2010 IT Act Amendment Bringing Overseas Technical Services Into Tax Net Cannot Apply Retrospectively: Karnataka HC

The Karnataka High Court has recently held that a 2010 amendment to the Income Tax Act, which widened the scope of taxation of fees for technical services paid to non-residents, cannot be applied retrospectively to create a tax liability on past transactions. The court found that the amendment did more than clarify the existing law, as it widened the charging provision by removing the requirement that the technical services must have been rendered in India.“The impugned Amendment Act—Finance Act...

Four-Year Income Tax Refund Delay: Delhi High Court Directs AO To Appear If Campus Activewear Not Paid With Interest

The Delhi High Court has directed the Assessing Officer (AO) to remain present before it and explain the “inordinate delay” in refunding Campus Activewear if the due payment along with applicable interest is not made by the next date. The refund has remained unpaid for last four years.The Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta was informed by the Income Tax Department counsel that the requisite exercise for processing the Petitioner-company's refund was underway and the...

No Unaccounted Assets Or Investments Found: Delhi High Court Rejects Revenue's Plea For Higher Tax

The Delhi High Court has dismissed an appeal filed by the Income Tax Department seeking to levy tax at a higher rate under Section 115BBE of the Income Tax Act, 1961, holding that neither the Assessing Officer nor the Principal Commissioner of Income Tax had recorded any finding regarding the existence of undisclosed or unaccounted assets or investments.The Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta upheld the ITAT order, observing that in the absence of unexplained...

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...

Section 74(10) GST Act | Starting Point For GST Demand Limitation 'Debatable': Delhi High Court Declines Writ

The Delhi High Court has refused to exercise its writ jurisdiction to examine a dispute regarding the starting point for computation of limitation period under Section 74(10) of Central Goods and Services Tax Act, 2017.The Division Bench of Justices Anil Kshetarpal and Harish Vaidyanathan Shankar held that it was “debatable” as to which limb of Section 74(10) would apply in the facts of the case and relegated the petitioner to the alternative remedy of appeal.Petitioner-company had challenged an...

GST Audit File Transfer Between Wings Is Administrative, Cannot Be Challenged In Writ Petition: Delhi High Court

The Delhi High Court has held that the transfer of a Goods and Services Tax (GST) audit file from the Audit Wing to the Anti-Evasion Wing is essentially an administrative exercise. It further held that in the absence of any statutory prohibition under the Central Goods and Services Tax Act, 2017 against such transfer, the transfer by itself cannot be a ground for interference in writ jurisdiction.The division bench of Justices Anil Kshetarpal and Harish Vaidyanathan Shankar was dealing with a...

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...

CESTAT Kolkata Allows CENVAT Credit On Steel Used To Manufacture Capital Goods

The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has allowed Maithan Steel & Power Ltd. to claim CENVAT credit on MS angles, channels, joists and plates used to manufacture capital goods for use within its factory.The tribunal also allowed credit on welding rods and oxygen. Judicial Member R. Muralidhar observed, “From the above Certificate, it is seen that the goods in question including the welding rods and oxygen have been used within the factory...

Calcutta HC Rejects ₹27.74 Cr CENVAT Demand, Says Revenue Cannot Choose Assessee's Compliance Method

The Calcutta High Court has recently dismissed the Revenue's appeals against a biscuit manufacturer in a Rs 27.74 crore CENVAT credit dispute involving the manufacture of both dutiable and exempted biscuits.It held that an assessee has the right to choose between the methods of compliance available under Rule 6(3) of the CENVAT Credit Rules.A Division Bench of Justice Rajarshi Bharadwaj and Justice Uday Kumar held that the Revenue cannot switch an assessee to a more punitive method merely...

GST Demand Order Served Only On Portal: Delhi High Court Allows Appeal To Be Filed Without Limitation Objection

The Delhi High Court has allowed a GST assessee who participated in the show cause notice proceedings to file a statutory appeal against a subsequent demand order within four weeks after finding that the order had been served only by uploading it on the Common Portal.The Division Bench of Justices Anil Kshetarpal and Shail Jain held that while the assessee could not seek restoration of the proceedings to the stage of issuance of the show cause notice since it had filed a reply and participated...

Delhi High Court Grants Limitation Relief To Importer After Supreme Court's ITC Ruling Changed Customs Refund Rules

The Delhi High Court recently granted limitation relief to an importer whose customs refund remedy became ineffective following the Supreme Court's decision in ITC Limited v. Commissioner of Central Excise, Kolkata-IV.The top court in the case had held that a refund claim could not be entertained unless the underlying assessment or self-assessment had first been modified in appeal or under another provision of the Customs Act.The division bench of Justices Anil Kshetarpal and Shail Jain held...

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...