Tax Weekly Round-Up: July 21 To July 27, 2025
Kapil Dhyani
28 July 2025 3:40 PM IST
SUPREME COURTForeign Entity Doing Business Through Temporary Premises In India Liable To Tax : Supreme Court Rejects Hyatt International's AppealCause Title: HYATT INTERNATIONAL SOUTHWEST ASIA LTD. VERSUS ADDITIONAL DIRECTOR OF INCOME TAX (and connected matters)The Supreme Court on Thursday (July 24) ruled that the existence of a Permanent Establishment (PE) is sufficient to attract tax...
SUPREME COURT
Cause Title: HYATT INTERNATIONAL SOUTHWEST ASIA LTD. VERSUS ADDITIONAL DIRECTOR OF INCOME TAX (and connected matters)
The Supreme Court on Thursday (July 24) ruled that the existence of a Permanent Establishment (PE) is sufficient to attract tax liability for a foreign entity in India, even in the absence of exclusive possession of a fixed place of business. The Court clarified that temporary or shared use of premises, when combined with administrative or operational control, is adequate to establish a PE, thereby triggering income tax liability in India.
Holding so, the bench comprising Justice J.B. Pardiwala and Justice R. Mahadevan dismissed Hyatt International's appeal against the Delhi High Court's order, which had held the company liable to pay income tax in India on income earned through its Strategic Oversight Services Agreements (SOSA) with Asian Hotels Ltd. for 20 years, the operator of Hyatt's hotel business in India.
Cause Title: M/S ASP TRADERS VERSUS STATE OF UTTAR PRADESH & ORS.
The Supreme Court observed that by mere payment of penalty for the release of the goods detained under Section 129 of the Central Goods and Services Tax Act, the assessee cannot be held to have waived the right to file a statutory appeal.
The Court ruled that mere payment of penalty for the release of goods detained during transit under the GST regime does not conclude proceedings unless a formal, reasoned order is passed under Section 129(3) of the CGST Act.
HIGH COURTS
Bombay HC
Case Title: Umicore Autocat India Private Limited v. Union of India
Case Number: WRIT PETITION NO. 463 of 2024
The Bombay High Court has directed the GST Council and GST Network to develop a mechanism for cross-state ITC transfer in Mergers/amalgamations.
Justices Bharati Dangre and Nivedita P. Mehta permitted the IGST and CGST amount lying in the electronic credit ledger of the Transferor Company to be transferred to the Petitioner Company by physical mode for the time being, subject to the adjustments to be made in future.
Delhi HC
Case title: Anurag Dalmia v. Income Tax Office
Case no.: CRL.M.C. 1575/2018
The Delhi High Court has quashed the criminal proceedings initiated against an assessee under Section 276C, 276D and 277 of the Income Tax Act 1961 merely on the basis of some unauthorised documents alleging existence of an undisclosed Swiss Bank account in his name.
In doing so, Justice Neena Bansal Krishna observed, “Merely on some unauthenticated information received from a third Country with no material evidence, is not sufficient to make out a prima facie case and there cannot be a presumption that a person has committed any wrongdoing.Thus, mere surmise and conjectures is not enough to prosecute a person alleging a criminal offence under Section 276D.”
Gujarat HC
Case Title: Sazid Ali Khan v. Office of Principal Commissioner, Central GST and Central Excise Commissionerate, Vadodara-I & Ors.
Case Number: R/SPECIAL CIVIL APPLICATION NO. 6437 of 2025
The Gujarat High Court held that GST officers issuing summons/arrest memo are not required to be cross-examined by assessee.
Justices Bhargav D. Karia and Pranav Trivedi observed that the assessee wants to cross-examine the persons who belongs to the department who have either issued the summons or arrest memo. Such persons are not required to be cross-examined by the assessee.
Karnataka HC
IGST Not Leviable On Secondment Of Employee From Overseas Group Companies: Karnataka High Court
Case Title: M/s Alstom Transport India Limited v. Commissioner of Commercial Taxes
Case Number: WRIT PETITION NO.1779 OF 2025 (T-RES)
The Karnataka High Court held that IGST is not leviable on secondment arrangement with overseas entities.
Justice Sachin Shankar Magadum was addressing the issue of whether a secondment constitutes a taxable supply of manpower services or a non-taxable employer-employee relationship exempt under Schedule III of the CGST Act.
Case Title: M/s Muni Naga Reddy HUF v. The Assistant Commissioner of Commercial Taxes
Case Number: WRIT PETITION NO. 12543 OF 2025 (T-RES)
The Karnataka High Court has directed the GST department to establish tracking system for notices sent to the taxpayers via email
Justice Suraj Govindaraj stated that it is required for the department to establish a system to ascertain delivery of e-mail notices, when the said e-mail was opened and when the email was read.
Madras HC
Case Title: M/s. Eminent Textiles Mills Private Limited v. The State Tax Officer & Ors.
Case Number: W.A(MD) No.1821 of 2025 and C.M.P.(MD)No.10304 of 2025
The Madras High Court stated that the GST authority can dismiss the rectification application without a personal hearing. The issue before the bench was whether the third proviso to Section 161 of the TNGST Act, 2017, requires complying with the principles of natural justice even for dismissing a rectification petition.
The Bench of Justices G.R. Swaminathan and K. Rajasekar observed that “When the rectification application is dismissed as such without there being anything more, the original order stands as such. In that event, there is no rectification at all. When there is no rectification, there is no question of invoking the principles of natural justice.”
TRIBUNALS
Case Title: Sivakarthick Raman v. The Assistant Commissioner of Income Tax
Case Number: ITA No.:281/Chny/2025
The Chennai Bench of Income Tax Appellate Tribunal (ITAT) has stated that salary received by Chinese resident for the services in China not taxable in India, even if credited to the Indian bank account.
Manu Kumar Giri (Judicial Member) and S.R. Raghunatha (Accountant Member) observed that “the AO has disallowed the exemption claimed with respect to salary received in India for services rendered in China as taxable in India since the salary has been credited by BMW India Pvt Ltd into the assessee's account at Chennai from the payroll account of Chennai……. The salary income for services rendered in China has been rightly offered tax by the assessee in China.”
Case title: Indian National Congress All India Congress Committee v. DCIT Central Circle-19, New Delhi
Case no.: ITA No.1609/Del/2023
The Income Tax Appellate Tribunal dismissed an appeal by the Indian National Congress seeking income tax exemption for the income of ₹199.15 crore during the assessment year 2018-19.
The Tribunal rejected the party's claim for exemption on the ground that there was a violation of the conditions in Section 13A of the Income Tax Act. The returns were filed late, the ITAT noted. Calling for a strict interpretation of the exemption clause, the ITAT observed that "the moment there is violation of such a “due” date, section 13A 3rd proviso gets attracted, so as to result in denial of exemption to the political party concerned."
Case Title: Riyaz Sayed Abdul Aziz v. Commissioner of Customs (Export)
Case Number: CUSTOMS APPEAL No. 85411 of 2024
The Mumbai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that Section 114 AA Customs Act is applicable only for dummy exports made only on paper, not actual export of goods.
S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) stated that it has been made clear that the imposition of enhanced penalty under Section 114AA of Customs Act is applicable only for serious frauds being committed in cases where no goods are being exported, but only papers are being created for availing the number of benefits under various export promotion schemes.