Indirect Tax Weekly Flashback for the period 2 to 8 March 2025.
Supreme Court
Mobile Chargers Sold With Phones Can’t be Taxed Separately Under UPVAT Act: Supreme Court
The Supreme Court in the case of Commissioner, Commercial Tax UP Vs. Samsung India upheld the decision of the Allahabad High Court, stating that mobile chargers sold as part of a composite package with mobile phones cannot be taxed separately under the Uttar Pradesh Value Added Tax Act, 2008 (UP VAT Act).
A Bench comprising Justice BV Nagarathna and Justice Satish Chandra Sharma dismissed the appeal filed by the State’s revenue authorities, refusing to interfere with the High Court’s judgment from 2018.
Nokia Ruling Under Scrutiny | Whether Charger And Mobile Phone To Be Taxed Separately? Supreme Court Grants Leave – Final Hearing on March 27
The Supreme Court has granted leave in a case challenging Punjab VAT orders that were based on its earlier decision in Nokia India Pvt. Ltd. v. State of Punjab.
The bench of Justice B.V. Nagarathna and Justice Satish Chandra Sharma listed the matter for final hearing on March 27, 2025.
Delhi High Court
Are Gold Baggage Rules Unfair to Tourists? Directives By Delhi High Court
In a series of landmark judgments, the Delhi High Court has ruled in favor of tourists against the Customs Department, emphasizing due process and natural justice in the confiscation of goods. The rulings set crucial legal precedents on baggage regulations, waivers, and the disposal of seized items.
Rs.1.42 Crores Excise Duty Against Zarda Factory: Delhi High Court Dismisses Dept. Appeal Citing Low Tax Effect
The Delhi High Court has dismissed the department’s appeal demanding Rs.1.42 Crores Excise Duty from a Zarda Factory named Prabhat Zarda Factory citing low tax effect.
The bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta has observed that the duty demanded is about Rs.1.42 Crores which is less than the prescribed monetary limit of two crores for filing an appeal before the High Court in terms of Instruction F.No.390/Misc./163/2010-JC dated 17th August, 2011 issued by the Central Board of Indirect Taxes and Customs.
Relief to Airlines: Delhi High Court Strikes Down IGST Levy On Re-Imported Aircraft Parts
In a significant relief for aviation companies, including IndiGo, the Delhi High Court on Tuesday struck down the Integrated Goods and Services Tax (IGST) levy on the repair cost of goods re-imported into India after being sent abroad for maintenance.
A division bench comprising Justices Yashwant Varma and Ravinder Dudeja delivered the judgment, striking down the additional IGST levy imposed under the 2021 notification.
DRI Collected Overwhelming Evidence Against Accused Carrying Commercial Quantity Of Cocaine From Abroad To India: Delhi High Court Refuses Bail
The Delhi High Court has refused the bail to the person accused of carrying a commercial quantity of cocaine from abroad to India on the ground that the Directorate of Revenue intelligence (DRI) collected overwhelming evidence against the accused.
The bench of Justice Neena Bansal Krishna has observed that there are serious charges of carrying commercial quantities of Cocaine from abroad to India for handing over to the third persons, as a part of the International Drug Syndicate.
Delhi High Court Directs Customs Dept. To Release Gold Chain Of NRI Who Came To Attend Marriage
The Delhi High Court has directed the customs dept. to release gold chains of Non-Resident Indian (NRI) who came from UAE to attend marriage.
The bench Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta has observed that the customs department has failed to provide a Show Cause Notice and a Proper Hearing to the Petitioner. The gold chain was clearly personal jewellery of the Petitioner, the order requiring the petitioner-NRI to redeem the gold chain upon the payment of Rs.25,000 for re-export and penalty of Rs.20,000 is not sustainable.
Limitation For Claiming Refund Under Customs Act, 1962 Is Inapplicable On Extra Duty Deposit: Delhi High Court
The Delhi High Court has held that limitation for claiming refund under Customs Act, 1962 is inapplicable on Extra Duty Deposit (EDD).
The bench of Justice Prathiba M. Singh and Justice Dharmesh Sharma have observed that Section 27 of the Customs Act deals with refund of customs duty. It is abundantly clear that EDD is not in the nature of customs duty. The deposit of the EDD was itself to secure any customs duty which may have been later on found to be payable, due to the allegation of under- declaration. However, when the said allegation has been disproved and the Department has taken a view that there was no under-declaration, the substratum of the deposit of EDD itself no longer exists.
Lack Of Coordination Between Customs Dept. And Panel Of Standing Counsels: Delhi High Court
The Delhi High Court while pointing out that there is a lack of coordination between customs department and panel of standing counsels held that the non-appearance of customs counsel is a gross wastage of judicial time.
