Restaurant Service Or Bakery Product? Bombay High Court To Decide If Donuts & Cakes Should Be Taxed At 5% Or 18% Under GST

The Bombay High Court is to decide whether the donuts and cakes should be classified as restaurant service or a bakery product under Goods and Services Tax. The Division Bench of Justices B.P Colabawalla and Firdosh P. Pooniwalla were addressing the issue of whether the supply of donuts falls within the ambit of restaurant services under Service Accounting Code (SAC) 9963 or should be categorized as a bakery product subject to separate tax treatment under the Goods and Services Tax...

Rajasthan GST Department Mandates Virtual Hearing In All Tax Matters, Issues Guidelines

The Rajasthan GST Department on 20.02.2025 issued guidelines on virtual hearing. The Guidelines have been issued in pursuance of the para 143 of the Budget Speech 2025-26 and in exercise of power conferred under Section 168 of the RGST Act, 2017. The circular highlights that in Rajasthan, provisions have also been made for faceless scrutiny as well as carrying out of Business Audit and Enforcement pertaining to the taxpayers not just by the jurisdictional Proper Officers bit also...

Delhi High Court Allows Indigo Airlines' Plea, Holds Levy Of Additional IGST On Repaired & Re-Imported Aircraft Parts To Be Unconstitutional

In big relief to Indigo airlines, the Delhi High Court has held that an additional levy of Integrated Goods and Services Tax (IGST) and cess under Section 3(7) of the Customs Tariff Act, 1975 on re-import of aircraft parts that were repaired abroad, is unconstitutional.A division bench of Justice Yashwant Varma and Ravinder Dudeja observed that “additional duty even after the transaction has been subjected to the imposition of a tax treating it to be a supply of service would be clearly...

Service Tax Liability Can't Be Levied On Freight And Cartage Expenses Under GTA Services: CESTAT

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that service tax liability cannot be levied on freight and cartage expenses under GTA (Good Transport Agency) services. “The said amount/expenses/charges were not paid by the assessee directly to the transporter for transportation of any goods. Thus, the said activity cannot be covered under GTA Services, hence, no service tax liability can be levied on the aforesaid amount/expenses/charges...

Respondent Cannot File Cross-Objections To Appeal Before High Court U/S 260A Income Tax Act: Delhi High Court

The Delhi High Court has held that Section 260A of the Income Tax Act, 1961, which pertains to appeals to High Courts, does not envisage the filing of cross-objections by the opposite party, unlike Order XLI Rule 22 CPC.A division bench of Justices Yashwant Varma and Harish Vaidyanathan Shankar observed, “The Legislature appears to have consciously desisted from adopting principles akin to Order XLI Rule 22 of the Code or specifically introducing provisions enabling the respondent in an appeal...

Delhi High Court Expresses Concern Over Delay In Disposal Of Matters Before National Faceless Appeal Centre

The Delhi High Court has expressed grave concern over the pendency of over 5.4 Lakh appeals before the National Faceless Appeal Centre (NFAC).The body was created for faceless assessment under Section 143 or 144 of the Income Tax Act, 1961, by the insertion of Section 144B via the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.A division bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela remarked, “This court is cognizant of the...

Rule 36(4) Of CGST Rules Is Constitutionally Valid, Does Not Derive Power From Section 43A: Gauhati High Court

The Gauhati High Court has upheld the constitutional validity of Rule 36(4) of the Central Goods and Services Tax/Assam Goods and Services Tax Rules, 2017. The provision stipulates documentary requirements and conditions for a registered person claiming input tax credit (ITC).A division bench of Chief Justice Vijay Bishnoi and Justice N. Unni Krishnan Nair observed that the provision was enacted based on powers derived from Section 16 of the CGST Act and the general rule-making powers under...

Tax Weekly Round-Up: February 23 - March 02, 2025

SUPREME COURTGST Act | Can Time Limit To Adjudicate Show Cause Notice Be Extended By Notification Under S.168A? Supreme Court To ConsiderCase Name: M/S HCC-SEW-MEIL-AAG JV v. ASSISTANT COMMISSIONER OF STATE TAX & ORS. Case no.: Petition for Special Leave to Appeal (C) No.4240/2025The Supreme Court is to decide whether the time limit for adjudicating show cause notice and passing an order can be extended by the issuance of notifications under Section 168-A of the GST Act. This provision...

SCN & Orders Not Containing Signature Of Proper Officer Cannot Sustain Judicial Scrutiny: Telangana High Court

The Telangana High Court stated that the show cause notices and the orders which are not pregnant with the signature of the Proper Officer cannot sustain judicial scrutiny. The Division Bench of Acting Chief Justice Sujoy Paul and Justice Renuka Yara observed that “since Rule and prescribed Forms mandate requirement of signature of Proper Officer, its violation makes the notice/order vulnerable. Any contrary view taken by Court about DRC-07 having no signature without considering the...

Tax Monthly Digest: February 2025

SUPREME COURTIncome Tax Act | Offence Committed Before Show-Cause Notice Compoundable As Covered By 'First Offence' In Compounding Guidelines: Supreme CourtCase title: VINUBHAI MOHANLAL DOBARIA Vs CHIEF COMMISSIONER OF INCOME TAXCase no.: SPECIAL LEAVE PETITION (C) NO. 20519 OF 2024The Supreme Court on January 7 set aside the Gujarat High Court's judgment dated March 21, 2017, through which the rejection to the compounding application of the Appellant for the assessment year 2013-2014, for...

[CGST ACT] Dept Can't Seize Goods If Quantity Or Weight Of Goods Is Found Correct On Physical Verification: Calcutta High Court

The Calcutta High Court stated that GST department cannot seize the goods if the quantity or weight of the goods is found correct on physical verification. The Division Bench of Chief Justice T.S Sivagnanam and Justice Hiranmay Bhattacharyya noted that the quantity or the weight of the goods, which were carried in the vehicle, has been found to be correct by the department on physical verification and there is no discrepancy. The bench further stated that “the inspecting authority...

What Is The Difference Between 'Non-Service Of Notice' & 'Lack Of Knowledge Of Service Of Notice'? Kerala High Court Explains

The Kerala High Court has explained the difference between 'non-service of notice' and 'not noticing or lack of knowledge of service of notice'. “Lack of knowledge of service of notice can amount to a violation of principles of natural justice only in certain limited circumstances. When lack of knowledge is attributable to the default of the sender of the notice, then 'not noticing or lack of knowledge of service of notice' can amount to a negation of the principles of natural...