Daily Tax Law Briefing – GST & Income Tax | 11 August 2026
Goods & Services Tax (GST) (7 judgments)
| TITLE | BRIEF FACTS | RATIO |
| ANAS ENTERPRISE Versus UNION OF INDIA & ANR.
R/SPECIAL CIVIL APPLICATION NO. 11064 of 2025
Gujarat High Court
|
The petitioner, engaged in manufacturing and sale of chewing tobacco, filed belated GST returns for specified periods, though tax amounts were deposited in the Electronic Cash Ledger before the due dates except for April 2021. Following an audit objection, interest was paid through FORM GST DRC-03. The petitioner sought refund of excess interest relying on Arya Cotton Industries, but the refund application was rejected on 17.06.2025 on the ground that the proviso to Rule 88B of the CGST Rules operated prospectively. | The Court held that the petitioner’s case was squarely governed by Arya Cotton Industries, wherein it was held that interest under Section 50(1) can be levied only from the due date of tax payment until deposit of such tax in the Electronic Cash Ledger; interest thereafter until filing of the return is untenable. Rejecting the refund merely by treating the proviso to Rule 88B as prospective, while ignoring the binding judgment, was arbitrary and reflected non-application of mind. The refund rejection and recovery notice were quashed. Refund with statutory interest at 6% was directed within six weeks, failing which further interest at 12% per annum for each week of delay would apply; costs of Rs.5,000 were imposed. Petition Allowed. |
| Hcl Infotech Ltd. Versus State of Uttar Pradesh and 2 others
WRIT TAX No. – 3378 of 2026
Allahabad High Court
|
The petitioner challenged a show cause notice dated 22.07.2026 issued under Section 74 of the UPGST Act, 2017 for FY 2017-18. An earlier notice under Section 73 dated 30.09.2023 had been dropped, while a subsequent Section 74 notice dated 03.08.2024 was quashed by the High Court with liberty to initiate fresh proceedings if the requisite ingredients existed. The petitioner challenged the fresh notice on limitation, jurisdiction and prejudice reflected in its contents. | The Court held that its earlier order dated 27.09.2024 had expressly permitted fresh proceedings under Section 74 where jurisdictional facts of fraud, wilful misstatement or suppression to evade tax existed. Read with Section 75(3), compliance within two years from communication of that order was within limitation. However, observations in the impugned notice accusing the petitioner of misleading the Court demonstrated prejudice on the adjudicating authority’s part. The notice was therefore set aside and the matter remitted for fresh consideration by another officer. Fresh notice, if necessary, was directed within two weeks and proceedings to be concluded expeditiously by 31.12.2026. Matter Remanded. |
| Kumar Manish (Corpus) Versus Union of India and 2 others
Habeas Corpus Writ Petition No. 913 of 2026
Allahabad High Court
|
The petitioner sought declaration that his arrest and judicial custody in Case No. 2122 of 2025 under Sections 132(1)(a), 132(1)(f), 132(1)(i) and 132(1)(l) of the CGST Act were illegal. DGGI alleged that, through the SabPaisa payment gateway, he facilitated routing of online gaming transactions through dummy entities, suppressing taxable value and causing substantial GST evasion. He challenged compliance with Section 69, communication of grounds of arrest and the remand order dated 17.04.2026. | The Court found that detailed grounds of arrest had been served upon the petitioner and disclosed credible material regarding his alleged role, financial trail, tax evasion exceeding Rs.5 crore, risk of evidence tampering and necessity of custodial investigation. The grounds satisfied the requirements of Section 69 of the CGST Act and Circular No. 02/2022-2023 dated 17.08.2022. It further held that the five-year maximum punishment did not render the arrest illegal, as adequate reasons establishing necessity of arrest had been recorded in writing. Consequently, no illegality was found in the arrest warranting habeas corpus relief. Petition Dismissed. |
| M/S GIAS UDDIN AHMED AND ANR Versus THE UNION OF INDIA AND ORS
WP(C)/2540/2025
Gauhati High Court
|
