GST Department Cannot Retain Seized Records After Withdrawing Search Authorisation: Madras High Court

On 5 August, the Madurai Bench of the Madras High Court held that the GST Department cannot retain files and documents seized during an inspection once it withdraws the search authorisation under which the seizure was made, and directed the immediate return of all records taken from a jewellery dealer. A Bench of Justice G.R. Swaminathan allowed the writ petition filed by Bhima Enterprises and noted that the Department lost its statutory authority to retain the seized material after withdrawing...

Madras High Court Says Tax Authorities Must Consider Demerger Impact, Remands Grace Infrastructure Case

The Madras High Court on 20 July held that tax authorities must consider the impact of a court-approved demerger before revising an assessment and set aside a revision order passed without examining the effect of the restructuring on Grace Infrastructure Private Limited's financial statements. Justice C. Saravanan remitted the matter to the Principal Commissioner of Income Tax for fresh adjudication, directing it to reconsider the assessment after allowing the company to file a revised return...

Madras High Court Holds Later Clarifications Cannot Take Away 7% Drawback On Bus Bodies, Quashes Denial

The Madras High Court on 30 July held that Customs authorities cannot deny exporters the benefit of a beneficial drawback circular through later clarifications unless the original circular granting the concession has been withdrawn, quashing orders rejecting 7% brand rate drawback claims on the bus body portion of exported passenger buses. Justice Hemant Chandangoudar allowed the petitions filed by Ashok Leyland Limited and set aside the revisional orders dated 8 March 2022 and the CBEC...

Financial Crisis Reasonable Cause To Waive Service Tax Penalty: Madras High Court

The Madras High Court on 27 July held that penalties under the Finance Act, 1994 cannot be imposed where a taxpayer proves a genuine financial crisis as a reasonable cause for delayed payment of service tax, ruling that a Tribunal's finding of financial incapacity based on material on record cannot be interfered with in appeal. A Division Bench of Justices G. Jayachandran and N. Mala dismissed two appeals filed by the GST and Central Excise Department against the CESTAT order that waived...

Madras High Court Quashes Reassessment Against Stock Broker Over Misreading Client Funds As Income

The Madras High Court on 31 July held that reassessment proceedings cannot be initiated merely on the basis of suspicion arising from a misunderstanding of a stock broker's business model, ruling that client funds received by a broker in a fiduciary capacity cannot be treated as the broker's own income without tangible material. A Division Bench comprising Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan dismissed the Revenue's appeal against the Income Tax Appellate...

Madras High Court Restrains Three Pharma Companies From Using 'ORG-9' Trademark

The Madras High Court has granted a temporary injunction against three Haryana-based pharmaceutical companies over their use of the mark "ORG-9" after a prima facie finding that it infringes the registered trademark "ARG-9" owned by Chennai-based Nouveau Medicament Private Limited.Justice K. Kumaresh Babu passed the ad-interim order on July 27.Nouveau Medicament Private Limited, a Chennai-based pharmaceutical company, submitted that it holds registration for the trademark "ARG-9".The...

Madras High Court Refuses To Stall Release Of AI-Enhanced Kochadaiiyaan Over 2014 Financing Dispute

The Madras High Court has refused to stop the release of an AI-enhanced version of the 2014 Rajinikanth film Kochadaiiyaan. It held that the film's financier could not seek to restrain its release since it had not sought any relief against the company that is now the assignee of the film.Justice K. Kumaresh Babu observed that "the plaintiff had not sought for any relief as against the fifth defendant, who is admittedly now assignee of the film." In view of this, the court held that it could not...

Works Contractors Liable To Pay Purchase Tax On Unregistered Dealer Purchases: Madras High Court

The Madras High Court on 9 July held that works contractors are liable to pay purchase tax on materials purchased from unregistered dealers, even when such materials are used in the execution of works contracts involving deemed sales. A Division Bench of Justices N. Anand Venkatesh and K.K. Ramakrishnan allowed the revision petitions filed by the State of Tamil Nadu, set aside the orders passed by the appellate authority and the Tamil Nadu Sales Tax Appellate Tribunal, and restored the...

SARFAESI Rights Cannot Override Lessor's Right To Re-Enter Leased Land For Breach: Madras High Court

The Madras High Court on 29 July held that enforcement powers available to a secured creditor under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act cannot override a lessor's contractual right to cancel a lease and resume possession of industrial land for breach of lease conditions. A Division Bench comprising Chief Justice Arvind Dharmadhikari and Justice G. Arul Murugan dismissed Karur Vysya Bank's petition challenging the State...

Emden Formula For Calculating Construction Contract Damages Can't Apply To Dealership Agreements: Madras High Court

The Madras High Court has recently held that the Emden formula, developed to quantify damages in construction contracts, cannot ordinarily be used to assess compensation in disputes arising from automobile dealership agreements.A Division Bench of Justice P. Velmurugan and Justice K. Govindarajan Thilakavadi observed that the formula is rooted in the unique features of construction contracts and cannot be mechanically extended to commercial distribution arrangements. "A dealership agreement is a...

Madras High Court Sets Aside Order Reviving Kangaro's Trademark Opposition Against V-Guard

The Madras High Court has held that a trademark opponent cannot seek extra time to file evidence after missing the mandatory two-month deadline prescribed under the Trade Marks Rules, 2017. Setting aside a single judge's order, the court restored the assistant registrar's decision treating Kangaro Industries' opposition to V-Guard Industries' trademark application as abandoned. "The intention of the Legislature is that the time prescribed under Rule 45 shall be strictly adhered to and unlike...

Madras High Court Rules Omission Of 'Wilful Suppression' In Order Not Fatal, Upholds TNVAT Penalty

The Madras High Court on 27 July held that a penalty under the Tamil Nadu Value Added Tax (TNVAT) Act cannot be invalidated merely because the assessment order does not use the expression “wilful suppression” if the material on record establishes deliberate suppression of turnover. A Division Bench of Justices G. Jayachandran and N. Mala dismissed the tax case filed by Paharpur Cooling Towers Ltd. and upheld the Tamil Nadu Sales Tax Appellate Tribunal's order restoring the penalty imposed by...