LTD.
Observing that the movement of goods from a Domestic Tariff Area (DTA) to a Special Economic Zone (SEZ) is a domestic supply and not an export outside India, the Supreme Court provided relief to Adani Power Ltd. and other entities from paying export duty under the Customs Act, 1962, for the movement of goods from DTA to SEZ.
A bench of Justice BV Nagarathna and Justice R Mahadevan dismissed the Union of India's appeal against a judgment of the Gujarat High Court which ruled that export duty cannot be levied for movement from a Domestic Tariff Area (DTA) to an SEZ. The High Court had held that it was a domestic supply and not an export outside India, therefore exempted from the payment of the export duty.
Supreme Court Dismisses Airports Authority's Appeal Against Service Tax Levy For Cargo Handling
Case : Airports Authority of India v. Commissioner of Service Tax
The Supreme Court on Tuesday dismissed an appeal filed by the Airports Authority of India (AAI) challenging the levy of service tax on services rendered in handling export cargo, ruling that such services fall within the ambit of “taxable services” under the Finance Act, 1994.
A Bench of Justice Pankaj Mithal and Justice Prasanna B. Varale held that while “handling of export cargo” is excluded from the definition of “cargo handling service” under Section 65(23) of the Act, cargo handling service nonetheless qualifies as a “taxable service” in terms of sub-clause (zzm) of Section 65(105) was introduced with effect from September 10, 2004.
HIGH COURTS
Allahabad HC
[CGST Act] Tax Officers Expected To Know Law Laid Down By Higher Courts: Allahabad High Court
Case title: - M/S Rajdhani Udyog v. State Of U.P. And 2 Others
Case no.: WRIT TAX No. - 3684 of 2025
While calling for personal affidavit from Principal Secretary, Institutional Finance, Government of U.P., Lucknow explaining the conduct of the tax officers in the State in not following the orders of the High Court, the Allahabad High Court observed that the Officers must know the law.
Justice Piyush Agrawal observed that, “While it is expected from the citizen to know law, the duty of the Officers increases that they should also know the law laid down by the higher courts.”
Case Title: M/S Safecon Lifescience Private Limited Versus Additional Commissioner Grade 2 And Another
Case no.: WRIT TAX No. - 389 of 2023
The 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.”
Case Title: Shree Balaji Aromatics Pvt. Ltd v. State of U.P. and Another
Recently, the Allahabad High Court has issued notices to office of the Solicitor General of India and Advocate General, Uttar Pradesh in a writ petition challenging the validity of Section 127 of the Central and State Goods and Service Tax Act, 2017.
Petitioner was issued an order under Section 127, which he allegedly came to know of in 2025. It has been pleaded that the orders were neither sent to the petitioner nor uploaded on the portal. Petitioner, in the writ petition, submitted that proceedings under Section 74 were initiated regarding transactions made by the petitioner with another assesee, which were later dropped.
Case Title: M/S Soraza Recycling Private Limited Versus Union Of India And 4 Others
Case no.: WRIT TAX No. - 4630 of 2025
The Allahabad High Court has held that provisional attachment of bank accounts cannot be done merely upon issue of show cause notice under Section 74 of the Goods and Service Tax Act, 2017.
Referring to the judgment of the Supreme Court in Radha Krishan Industries v. State of H.P. and its earlier judgment in R.D. Enterprises v. Union of India, the bench of Justice Shekhar B. Saraf and Justice Praveen Kumar Giri held, “If the reason that provisional attachment is being done as proceedings have been initiated under Section 74 of the Act is allowed to stand, then in all proceedings wherein show cause notice is issued under Section 74, provisional attachment would become valid. The law as laid down in the abovementioned judgements makes it patently clear that a proper opinion has to be formed based on adequate reasons for such a draconian action to be taken.”
Case Title: Mahesh Gautam v. Commissioner Of Income Tax
Case no.: INCOME TAX APPEAL No. - 436 of 2012
The Allahabad High Court has held that notices under Section 148 and 282 of the Income tax Act, 1961 must be delivered to the assesee personally through speed post and not merely upon his address to complete service under Section 27 of the General Clauses Act, 1897.
It held that presumption of sufficient service arises only when the notice is sent by registered post as in registered post the notice is delivered to the person it is addressed to. Highlighting the difference between registered post and speed post, the Court held that service will be deemed sufficient when sent through speed post only if it has been delivered to the addressee him/herself and not upon the address to a different person.
Andhra Pradesh HC
Case Title: M/s. Mahadev Transport And Contractors v. Assistant Commissioner and Others
Case Number: WRIT PETITION Nos:16500, 16548 & 18862 of 2025
The Andhra Pradesh High Court held that absence of document identification number doesn't render assessment orders void.
