Transit Pass Surrender Not Conclusive Proof Of Goods Movement, Doesn't Bar KVAT Penalty: Karnataka HC

The Karnataka High Court on 15 July held that surrender of a transit pass under the Karnataka Value Added Tax (KVAT) Act does not conclusively establish genuine interstate movement of goods or prevent authorities from initiating penalty proceedings. A Division Bench of Justices S.G. Pandit and Dr. K. Manmadha Rao dismissed an appeal filed by Sri C. Girish, proprietor of Jai Gurudev Road Carriers, and upheld the penalty imposed under Section 53(12) of the KVAT Act (which provides for penalty...

Best Judgment Assessment Cannot Ignore VAT Composition Scheme Compliance By Contractor: Telangana HC

The Telangana High Court on 13 July held that a best judgment assessment cannot be sustained when the assessing authority fails to consider the statutory composition scheme opted by a works contractor and ignores the records maintained in accordance with the law. A Division Bench comprising Justices P. Sam Koshy and Nandikonda Narsing Rao set aside the assessment order passed against Chaitanya Enterprises, a proprietary concern engaged in electrical contracting works, which had challenged the...

KVAT Revision Orders Must Be Passed Within Five Years Of Order Sought To Be Revised: Karnataka High Court

The Karnataka High Court has held that tax authorities cannot keep suo motu revision proceedings under the Karnataka Value Added Tax (KVAT) Act pending indefinitely after initiating them within the statutory four-year period. While the authority validly initiates revision by calling for records within four years of the order proposed to be revised, the final revisional order must also be passed within a reasonable time, the court ruled. A division bench of Justice S.G. Pandit and Justice K.V....

Karnataka HC Holds Revised Return Mandatory For Lower VAT Claim, Rejects India Heritage Foundation's Plea

The Karnataka High Court on 8 July held that a taxpayer cannot seek a lower VAT rate during reassessment proceedings without first filing a revised return under the Karnataka Value Added Tax (KVAT) Act, and dismissed India Heritage Foundation, Bengaluru's revision petition seeking to reduce the VAT rate on iron and steel used in a works contract from 12.5% to 4%. A Division Bench of Justices S.G. Pandit and Rajesh Rai K relied on its earlier decision in Nandi Constructions v. State of Karnataka...

Bombay High Court Orders Registration Of Auction Purchaser's Sale Certificate, Quashes Sales Tax Attachment

The Bombay High Court has directed the Sub-Registrar to register an auction purchaser's sale certificate without insisting on a No Objection Certificate from the Sales Tax Department after finding that the secured creditor's claim took priority over the Department's tax dues. A division bench of Justices Manish Pitale and Shreeram V. Shirsat granted the relief to Neon Laboratories, which had purchased the property in an auction conducted by a bank under the SARFAESI Act. The court also...

Rent For Furniture In Commercial Lease Not Taxable As Deemed Sale: Telangana High Court

The Telangana High Court on 3 July held that rent received from leasing commercial buildings along with furniture, fixtures and other amenities cannot be taxed as a transfer of the right to use goods under the Andhra Pradesh Value Added Tax Act, 2005 (APVAT Act) or the Andhra Pradesh General Sales Tax Act, 1957 (APGST Act), where the transaction is essentially one of renting immovable property and no exclusive right over the goods is transferred to the tenant. A Division Bench of Justices P....

AP High Court Sets Aside VAT Orders On ISRO's Satish Dhawan Space Centre, Flags National Interest

The Andhra Pradesh High Court on 22 June set aside VAT assessment orders passed against Satish Dhawan Space Centre SHAR, a unit of the Indian Space Research Organisation, holding that an improper tax burden on an institution engaged in critical space programmes could adversely affect national interest. A Division Bench of Justices R. Raghunandan Rao and T. C. D. Sekhar allowed the writ petition, set aside the assessment orders, and remanded the matter to the assessing authority for fresh...

Rajasthan VAT Act Permits Search Of Residential Premises In Tax Evasion Cases: Rajasthan High Court

The Rajasthan High Court has recently held that the Rajasthan Value Added Tax Act does not prohibit searches at residential premises, provided the statutory requirements for search and seizure are strictly fulfilled. A Division Bench of Justice Arun Monga and Justice Sunil Beniwal referring to Section 75 of the Rajasthan Value Added Tax Act, 2003 observed, “Thus, the statute does not prohibit search of residential premises as such; however, the exercise of such power is conditioned upon strict...

Jharkhand HC Slams Tax Dept, Warns Commissioner Of Personal Liability Over ₹6.71 Crore VAT Refund Delay

The Jharkhand High Court has come down heavily on the State tax department for sitting over a VAT refund of Rs.6.71 crore for years, holding that excuses such as vacant posts and officers being on election duty are “neither legal nor satisfactory.”A Division Bench of Chief Justice M. S. Sonak and Justice Rajesh Shankar directed the Commissioner, Commercial Taxes Department, to ensure that the refund is paid with 6% annual interest by May 5, 2026, warning that any delay beyond the deadline would...

Delhi High Court Rejects Buyers' Denial Of Supply After VAT Credit Claim

The Delhi High Court has upheld a commercial court decree directing recovery of Rs. 8.89 lakh in a dispute over supply of chemical goods, holding that the purchasers' conduct in availing VAT input credit made their plea that the transactions were fictitious untenable. A Division Bench of Justices Prathiba M. Singh and Madhu Jain said, “The claim of VAT input credit necessarilyproceeds on the premise that the purchasing dealer recognizes the transaction as a genuine purchase from the supplier....

Earthen Roofing Tiles By Khadi Board-Recognised Unit Qualify For VAT Exemption: Kerala High Court

The Kerala High Court on 12 March held that earthen roofing tiles manufactured by a unit recognised and financed by the Kerala Khadi and Village Industries Board are eligible for tax exemption as “pottery” under the KVAT Act. A Division Bench comprising Justices Devan Ramachandran and Basant Balaji set aside tax demands raised against Annamanada Kalimon Vyavasaya Sahakarana Sangham Ltd., a cooperative society engaged in manufacturing clay products in Thrissur. The Bench observed: “We allow...

Refund Cannot Be Adjusted Against Settled Dues Under 2023 Settlement Act: Bombay High Court

The Bombay High Court on Thursday, 12 March, held that once a taxpayer opts for settlement under the Maharashtra Settlement of Arrears of Tax, Interest, Penalty or Late Fee Act, 2023 (Settlement Act), the State cannot adjust a refund from another assessment year against the settled dues. A Division Bench of Justice G. S. Kulkarni and Justice Aarti Sathe, while allowing a petition filed by President Trade and Exim Corporation, observed that the Settlement Act is a self-contained code, and its...