Daily Tax Law Briefing – GST & Income Tax | 24 August 2026
Goods & Services Tax (GST) (7 judgments)
| TITLE | BRIEF FACTS | RATIO |
| Halton India Private Limited v. Customs Authority for Advance Rulings & Anr.
Customs Appeal No. 12 of 2026
Karnataka High Court
|
The appellant, engaged in ventilation solutions, imported kitchen exhaust hoods from Malaysia for commercial kitchens and classified them under CTH 84148090. It sought advance ruling for proposed classification of future imports under CTH 84145990, contending that the hoods contained fans. Additional documents supporting this claim were inadvertently emailed to an incorrect address and were consequently not considered by the Customs Authority for Advance Rulings while passing its order dated 25.03.2026. | The Court held that a factual determination was necessary as to whether the imported kitchen exhaust hoods contained fans, since this fact was disputed and relevant to their classification. As the appellant’s additional supporting material had mistakenly been sent to an incorrect email address and was not considered by the Advance Ruling Authority, an opportunity was granted to place such material on record. The impugned advance ruling was set aside, the appellant was granted 15 days to furnish additional material, and the Authority was directed to reconsider the matter in accordance with law. Matter Remanded; Appeal Disposed Of. |
| M/s G.R. Infra Projects Limited Ratlam v. The State of Madhya Pradesh & Ors.
Civil Appeal No. 11277 of 2026 (@ Special Leave Petition (C) No. 33594 of 2025)
Supreme Court
|
The appellant-assessee challenged a Show Cause Notice dated 13.06.2025 issued under Section 74 of the CGST Act read with the MPGST Act for assessment year 2018-19. Earlier, summons and investigation proceedings had been initiated concerning financial years 2017-18 to 2020-21, followed by inspection, recording of statements, a draft notice-cum-investigation report and an intimation. The assessee contended that the SCN was barred by limitation applicable under Section 73 and lacked necessary allegations to invoke Section 74. | The Supreme Court held that invocation of the extended period under Section 74 requires the SCN itself to disclose allegations and particulars leading to an inference of fraud, wilful misstatement or suppression of facts. A mechanical or bland reference to “fraud or concealment of facts” is insufficient, and deficiencies in the notice cannot subsequently be supplied through a counter affidavit before the Court. Since the SCN dated 13.06.2025 was time-barred under Section 73 and did not validly invoke Section 74, the High Court order and SCN were set aside and further proceedings pursuant thereto were prohibited. Appeal Allowed; SCN Set Aside. |
| M/s TVS Motor Company Limited v. Commissioner of Central Excise, Chennai-III
Civil Appeal No. 7947 of 2013
Supreme Court
|
The appellant, an automobile dealer, received referral charges from HDFC Bank, ICICI Bank and Oriental Insurance Company when its customers availed motor vehicle loans or insurance policies through such institutions. The Department treated these receipts as consideration for Business Auxiliary Service under Section 65(105)(zzb) of the Finance Act, 1994. The dispute concerned taxability of the referral charges and invocation of extended limitation for alleged suppression. The appellant had discharged the entire service tax liability before issuance of the show cause notice dated 02.04.2008. | The Supreme Court upheld the finding that referral charges were taxable as Business Auxiliary Service, since the appellant promoted and marketed the services of banks and the insurance company and received consideration under agreements with them. On penalty, the Court noted that the entire tax liability had been discharged before issuance of the show cause notice and that there was some confusion regarding taxability during 2003-04 to 2006-07. In view of Section 73(3), the Court set aside the penalty under Section 78; the Section 76 penalty had already been set aside by the Tribunal. Appeal Partly Allowed. |
| M/s. Santhome Latex Enterprises v. The Commissioner of CGST Thiruvananthapuram
Appeal No. APL/21/TVP/2026
Goods and Services Tax Appellate Tribunal, Thiruvananthapuram
|
The appellant, engaged in manufacture and supply of Centrifugal Rubber Latex, was subjected to audit for July 2017 to March 2022. An SCN under Section 74(1) proposed recovery of allegedly excess ITC for FY 2017-18 to 2021-22 with interest and penalty. The adjudicating authority dropped the demand, finding the ingredients of Section 74 unestablished. On Revenue’s appeal, the Joint Commissioner (Appeals) reversed that order, leading to the present appeal before GSTAT. | The Tribunal held that mere availment of ineligible self-assessed ITC does not constitute suppression under Section 74(1) absent clear evidence of fraud, wilful misstatement or suppression with intent to evade tax. Likewise, mere failure to reply to an audit enquiry or final audit report does not, without contrary evidence, amount to suppression. The appellate authority could not sustain Section 74 on a new ground absent from the SCN, as this violated principles of natural justice. Since reconciliation was already disclosed through GSTR-9C/annual returns, the Order-in-Appeal was unsustainable. Order-in-Appeal Set Aside; Appeal Allowed with Consequential Relief. |
| Siddhi Vinayak Automobiles v. The Commissioner of Kerala State GST, Thiruvananthapuram
Appeal No. APL/2/TVP/2026
Goods and Services Tax Appellate Tribunal, Thiruvananthapuram
|
The appellant transported automobile parts under two e-invoices dated 16.04.2022, but the driver could not produce an e-way bill when the vehicle was intercepted on 18.04.2022. MOV-07 was issued and penalty of ₹1,38,706 was imposed under Section 129. Though the goods and conveyance were released against bond and bank guarantee, MOV-09 confirming the penalty was passed on 04.06.2022. The First Appellate Authority upheld the penalty, leading to the appeal before GSTAT. | The Tribunal held that the seven-day period prescribed under Section 129(3) of the CGST/KGST Act for passing the penalty order from service of notice is mandatory. MOV-09, passed 47 days after MOV-07, was therefore illegal and without jurisdiction. It further found no mens rea to evade tax since valid e-invoices existed and GST had been paid through the April 2022 return. The Order-in-Appeal was set aside and consequential relief granted, with immediate release of the bank guarantee directed. Appeal Allowed; Order-in-Appeal Set Aside. |
| Smt. Lalitha S v. The Deputy Commissioner, Mandya District & Ors.
