License Fees for Bar Contractors Exempt from Service Tax Post March 29, 2013 Under Statutory Function Rule
The tribunal held that the issuance of licenses permitting contractors to operate bars is not a taxable service under service tax law from March 29, 2013, onwards, as it constitutes a statutory function based on sovereign authority. The appellant, authorized by the state government to grant such licenses and collect fees, was deemed to act under statutory backing, similar to state-controlled rights. While the department argued that license fees were consideration for taxable services, the tribunal found that only the agency commission retained by the appellant was subject to service tax. Consequently, service tax liability applied solely for the period from July 1, 2012, to March 28, 2013, and not thereafter, reflecting the statutory nature of the activity and its exclusion from taxable services under the relevant provisions. - (AI Summary)

Income Tax Bill 2025 Cuts Complexity, Allows Late Filing, Sets Time Limits, and Protects Digital Data Privacy
The Income Tax Bill, 2025, proposes a comprehensive overhaul of the existing tax framework, focusing on simplification, legal clarity, and enhanced enforcement in a digital economy. It reduces the law's complexity by cutting chapters and sections nearly in half without altering tax slabs or definitions. Key recommendations include allowing late tax filing without penalties for refund claims, instituting time-bound dispute resolution, and clarifying exemptions and rebates to reduce litigation and taxpayer confusion. The Bill retains controversial digital enforcement provisions permitting tax authorities access to digital data, raising privacy concerns despite safeguards. It also protects anonymous charitable donations under conditions, supporting non-profits while aiming to prevent misuse. The Bill's success depends on effective implementation, balancing enforcement with privacy, and clear guidance from tax authorities. It is expected to be enacted by April 2026, marking a significant shift toward a more accessible and modernized tax regime. - (AI Summary)

Late Filing of Form 10ID Leads to Denial of 15% Tax Rate Under Section 115BAB for New Manufacturers
Section 115BAB of the Income Tax Act provides a concessional 15% tax rate for new domestic manufacturing companies meeting specified conditions, including incorporation after October 1, 2019, commencement of manufacturing by March 31, 2024, and restrictions on prior use of machinery and certain business activities. To avail this benefit, the company must file Form 10ID by the due date for the relevant assessment year's income tax return. In a case before the ITAT, a company was denied the concessional rate because it filed Form 10ID after the due date for its first return, failing to comply with statutory requirements. The ITAT held that strict adherence to the filing deadline is mandatory, and tax authorities cannot interpret the provisions otherwise, resulting in denial of the concessional tax rate. - (AI Summary)

Statutory 120-Day Limit for Filing Written Statement Under Order VIII Rule 1 CPC is Absolute and Non-Extendable
The Delhi High Court upheld a trial court decree favoring the plaintiff in a suit for recovery of an advance payment for granite slabs, emphasizing that the statutory 120-day limit under Order VIII Rule 1 CPC for filing a written statement is absolute and non-extendable. The defendant failed to submit the written statement within this period, leading the trial court to proceed ex parte and subsequently decree the suit under Order VIII Rule 10 CPC based on documentary evidence. The court rejected the defendant's fraud allegations due to lack of official records. It affirmed that failure to file a written statement does not relieve the plaintiff of proving their case and that the trial court properly exercised discretion in granting the decree. This decision aligns with precedents confirming that statutory time limits for filing defenses cannot be bypassed by courts' inherent powers. - (AI Summary)

Kerala High Court Upholds Sections 16(2)(c) & 16(4) CGST Act, Emphasizes Fair ITC Claims for Honest Taxpayers
The Kerala High Court has upheld the constitutional validity of Sections 16(2)(c) and 16(4) of the CGST Act, which govern Input Tax Credit (ITC) eligibility, but mandated their application with fairness rather than mechanical rigidity. In a series of judgments beginning with M. Trade Links v. Union of India, the Court recognized that taxpayers acting in good faith-who possess valid invoices, have paid GST to suppliers, and show no fraud-should not be penalized for supplier defaults or technical delays. The Court emphasized the use of alternate documentary evidence beyond GSTR-2A data and allowed flexibility on time limits under Section 16(4) when delays are genuine. These rulings provide relief to honest taxpayers, particularly MSMEs, and require tax authorities to reassess ITC denials considering substantive compliance, promoting equity and practical GST enforcement. - (AI Summary)