The bench consists of Justices R Raghunandan Rao and Sumathi Jagadam were addressing the issue where the assessee/petitioner has challenged the assessment orders passed against him. The main ground for challenge is the lack of a Document Identification Number on the orders, passed by the assessing officers.
Bombay HC
Case Title: Tivoli Investment & Trading Co. Pvt. Ltd. v. The Assistant Commissioner of Income-tax and another
Case Number: INCOME TAX APPEAL NO. 5 OF 2004
The Bombay High Court stated that the assessing officer (AO) can determine the annual value of the property higher than the municipal rateable value under Section 22 of the Income Tax Act.
The issue before Chief Justice Alok Aradhe and Justice Sandeep V. Marne was whether it is permissible for the Assessing Officer to determine annual value of the property for the purposes of taxation under Section 22 of the Income Tax Act, 1960 higher than the rateable value determined under the Municipal laws.
Case Title: Sruti Vijaykumar v. Falgun Yogendra Shroff and anr.
Case Number: Criminal Writ Petition No.4670 of 2025
The Bombay High Court has stated that facing tax prosecution does not automatically bar an accused from foreign travel.
Justice S.M. Modak stated that, "It is true right to travel abroad is recognized as a fundamental right. Merely because a person is facing with prosecution, it does not mean that he cannot travel abroad till the time the investigation is under progress or criminal case is pending."
Case Title: M/s Provident Housing Ltd. v. Union of India
Case Number: WRIT PETITION NO. 5 OF 2022
The Bombay High Court held that tax liability under JDA (joint development agreement) arises only upon conveyance of property, not on execution of agreement.
The bench consists of Justices Bharati Dangre and Nivedita P. Mehta stated that no liability actually fell upon the assessee at the time when JDA was entered into, as the liability arises only upon the conveyance of the property. The assessee developer becoming the owner of the property for which the JDA was executed. Accordingly, the tax liability does not fall upon the assessee.
Case Title: Molbio Diagnostics Limited v. Assistant Commissioner of Income Tax
Case Number: WRIT PETITION NO.142 OF 2025
The 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 expenses exceeded 50 Lakhs.
Case Title: Classic Legends Pvt Ltd. v. Assessment Unit & Ors.
Case Number: CIVIL JURISDICTION WRIT PETITION (L) NO. 14748 OF 2025
The Bombay High Court has held that a draft assessment order is not permissible under section 144C(1) of the Income Tax Act when the TPO (transfer pricing officer) makes no variation.
Justices B.P. Colabawalla and Amit S. Jamsandekar stated that …..the assessee/petitioner can be stated to be an “eligible assessee” only if there is a case of variation referred to in the said sub-section 1 and which arises as a consequence of the order passed by the TPO under sub-section 3 of Section 92CA. It is an admitted position that there was no variation in the income of the assessee by virtue of the order of the TPO…
Case Title: The Commissioner of Income Tax v. Dr. Balabhai Nanavati Hospital
Case Number: INCOME TAX APPEAL NO. 2166 OF 2018
The Bombay High Court has held that payments to consultant doctors are not salary. Hence, TDS is deductible under section 194J and not under section 192 of the Income Tax Act.
Justices B.P. Colabawalla and Firdosh P. Pooniwalla stated that there does not exist an employer-employee relationship between the assessee and consultant doctors, and the payments made to them by the assessee come under the purview of section 194J of the Income Tax Act.
Case Title: Hikal Limited v. Union of India
Case Number: WRIT PETITION NO. 78 OF 2025
The Bombay High Court has held that all pending proceedings under the omitted CGST Rules 89(4B) & 96(10) lapse in the absence of a savings clause.
The bench agreed with the assessee/petitioners that the provisions of Section 6 of the General Clauses Act are not attracted and therefore the pending proceedings can claim no immunity or protection.
Denial Of Re-Testing Of Seized Goods Must Be Occasional And Recorded In Writing: Bombay High Court
Case Title: Shri Vyom Dipesh Raichanna v. Union of India
Case Number: WRIT PETITION NO.10708 OF 2025
The Bombay High Court has held that re-testing of seized goods is a trade facilitation measure, not to be denied in the ordinary course.
Justices M.S. Sonak and Advait M. Sethna stated that "...Ultimately, such denial must be only occasional and that too, on reasonable grounds to be recorded in writing. The guidelines emphasised that this facility of re-testing is nothing but a trade facilitation measure, which, generally, will not be denied in the ordinary course…"
Chhattisgarh HC
Case Title: Nanakchand Agrawal v. The Income-tax Officer
Case Number: TAXC No. 8 of 2024
The Chhattisgarh High Court held that cash deposits during demonetisation are not unexplained money if traceable to previous year's balance.
Justices Sanjay K. Agrawal and Deepak Kumar Tiwari stated that the factum of liquidation/refund of short-term loans and advances and its consequential accumulation as cash-in-hand as on 31-3-2016 could have been examined in the assessment year 2016-17 only particularly when the Assessing Officer has not discharged the burden cast upon him to implicate the assessee into the sweep of Section 69A.
