Tax Weekly Round-Up: August 11 - August 17, 2025
Kapil Dhyani
18 Aug 2025 4:05 PM IST
SUPREME COURTS.6(2)(b) CGST Act | Central Authority Can Issue Summons Despite State Authority Initiating Proceedings : Supreme CourtCause Title: M/S ARMOUR SECURITY (INDIA) LTD. VERSUS COMMISSIONER, CGST, DELHI EAST COMMISSIONERATE & ANR.In a significant ruling, the Supreme Court on Thursday (Aug. 14) held that a summons issued by the Central GST authorities under Section 70 of the Goods...
SUPREME COURT
Cause Title: M/S ARMOUR SECURITY (INDIA) LTD. VERSUS COMMISSIONER, CGST, DELHI EAST COMMISSIONERATE & ANR.
In a significant ruling, the Supreme Court on Thursday (Aug. 14) held that a summons issued by the Central GST authorities under Section 70 of the Goods and Services Tax Act does not constitute “initiation of proceedings" under Section 6(2)(b) of the CGST Act. Therefore, there's no bar to issuing a summons where the State GST authorities have already issued a show cause notice on the same subject matter.
The Court clarified that the bar under Section 6(2)(b) of the CGST Act, to avoid duplicity of proceedings, would be applicable only when the Central and State GST authorities initiate proceedings on the same subject matter. The Court reasoned that since the summons served are meant to be investigative, not adjudicative, they fall outside the bar Section 6(2)(b) of the CGST Act.
HIGH COURTS
Allahabad HC
Case Title: Atlantis Intelligence Ltd. v. Union of India And 2 Others
Case no.: WRIT TAX No. - 3608 of 2025
The Allahabad High Court has held that under Section 169 of the Central Goods and Service Tax Act, 2017 service on registered email is sufficient service for the purpose of limitation. It held that holding that service was to be made by more than one modes would be absurd and defeat the purpose of the provision.
The bench of Justice Shekhar B. Saraf and Justice Praveen Kumar Giri held, “Upon perusal of Section 169 of the Act, we are of the view that in the event the service is made by way of the registered email, the same would be a good service and limitation would start from that date itself. The petitioner cannot be allowed to take a ground that the other modes of service that have been provided in clauses (a) to (f) of sub-section (1) to Section 169 of the Act have not been followed. If one were to read that for service to be complete more than one mode as has been prescribed under Section 169 of the Act is required to be followed, the entire purpose of the provision would become absurd.”
Bombay HC
No Sales Tax On HDPE Bags Used To Pack Cement When Sold Separately: Bombay High Court
Case Title: The Commissioner of Sales Tax v. M/s. Associated Cement Company Limited
Case Number: SALES TAX REFERENCE NO. 20 OF 2010
The Bombay High Court stated that no sales tax can be levied on HDPE (High-Density Polyethylene) bags at cement rate when sold separately. Justices M.S. Sonak and Jitendra Jain were addressing the issue of whether there is an express and independent contract on the sale of HDPE bags in which cement is packed.
“HDPE bags used to pack the cement were a distinct commodity with its own identity and were classified separately. There was no chemical or physical change in the packing either at the time of packing or at the time of use of the contents. The packing is capable of being reused after the contents have been consumed; there was evidence of reuse or resale, which was not challenged by the revenue. The HDPE bags were used to pack the cement for ease of transportation and convenience…,” opined the bench.
Calcutta HC
Case Title: Tara Lohia Private Limited v. Additional Commissioner, CGST & CX, Kolkata South Commissionerate & Anr.
Case Number: WPA 9655 of 2025
The Calcutta High Court stated that writ not maintainable against officer's ITC finding made within jurisdiction.
Justice Raja Basu Chowdhury stated that “Though, violation of principles of natural justice, and a challenge on jurisdictional issue can be maintained, such issue must, relate to an exercise of jurisdiction by an authority which it does not have, and not merely an error committed within its jurisdiction.”
Case Title: The West Bengal State Co-operative Agriculture & Rural Development Bank Ltd. v. Deputy Commissioner of Income Tax, Circle-54 Kolkata
Case Number: ITAT/36/2025
The Calcutta High Court stated that interest earned on surplus lending funds is attributable to banking business, qualifies for 80P deduction under Income Tax Act.
Chief Justice T.S. Sivagnanam and Justice Chaitali Chatterjee (Das) stated that interest earned by the West Bengal State Co-operative Agriculture & Rural Development Bank Ltd. on surplus funds from NABARD lending business eligible for deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961.
Delhi HC
Case title: Raj Kumar Kedia v. Income Tax Office
Case no.: CRL. M.C. 219/2018
The Delhi High Court recently dismissed a plea for quashing a criminal complaint lodged under Income Tax Act 1961 for alleged tax evasion, moved on the ground that reassessment action was pending and hence the complaint was premature.
