Bombay High Court Quashes Municipal Cess Assessment Orders Against HPCL Over 10-Year Delay

The Bombay High Court has recently quashed municipal cess assessment orders passed by the Navi Mumbai Municipal Corporation against Hindustan Petroleum Corporation Ltd., holding that completing proceedings more than ten years after issuing show cause notices was unreasonable and liable to be set aside. A Division Bench of Justices G. S. Kulkarni and Aarti Sathe noted that the issue raised was already covered by its earlier ruling and that the corporation was bound by it. “In this view of the...

Company Auditor's General Observation Not Adverse Remark, Can't Trigger Criminal Liability: Bombay High Court

The Bombay High Court at Goa on Monday quashed criminal proceedings initiated against the directors of a company under the Companies Act, 1956, holding that the auditor's remark was merely a general observation or recommendation and did not constitute a “reservation, qualification, or adverse remark” so as to attract penal liability. A bench of Justice Ashish S. Chavan was dealing with a writ petition filed by the directors of Timblo Private Limited challenging the order of the Judicial...

GST Refund Cannot Be Rejected Without Considering Documents Already On Record: Bombay High Court

The Bombay High Court on 16 April set aside an order rejecting a GST refund claim after finding that the authorities failed to properly consider documents submitted by the taxpayer, including the Foreign Inward Remittance Certificate (FIRC). A Division Bench comprising Justices G. S. Kulkarni and Aarti Sathe held that when relevant documents are already placed on record, the refund claim must be examined fairly and through a reasoned order. It observed: “No prejudice would be caused to the...

Arbitral Award Sent To Last Known Address Is Valid Service; Limitation Runs From Attempted Delivery: Bombay HC

The Bombay High Court has reiterated that an arbitral award dispatched to a party's last known address amounts to valid service in law, even if the party does not actually receive it, and the limitation to challenge the award begins from the date of attempted delivery. Justice Sharmila U. Deshmukh held that, “Once the signed copy of the Award is shown to have been dispatched to the last known address of the Applicants, the same is sufficient to raise the deeming fiction under Section 3(2) and...

Bombay High Court Sets Aside Cap On Export Unit Tax Deduction Based On Sister Concern Profits

The Bombay High Court has held that deduction under Section 10B of the Income Tax Act, which grants tax relief to export-oriented units on profits derived from exports, cannot be restricted merely by comparing the assessee's profit margins with those of a sister concern, in the absence of any material establishing an arrangement to inflate profits. “The capping of the profit share of the Assessee on which deduction under Section 10B could be claimed at 19% solely on the basis of the sister...

Customs Public Notices Cannot Be Issued In A Manner Diluting FTA Benefits Or Overriding Law: Bombay HC

The Bombay High Court recently observed that Commissioner of Customs cannot issue public notices in a manner that dilutes the benefits under free trade agreements or overrides statutory provisions and CBIC circulars, while setting aside an order denying preferential duty to Covestro India Pvt. Ltd. The dispute arises from a public notice issued in March 2024 by the Commissioner of Customs at Nhava Sheva, which prescribed additional documentation requirements in cases involving third-party...

Homebuyer Labelled As 'Investor' To Undermine Rights: Bombay High Court Dismisses Developer Appeal

The Bombay High Court has dismissed a developer's second appeal, holding that it could not justify cancelling a flat allotment and pushing the homebuyer toward a refund by treating her as an "investor" instead of honoring the allotment. The court found that, in this case, calling the buyer an “investor” was not an innocent choice of words. She had already paid 30% of the price for a clearly identified flat. Describing her as an investor was a way to deny her the apartment and steer her toward a...

Bombay High Court Upholds RBI's 2019 Stressed Assets Framework, Finds No Arbitrariness

The Bombay High Court recently upheld the Reserve Bank of India's June 7, 2019 circular on the Prudential Framework for Resolution of Stressed Assets, refusing to interfere with the policy decision that repealed multiple earlier restructuring circulars. The court found no arbitrariness in the RBI's decision to withdraw earlier schemes, including those relating to corporate debt restructuring, restructuring of advances by banks, and restructuring of dues of small and medium enterprises, holding...

Bombay High Court Reads Down RBI 5-Year Ban On New Venture Funding For Wilful Defaulters After NPA Settlement

The court held the five-year embargo cannot continue unless it is established that the borrower is guilty of fraud or has siphoned or diverted funds.

Bombay HC Flags 'Judicial Chaos,' Urges Uniform Litigation Policy Over Contradictory Stands Taken by Tax Depts

The Bombay High Court has recently flagged a persistent issue of the tax and customs department taking inconsistent stands on the same legal question before different High Courts, warning that such conduct leads to “judicial chaos” and needs correction through a uniform litigation policy. A bench of Justice G. S. Kulkarni and Justice Aarti Sathe held that once a legal issue has reached finality against the department, it cannot be reopened elsewhere by taking a contrary stand. The court...

Bombay High Court Allows Delay Condonation For Charitable Trust IT Filing, Attributes Delay To CA Lapse

The Bombay High Court has set aside an order rejecting a charitable trust's request to excuse a delay in filing Form 10, holding that a lapse on the part of its Chartered Accountant could not be used to deny the trust tax exemption under Section 11 of the Income Tax Act. A Bench of Justice B.P. Colabawalla and Justice Firdosh P. Pooniwalla said, “the Petitioner Trust would suffer grave hardship if the delay is not condoned since the Petitioner Firm would be saddled with a huge tax liability for...

Bombay High Court Quashes Infinx GST Refund Rejection After Hearing Adjournment Denied Despite Heavy Rains

The Bombay High Court has set aside a GST refund rejection against Infinx Services Private Limited, finding that the tax department shut the company out of the process by deciding the case without giving it a hearing, even after it asked for time citing heavy rains in Mumbai. A Bench of Justice G. S. Kulkarni and Justice Aarti Sathe held that the order had been passed without affording a personal hearing despite a specific request to reschedule the hearing on account of heavy rains in the city....