Compensation Received From NHAI For Acquisition Of Land Not Taxable: Chhattisgarh High Court
Case Title: Sanjay Kumar Baid v. Income Tax Officer
Case Number: TAXC No. 176 of 2025
The Chhattisgarh High Court held that the compensation received against the acquisition of land from the NHAI (National Highways Authority of India) is not exigible to tax under Section 96 of the RFCTLARR Act (Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013).
Justices Sanjay K. Agrawal and Sanjay Kumar Jaiswal stated that once compensation is determined under the provisions of the RFCTLARR Act, as a necessary corollary, the benefits flowing from the provisions of the said Act, including exemptions from income tax, stamp duty and fees contemplated under Section 96 of the RFCTLARR Act, would also have to be made applicable.
Delhi HC
Case title: Mitraj Business Private Limited Through Its Director Mr Manoj Kankane v. Union Of India Represented By The Secretary Ministry Of Finance & Ors.
Case no.: W.P.(C) 12907/2025
The Delhi High Court has asked the Central Board of Indirect Taxes and Customs to consider whether some “preferential treatment” ought to be given to Start-ups and MSMEs in terms of timelines, warehousing and provisional release in cases of misdeclaration of goods, especially in case of low value consignments.
A division bench of Justices Prathiba M. Singh and Shail Jain observed that considering the prevailing policy in India to encourage start-ups and MSMEs, the Customs Department also needs to be sensitized to ensure that such parties are given some consideration, especially, when the goods are not prohibited goods.
Case title: Gurpreet Singh Sonik v. Commissioner Of Customs
Case no.: W.P.(C) 13229/2025
The Delhi High Court has made it clear that the Customs Department cannot exceed the limitation period prescribed for issuance of show cause notice after detention of goods, merely on the ground that the person from whom goods were seized did not appear for appraisement.
A division bench of Justices Prathiba M. Singh and Shail Jain observed, “non-appearance for appraisement does not stop the limitation for the issuance of the SCN in terms of Section 110 of Customs Act, 1962.”
Case title: Sangeet Seth v. Chief Commissioner of Income Tax
Case no.: W.P.(C) 16569/2023
The Delhi High Court has held that the higher rate of 5% interest to be paid when an assessee moves second plea for compounding the offence of failure to pay Tax Deductible at Source (TDS), is not applicable if their first plea was simply rejected.
A division bench of Justices V. Kameswar Rao and Vinod Kumar observed, “5% is only chargeable when the earlier offence has been compounded. This means that the compounding order should have been passed, and also the conditions stipulated in the said order should have been complied with (like payments), for the respondents to claim 5% charges on the second application, which necessarily has to be for a second offence.”
Case title: Uday Jain & Anr. v. Additional Commissioner Customs Air Cargo And Import & Anr
Case no.: W.P.(C) 13092/2025
The Delhi High Court has ordered the Customs Department to release the artwork of Padma Bhushan awardee Late BC Sanyal, seized amid a dispute surrounding its valuation.
A division bench of Justices Prathiba M. Singh and Shail Jain observed there is no conclusive proof that the artwork was made in Pakistan, as claimed by the Department. “The bill of entry itself reveals that the import is being effected from Dubai,” it observed.
Case title: Commissioner Of Customs (Airport And General) v. M/S Jaiswal Import Cargo Services Ltd
Case no.: CUSAA 111/2025
The Delhi High Court has held that a Customs Broker must diligently perform its responsibilities under the 2018 Licensing Regulations however, any failure thereof must be met with a proportionate punishment.
While dealing with a case where the broker's license was suspended due to alleged failure to oversee warehousing of goods meant for re-export, leading to their sale in the domestic market, a division bench of Justices Prathiba M. Singh and Shail Jain observed, “There is no doubt that Customs Brokers do have significant responsibility under the CBLR (Customs Brokers Licensing Regulations) 2018 which ought to be performed with diligence and commitment. The fact that the Respondent did not oversee the clearance and the warehousing of the goods leading to diversion of the goods in the domestic market is a clear infraction.”
Case title: M/S Tecmax Electronics v. The Principal Commissioner Of Customs (Import)
Case no.: CUSAA 121/2025
The Delhi High Court has held that the provision of pre-deposit for preferring an appeal before the Central Excise and Service Tax Appellate Tribunal is mandatory and the forum has no power to admit any appeal without the same.
However, a division bench of Justices Prathiba M. Singh and Shail Jain further added that the High Court may, in rare circumstances, waive off the said deposit. It observed, “CESTAT does not have the power to admit appeal without the pre-deposit, however, this Court in exercise of writ jurisdiction may waive the same in rare circumstances, on a case to case basis.”
