Customs Dept Cannot Run Parallel Proceedings By Passing Penalty Order While Challenge To SCN Is Pending Before Court: Delhi HC

The Delhi High Court has set aside a final order of penalty passed by the Customs Department against a paper trader for alleged undervaluation of imported goods, stating that the same was passed during pendency of challenge to the show cause notice (SCN) issued to the trader.A division bench of Justices Prathiba M. Singh and Dharmesh Sharma observed, “passing of the impugned Order-in-Original while the impugned SCN was under challenge before this Court would amount to initiation of parallel...

Issue Related To Existence Of Arbitration Agreement Cannot Be Decided Ex-Parte, Without Hearing Respondent: Delhi High Court

A Delhi High Court Bench of Justice Navin Chawla and Justice Shalinder Kaur held that the District Judge should not have decided the issue related to the existence of an arbitration agreement ex-parte, without calling upon the respondent to give its stand on the same.Additionally, the court held that an arbitration agreement, by virtue of the presumption of separability, survives the principal contract in which it was contained.Brief Facts: The dispute arose with respect to a lease deed...

Trader Cannot Accept Settlement Commission's Order U/S 127C Of Customs Act 'In Parts': Delhi High Court

The Delhi High Court has held that an order passed by the Settlement Commission under Section 127C of the Customs Act, 1962 is in the nature of a 'settlement' and cannot be accepted by a trader only in part.A division bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma observed, “Given the nature of the order passed under Section 127C of the Act – which is in the nature of a settlement – it would not be permissible to dissect the same and accept that parts of the order...

Referral Courts At Post-Award Stage Must Protect Parties From Being Forced To Arbitrate Non-Arbitrable Claims: Delhi High Court

The Delhi High Court bench of Justice Subramonium Prasad, while refusing to appoint an arbitrator in a Section 11 petition, has held that the referral court in a post-award stage must protect the parties from being forced to arbitrate when, after prime facie scrutiny of the facts the claims are found to be non-arbitrable. The court applied the 'eye of the needle' test, which allows the referral court to reject arbitration in exceptional circumstances where the claims are deadwood. ...

Section 13 Of Commercial Courts Act Doesn't Provide Any Independent Right To Appeal In Arbitration Matters: Delhi High Court Reiterates

The Delhi High Court bench of Justice Navin Chawla and Justice Shalinder Kaur has held that an order which neither sets aside nor refuses to set aside the arbitral award, does not fall under the ambit of Section 37(1)(c) of the Arbitration & Conciliation Act and is not appealable. The court observed that appeals in arbitration matters are maintainable only if expressly provided for in section 37/ 50 of the A&C Act. Section 13 of the Commercial Courts Act, 2015 does not confer ...

Importation Of Wireless Access Points Which Operate Solely On MIMO Technology Exempt From Customs Duty: Delhi High Court

Coming to the rescue of an IT distribution company, the Delhi High Court has held that the import of Wireless Access Points (WAPs), which operate on MIMO technology, are exempt from Customs duty.In doing so, the division bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma held that the word “and” used between 'MIMO and LTE Products', which are eligible for exemption under the relevant notification issued by the Centre, is disjunctive.It thus rejected the Customs'...

Penalties Like Seizure, Detention Of Goods In Transit U/S 129 CGST Act Shouldn't Be Imposed To Penalise Minor Breaches: Delhi High Court

The Delhi High Court has held that Section 129 of the Central Goods & Services Tax Act, 2017 which pertains to detention, seizure and release of goods while in transit cannot be invoked for imposing penalties for minor breaches, like incomplete e-way bill.A division bench of Justices Yashwant Varma and Harish Vaidyanathan Shankar further held that Section 129 cannot, merely by virtue of its non-obstante clause, be construed to have an overriding effect on Section 126 which interdicts tax...

Whether Entity Is 'Permanent Establishment' Is A Fact-Specific Issue, Must Be Examined Separately For Different Tax Periods: Delhi High Court

The Delhi High Court has held that whether an entity is a Permanent Establishment (PE) of a foreign company or not is a “fact-specific” issue which must be examined separately for different tax periods.A division bench of Justices Yashwant Varma and Harish Vaidyanathan Shankar observed,“The position of a PE being a facts-specific issue and thus liable to be examined against the backdrop of what obtained in a particular tax period…”Reliance was placed on a Commentary of the Organization for...

Delhi High Court Distinguishes From SC's Sky Light Judgment, Declines Assessment Issued In Wrong Name After Entity's Merger

The Delhi High Court on Friday declined the Income Tax Department's appeal to treat as 'curable', the error committed in naming the relevant entity while issuing reassessment notices.A division bench of Justices Yashwant Varma and Dharmesh Sharma refused to grant the benefit which the Supreme Court had given to the Department in Sky Light Hospitality LLP v. Assistant commissioner of Income-tax (2018). It observed,“It was the conduct of the assessee in Sky Light which had convinced the Supreme...

[S.151 IT Act] SC Judgment In Rajeev Bansal Doesn't Affirm Authority Of Joint Commissioner To Accord Approvals For Reassessment: Delhi HC

The Delhi High Court has held that the Supreme Court's decision in Union of India and Ors. vs. Rajeev Bansal (2024) did not affirm the authority of a Joint Commissioner to grant approval under Section 151 of the Income Tax Act, 1961 for initiation of reassessment proceedings. The provision precludes the Assessing Officer from issuing notice for reassessment after the expiry of four years from the end of the relevant Assessment Year, unless the Principal Chief Commissioner or...

[S.115JB Income Tax Act] Delhi HC Rejects Dept's Appeals Against Tata Power's Joint Venture With Delhi Govt For Supply Of Electricity

The Delhi High Court has held that Section 115JB of the Income Tax Act, 1961, as it stood prior to its amendment by virtue of Finance Act, 2012, would be inapplicable to an electricity generation company. A division bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta Sharma thus dismissed the Department's appeals against Tata Power Delhi Distribution Limited, a joint venture of Tata Power with the Delhi government for purposes of power generation and distribution of ...

ITAT Cannot Decide On Grounds Not Addressed By Commissioner Of Income Tax (Appeals): Delhi High Court

The Delhi High Court recently said aside an order passed by the Income Tax Appellate Tribunal, deciding grounds that did not arise from the impugned order passed by the Commissioner of Income Tax (Appeals). A division bench of Acting Chief Justice Vibhu Bakhru and Justice Tushar Rao Gedela observed, “The Assessee's challenge to the addition of ₹4,30,00,000/- under Section 68 of the Act had remained unaddressed by the learned CIT(A) but had been affirmed by the learned ITAT, without...