Karnataka High Court
Karnataka High Court Upholds Deletion Of Tax Addition On Advances Received By Businessman Procuring Land
The Karnataka High Court has upheld the deletion of a ₹21.11 crore tax addition made against a Bengaluru-based businessman engaged in identifying and procuring land for real estate projects. The court held that advances received in the course of that business cannot be taxed merely because they remained outstanding for several years.The court observed that the mere passage of time does not amount to forfeiture, and such advances cannot be treated as taxable income in the absence of material...
Transit Pass Surrender Not Conclusive Proof Of Goods Movement, Doesn't Bar KVAT Penalty: Karnataka HC
The Karnataka High Court on 15 July held that surrender of a transit pass under the Karnataka Value Added Tax (KVAT) Act does not conclusively establish genuine interstate movement of goods or prevent authorities from initiating penalty proceedings. A Division Bench of Justices S.G. Pandit and Dr. K. Manmadha Rao dismissed an appeal filed by Sri C. Girish, proprietor of Jai Gurudev Road Carriers, and upheld the penalty imposed under Section 53(12) of the KVAT Act (which provides for penalty...
Karnataka High Court Holds CESTAT Must Decide Limitation Plea Before Remanding Excise Matter
The Karnataka High Court on 2 July held that the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) must decide a specifically pleaded limitation objection before remanding an excise dispute for adjudication on merits, as accepting the limitation plea could make further proceedings unnecessary. A Division Bench of Justices S.G. Pandit and Rajesh Rai K. disposed of the appeal filed by Lotus Printers Private Limited and directed CESTAT to decide the limitation issue while keeping its...
Karnataka High Court Upholds ₹1.77 Lakh Refund, Says Developer Failed To Establish RERA Exemption Claim
The Karnataka High Court has upheld an order directing a Bengaluru-based real estate developer and its promoter to refund about ₹1.77 lakh with interest to homebuyers. It found that the project, which remained unregistered under the Real Estate (Regulation and Development) Act, 2016, could not claim exemption from registration without demonstrating compliance with the statutory requirements.A division bench of Justice Jayant Banerji and Justice Tara Vitasta Ganju observed:“It is the mandate of...
Karnataka High Court Holds S. 271DA Penalty Begins Only With S. 274 Notice, Reads In Six Month Limit
The Karnataka High Court on 7 July held that penalty proceedings under Section 271DA of the Income Tax Act commence only when the Joint Commissioner issues a show cause notice under Section 274, and not when the Assessing Officer merely forwards a proposal for initiating penalty. A Division Bench of Justices S.G. Pandit and K.V. Aravind partly allowed a batch of ten Revenue appeals, clarifying that, although the Act does not prescribe a time limit for issuing a notice under Section 274, the...
Income Tax Order Not Invalid If DIN Is Communicated Later Through Separate Intimation: Karnataka High Court
The Karnataka High Court has held that an income tax order initially communicated without a Document Identification Number (DIN) does not become invalid merely because the DIN is communicated later through a separate authenticated intimation letter. The court held that the procedure substantially complied with CBDT Circular No. 19/2019 as it maintained the audit trail and authenticity of departmental communications. A Division Bench of Justice S.G. Pandit and Justice K.V. Aravind allowed two...
KVAT Revision Orders Must Be Passed Within Five Years Of Order Sought To Be Revised: Karnataka High Court
The Karnataka High Court has held that tax authorities cannot keep suo motu revision proceedings under the Karnataka Value Added Tax (KVAT) Act pending indefinitely after initiating them within the statutory four-year period. While the authority validly initiates revision by calling for records within four years of the order proposed to be revised, the final revisional order must also be passed within a reasonable time, the court ruled. A division bench of Justice S.G. Pandit and Justice K.V....
Karnataka High Court Says Third Parties Cannot Invoke Art. 226 Against GST Rulings, Dismisses BMRCL Challenge
The Karnataka High Court on 7 July held that a person who is neither the applicant nor the concerned tax authority in an advance ruling proceeding cannot challenge the ruling under Article 226 of the Constitution, as such rulings are binding only on the parties to the proceeding. A Division Bench of Justices S.G. Pandit and K.V. Aravind dismissed Bangalore Metro Rail Corporation Limited's (BMRCL) writ petition challenging an order of the Karnataka Appellate Authority for Advance Ruling (AAAR),...
Karnataka High Court Rejects Deccan Mining's Refund Claim, Holds Pay Slips Qualify As Consignment Notes
The Karnataka High Court on 8 July held that transportation services provided by individual truck owners can be treated as Goods Transport Agency (GTA) services if the documents issued for transportation contain the essential features of a consignment note. A Division Bench of Justices S.G. Pandit and Rajesh Rai K dismissed an appeal filed by Deccan Mining Syndicate (P) Ltd., holding that the "pay slips" issued by the transporters fulfilled the requirement of consignment notes under Section...
Karnataka HC Holds Revised Return Mandatory For Lower VAT Claim, Rejects India Heritage Foundation's Plea
The Karnataka High Court on 8 July held that a taxpayer cannot seek a lower VAT rate during reassessment proceedings without first filing a revised return under the Karnataka Value Added Tax (KVAT) Act, and dismissed India Heritage Foundation, Bengaluru's revision petition seeking to reduce the VAT rate on iron and steel used in a works contract from 12.5% to 4%. A Division Bench of Justices S.G. Pandit and Rajesh Rai K relied on its earlier decision in Nandi Constructions v. State of Karnataka...
No GST Payable On Machinery Returned For Testing Without Fresh Consideration: Karnataka High Court
The Karnataka High Court held on 25 June that a company does not incur GST liability when it returns machinery to a seller for testing without any fresh consideration, as the movement does not amount to a taxable supply. A Division Bench of Justices S.G. Pandit and Rajesh Rai K dismissed the State's appeal and upheld the Single Judge's order reducing the penalty imposed on AAM India Manufacturing Corporation Pvt. Ltd. to Rs.25,000, while directing the Department to refund the remaining amount...
Advanced Liquidation Cannot Be Shifted To NCLT Merely Because Assets Are Unsold: Karnataka High Court
The Karnataka High Court on 23 June, held that winding up proceedings cannot be transferred to the National Company Law Tribunal (NCLT) merely because the company's assets have not yet been sold. It noted that once liquidation has progressed substantially in time and substance, transfer would disrupt a mature liquidation process and is not warranted. Justice Suraj Govindaraj dismissed an application filed under the fifth proviso to Section 434(1)(c) of the Companies Act, 2013 (which empowers...