Case title: Woodland (Aero Club) Private Limited v. Assistant Commissioner Of Income Tax, Circle 49(1), New Delhi
Case no.: ITA 267/2023
The Delhi High Court has held that an employer can claim deduction of employees' contributions towards Provident Fund or Employer's State Insurance Fund, held by it in trust, only if it deposits these amounts on or before the statutory due date prescribed under the relevant labour law.
Thus a division bench of Justices V. Kameswar Rao and Vinod Kumar held, “Employer's contributions under Section 36(1)(iv) and employees' contributions covered under Section 36(1)(va) read with Section2(24)(x) are fundamentally different in nature and must be treated separately. Employees' contribution deducted from their salaries are deemed to be income under Section 2(24)(x) and are held in trust by the employer. The employers can claim deduction only if they deposit these amounts on or before the statutory due date under Section 36(1)(va).”
Case title: Sonaram Bagadaram Mali v. The Commissioner Of Custom & Ors
Case no.: W.P.(C) 13649/2025
The Delhi High Court has held that misleading consumers about locally manufactured goods by labelling them as 'Made in China' or in some other foreign country is contrary to public interest.
The bench was dealing with a Customs case whereby Petitioner's goods (mobile tempered glass) bearing 'Made in China' mark were seized by the Department in a raid.
Delhi High Court Directs Customs Department To Set Up Passenger Grievance Counters At Delhi Airport
Case title: Imran v. Commissioner Of Customs, IGI Airport
Case no.: W.P.(C) 10651/2025
The Delhi High Court has asked the Commissioner of Customs at the IGI Airport to create some counters of the Department outside the airport's security zone, for easy access of aggrieved passengers.
The direction was made by a division bench of Justices Prathiba M. Singh and Shail Jain after the Petitioner, a resident of Kuwait whose gold cut piece was seized by the Department, complained that since the counters of the Customs Department are in the secured area, it is not easy to access them for making representations.
Case title: Raj Krishan Gupta And Ors v. Principal Director Of Income Tax (Investigation) -1 New Delhi
Case no.: W.P.(C) 11005/2024
The Delhi High Court has upheld the surprise search and seizure conducted by the Income Tax Department at the private lockers maintained by a family at South Delhi Vaults, without issuance of prior notice or summons to them. The family claimed that failure to notify them was a flagrant violation of Section 132 of the Income Tax Act, 1961 which relates to 'Search and seizure'.
Section 132(1)(c) stipulates that when the Department has 'reason to believe' that any person is in possession of undisclosed money, bullion, jewellery or other valuable articles, then the officer authorised may open the locker, safe, etc. and seize such articles. The Petitioners however stressed on sub-sections (a) of the provision which stipulates issuance of summons or notice to such persons, asking them to produce books of account explaining the articles.
Case title: Mushlina v. Commissioner Of Customs
Case no.: W.P.(C) 14324/2025
The Delhi High Court has flagged the Customs Department's regular non-appearance in an appeal preferred by an aggrieved traveller whose articles were confiscated at the airport. The passenger further faced consistent non-implementation of the relief orders passed by the Appellate Authority. The court also allowed the release of the articles while upholding the order of the appellate authority.
A division bench of Justices Prathiba M. Singh and Shail Jain further noted that in cases where the Department prefers revision against the appellate order, like in this case, it does not keep the traveller in the loop, making them wait endlessly.
Case Title: Genesis Enterprises v. Principal Commissioner CGST Delhi East
Case Number: W.P.(C) 13821/2025
The Delhi High Court has issued directions safeguarding the right to privacy in GST search proceedings, stating that any family-related CCTV footage which violates the privacy of family members cannot be used or disseminated in any manner.
“Some of the concerns which are raised by the Petitioners such as right to privacy of the family being violated, etc., deserve to be addressed. Clearly, any family-related CCTV footage which is with the GST department and violates the privacy of family members cannot be used or disseminated in any manner,” stated the bench consists of Justices Prathiba M. Singh and Shail Jain.
One Rolex Watch Can Be For Personal Use, Not 'Commercial Quantity': Delhi High Court To Customs
Case title: Mahesh Malkani v. Commissioner Of Customs
Case no.: W.P.(C) 14402/2025
The Delhi High Court has made it clear that one Rolex watch seized by the Customs Department from an air passenger cannot be called 'commercial quantity'. It thus cautioned the Department's Adjudicating Authority against “error” on its part, in declaring the same as commercial.
“Clearly, this Court is of the view that one Rolex watch cannot be held to be a commercial quantity and there is no reason as to why the same cannot be kept for personal use,” a division bench of Justices Prathiba M. Singh and Shail Jain observed.
Case title: Union of India v. Essilorluxottica Asia Pacific Pte Ltd. And Ors
Case no.: W.P.(C) 14723/2025
The Delhi High Court is set to examine whether the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has jurisdiction to hear challenges to notifications issued by the Central Government, imposing Anti-Dumping Duty.
