Gujarat High Court Quashes ₹43.43 Crore GST Demand Against Amul

The Gujarat High Court has recently quashed an IGST demand of ₹43.43 crore against Gujarat Co-operative Milk Marketing Federation Limited, popularly known as Amul. The court held that failure to allocate common expenses to branches through cross-charging does not, by itself, establish fraud or suppression of facts to evade GST.A Division Bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati ruled that the tax authorities had failed to establish the conditions required to invoke Section...

Gujarat High Court Holds ₹50 Cr. Nirma Trademark Sale Non-Taxable For Unascertainable Acquisition Cost

The Gujarat High Court on 9 October held that the Rs. 50 crore received by Shantaben K. Patel from the sale of the 'Nirma' and 'Nima' trademarks was not taxable as long-term capital gains because their cost of acquisition was unascertainable. A Division Bench comprising Justices Bhargav D. Karia and Pranav Trivedi dismissed the Revenue's appeals against the Income Tax Appellate Tribunal's orders and upheld the Tribunal's findings on the taxability of the receipt, the binding nature of the...

SARFAESI | Secured Creditor's Prior Charge Over Property Takes Precedence Over State VAT Charge: Gujarat High Court

The Gujarat High Court has reiterated that a secured creditor's charge over a property will take precedence over a subsequent charge created by the State VAT Department. The court applied the principle to a property purchased by auction purchasers in proceedings under the SARFAESI Act.The court relied on its earlier rulings, as well as the Supreme Court's judgment in Punjab National Bank v. Union of India.A division bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati observed, “once...

Revenue Cannot Reopen Assessment Over Additions Already Pending In Tax Appeals: Gujarat High Court

The Gujarat High Court on 16 September held that the Revenue cannot reopen an assessment under Section 147 of the Income Tax Act and pursue parallel proceedings where the same additions have already been examined by the CIT(A) on merits and remain subject matter of tax appeals before the High Court. A Division Bench comprising Justices A.S. Supehia and Vaibhavi D. Nanavati quashed reassessment proceedings initiated against Venus Township (India) LLP, finding that the reassessment sought to...

Director Of Public Company Cannot Be Made Liable For Tax Dues Due To Substantial Shareholding: Gujarat High Court

The Gujarat High Court has held that a public limited company cannot be treated as a private company merely because one of its directors holds a substantial number of shares. Thus, a director cannot be held personally liable for the company's unpaid tax merely because the director holds substantial shares in the company.The case concerned Section 179 of the Income Tax Act. The provision allows the Income Tax Department, in certain circumstances, to recover a private company's unpaid tax from its...

Insight Portal Screenshots Without Underlying Material Can't Sustain Reassessment: Gujarat High Court

The Gujarat High Court on 7 September held that reassessment proceedings cannot be sustained where the Revenue relies merely on screenshots from the Insight Portal without furnishing the underlying reports and material allegedly linking the taxpayer to accommodation transactions. A Division Bench comprising Justices A.S. Supehia and Vaibhavi D. Nanavati quashed the reassessment proceedings against Jyoti CNC Automation Ltd., finding that the notice issued under Section 148A(1) of the Income Tax...

Gujarat High Court Rejects Writ Plea, Finds GST Officer Was Authorised To Verify Vehicle Carrying Goods

The Gujarat High Court has rejected Shreeji Steel's writ challenge to GST confiscation proceedings after finding that the officer who physically verified its vehicle was authorised under Rule 138B of the CGST Rules.A bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati also held that the company had an alternative statutory remedy of appeal under Section 107 of the CGST Act. The court observed, “Upon examination of the documents on record, we find that there is no violation of the said...

Gujarat High Court Upholds ₹23.77 Crore Income Tax Relief For Adani Infrastructure Services

The Gujarat High Court has ruled in favour of Adani Infrastructure Services Pvt. Ltd., upholding the deletion of a ₹23.77 crore income tax disallowance. The court found that the company's interest income exceeded its interest expenditure and that the borrowed funds were advanced in a back-to-back transaction.The dispute concerned a disallowance under Section 14A of the Income Tax Act read with Rule 8D(2)(ii). Section 14A deals with expenditure incurred in relation to income that does not form...

Municipal Commissioner Cannot Alter Property-Tax Categories Without State Sanction: Gujarat High Court

The Gujarat High Court has ruled that a Municipal Commissioner cannot use a carpet-area cut-off to move commercial properties from one property-tax category to another without prior State Government approval.A Division Bench of Justice A.S. Supehia and Justice Vaibhavi D. Nanavati quashed a March 27, 2015, office order issued by the Bhavnagar Municipal Corporation, which treated shops and showrooms with a carpet area of more than 35 square metres as NU-1 properties. NU-1 properties carry a...

Gujarat High Court Refuses To Quash Case Over Fake Honda Parts, Says Logo Can Be Copyrighted

On 30 September, the Gujarat High Court refused to quash a criminal case against businessman Atul Bhalerao Patil over the seizure of counterfeit Honda scooter accessories and 250 loose stickers bearing the Honda Wing Logo. Justice P. M. Raval dismissed Patil's petition after police seized duplicate Honda Activa accessories worth over Rs. 7 lakh, including goods worth Rs. 4,65,650 from his unit in Ahmedabad, along with the stickers. The Bench observed: “Where the accused is found in possession...

Changing Rent Claim To Mesne Profits Without Changing Quantum Not Patent Illegality: Gujarat High Court

The Gujarat High Court on 24 September held that recasting an arbitral claim from “rent” as “mesne profits” does not amount to patent illegality warranting interference with an award when the monetary liability remains unchanged. A Division Bench comprising Chief Justice Sunita Agarwal and Justice D.N. Ray dismissed Indus Towers' challenge to an arbitral award directing it to pay the landowners Rs. 25,800 per month, with contractual escalation, until it handed over vacant possession, describing...

Gujarat HC Allows Plea To Condone Delay In Filing Income Tax Return Despite Pending Appeal Against Assesment

The Gujarat High Court has ruled that the rejection of a taxpayer's application seeking condonation of delay in filing an income tax return can be examined even after an assessment order has been passed and an appeal against it is pending before the Commissioner of Income Tax (Appeals).“We do not subscribe to the objection raised by the Revenue since it is an admitted position that the Commissioner of Income-tax (Appeals) does not have the power in condoning the delay and the remedy invoked by...