Madras High Court Rules In Favour Of Mahindra Holidays On ₹158 Crore Membership Fees, Software Licence Tax Dispute

The Madras High Court has ruled in favour of Mahindra Holidays and Resorts India Ltd. on its accounting treatment of membership fees worth ₹158.43 crore. It also held that expenditure on domestic software licence renewals could not be disallowed merely because the company had deducted tax on software purchases from foreign suppliers.A Division Bench of Justice Anita Sumanth and Justice S. Raveekumar observed that the company could apportion membership fees over the membership period instead of...

Freshly Manufactured Goods Cannot Replace Re-Imported Goods For Customs Duty Exemption: CESTAT Kolkata

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata has ruled that goods re-imported for repairs cannot be replaced with freshly manufactured goods to claim customs duty exemption, even if they match in description and quality. Dismissing Crescent Foundry Company Private Limited's appeal, the tribunal held that Notification No. 158/95-Cus. requires the same goods to be re-exported after repairs or reconditioning.“This condition makes it clear that the goods which are to be...

Income Tax Penalty Can Be Waived Even In Cases Of Misreporting After 2026 Amendment: Bombay High Court

The Bombay High Court has ruled that taxpayers can seek waiver of income tax penalties even in cases of misreporting of income under the amended Section 270AA of the Income Tax Act, 1961. It also held that an earlier rejection does not prevent a taxpayer from applying again under the amended law.“However, we note that the position has changed considerably as a result of the amendments made by the Finance Act, 2026 w.e.f. 1st March 2026. As is evident from the amendments made, an application for...

Calcutta High Court Declines To Hear Plea Alleging Torture By DRI Officials, Says Matter Falls Under Revenue Bench

A Calcutta High Court bench has declined to hear a plea alleging that Directorate of Revenue Intelligence (DRI) officials tortured three individuals during interrogation and forced them to execute an affidavit and declaration. The court held that the main challenge concerned customs summons and fell under the roster dealing with revenue matters.“Considering the above and going through the summons and the averments made in the petition, this court finds that the petitioners have mainly challenged...

Supplier Cannot Automatically Recover GST From Recipient Without Contractual Basis: Kerala High Court

The Kerala High Court has held that a supplier's statutory obligation to pay Goods and Services Tax (GST) does not automatically entitle the supplier to recover the tax separately from the recipient of the service.“The liability of a supplier to discharge the tax payable under the statute and the question as to whether the supplier is entitled to pass on the burden of such tax to the recipient are distinct and separate matters," the court ruled"However, the right to collect tax from the...

Kerala High Court Quashes GST Notice Issued Before Audit Findings Were Finalised

The Kerala High Court has held that a GST show cause notice issued on the basis of preliminary audit observations, before the audit findings attain finality, cannot be sustained. The court also held that tax authorities must consider a taxpayer's reply to discrepancies before finalising the audit findings.Justice Ziyad Rahman A.A. was hearing a petition filed by The Alleppey Company Ltd., challenging a GST show cause notice issued despite its requests for additional time to respond to audit...

Service Tax On Construction Services Payable On Actual Receipts, Not Accruals: CESTAT Kolkata

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata, has remanded a ₹11,98,511 service tax demand against Britannia Engineering Ltd., holding that liability for the relevant period must be calculated on actual receipts rather than accruals. The dispute covers financial years 2006-07 to 2008-09, spanning the introduction of Works Contract Service as a separate taxable category from June 1, 2007. “Service tax is to be discharged on the receipt of the amount,” a bench of...

TDS Paid By Indian Company For Foreign Service Provider Not Taxable As Service Value: CESTAT Bangalore

The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that TDS paid separately by an Indian company on behalf of a foreign service provider cannot be included in the taxable value for service tax purposes. This applies when the agreement requires the Indian company to bear the tax. A Bench of Judicial Member P.A. Augustian and Technical Member R. Bhagya Devi set aside a service tax demand of ₹13.49 lakh against Promac Engineering Industries Limited....

Interest Between Indian Branch And Overseas Head Office Not Taxable: ITAT Mumbai

The Income Tax Appellate Tribunal (ITAT), Mumbai, on 8 October held that interest transactions between an Indian permanent establishment and its overseas Head Office or branches do not constitute taxable income under domestic law, as they represent transactions with oneself. Further that Section 14A of the Income Tax Act, 1961, cannot apply to such receipts. A Bench comprising Judicial Member Beena Pillai and Accountant Member Bijayananda Pruseth partly allowed cross-appeals filed by American...

Tax Refund Cannot Be Claimed Without Challenging Or Modifying Self-Assessment: CESTAT Mumbai

On 8 October, the Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that a taxpayer cannot claim a service tax refund solely on the basis of a subsequent departmental clarification granting an exemption. The taxpayer must first challenge or modify the original self-assessment before seeking a refund of nearly Rs. 5.92 crore. A Bench comprising Judicial Member S.K. Mohanty and Technical Member Sanjiv Srivastava dismissed five appeals filed by Sodexo India and...

GST Council Recommends Dropping Arrest Powers, Raising Prosecution Threshold To ₹5 Crore

The GST Council has recommended dropping arrest powers under the Goods and Services Tax (GST) law by omitting Section 69 of the Central Goods and Services Tax Act, 2017.Section 69 currently allows the tax authorities to authorise the arrest of a person suspected of committing specified GST offences. These offences are set out under Section 132 of the Act and include certain cases involving tax evasion and fraudulent input tax credit.It has also proposed raising the monetary threshold for...

Delhi High Court Gives Income Tax Dept Final Chance To Credit ₹3.65 Crore Advance Tax To 92-Year-Old Assessee

The Delhi High Court has given the Income Tax Department a final opportunity to comply with its earlier order directing adjustment of a ₹3.65 crore advance tax payment towards the capital gains tax liability of a 92-year-old assessee, failing which the Court said it would direct payment of interest on the amount.The Division Bench of Justices Subramonium Prasad and Renu Bhatnagar has directed the Department to ensure that the amount is credited to the assessee's account by October 31, 2026.The...