Prior to Finance Act 2023, Section 9C of the Customs Tariff Act, 1975, which is the governing provision for appeals before CESTAT, conferred jurisdiction on CESTAT to hear appeals against 'order'. However, post amendment vide Section 134 of Finance Act, the power is circumscribed to appeals against 'determination or review'. Hence, the question before the High Court is whether only 'determination or review' finding of the DGTR can be challenged before CESTAT or also the 'order' of its acceptance by the Finance Ministry.
Case title: M/s Sharma Trading Company v. Union of India
Case no.: W.P.(C) 13194/2018
The Delhi High Court has made it clear that when GST rates applicable on a given product are reduced by the GST Council, its benefit should trickle down to the end consumer by reduction in prices of such products.
A division bench of Justices Prathiba M. Singh and Shail Jain observed that letting manufacturers increase the quantity of the product while charging the same MRP will defeat the purpose of rate-cuts.
Case title: M/s Sharma Trading Company v. Union of India
Case no.: W.P.(C) 13194/2018
The Delhi High Court has held that an authority constituted under Section 171 of the Central Goods and Services Tax Act 2017 can order businesses to reduce their prices following reduction in GST rates applicable to their products.
A division bench of Justices Prathiba M. Singh and Shail Jain further held that such authority can also impose penalty or cancel GST registration of those in default, in extreme cases.
Case title: M/S Dart Air Services Pvt. Ltd v. Commissioner Of Customs (Airport And General)
Case no.: W.P.(C) 7116/2019
The Delhi High Court has held that the Commissioner of Customs can impose a penalty on a courier service which fails to report suspicious consignments being sent or received from abroad.
A division bench comprising Justices Prathiba M. Singh and Shail Jain observed that courier agencies have a responsibility to ensure that whenever there are any suspicious courier packets being delivered or being transacted through them, due diligence ought to be exercised and if there is any suspicion, the same ought to be reported to the concerned authority.
Case title: Qamar Jahan v. Union of India
Case no.: W.P.(C) 198/2025
The Customs Department recently informed the Delhi High Court that the Draft Baggage Rules (amending Baggage Rules, 2016) have been finalized and are ready to be issued.
A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta were further informed that the Department is awaiting upgradation of IT infrastructure, for effective implementation of the new rules.
Case title: M/S A. L. Exports Through Its Proprietor Arsh v. Union of India
Case no.: W.P.(C) 15025/2025
The Delhi High Court recently came across a peculiar case relating to Input Tax Credit refund claim, whereby a notice for personal hearing was issued to the trader, after the Appellate Authority rejected its plea.
A division bench comprising Justices Prathiba M. Singh and Shail Jain flagged the glitch in the Department's portal, which generated a personal hearing notice after the passage of the final order.
Karnataka HC
Case Title: TTK Prestige Limited AND Union of India & Others
Case No: WP 27926/2025
The Karnataka High Court on Monday refused to pass an ex-parte order staying the guideline dated September 9 issued by the Union of India mandating the declaration of revised retail sale price (MRP), on unsold stock manufactured/packed/imported, which would be effective from September 22, in addition to the existing retail sale price (MRP).
Justice B M Shyam Prasad refused the ex parte interim order on the petition filed by Kitchen and Home Products Company, TTK Prestige Limited. The company has approached the court seeking to quash the guideline.
Case Title: M/s BEE JAY Engineers v. Commercial Tax Officer
Case Number: WRIT PETITION NO. 106642 OF 2025 (T-RES)
The Karnataka High Court has held that an officer below the rank of Joint Commissioner cannot, by himself, inspect the premises of the assessee without authorisation under Section 67 of the Central Goods and Services Tax.
The bench further stated that there is no requirement to provide a copy of the authorisation and details of the order passed by the Joint Commissioner, but the delegate who inspects or confiscates any document or goods would be required to provide the details of the authorisation to the taxable person.
Case Title: M/s NCS Pearson INC. v. Union of India
Case Number: WRIT PETITION NO. 7635 OF 2024 (T-RES)
The Karnataka High Court has stated that a failure to mention the correct value in returns or apply the correct GST rate is not suppression under section 74 of the Central Goods and Services Tax (CGST).
Justice S.R. Krishna Kumar stated that "...though the revenue alleged in the impugned SCN that the assessee failed to mention the value of services correctly in the GSTR-5A returns and apply the correct GST rate on the consideration received, the mere omission to mention the value of services correctly in the returns and/or apply the correct GST rate would not be tantamount to wilful suppression…"
Karnataka High Court Directs CBDT To Extend Tax Audit Due Date To 31st October
The Karnataka High Court today directed the Central Board of Direct Taxes to extend the due date for filing Tax Audit Reports under Section 44AB of the Income Tax Act, 1961, by one month to 31st October, 2025.