The petitioners challenged a Demand-cum-Show Cause Notice dated 17.04.2024 issued by the Deputy Director, DGGI, Guwahati Zonal Unit, primarily contending that a consolidated notice covering four years was impermissible. They further asserted that the case fell under Section 73, rather than Section 74, of the CGST Act, 2017 and was consequently barred by limitation. The petitioners had not submitted a reply to the notice and approached the High Court on 09.05.2025. | The Court held, following M/s Tata Projects Limited, that there is no bar on issuing a consolidated show cause notice for different financial years under Section 73(1) or Section 74(1) of the CGST Act. Whether proceedings properly fall under Section 73 or Section 74 depends upon factual adjudication, particularly regarding fraud, wilful misstatement or suppression to evade tax, and cannot be determined under Article 226 at the notice stage. The petitioners were granted 30 days to reply, except on the settled consolidated-notice issue, and the period from 18.04.2024 to the judgment date was excluded for computing limitation for adjudication. Writ Petition Disposed Of. |
| M/s Goodluck India Limited & Anr. Versus Union of India & Ors.
Special Leave Petition (C) No. 24550 of 2025 with connected matters
Supreme Court
|
The batch concerned the effect of omission of Rule 96(10) of the CGST Rules, 2017 by Notification No. 20/2024 with effect from 08.10.2024 on pending proceedings involving refund of IGST paid on exports. The Union of India and Department challenged High Court judgments extending the benefit of such omission to pending proceedings, while assessees in SLP(C) Nos. 24550 of 2025 and 26411 of 2026 challenged the vires and validity of Rule 96(10). Those two SLPs were dismissed as infructuous. | The Supreme Court held that the Constitution Bench decision in Kolhapur Canesugar Works Ltd. v. Union of India squarely applied. Upon omission of Rule 96(10), pending proceedings could continue under the omitted rule only if a saving provision or statutory legal device preserved them. No saving or sunset clause accompanied the omission. The GST Council’s recommendation that omission operate prospectively was merely advisory and did not bind the rule-making authority. Accordingly, omission of Rule 96(10) applies to pending proceedings, which cannot continue under the omitted restriction. The Court declined interference with the High Court judgments and directed circulation of its order to all High Courts for expeditious disposal of similar matters. Appeals Dismissed. |
| M/s Radhika Furniture @Radha Devi Versus The Commissioner, State Goods and Services Tax & others
Writ Petition (M/B) No. 317 of 2025 with connected writ petitions
Uttarakhand High Court
|
A batch of writ petitions raised the common question whether appeals under Section 107 of the CGST/SGST Act, 2017 could be entertained beyond the prescribed three-month period and the further condonable period of one month by invoking Section 5 of the Limitation Act, 1963. Since the individual factual matrices differed, the Court, with consent of the parties, first decided this common question of law before examining whether writ jurisdiction could nevertheless be exercised in individual cases where appeals had been dismissed as time-barred. | The Court held that the CGST/UKGST Act is a fiscal statute constituting a self-contained code and that Section 107 prescribes both the limitation period and the maximum further period for condonation. Consequently, Section 5 of the Limitation Act stands excluded by necessary implication, and the Appellate Authority has no jurisdiction to entertain an appeal beyond the period prescribed under Sections 107(1) and 107(4). The Court distinguished S.V. Global Mill Ltd. as concerning a materially different beneficial legislation. Having answered the common legal issue, it directed the writ petitions to be listed for examining individually whether Article 226 jurisdiction should be exercised against the original orders despite dismissal of the appeals on limitation. Question of Law Decided; Writ Petitions Directed to be Listed for Individual Consideration. |
| M/s.Bhima Enterprises Vs. The Principle Chief Commissioner of GST & Central Excise Tamil Nadu & Puducherry & Ors.