Court orders deletion of GST registration fraudulently made using Aadhaar and PAN under Section 29
The Bombay High Court directed the deletion of a GST registration fraudulently obtained using the petitioner's Aadhaar and PAN, criticizing multiple statutory authorities for their prolonged inaction despite clear evidence of identity impersonation. The petitioner, a small business owner, faced legal and financial consequences due to misuse of his identity documents without his consent. The court condemned the systemic failure of agencies including UIDAI, GST authorities, the Income Tax Department, and a bank, highlighting the absence of facial verification during KYC processes and the lack of proactive fraud prevention measures. It emphasized the need for enhanced Aadhaar authentication protocols, including photograph comparison, and imposed costs on the respondents for their negligence. The ruling underscores the obligation of authorities to protect citizens' identities and swiftly address identity fraud, reinforcing accountability and the rule of law. - (AI Summary)

GST officers must follow binding higher court rulings under Article 141 to ensure fair and consistent tax enforcement
GST officers are legally required to follow binding decisions of higher courts to ensure consistency and fairness in tax administration. Supreme Court rulings under Article 141 of the Constitution are binding on all authorities nationwide, while High Court decisions generally bind officers within their jurisdiction unless contradicted by another equal or higher court. The landmark case emphasizing this principle held that officers cannot disregard appellate authorities' rulings even if appeals are pending. Ignoring judicial discipline leads to inconsistent tax enforcement, increased disputes, and undermines rule of law, harming taxpayer confidence. Taxpayers should cite relevant higher court decisions and may seek judicial enforcement if officers deviate. In cases of conflicting High Court rulings, officers may rely on decisions favoring the department unless the Supreme Court has settled the issue. Adherence to judicial discipline promotes legal certainty and equitable treatment in GST matters. - (AI Summary)

Concerns Over Vague Show Cause Notices Under Section 144B Impacting Fair Tax Assessments and Rights
The Faceless Assessment Scheme under Section 144B of the Income Tax Act aims to enhance transparency and efficiency by digitizing tax assessments. However, concerns have arisen regarding the issuance of Show Cause Notices (SCNs), which are increasingly viewed as standardized, vague, and lacking substantive explanation or supporting evidence. This undermines taxpayers' ability to respond effectively, compromising procedural fairness and the audi alteram partem principle. The short response time further exacerbates these issues, especially for complex cases. Judicial interventions have highlighted the necessity for clear, evidence-based notices to uphold natural justice, emphasizing that digital processes must not curtail constitutional rights under Articles 14 and 21. The scheme's segmented, automated approach risks diluting accountability and genuine justice. To restore trust and fairness, procedural reforms are needed to ensure SCNs are precise, transparent, and provide adequate response time, with trained officers conducting thorough and reasoned evaluations. - (AI Summary)

Section 74 CGST Proceedings Invalid Without Fraud Proof; Case Referred to Section 73 After CA Certificate Accepted
A taxpayer faced proceedings under Section 74 of the CGST Act alleging discrepancies in returns, despite submitting a Chartered Accountant's certificate confirming compliance. The tax authority mechanically initiated Section 74 proceedings without finding fraud or suppression and disregarded the CA certificate. The court held that Section 74, which requires proof of fraud or wilful misstatement, was improperly invoked. It set aside the order and directed the matter be reconsidered under Section 73, conditional on the taxpayer depositing the disputed tax. The ruling emphasized that without evidence of fraud, proceedings under Section 74 are unsustainable and must be replaced by Section 73 adjudication. - (AI Summary)

Amendments to Criminal Complaints Allowed if No Prejudice or Fundamental Change Occurs
A criminal complaint can be amended to correct minor errors or omissions without fundamentally altering the nature of the offense or causing prejudice to the accused. Amendments are generally allowed before the magistrate takes cognizance or early in the trial process. Courts disallow amendments that introduce new facts, change the core allegations, or prejudice the defense. In cases involving dishonored checks, amendments correcting minor errors may be permitted if they do not affect substantive rights or timelines. The Supreme Court has emphasized that the key consideration is whether the amendment causes prejudice to the accused. Amendments made after summons but before completion of the complainant's evidence may be allowed if they rectify inadvertent errors without altering the complaint's character. Courts may permit recalling witnesses if charges are altered to ensure fairness. - (AI Summary)