The Court took into consideration the difficulties faced and directed the CBDT to extend the due date until the end of October.
Kerala HC
Case Title: Mrs. Sainaba Hamza Koya v. The Income Tax Officer
Case Number: WP(C) NO. 40744 OF 2024
The Kerala High Court stated that to claim the Section 54F deduction under the Income Tax Act, the assessee must satisfy the authorities that borrowed funds were used at their own risk with the intention to be repaid with capital gains.
Justice Ziyad Rahman A.A. stated that "...even in a case where, the residential building was purchased, or it was constructed utilising the borrowed funds or funds from other sources, there is an obligation on the part of the Assessee to satisfy the authorities that, the funds were spent by the assessee either through borrowing or arranging from other sources at his/her own risks and costs, in anticipation of or with an intention to appropriate the income to be subjected to capital gain tax, for such purchase or construction…"
Case Title: Deputy Commissioner v. Hakeem K.
Case Number: WA NO. 1543 OF 2016
The Kerala High Court stated that the assessments under Section 17D Kerala General Sales Tax Act must be finalised within a reasonable period despite the absence of a limitation period.
Justices A. Muhamed Mustaque and Harisankar V. Menon stated that even when the statute does not provide for an outer time limit, the authority has to exercise jurisdiction within a reasonable time. The reasonable period of time for such assessment has to be fixed with reference to the other provisions of the statute.
Madhya Pradesh HC
Case Title: M/s Hindustan Unilever Ltd. v. Commercial Taxes Department
Case Number: VALUE ADDED TAX APPEAL No. 73 of 2019
The Madhya Pradesh High Court stated that White Petroleum Jelly is classified as a 'Drug', not 'Cosmetic', and therefore is not liable to higher VAT and Entry Tax.
Justices Vivek Rusia and Jai Kumar Pillai stated that a White Petroleum Jelly of IP grade manufactured and sold by appellant under a valid drug licence is liable to be classified as a category of drug and medicine under Entry 19-A of Part II, Schedule II of the MP VAT Act.
Madras HC
Case Title: M/s.Sivakumar and Co., Perundurai Road, Erode v. The Tamil Nadu Sales Tax Appellate Tribunal
Case Number: W.P.No.33265 of 2007
The Madras High Court has held that if the assessee has purchased goods both within the State and from other States, then to claim exemption for inter-State purchases, the purchases made within the State must be segregated from those made from others.
Justices S.M. Subramaniam stated that when the facts are established in clear terms that the goods were found mingled during the course of physical verification/inspection, the decision of the assessing Authority and the appellate Tribunal that the assessee is not entitled for exemption, is correct and in consonance with the provisions of the exemption Order.
Case Title: M/s. Inalfa Gabriel Sunroof Systems Pvt. Ltd. v. Customs Authority for Advance Ruling, Mumbai
Case Number: C.M.A.No.2553 of 2025
The Madras High Court has held that the scope of appeal is limited under Section 28KA of the Customs Act and an advance ruling is binding unless it is palpably arbitrary or irrational.
Justices S.M. Subramaniam and C. Saravanan stated that the scope of appeal under Section 28KA of the Customs Act, 1962, is limited, as the ruling obtained is binding on the persons mentioned in Section 28J of the Customs Act, 1962. Unless the ruling of the Authority is palpably arbitrary or irrational or without any proper reasoning, they cannot be interfered by this Court under Section 28KA of the Customs Act, 1962.
No Tax Exemption On Bakery Products Sold At Snack Bar: Madras High Court
Case Title: Cakes N Bakes v. The Commercial Tax Officer
Case Number: W.P.No. 19651 of 2007
The Madras High Court held that there is no tax exemption for bakery products sold in a snack bar.
Justices S.M. Subramaniam and C. Saravanan were addressing the issue of whether bakery products sold in a snack bar are covered under the notification G.O.P.No.570 dated 10th June 1987 and exempted from tax.
Rajasthan HC
Title: IDP Education Indian Pvt. Ltd. v Union of India & Ors. and other connected petitions
While hearing a petition against the decision of Department of Revenue by a company providing services to a foreign entity, Rajasthan High Court held that for someone to be called an “intermediary”, there had be existence of 3 parties in the contract, in the absence of which, the services rendered under a bipartite agreement could not be called “intermediary”.
The division bench of Justice Mr. K.R. Shriram and Justice Maneesh Sharma was hearing the petition filed by a subsidiary of IDP Australia, a foreign entity assisting students with their enrolment with foreign universities.
Title: M/s Sahil Steels v State of Rajasthan & Ors.
Citation: 2025 LiveLaw (Raj) 313
The Rajasthan High Court has questioned why the tax department can send attachment orders via email, but not assessment orders, to ward off any communication gap or confusion about the date of communication.
The Court was hearing a petition filed against the order of the Appellate Authority, State Tax, that had rejected an appeal preferred by the petitioner under Section 107(1) of the Rajasthan GST Act, 2017.
