Tax Weekly Round-Up: May 21 - June 01, 2025

S.27 Customs Act Or Doctrine Of Unjust Enrichment Won't Apply To Refund Of Bank Guarantee : Supreme Court Allows Patanjali Plea

Case Title: M/S PATANJALI FOODS LIMITED (FORMERLY KNOWN AS M/S RUCHI SOYA INDUSTRIES LTD.) VERSUS UNION OF INDIA & ORS.

Case no.: CIVIL APPEAL NOS. 3833-3835 OF 2025

The Supreme Court has held that Section 27 of the Customs Act, which requires a person seeking refund of duty to show that the burden was not passed on to the customer, is not applicable when refund is sought of a wrongly invoked bank guarantee.

This is because encashment of bank guarantees by the Customs Department cannot be treated as payment of customs duty. Hence, neither Section 27 nor the doctrine of unjust enrichment is applicable.

Circular Clarifying Previous Notifications On Fiscal Duty Has Retrospective Effect : Supreme Court

Case Title: M/S SURAJ IMPEX (INDIA) PVT. LTD. VERSUS UNION OF INDIA & ORS.

Case no.: SLP (C) Nos. 26178-79 OF 2016

The Supreme Court recently held that a circular/notification issued by the revenue department, clarifying or explaining a fiscal regulation, has to be given retrospective effect.

In the facts of the case at hand, the Court held that a Circular dated 17.09.2010 issued by the Central Board of Excise and Customs (CBEC) had to be given retrospective effect as it clarified certain previous notifications on customs duty.

HIGH COURTS

Chhattisgarh HC

Disallowance U/S 143(1)(a) Of Income Tax Act Inapplicable When Issue Involved Is Pending Before Supreme Court: Chhattisgarh High Court

Case Number: TAXC No. 56 of 2025

Case Title: Raj Kumar Bothra v. Deputy Commissioner Of Income Tax

The Chhattisgarh High Court has held that an Assessing Officer (AO) cannot apply Section 143(1)(a) of the Income Tax Act, 1961 (the 1961 Act), to disallow a claim where the issue involved, such as the deductibility of employees' contributions to EPF/ESI under Section 36(1)(va), was pending consideration before the Supreme Court in Checkmate Services Pvt. Ltd. v. CIT [(2023) 6 SCC 451].

In this regard, a Division Bench of Justice Sanjay K. Agrawal and Justice Deepak Kumar Tiwari held, “…we are of the considered opinion that the Assessing Officer should not have resorted to the provisions contained under Section 143(1)(a) of the Act of 1961 and instead could have resorted to the provisions under Section 143(3) of the Act of 1961, as on the date of issuance of intimation order dated 16.12.2021 by the Assessing Officer, exercising power under Section 143(1)(a) of the Act of 1961, the subject issue was highly debatable and ultimately, that issue was resolved by their Lordships in the matter of Checkmate Services Pvt Ltd (supra) on a later date.”

Delhi HC

'Industrial Building' Not Limited To Manufacturing Units, Can Include IT & Software Offices For Purposes Of Property Tax: Delhi High Court

Case title: SDMC v. Moon Steeland General Industries Pvt. Ltd.

Case no.: W.P.(C) 9986/2021

The Delhi High Court has held that the scope of an 'Industrial Building' cannot be restricted merely to traditional notions of manufacturing involving tangible and physical goods.

Justice Purushaindra Kumar Kaurav rather held that an 'Industrial Building' encompasses IT sector businesses where non-material inputs such as data, digital content, or intellectual capital are subjected to systematic transformation or reconstitution into new intellectual property outputs, such as software, algorithms, digital products, or proprietary databases.

Himachal Pradesh HC

No Equity In Taxation Law: Himachal Pradesh High Court On Tax Liability Of Auction Purchaser

Case Name: Arif Khan v/s State of H.P. & Ors.

Case No.: CWP No.1948 of 2024

Himachal Pradesh High Court held that an auction Purchaser is liable to pay the outstanding taxes on vehicles acquired through auction. It stated that there is no equity in taxation law and equity would only come into play in case there is no law operating in the field.

Justice Tarlok Singh Chauhan & Justice Sushil Kukreja: “It is more than settled that there is no equity in taxation law and further more equity would only come into play in case there is no law operating in the field. Here, there is already law operating in the field and therefore, equity has to yield before law. For, it is well settled that whenever conflict is between the law and equity, law would prevail”.

Other Developments

ITR Filing Due Date Extended From July 31 To September 15

The CBDT has decided to extend the due date of filing of ITRs, which are due for filing by 31st July 2025, to 15th September 2025.

"This extension will provide more time due to significant revisions in ITR forms, system development needs, and TDS credit reflections. This ensures a smoother and more accurate filing experience for everyone. Formal notification will follow," the Income Tax department said in a post on X.