Pendency Of Customs Adjudication Process Cannot Justify Provisional Attachment Beyond 12 Months: Madras High Court

The Madras High Court has directed the defreezing of a bullion account belonging to a Chennai-based jewellery exporter.It held that a provisional attachment of a bank account under Section 110(5) of the Customs Act cannot continue beyond the maximum statutory period of 12 months.Justice Hemant Chandangoudar passed the order on a plea filed by Dhruv Jewellers, challenging a communication dated August 4, 2022, issued by the Directorate of Revenue Intelligence (DRI) to the bank directing it to...

Gauhati High Court Bars Coercive GST Recovery During Search, Directs Authorities To Follow Investigation Guidelines

The Gauhati High Court has directed GST authorities not to take coercive steps against a taxpayer for discharge of any liability during an ongoing search and directed them to adhere to the prescribed GST investigation guidelines till the returnable date.Justice Manish Choudhury passed the order while hearing a writ petition filed by Deepak Construction Co., a partnership firm having its principal place of business at Hijuguri, Tinsukia, Assam.The petitioner's principal place of business was...

“Tremendous Pressure” Not Ground: Calcutta HC Refuses To Condon 1,480-Day Income Tax Department Appeal Delay

The Calcutta High Court has refused to condone a 1,480-day delay in filing an income tax appeal, holding that the Income Tax Department cannot explain such an inordinate delay merely by pointing to its heavy workload and the number of matters it was handling.A Division Bench of Justice Rajarshi Bharadwaj and Justice Sudip Deb found that the Department had not shown due diligence in pursuing the appeal. The explanation offered for the delay was not sufficient to justify condoning it.The court was...

Bona Fide Buyer Of Duty-Free Import Licence Not Liable For Exporter's Fraud: Calcutta High Court

The Calcutta High Court has recently held that a bona fide purchaser of a duty-free import licence cannot be made liable for the exporter's fraud when the purchaser had no knowledge of it.It observed that a licence obtained through fraud or misrepresentation is not automatically void or non-existent. Where the licence was genuinely issued by the competent authority and remained uncancelled, it continues to be valid until it is avoided in accordance with law."A bona fide purchaser of a duty-free...

CESTAT Mumbai Allows MIRC Electronics CENVAT Credit On Commission, Insurance, Detention Charges

The Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has allowed MIRC Electronics Ltd. (OnIda Electronics) to claim CENVAT credit on brokerage and commission, membership fees, detention charges, and insurance expenses.Judicial Member S.K. Mohanty held that these expenses qualified as “input services” under the CENVAT Credit Rules, 2004. The tribunal, however, upheld the denial of credit on staff welfare expenses relating to canteen and bus facilities.CENVAT credit...

Digital Film Delivery Does Not Make It 'IT Software': Bombay HC Quashes GST Demand Against Dharma Productions

The Bombay High Court has quashed a ₹12.11 crore GST demand against Dharma Productions over licensing of copyright in cinematographic films, holding that electronic delivery of film content cannot by itself make the transaction one involving “Information Technology Software”. A bench of Justice M.S. Karnik and Justice Sandesh D. Patil was considering whether the manner in which the films were delivered, physically through encrypted hard disks or electronically, could determine their GST...

GST | Same Assessee, Overlapping Periods Not Enough To Bar DGGI Proceedings: Delhi High Court

The Delhi High Court has held that proceedings initiated by State GST authorities and the Directorate General of GST Intelligence (DGGI) are not barred under Section 6(2)(b) of the Central Goods and Services Tax Act, 2017, merely because they relate to the same assessee, overlapping financial periods, or involve Input Tax Credit (ITC).The Division Bench of Justices Anil Kshetarpal and Shail Jain observed that the statutory bar under Section 6(2)(b) is attracted only when the subsequent...

Objection To Parallel State GST, DGGI Proceedings Can Be Raised In Statutory Appeal: Delhi High Court Refuses Writ

The Delhi High Court has held that a taxpayer challenging proceedings initiated by the Directorate General of GST Intelligence (DGGI) on the ground that the same subject matter had already been dealt with by State GST authorities can raise the objection under Section 6(2)(b) of the Central Goods and Services Tax Act, 2017 (CGST Act), before the statutory appellate authority.The Division Bench of Justices Anil Kshetarpal and Shail Jain was dealing with a plea by challenging show cause notice...

GST | Disputed SCN Service, Personal Hearing Issues Cannot Be Raised In Writ Plea: Delhi High Court

The Delhi High Court has declined to exercise its writ jurisdiction over pleas by two directors of Sterne India Pvt. Ltd. challenging a ₹27.11 crore GST penalty. The court held that their claims over service of the show cause notice (SCN) and denial of personal hearing involved factual issues that could be examined by the statutory appellate authority. According to the court, these grievances did not justify bypassing the remedy of appeal available under Section 107 of the Central Goods and...

CBDT Circulars Reflect Executive's Understanding Of Law, Not Binding On Courts: Supreme Court

The Supreme Court on Friday held that CBDT circulars merely represent the Executive's understanding of a statutory provision and are not binding on the High Courts or the Supreme Court. The observation came while the court rejected an assessee's reliance on a CBDT Office Memorandum to claim a deduction under Section 80HHC of the Income Tax Act on premium received from the sale of export quotasA bench of Justice S.V.N. Bhatti and Justice N.V. Anjaria held that such circulars merely reflect the...

GST | Proceedings Under Sections 73, 74 Can Co-Exist If They Concern Distinct Infractions: Delhi High Court

The Delhi High Court has held that proceedings under Sections 73 and 74 of the Central Goods and Services Tax Act, 2017 (CGST Act) can co-exist where they concern distinct liabilities or contraventions.The Division Bench of Justices Anil Kshetarpal and Shail Jain made the observation while dismissing a plea filed challenging proceedings initiated by the Central GST authorities under Section 74 of the CGST Act in relation to alleged inadmissible Input Tax Credit (ITC) availed by...

India-Netherlands DTAA | AO Can't Use Reassessment To Cure Own Failure To Record On PE: Delhi High Court

The Delhi High Court has held that an Assessing Officer (AO) cannot invoke reassessment proceedings under Section 148 of the Income Tax Act merely to make up for his own failure to record a finding on the existence of a Permanent Establishment (PE) in India, after having conducted an inquiry into the issue during the original assessment.The division bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta made the observation while allowing a petition filed by Elsevier BV, a company incorporated...