Case Title: Shree Arihant Oil and General Mills v. Union Of India
Case Number: D.B. Civil Writ Petition No. 2932/2023
The Rajasthan High Court has quashed Point No. 2 of the Circular No. 181/13/2022-GST dated 10.11.2022, restricting ITC claims on the inverted duty structure prior to 18.07.2022.
The bench, consisting of Justices Dinesh Mehta and Sangeeta Sharma, stated that if the impugned clarification is tested on the anvil of reasonableness, it falls foul to Article 14 of the Constitution of India, inasmuch as the right to claim refund of Input Tax Credit of the input tax on inverted duty structure has been denied with effect from 18.07.2022 only.
Title: Tax Bar Association, Bhilwara v UOI & Anr.
The Rajasthan High Court has extended the deadline for filing the Tax Audit Report by one month. A division bench of Justice (Dr.) Pushpendra Singh Bhati and Justice Bipin Gupta at the Rajasthan High Court extended the deadline under Section 44AB of the Income Tax Act, 1961, by 1 (one) month beyond September 30, 2025.
It was submitted that in the previous years, CBDT had consistently granted such extensions in similar circumstances, and refusal to grant the same in the present situation was arbitrary, unreasonable, and a violation of Articles 14, 19(1)(g) and 21 of the Constitution of India.
Sikkim HC
Case Title: Union of India v. The Commissioner of Central Goods and Services Tax & Central Excise
Case Number: W.A. No. 02 of 2025
The Sikkim High Court stated that no refund of unutilised ITC (Input Tax Credit) on closure of business under section 54 CGST Act (Central Goods and Services Tax), must be reversed under section 29(5).
Chief Justice Biswanath Somadder and Justice Bhaskar Raj Pradhan stated that the accumulated credit on closure of business must be reversed under section 29(5) and no refund can be granted under section 49(6) and section 54 of the CGST Act and the relevant rules.
TRIBUNALS
Refund Claim On Service Tax For Cancelled Property Bookings Maintainable: CESTAT
Case Title: M/s. Wave Megacity Centre Private Limited v. Commissioner (Appeals-I), Central Tax Goods And Service Tax and Central Excise
Case Number: Service Tax Appeal No.54979 of 2023
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that refund claim on service tax for cancelled property bookings maintainable.
The Tribunal stated that the assessee had issued credit notes in respect of service which is not rendered to the customers on account of cancellation of the agreement and hence there was no scope of rendering any services on which the service tax could be levied.
Service Tax Not Leviable On Deposits Made Under Interim Orders: CESTAT
Case Title: Principal Commissioner v. M/s Micromax Informatics Limited
Case Number: SERVICE TAX APPEAL NO. 50318 OF 2019
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that service tax can't be levied on deposits made pursuant to interim orders.
Binu Tamta (Judicial Member) and P.V. Subba Rao (Technical Member) were dealing with the issue of whether service tax can be levied on the amounts paid or deposited during the pendency of the proceedings before the High Court as per interim orders.
ADG DRI Does Not Have Power To Declare DEPB Scripts Issued By DGFT Null And Void: CESTAT
Case Title: Pankaj Chordia v. The Commissioner of Customs, Cargo Complex
Case Number: CUSTOMS APPEAL NO. 50453 OF 2023
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that ADG DRI (Additional Director General of the Directorate of Revenue Intelligence) does not have power to declare DEPB (Duty Entitlement Pass Book) scripts issued by DGFT Directorate General of Foreign Trade) null and void.
Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) stated that the customs officers who cleared the goods also must have also accepted the DEPB scrips in good faith. At any rate, the DEPB scrips were validly issued by the DGFT and neither the Commissioner nor the DRI has the power to overrule the decision of the DGFT and hold that the DEPB scrips were ab initio null and void.
Refund Of CVD & SAD Paid After GST Introduction Maintainable U/S 142(3) Of CGST Act: CESTAT
Case Title: Rashtriya Metal Industries Limited v. Commissioner of CGST & Central Excise, Surat
Case Number: EXCISE APPEAL NO. 10388 OF 2020-SM
The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that refund of CVD (Countervailing Duty) & SAD (Special Additional Duty) paid after GST introduction maintainable U/S 142(3) CGST Act.
Dr. Ajaya Krishna Vishvesha (Judicial Member) was addressing the issue of whether refund claim is admissible under Section 142 (3) of CGST Act, 2017 in lieu of CENVAT credit of CVD & SAD, where such CVD & SAD are paid after introduction of GST due to non-fulfilment of export obligations against the goods imported duty free, prior to introduction of GST.
Case Title: IBM India Private Limited v. Commissioner of Service Tax
Case Number: Final Order No. 21279/2025
The Bangalore Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that assessee liable to pay interest on short reversal of common cenvat credit used for exempted services.