W.P.(MD)No.9040 of 2024
Madras High Court
|
The petitioner, a partnership firm engaged in manufacture and wholesale of jewellery, challenged the authorization dated 15.08.2023 for a search conducted under Section 67(2) of the CGST Act. During search, officials seized alleged excess gold ornaments and bullion and the petitioner paid Rs.32,62,640 towards tax liability. It contended that the authorization lacked mandatory DIN and that the payment was coercively extracted, seeking quashing of the authorization and refund with interest. | The Court held that inspection, search and seizure under Section 67 are distinct powers requiring specific authorization and existence of “reasons to believe”. Display of DIN is mandatory; where initially unavailable under a permissible exception, the reasons must be contemporaneously recorded, DIN generated within 15 days and subsequently shared with the assessee. Payment under Section 74(5) must follow written self-ascertainment and prescribed safeguards; otherwise it is involuntary. Though the search and payment of Rs.32,62,640 were found procedurally defective and involuntary, the Court declined immediate refund because the petitioner had earlier secured release of seized goods relying upon such payment. Fresh assessment proceedings were directed, with refund to abide by their outcome. Writ Petition Disposed Of; Fresh Assessment Directed. |
Income Tax (5 judgments)
| TITLE | BRIEF FACTS | RATIO |
| Appnell Holdings Limited Vs. The Deputy Commissioner of Income-tax, International Tax, Circle 1(1), Chennai & Anr.
W.P.No.1513 of 2023
Madras High Court
|
The petitioner challenged CBDT Instruction No.01/2022 dated 11.05.2022, the order dated 28.07.2022 under Section 148A(d), and consequential notice under Section 148 of the Income Tax Act for AY 2015-16 as time-barred, relying principally on the Revenue’s concession recorded in Union of India v. Rajeev Bansal. The escaped income alleged in the Section 148A(b) notice dated 27.05.2022 was Rs.27,06,46,000. The petitioner had not replied to that notice. | The Court held that CBDT Instruction No.01/2022 merely implemented Union of India v. Ashish Agarwal and its challenge was untenable. The Revenue’s concession recorded in Rajeev Bansal was not law under Article 141 and did not render the proceedings time-barred where the escaped income exceeded the applicable threshold. Since the original Section 148 notice dated 30.06.2021 was issued before expiry of the six-year limitation on 31.03.2022 and the prescribed/excluded periods under Sections 148A and 149 were considered, the Section 148A(d) order and Section 148 notice dated 28.07.2022 were within time. The petitioner was granted 30 days to reply and the Revenue was directed to complete assessment after hearing it. Petition Dismissed. |
| C L. EDUCATE LIMITED Vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-(6)(1), NEW CIRCLE-4(2)
ITA Nos. 120 & 121/DEL/2026
Income Tax Appellate Tribunal, Delhi
|
C L. Educate Limited filed appeals concerning AYs 2013-14 and 2017-18 against CIT(A)/NFAC orders dated 12.12.2025 arising from assessments under section 143(3). For AY 2013-14, disputes concerned section 56(2)(viib), doubtful advances/bad debts, section 14A, write-back of liabilities, loan processing charges, TDS disallowances and prior-period expenses. For AY 2017-18, disputes involved bad debts, TDS-related disallowances, provision for expenses and alleged cessation of liabilities under section 41(1). | The Tribunal granted substantial relief on the issues decided. Section 56(2)(viib) was held inapplicable where shares were allotted as non-cash consideration for acquisition of a business; bad debts satisfying sections 36(1)(vii)/36(2) were allowable; section 14A could not apply without exempt income; and sections 28(iv)/41(1) did not apply to mere reversal of book entries without benefit. Loan processing charges were allowable as interest-related expenditure. Outstanding acknowledged liabilities subsequently settled could not be treated as ceased under section 41(1). Certain TDS issues were partly allowed/remanded, while advertisement expenditure and prior-period expense grounds were rejected. ITA No. 120/DEL/2026 partly allowed; ITA No. 121/DEL/2026 allowed for statistical purposes. |
