Madras High Court Quashes ₹4.56 Crore Customs Duty Demand Against Shipping Forwarder

The Madras High Court on 19 August set aside a Rs. 4.56 crore differential customs duty demand, along with interest and penalties, imposed on the proprietor of The Sea Shipping Forwarders. A Single-Judge Bench comprising Justice Hemant Chandangoudar held that the Customs Department failed to record a specific finding, supported by cogent evidence, that the petitioner had prior knowledge of the concealed goods or knowingly facilitated their concealment and attempted duty evasion. He held: ...

Interest On Trust's FDs Taxable Without Specific Donor Direction For Corpus: Madras High Court

The Madras High Court on 17 August held that interest earned on fixed deposits maintained by a Trust is taxable revenue receipt where donors have not specifically directed that such interest form part of the Trust's corpus. A Bench comprising Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan dismissed an appeal filed by St. Joseph's Development Trust, upholding the addition of Rs. 94.66 lakh as taxable interest income for Assessment Year (AY) 2017-18. The judges held: ...

ITC Blockage Cannot Continue Beyond One Year Under CGST Rules: Madras High Court

The Madras High Court on 21 August held that a restriction on the use of Input Tax Credit (ITC) under Rule 86A of the Goods and Services Tax (GST) Rules cannot continue beyond one year. Justice S. Raveekumar directed the authorities to unblock the ITC of Metal Trade Incorporation, which had remained blocked for more than two-and-a-half years. He held: “the restriction was imposed on 27.01.2023 and more than 2 ½ years have passed. In view of the same, the restrictions on the blockage ceased to...

Court Holds Court Fee Cannot Be Retained For Non-Maintainable Appeal: Madras High Court

The Madras High Court on 6 August held that court fee paid for an appeal that is not maintainable cannot be retained by the State, as such collection would be without the authority of law and result in unjust enrichment. A Division Bench comprising Justices G.R. Swaminathan and K.K. Ramakrishnan refused to entertain J. Murugavel's appeal against Pichai, Proprietor of Vel Murugan Traders, filed under Section 37(2) of the Arbitration and Conciliation Act, 1996, challenging a final arbitral award....

Six-Month Limit Does Not Apply To Currency Seized As Evidence Under Customs Act: Madras High Court

The Madras High Court on 10 August held that the six-month time limit under Section 110(2) of the Customs Act, 1962 for issuing a show-cause notice does not apply to Indian currency treated as a “thing” under Section 110(3) when Customs officers retain it as material evidence during an investigation. A Division Bench of Justices G. Jayachandran and N. Mala allowed a writ appeal filed by the Principal Commissioner of Customs against an order directing the release of Rs. 21.55 lakh recovered from...

MSME Council Must Follow Mandatory Arbitration Process Before Passing Award: Madras High Court

On 19 August, the Madras High Court held that an award passed by the Chennai Region Micro, Small and Medium Enterprises Facilitation Council without initiating arbitration as required under Section 18(3) of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) cannot be sustained. Justice P.B. Balaji set aside the Rs. 33.40 lakh award passed in favour of Mahalakshmi Trading Corporation against 3F Industries Ltd., holding that the Council had proceeded straight to an “Award”...

Insolvency Does Not Bar Liquidator From Recovering Chit Company Dues: Madras High Court

The Madras High Court on 10 August held that the pendency of insolvency proceedings against a chit company does not prevent its Liquidator from taking steps under the Chit Funds Act, 1982 to recover amounts due to the company. Justice D. Bharatha Chakravarthy directed the Economic Offences Wing (EOW) to furnish the Liquidator of Thiripura Chits Private Limited with a complete set of investigation materials so that he could initiate recovery proceedings under the Chit Funds Act. The Bench...

Madras High Court Directs Provisional Release Of 119 Machines, Rejects Retrospective Customs Rule

The Madras High Court on 3 August held that a Customs notification that came into force after the shipment of imported goods could not be applied retrospectively to deny provisional release of the goods. Justice Hemant Chandangoudar directed the Customs authorities to consider the request of S.P. Associates, represented by its proprietor Yogendra Pratap, for provisional release of 119 used digital multifunction printing, copying and scanning machines imported under a Bill of Entry dated 17 July...

Madras High Court Quashes Geeco Enercon Reassessment, Says New Regime Cannot Revive Limitation

The Madurai Bench of the Madras High Court has held that the Income Tax Department cannot initiate reassessment proceedings under the new reassessment regime after the limitation period under the old regime has expired, and quashed the reassessment proceedings against Geeco Enercon Private Limited for Assessment Year (AY) 2015-16. Justice C. Saravanan held that the proceedings the Income Tax Department initiated in August 2024 were barred by limitation and quashed the order dated 31 August 2024...

Madras High Court Quashes Vital Wheat Gluten Seizure, Cites Earlier Ruling On DFIA Exemption

The Madras High Court has recently quashed a seizure memo issued against Bhansali Chematics Private Limited over its import of Vital Wheat Gluten. The court held that there was no legally sustainable material to form the requisite belief that the goods were liable to confiscation.A Single Bench of Justice Hemant Chandangoudar held that wheat gluten falls within the description of “wheat flour” for the purposes of the Duty Free Import Authorisation (DFIA) Scheme. The court relied on earlier...

Madras High Court Calls CESTAT Order 'Very Cavalier', Restores ₹90 Lakh Customs Penalty On Steamer Agent

The Madras High Court has recently restored a ₹90.15 lakh customs penalty imposed on MSC Agency India Pvt. Ltd. It found that the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) had dealt with the matter in a “very cavalier fashion”, despite the fact that the actual weight of goods unloaded from 150 containers was only 12.5% on average of the declared weight.“We find that the Tribunal failed to note that admittedly, 150 containers were shipped through the same shipping line and in...

Madras High Court Grants Anti-Piracy Injunctions For 'Batwara 1947,' 'Awarapan 2'

The Madras High Court has recently granted anti-piracy protection to the Hindi films Batwara 1947 and Awarapan 2 after their producers approached the Court apprehending copyright infringement. The films were scheduled for release on August 13 and August 14, respectively. Justice K. Surender passed separate common orders on August 14 on applications filed by Aamir Khan Productions Pvt Ltd for Batwara 1947 and Vishesh Pictures Pvt Ltd for Awarapan 2. Both production houses approached the...