The question before P.A. Augustian (Judicial Member) and R. Bhagya Devi (Technical Member) was whether interest liability arises on the short reversals of the cenvat credit availed by the assessee on the exempted services.
Preloaded Software On Imported Navigation Devices Liable To Customs Duty: CESTAT
Case Title: M/s. Lakshmi Access Communications Systems Pvt. Ltd. v. Commissioner of Customs
Case Number: Customs Appeal No.2006 of 2012
The Bangalore Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that value of preloaded software to be included in assessable value of imported navigation devices and is liable to customs duty.
Dr. D.M. Misra (Judicial Member) and Pullela Nageswara Rao (Technical Member) were addressing the issue of whether the value of software preloaded/ etched into the imported navigation systems, be included in the assessable value of the said navigation systems and confiscation of goods and imposition of penalties sustainable.
Case Title: Ankit Gems Private Limited v. Circle 5(1)(1), Mumbai
Case Number: ITA No. 3097/MUM/2025
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has stated that the assessee is not required to prove negative once documentary evidence is produced.
Amit Shukla (Judicial Member) and Girish Agrawal (Accountant Member) stated the assessee cannot be made to prove the negative stance for which has been taken by it, right from the very first hearing by bringing on record all the corroborative documentary evidence in respect of its actual and real purchase made by it, forming part of the books of accounts.
Refund Can't Be Rejected On Grounds Of Classification Once Tax Liability Is Settled: CESTAT
Case Title: M/s Airport Retail Private Limited Versus Commissioner of Service Tax, Gurgaon-II
Case Number: Service Tax Appeal No. 51677 OF 2017
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that refund cannot be rejected on grounds of classification once tax liability is settled.
Dr. Rachna Gupta (Judicial Member) and R. Priya (Technical Member) stated that refund under Section 11B of Central Excise Act read with Section 83 of the Finance Act, 1994, is permissible subject to two conditions: - the claim should have been raised before one year from the relevant date; and the claimant has not passed on the incidence of such duty and interest to any other persons.
Case Title: Pradeep Jeyavelu v. The Income Tax Officer
Case Number: I.T.A. No.1626/Chny/2025
The Chennai Bench of Income Tax Appellate Tribunal (ITAT) has stated that sale proceeds of a minor's property share deposited under court order are excluded from father's taxable income.
S.S. Viswanethra Ravi (Judicial Member) held that the assessee cannot decide the utilization of his minor daughter's share as it is deposited as per Court's order and it is impossible to club the same in the assessee's (father) hand.
Case Title: Ajay Kumar Sood v. Commissioner (Appeals-I), CGST- Delhi
Case Number: SERVICE TAX APPEAL NO. 51127 OF 2020
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that compensation for breach of agreement to sell land is not taxable as declared service U/S 66E(e) of the Finance Act.
Binu Tamta (Judicial Member) and P.V. Subba Rao (Technical Member) stated that the amount of Rs. 4.5 crores each received by the assessee from the land owners is compensation for the reneging on the agreement to sell. It does not fall under section 66E(e) and is not a declared service.
Case Title: Habasit Iakoka Pvt. Ltd v. Commissioner of Customs
Case Number: Customs Appeal No. 41230/2013
The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has directed the Registry to refer two appeals to the President of CESTAT for the constitution of a Special Bench to hear and decide the matter against a common order.
Citing the principle of “comity of Courts,” the bench, consisting of Ajayan T.V. (Judicial Member) and M. Ajit Kumar (Technical Member), observed that since the Ahmedabad Bench had already heard an appeal from the same impugned order, it would be appropriate for the Chennai Bench to decline jurisdiction over the same subject matter.
OTHER DEVELOPMENTS
GST Council Announces Revised Slabs Of 5%, 18% And 40% , Cuts Rates On Small Cars, ACs
The 56th meeting of the GST Council was held on 3rd September, 2025. The GST Council inter-alia made the recommendations relating to changes in GST tax rates.
The changes in GST rates on services will be implemented with effect from 22nd September 2025. The changes in GST rates of all goods except pan masala, gutkha, cigarettes, chewing tobacco products like zarda, unmanufactured tobacco and bidi, will be implemented with effect from 22nd September 2025.
CBDT Extends Due Date For Filing Tax Audit Reports To 31st October
On 25th September, the Central Board of Direct Taxes extended the specified date for filing various audit reports for the Previous Year 2024-25 (Assessment Year 2025-26), from 30th September 2025 to 31st October 2025, for assesses referred to in clause (a) of Explanation 2 to sub-section (1) of section 139 of the Income Tax Act,1961.
The extension was granted after the Board received multiple representations from various professional associations, including Chartered Accountant bodies. These associations submitted that the taxpayers and professionals were facing difficulties in timely completion of audit reports due to disruptions caused by natural calamities and floods in certain parts of the country.