The bench Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta has observed that in a large number of customs matters, the Counsels are either not appearing or appear without proper instructions. In cases of non- appearance, the Court is compelled to request Standing Counsels present in Court to accept notice. This reflects a clear lack of coordination between the Department and the learned panel of Standing Counsels. Such a practice is highly undesirable and leads to gross wastage of judicial time.
Delhi High Court Directs CESTAT To Hear Tata Teleservices’ Appeal Against Double Taxation On Prepaid Services Subject To Rs. 1 Crore Pre-Deposit
The Delhi High Court has directed the (CESTAT) to hear Tata Teleservices’ appeal against double taxation on prepaid services subject to Rs. 1 crore pre-deposit.
Bombay High Court
Stressed Assets Stabilization Fund Liable To Pay VAT On Sale Of Movable Assets: Bombay High Court
The Bombay High Court has held that Stressed Assets Stabilization Fund (SASF) liable to pay Value Added Tax (VAT) on sale of movable assets.
The bench of Justice B. P. Colabawalla and Justice Firdosh P. Pooniwalla has observed that as per clause (vii) of the Explanation to Section 2(8) of the Maharashtra Value Added Tax (MVAT), Insurance and Financial Corporations, institutions or companies and banks included in the Second Schedule to the Reserve Bank of India Act, 1934 would be a deemed dealer under the provisions of the MVAT Act.
Submission Of Passport Before DRI As Bail Condition Is Onerous: Bombay High Court
The Bombay High Court has labelled the bail condition requiring the applicant to submit the passport before Directorate of Revenue Intelligence (DRI) as onerous.
The bench of Justice Milind N. Jadhav has observed that employing such an onerous condition of submission of passport before DRI in a bail order clearly amounts to indirectly impounding of the passport in substance. Even under the provisions of the Passport Act and more specifically Sections 10-A readwith 10 (3)(e), passport can be retained by the Central Government for four weeks and thereafter it can only be retained by the order of the Passport Authority under Section 10(3) of the Passports Act.
Calcutta High Court
Retrospective Pre-Deposit Mandate Under Central Excise Act Shakes Pending Cases: Calcutta High Court
The Calcutta High Court has ruled that the amended Section 35F of the Central Excise Act applies retrospectively, making pre-deposits mandatory for appeals irrespective of when the dispute (lis) commenced.
Rejection of Eligibility Certificate Renewal Makes Dealer Liable for Output Tax Payment: Calcutta High Court
The Calcutta High Court has held that the rejection of the renewal of the eligibility certificate will render the petitioner/dealer ineligibility for output tax for discharging the liability the dealer will have to pay the taxes.
The bench of Chief Justice T. S. Sivagnanam and Justice Chaitali Chatterjee (Das) has observed that the claim of the petitioner/dealer to adjust the carry forward input tax which was carried forward to the subsequent quarter is not feasible as there is no such provision under the West Bengal Value Added Tax Act, 2003.
Gujarat High Court
Gujarat High Court Restrains Customs Dept. To Probe Against Buyer of Imported Bogus CRGO Steel Strips
Case Title: M/S Pacific Powertech Solutions Versus Union Of India & Ors.
The Gujarat High Court has restrained the customs dept. to probe against the buyer of the alleged imported sb-standard/bogus CRGO Steel Strips.
The bench of Justice Bhargav D. Karia and Justice D.N.Ray has observed that when the petitioner has filed the detailed reply in response to the summons issued under Section 108 of the Customs Act, no further purpose would be served to continue the investigation qua the petitioner by the customs department.
Gujarat High Court Imposes Rs. 1000 Cost On Central Excise Commissioner For Not Following CESTAT’s Directions
The Gujarat High Court has imposed the token cost of Rs. 1000 on CGST and Central Excise (CE) Commissioner for not following the directions of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).
The bench of Justice Bhargav D. Karia and Justice D.N.Ray has observed that CGST And CE Commissioner was only required to verify that whether the principal manufacturer has paid the duty on the total value of the final product including the value of material supplied by the principal manufacturer to the petitioners for job work in the facts of the case. However, the CGST And CE Commissioner for reasons best known to him has tried to overreach the directions issued by the CESTAT.
Kerala High Court
KVAT Rules | Kerala High Court Upholds Rs. 10K Penalty On Jeweller Who Sent Jewellery To Hallmarking Centre Without Delivery Challan
The Kerala High Court has imposed the cost of Rs. 10K on jewellers who sent jewellery to the hallmarking centre without delivery challan, which was a violation of Rule 58 (18A) of the Kerala Value Added Tax Rules (KVAT Rule).
The bench of Dr. Justice A.K.Jayasankaran Nambiar and Justice Easwaran S. has observed that the jewellery that was seized was found in the possession of one Sumesh who was standing at the hallmarking centre where he had been entrusted to take the gold ornaments by the respondent/assessee.