| Deputy Commissioner of Income Tax, CPC & Ors. Versus M/s Om Siddhakala Associates
Civil Appeal No. 10175 of 2026
Supreme Court
|
The respondent-assessee filed a self-assessment return which was processed by the Centralised Processing Centre, Bengaluru, resulting in an intimation under Section 143(1) and demand under Section 156 of the Income Tax Act, 1961. The assessee thereafter invoked Section 264 seeking benefit of the tolerance limit under Section 43CA. The Principal Commissioner rejected the revision on grounds including delay and absence of a revised return. The High Court remanded the matter for fresh consideration. | The Supreme Court held that the High Court erred in remanding the matter. The tolerance-limit claim had neither been made in the self-assessment return nor introduced through a revised return within the statutory period. Section 264 could not thereafter be invoked as a means to revise the return under the guise of revision. The Court set aside the High Court judgment and held that any reassessment pursuant to the remand would have no effect. The assessee remained liable on the basis of the return originally filed. The Court expressly left open whether the tolerance limit operates retrospectively or prospectively. Appeal Allowed. |
| GE ENERGY PARTS INC Vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE INT TAX 1(3)(1)
ITA 1947/DEL/2025
Income Tax Appellate Tribunal, Delhi
|
The US tax resident assessee supplied spare parts and undertook replacement, refurbishment and repair activities for Indian customers on an offshore basis, receiving Rs.108,56,70,943 during AY 2022-23. The Assessing Officer treated GE International Inc.’s Indian project office as the assessee’s Permanent Establishment under Article 5 of the India-US DTAA and attributed 10% of the offshore receipts, making an addition of Rs.10,85,67,794. The assessee challenged the assessment, relying upon Tribunal decisions for preceding assessment years holding that it had no PE in India. | The Tribunal held that the Revenue failed to establish that GEII’s project office constituted either a fixed place PE or DAPE of the assessee under Article 5 of the India-US DTAA. The Comprehensive Service Agreement relied upon by the AO was between GEII and the customer, and there was no evidence that GEII’s Project Director represented the assessee. The offshore and onshore agreements were separate from the bid stage and were not artificially split. Since title to offshore supplies passed outside India and repairs/refurbishment were also performed outside India, no taxable event arose in India and no profit could be attributed to a non-existent PE. The assessment order was set aside. Appeal Allowed. |
| PR. COMMISSIONER OF INCOME TAX – 1 versus M/S ETAWAH CHAKERI (KANPUR) HIGHWAY PRIVATE LIMITED
ITA 160/2026
Delhi High Court
|
The assessee, incorporated in 2011 for an NHAI highway project, allotted 1,00,00,000 shares at Rs.100 each, including premium of Rs.90 per share, to its parent companies on 29.08.2012. The valuation was supported by a Chartered Accountant’s report applying the Discounted Cash Flow (DCF) method. The Assessing Officer rejected the valuation and made an addition of Rs.90 crore under Section 56(2)(viib) read with Section 2(24) of the Income Tax Act. CIT(A) deleted the addition and the Tribunal affirmed that decision. | The Court held that although the DCF method was formally incorporated in Rule 11UA only on 29.11.2012, it was already a recognised method of valuation when the assessee issued its shares. A distinction exists between a valuation method being commercially “recognised” and being statutorily “notified”. For a newly incorporated company, the assessee’s explanation for not adopting NAV was valid. The Assessing Officer could identify defects in the valuation methodology or report but could not substitute his own assessment of the expected rate of return. Valuation rules are procedural and should not defeat substantive rights absent substantial violation. Finding no reason to interfere with the concurrent findings of CIT(A) and the Tribunal, the Court rejected the Revenue’s challenge. Appeal Dismissed. |