Tax Monthly Digest: June 2025

HIGH COURTSAllahabad HCAllahabad High Court Rejects Patanjali's Plea Against ₹273.5 Crore GST PenaltyCase Title: M/s Patanjali Ayurved limited v. Union of India and OthersCase no.: WRIT-TAX NO. 1603 OF 2024The Allahabad High Court has directed continuation of proceedings under Section 122 of the Central Goods and Services Tax Act, 2017 against M/s Patanjali Ayurved limited's 3 plants even though proceedings under Section 74 of the Act have been dropped against them.The bench of Justice Shekhar...

Interest On Delayed Refund Is Statutorily Mandated After 3 Months: CESTAT Applies 6% Interest U/S 11BB Of Central Excise Act

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that interest on delayed refund is statutorily mandated after 3 months under Section 11BB Of Central Excise Act. Section 11BB of the Central Excise Act, 1944 mandates that if a duty refund is not processed within three months from the receipt of an application, the applicant is entitled to interest on the delayed amount. It empowers Central Government to fix rate between 5-30% through...

Income Tax | Sales Tax Incentive Under Govt Scheme For Industrial Promotion Is Capital Receipt, Not Taxable: Bombay High Court

The Bombay High Court has stated that sales tax incentive under a government scheme for industrial promotion is a capital receipt, not taxable.Chief Justice Alok Aradhe and Justice Sandeep V. Marne were addressing the issue of whether an incentive received in sales tax liability under a Scheme formulated by the State Government would be on the capital account, exempt from taxation, or on the revenue account, liable for taxation.“If the incentive is offered for the purpose of setting up of new...

Delhi High Court Rejects Income Tax Department's Appeal Against Thomson Press Over Alleged Transaction Of Property Below Circle Rate

The Delhi High Court has dismissed an appeal preferred by the Income Tax Department against Thomson Press (India) over the sale of a property in Noida back in 2013, allegedly at a price much lower than the prevailing circle rate.A division bench of Justices Vibhu Bakhru and Tejas Karia noted that the registered agreement to sell and payment of stamp duty with respect to the property transaction were already completed by the date when the circle rate of the area in question was enhanced.“In view...

Delhi High Court Sets Aside ₹10 Crore Security Demanded By Customs For Provisional Release Of Seized Goods, Calls It 'Onerous'

Coming to the rescue of an importer, the Delhi High Court has set aside the security of ₹10 crore (approx) demanded by the Customs Department for provisional release of its perishable goods.Calling the condition 'onerous', a division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta ordered provisional release of Petitioner's imported Roasted Areca Nuts on furnishing bond of Rs.4.10 crore along with a Bank Guarantee of Rs. 50 lakh.The Department had claimed that the value of goods as...

Delhi HC Sets Aside Income Tax Action Against Rajat Sharma-Owned India TV's Parent Company Over Alleged Unaccounted Foreign Remittances

The Delhi High Court on Wednesday set aside the reassessment action initiated against journalist Rajat Sharma's company, M/S Independent News Service Pvt. Ltd., which owns and runs the India TV channel, over alleged foreign remittances.The notice was issued following a survey conducted by the Income Tax Department at the J&K Bank back in 2019, revealing that the company had made foreign remittances amounting to ₹6,50,84,454/- during AY 2017-18, which did not tally with the amounts reflected...

S. 245A Income Tax Act | Kerala High Court Allows Settlement Application Filed Beyond Cutoff Date, Citing SC's COVID Limitation Order

The Kerala High Court has allowed the settlement application under Section 245A of the Income Tax Act filed beyond cutoff date, while citing Supreme Court's COVID limitation order. Justices A.K. Jayasankaran Nambiar and P.M. Manoj referred to the order of Supreme Court in MA. Nos.665 of 2021 [In Re Cognizance For Extension Of Limitation] and stated that the assessee had filed the application for settlement on 17.03.2022, which is well within the time granted by the Supreme Court...

Appeal On Taxability Including Point Of Limitation Doesn't Lie Before HC U/S 35G Of Central Excise Act: Delhi High Court

The Delhi High Court has reiterated that an appeal from CESTAT under the Central Excise Act 1944 involving the issue of taxability will lie before the Supreme Court under Section 35L.A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta ruled that such an appeal, even on a limited point of limitation, will not lie before the High Court under Section 35G. It observed,“Even if the question of limitation has been raised, the Court has to go into the merits of the matter after a...

Service Of Notice On Adult Member Of Noticee Is Valid U/S 153 Of Customs Act, 1962: Kerala High Court

The Kerala High Court stated that service of notice on the adult member of noticee is valid under Section 153 Of Customs Act, 1962. Section 153 of the Customs Act, 1962, outlines the modes of service for notices, orders, summons, and other communications under the Act and its rules. Justice Ziyad Rahman A.A. stated that “the contentions that the assessee was denied a proper opportunity to contest the matter cannot be accepted. The notice was served upon the assessee through the...

Customs Cannot Rely On S.122A To Deny Personal Hearing Mandatory U/S 28(8) Of Customs Act: Kerala High Court

The Kerala High Court stated that customs cannot rely on Sec. 122A to deny personal hearing mandatory under Section 28(8) of the Customs Act. Justice Ziyad Rahman A.A. after analysing Section 28(8) of the Customs Act observed that it is evident that, as far as personal hearing is concerned, it is made mandatory as per the provision. Since this is a special provision deals with the issue on hand, the reliance placed by the department upon Section 122A, which is a general provision,...

Payments Made To AWS For Cloud Computing Services Not Taxable: Delhi High Court

The Delhi High Court has held that payments made to Amazon Web Services (AWS) for cloud computing services do not qualify as “royalty.” The bench, comprising Justice Vibhu Bakhru and Justice Tejas Karia, upheld the Income Tax Appellate Tribunal's (ITAT) decision which held that such payments are not taxable as royalties or fees for technical services (FTS). The Court referred to earlier judgments to emphasize the difference between transferring intellectual property rights and simply...

CESTAT Quashes Service Tax Demand Based Solely On Income Tax Data In Form 26AS

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that the service tax demand cannot be based solely on Income Tax Data in Form 26AS without establishing receipt of consideration. The Bench of Dr. Rachna Gupta (Judicial Member) stated that “Revenue cannot raise the demand on the basis of difference in the figures reflected in the ST-3 returns and those reflected in Form 26AS without examining the reasons for said difference and without...