The bench of Justice Neena Bansal Krishna cited P. Jayappan vs. S.K. Perumal, First Income Tax Officer [1984] where it was held that pendency of re-assessment proceedings cannot act as a bar to the institution of criminal prosecution for the offences under Section 276-C or Section 277 Income Tax Act.
Case title: Ganpati Polymers Through It Proprietor Prop. Ankur Jain v. Commissioner Of Central Goods And Service Tax And Another
Case no.: W.P.(C) 11906/2025
The Delhi High Court recently refused to interfere with a GST demand raised against a trader, who failed to either appear for personal hearing or even file a reply.
Though the trader sought to contend that reply could not be filed as he is not a frequent visitor to the GST portal, a division bench of Justices Prathiba M. Singh and Renu Bhatnagar said, “It is a matter of practice of the GST Department that the notices for personal hearing and notices for replies to be filed are all uploaded on the GST Portal. The Petitioner was well aware of the complete investigation that was going on against him and such callous conduct on behalf of the Petitioner cannot be condoned by the Court where the Petitioner chooses not to even participate in the proceedings in any manner whatsoever.”
Case title: The Commissioner Of Income Tax - International Taxation -3 v. Xiocom (Nz) Ltd
Case no.: ITA 299/2025
The Delhi High Court has reiterated that consideration paid by an Indian entity to a foreign company for the resale/ use of their computer software is not 'royalty'. A division bench of Justices V. Kameswar Rao and Vinod Kumar thus held that the Indian entity is not liable to deduct TDS in such cases.
The bench in this regard relied on Engineering Analysis Centre of Excellence Pvt. Ltd. v. The Commissioner of Incometax & Another (2021) where the Supreme Court had held that amounts paid by Indian companies for the use of softwares developed by foreign companies do not amount to 'royalty' and that such payment do not give rise to income which is taxable in India.
Karnataka HC
Export Incentives Can't Be Denied For Inadvertent Error In Shipping Bill: Karnataka High Court
Case Title: Louis Dreyfus Company India Pvt. Ltd. v. Union of India
Case Number: WRIT PETITION NO. 9005 OF 2025 (T-CUS)
The Karnataka High Court held that export incentives can't be denied for inadvertent error in shipping bill.
The bench opined that …there are situations where the assessee by inadvertence or even otherwise has uploaded certificate/forms or returns which contains some errors which would require correction. The said correction or amendment cannot be denied on the basis of the technological system which has been introduced by the Department to contend that the software does not allow for such amendment…
Patna HC
Limitation To Claim GST Refund Begins From Date Of Correct Tax Payment: Patna High Court
Case Title: M/s Sai Steel v. The State of Bihar
Case Number: Civil Writ Jurisdiction Case No.13163 of 2024
The Patna High Court held that limitation for GST refund in wrong head ceases computed from correct payment date.
Justices Rajeev Ranjan Prasad and Shailendra Singh after reading Section 77 of the CGST Act, 2017 read with Section 19 of the IGST Act opined that the relevant date for counting the period of limitation would start from the date when the assessee had deposited the tax under IGST Act.
TRIBUNALS
Cenvat Credit Can Be Availed On Sugar Cess Paid On Imported Raw Sugar: CESTAT
Case Title: M/s A B Sugar Ltd. v. Commissioner of Central Excise and Service Tax, Ludhiana
Case Number: Excise Appeal No. 2696 of 2012
The Chandigarh Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that cenvat credit can be availed on sugar cess paid on imported raw sugar.
S.S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) were addressing the issue of whether the assessee is entitled to avail the CENVAT credit of the sugar cess paid on imported raw sugar or not.
Tribunal Has Inherent Authority To Stay Orders Detrimental To Revenue: CESTAT
Case Title: Commissioner of Customs v. M/s. SKOT India
Case Number: Customs Appeal No. 40893/2024
The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that tribunal has inherent authority to stay orders detrimental to revenue.
P. Dinesha (Judicial Member) and M. Ajit Kumar (Technical Member) stated that “the power of taxation including its collection being an inherent attribute of sovereignty, the right of revenue to seek a stay of an order determinantal to the collection of taxes, cannot be lightly dismissed….……..we find force in the plea made by the revenue that Rule 41 of the CESTAT (Procedure) Rules, 1982 also contains the power for grant of a stay against an order or its part. In any case such a power is inherent in the powers of the Tribunal.”
No Service Tax On Catering Services Provided To Educational Institutions: CESTAT
Case Title: M/s Smt. Kala Kudal v. The Commissioner, Central Excise & GST, Udaipur (Rajasthan)
Case Number: Service Tax Appeal No. 51606 Of 2019
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that no service tax on catering services provided to educational institutions.
Dr. Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) were addressing the issue of whether the catering services provided by the assessee to a School with hostel facility are covered under the exemption from payment of service tax given at serial no.9 of Notification No.25/2012-ST dated 20.06.2012.