Single Show Cause Notice for Multiple Years Under GST Sections 73 & 74 Is Invalid; Separate Notices Required
The Madras High Court held that issuing a single show cause notice and composite assessment order covering multiple financial years under Sections 73 and 74 of the GST Act is impermissible and void ab initio. Each financial year constitutes a distinct tax period requiring separate notices and assessments to comply with the statutory limitation periods and ensure procedural fairness. The Court emphasized that the phrase "any period" must be read with the definition of "tax period," precluding the bundling of several years into one notice. Such bundling frustrates the limitation scheme, impedes effective year-wise rebuttal, and amounts to jurisdictional overreach. Similar rulings by the Karnataka High Court and earlier Madras High Court decisions reinforce that consolidated notices violate the GST Act's limitation provisions and must be quashed, mandating issuance of separate show cause notices and assessment orders for each financial year. - (AI Summary)

Possession Requires Physical Control and Intent to Exclude Others Under Legal Principles and GST Rules
Possession in law requires both physical control and the intention to exclude others, known as animus possidendi. Courts distinguish between de facto possession (actual control without legal title) and de jure possession (legal ownership). Judicial rulings clarify that possession must be conscious and intentional, not incidental, with knowledge inferred from circumstances. In criminal and civil contexts, possession includes physical control, custody with intent, and dominion through concealment. In tax law, particularly under GST, penalties depend on the taxpayer's intent; deliberate evasion attracts penalties, while bona fide disputes may not. Thus, possession is a complex concept involving both factual and mental elements, crucial for determining liability and penalties in various legal domains. - (AI Summary)

Solar Power Plant on Mall Rooftop Qualifies for Full ITC Under Sections 16 and 17 of CGST Act
A partnership firm operating a mall installed a rooftop solar power plant exclusively to supply electricity for common area maintenance services, which are fully taxable. The Kerala Authority for Advance Ruling held that the solar plant qualifies as 'plant and machinery' and 'capital goods' under the CGST Act, as it is affixed to the rooftop by structural supports without major civil construction. Since the electricity generated is used solely for taxable services and each licensee pays separately, the input tax credit (ITC) on the solar plant is fully available under Sections 16 and 17 of the CGST Act. The ruling clarified that the plant is not considered immovable property and is not subject to ITC restrictions related to exempt supplies or construction of immovable property, thereby allowing full ITC recovery on the solar power plant installation. - (AI Summary)

India enforces colour-coded food labels with vegetarian symbols and traffic-light warnings under Food Safety Act
India mandates colour-coded food labelling under the Food Safety and Standards Act, requiring vegetarian and non-vegetarian symbols on pre-packaged foods, with strict size and placement rules. Mislabeling carries penalties including fines and imprisonment. A traffic-light system warns consumers of high fat, sugar, or salt, restricting marketing of such products to children. Food colour additives must be declared with INS codes and adhere to usage limits. Processed fruit products require an FPO mark, and all food operators must hold valid FSSAI licenses. These regulations promote transparency, protect public health, and empower consumers to make informed choices. Legal provisions under the Food Safety and Standards Act and Consumer Protection Act enable complaints against misleading labelling, ensuring accountability and safeguarding against health risks such as allergies and non-communicable diseases. Consumer awareness is essential for the system's effectiveness. - (AI Summary)

GST Input Tax Credit Transfer Allowed Between Amalgamating Companies in Different States Under Section 18(3) CGST Act
The Bombay High Court ruled that the transfer of unutilized GST Input Tax Credit (ITC) between amalgamating companies registered in different States is permissible under Section 18(3) of the CGST Act and Rule 41 of the CGST Rules. The court held that neither the GST law nor rules prohibit inter-State ITC transfer upon merger or amalgamation, rejecting the argument that distinct State registrations prevent such transfer. It emphasized that GST's objective is seamless credit flow across the supply chain and that denial based on technical or jurisdictional grounds contradicts this purpose. The court directed the GST Network to facilitate ITC transfer from the transferor company in one State to the transferee company in another, affirming that legislative intent and constitutional provisions support such transfer without causing revenue loss to any State. - (AI Summary)

Mandatory Colour-Coded Food Labels Under Food Safety and Standards Act for Clear Consumer Awareness
India's food labelling regulations mandate colour-coded symbols to inform consumers about the nature and safety of packaged foods. Green indicates vegetarian products, red denotes non-vegetarian items, yellow signals the presence of eggs, blue marks medicinal or therapeutic foods requiring medical supervision, and black warns of high chemical additive content linked to health risks. These labels are enforced under the Food Safety and Standards Act, 2006, and supported by the Consumer Protection Act, 2019, ensuring transparency and consumer rights. Consumers are advised to verify labels and report misleading information through official channels. The system aims to safeguard dietary preferences, public health, and informed choice, emphasizing the importance of consumer awareness in interpreting these legally backed food safety indicators. - (AI Summary)