Writ Petition No. 24040 of 2026 (LA-RES)
Karnataka High Court
|
The petitioner’s land measuring 10.08 guntas in Sy.No.219/2, B. Agrahara Village, was acquired by the Union of India for widening the Mysuru–Madikeri Highway. Compensation of ₹8,89,035.20 was determined for the acquired land and structure, from which ₹1,14,815.29 was deducted as 18% GST. Contending that compulsory acquisition of land neither constituted sale of goods nor provision of services, the petitioner challenged the GST deduction and sought reimbursement with interest. | The Court held that land and structures constitute immovable property and compulsory acquisition by the State in exercise of eminent domain involves neither supply of goods nor provision of services. The respondents failed to identify any provision of the GST Act authorising levy of GST on acquisition of land or structures. The GST deduction was therefore held to be in excess of authority and quashed. Refund of ₹1,14,815.29 with 15% annual interest was directed; such interest was recoverable personally from respondent No.2, who was also ordered to pay ₹50,000 costs. Petition Disposed of; GST Deduction Quashed and Refund Directed. |
| Vijayan Sahadevan (Deceased) v. The Commissioner of Kerala State GST, Thiruvananthapuram
Appeal No. APL/19/TVP/2026
Goods and Services Tax Appellate Tribunal, Thiruvananthapuram
|
The appellant’s ITC of ₹1,72,430 was disallowed under Section 16(4) because the GSTR-3B for March 2018 was filed belatedly on 16.06.2019. DRC-01 dated 15.07.2021 also demanded interest and penalty, culminating in an ex parte order dated 15.02.2022 and rejection by the First Appellate Authority. The appellant died on 05.09.2024, and his son, claiming to be the legal heir, filed the present appeal on 26.03.2026. | The Tribunal held that where the deceased proprietor’s business stood discontinued, Section 93(1)(b) permits recovery from the legal representative only out of the inherited estate and to its extent. No notice was issued to the legal heir or inquiry made regarding such estate, rendering the proceedings unsustainable. On merits, Section 16(5), retrospectively effective from 01.07.2017, entitled the appellant to ITC for FY 2017-18 since the relevant returns were filed before 30.11.2021. The impugned OIA was therefore set aside with consequential relief. Appeal Allowed; Order Set Aside. |
Income Tax (2 judgments)
| TITLE | BRIEF FACTS | RATIO |
| Income Tax Officer, Ward 14(1), New Delhi v. Kapil Mohan and Associates Hydro Power Pvt. Ltd.
ITA Nos. 7818 & 7819/DEL/2025
Income Tax Appellate Tribunal, Delhi
|
The assessee, engaged in generation of power through two hydro power units in Himachal Pradesh, claimed deduction under Section 80IA for AYs 2018-19 and 2020-21. The Assessing Officer treated receipts from sale of Renewable Energy Certificates (RECs) as trading income not derived from the eligible power-generation business and denied Section 80IA deduction thereon. The CIT(A) instead held the REC sale receipts to be capital receipts and excluded them from book profits under Section 115JB. Revenue appealed. | The Tribunal held that receipts from sale of RECs are capital receipts, following the coordinate Bench decisions in Satia Industries Ltd. and DCM Shri Ram Industries Ltd. RECs are incentives connected with environmental concerns and cannot be equated with taxable carbon credits merely because their underlying objectives are similar. Consequently, there was no question of allowing or disallowing deduction under Section 80IA on such capital receipts. The REC receipts were also required to be excluded while computing book profits under Section 115JB for MAT purposes. Finding no error in the CIT(A)’s orders, the Tribunal dismissed all Revenue grounds. Revenue’s Appeals Dismissed. |
| Nitin Enterprises v. Income-tax Officer, Ward – 5(1), Hyderabad & Ors.
Writ Petition No. 24088 of 2026
Telangana High Court
|
The petitioner, a partnership firm trading in electrical fittings, filed its return for AY 2024-25 declaring income of ₹21,01,230. Following a search of M/s Polycab India Limited and its group concerns, the Assessing Officer alleged unexplained transactions of ₹3,46,11,545 and issued a show cause notice under Section 148A(1). The petitioner denied transactions with Polycab and challenged the subsequent Section 148A(3) order and Section 148 notice, principally invoking Sections 152(3) and 151. | The Court held that proceedings under Sections 148A(1), 148A(3) and 148 are preliminary steps forming part of an ongoing reassessment and ordinarily should not be challenged under Article 226 before completion of the statutory process. Although the Assessing Officer had not specifically dealt with the petitioner’s objections concerning Section 152(3) and validity of sanction under Section 151, those jurisdictional objections could first be examined during reassessment and thereafter by the statutory appellate authorities. No case of total absence of jurisdiction or patent violation warranting threshold interference was established. Petition Dismissed. |
