Gujarat High Court Declares Pre-October 2023 GST Levy On Related Persons' Corporate Guarantees Unconstitutional

The Gujarat High Court has declared unconstitutional the levy of GST on corporate guarantees furnished by one related company on behalf of another before October 26, 2023, holding that the retrospective levy violates fundamental rights.However, the court held that GST can be levied from that date where such corporate guarantees continue.While upholding the constitutionality of Rule 28(2) of the CGST Rules read it down by removing the expression “whichever is higher” from the prescribed valuation...

GST Appellate Authorities Presumed To Know Government Notifications, Can't Ignore Them: Gujarat High Court

The Gujarat High Court has held that a taxpayer who filed a GST appeal before the January 31, 2024 cut-off cannot be denied the benefit of a special procedure introduced to allow appeals affected by limitation. The procedure permitted eligible taxpayers to file appeals against orders under Sections 73 and 74 of the Central Goods and Services Tax Act by January 31, 2024, subject to prescribed payment conditions.The Division Bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati made the...

IT Dept. Cannot Cite Website Functionality To Avoid Withdrawing Order Passed In Defiance Of Court: Gujarat High Court

The Gujarat High Court has recently quashed reassessment proceedings against a charitable trust after the Revenue told the court that its tax portal had no functionality to withdraw an assessment order once it had been passed and accounted for. The assessment order was passed despite an interim order restraining the Assessing Officer from doing so.A Division Bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati ruled, "Revenue cannot cite the excuse of nonavailability of any...

MSME Council Cannot Decide Post-Award Enforcement Disputes: Gujarat High Court

The Gujarat High Court on 6 August, held that a Micro and Small Enterprises Facilitation Council becomes functus officio after passing an arbitral award and cannot thereafter adjudicate disputes concerning enforcement of the award or determine whether the awarded amount has been fully paid. A Division Bench comprising Chief Justice Sunita Agarwal and Justice D.N. Ray modified a Single Judge's order directing the Madhya Pradesh MSME Facilitation Council to reconsider Mahakali Foods Pvt. Ltd.'s...

Police Can Investigate SCRA Offences But Cannot Take Cognizance Through Report: Gujarat High Court

The Gujarat High Court on 27 July held that while police can investigate cognizable offences under the Securities Contracts (Regulation) Act, 1956 (SCRA), courts cannot take cognizance of such offences on the basis of a police report and must act only on a complaint filed by the competent authority. A Bench of Justice P.M. Raval partly allowed a petition seeking quashing of an FIR alleging illegal “dabba trading” and quashed the proceedings relating to offences under Sections 406 and 420 of the...

Gujarat High Court Rejects Plea Against Tribunal Order Granting VAT Exemption For Seeds Used For Sowing

The Gujarat High Court has dismissed the State's plea against Western Agri Seeds Ltd., ruling that the state failed to prove the company's seeds were not used for sowing and were therefore outside the scope of the Value Added Tax exemption notification. "The petitioner Department has miserably failed to prove before us that the seeds which are procured by the respondents are not used for sowing purposes," the court observed while upholding the Gujarat VAT tribunal's decision to quash...

Retrospective Property Tax Demands Invalid Under GPMC Act: Gujarat High Court

The Gujarat High Court has held that the Ahmedabad Municipal Corporation (AMC) could not retrospectively revise the rateable value of a property and demand property tax years after the relevant assessment period had ended, ruling that such demands were contrary to the Gujarat Provincial Municipal Corporations Act, 1949, and the Taxation Rules framed under it."Having regard to the statutory provisions and rules thereunder, demand of taxes on the basis of revised rateable value with retrospective...

Gujarat High Court Sets Aside Order Restraining Trademark Owners From Using Own Mark, Calls It 'Grave Error'

The Gujarat High court has set aside a temporary injunction restraining the registered proprietors of the trademark "Aditya Jewellers" from using their own registered mark, ruling that the Commercial court in Rajkot committed "a grave error of law" by granting the relief. The court observed that the trial court had assessed the reliability of the appellants' evidence at the interim stage, even though "no mini trial can be conducted" while deciding an application for temporary injunction.A...

Gujarat High Court Reiterates Trade Associations Can Qualify As Charitable Institutions Under Income Tax Act

The Gujarat High court has recently upheld an Income Tax Appellate tribunal order directing the Commissioner of Income Tax (Exemptions) to reconsider a trade association's application for registration as a charitable institution.It held that trade promotion bodies established to advance trade and commerce can qualify as charitable institutions under the "general public utility" category of the Income Tax Act.A division bench of Justice Bhargav D. Karia and Justice Pranav Trivedi said the...

Income Tax Act | Trustee's Shareholding Doesn't Make Public Trust A 'Concern' Under Deemed Dividend Provision: Gujarat High Court

The Gujarat High Court has recently held that a public trust cannot be treated as a "concern" under the deemed dividend provisions of the Income Tax Act (Section 2(22)(e)) merely because its trustee holds substantial shares in the lending company. Holding that the legal fiction created by the provision cannot be stretched to cover such trusts, the court observed, "The word "concern" used under the Act in such Explanation, which encompasses a Hindu Undivided Family (HUF), or a firm, or an...

Three Days To Reply To Income Tax SCN Not Reasonable: Gujarat High Court Quashes Assessment

The Gujarat High Court recently held that granting a taxpayer only three days to respond to an income tax show cause notice does not amount to a reasonable opportunity of hearing and violates the principles of natural justice.Setting aside an income tax assessment order passed after scrutiny proceedings, a Division Bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati observed, "Thus, in view of the settled legal position, granting only three days' time to file a reply cannot be said to...

Gujarat High Court Quashes Reassessment Notice Issued Beyond COVID-Era TOLA Deadline

The Gujarat High Court has quashed a reassessment notice issued under Section 148 of the Income Tax Act, holding that it was issued beyond the "surviving time" available under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA), as interpreted by the Supreme Court in Union of India v. Rajeev Bansal.TOLA was enacted to extend statutory timelines for tax and other legal proceedings during the COVID-19 pandemic.A Division Bench of Justice A.S. Supehia and...