Topic
Madras High Court rules that prosecution under Section 276C(2) of the Income Tax Act requires proof of wilful intent to evade tax, not mere non-payment. The court held that financial distress or inadvertent default does not attract penal provisions, reinforcing that mens rea is a prerequisite for criminal liability in tax evasion cases.
Bombay HC reinforces that RBI-based show cause notices declaring wilful default must explicitly identify which of the four sub-clauses under Clause 2.1.3 of the RBI Master Circular was violated. Vague or generic notices violate principles of natural justice and are liable to be quashed, protecting borrowers from arbitrary classification as wilful defaulters.
Calcutta High Court sets aside RBI's wilful defaulter notice against BSCPL, ruling that invocation of a corporate guarantee alone-without proof of fund siphoning, asset disposal, or repayment capacity-does not meet the statutory threshold under RBI's 2025 Directions. The judgment reinforces natural justice safeguards for guarantors facing regulatory action.
Rajasthan High Court holds that Order XI Rule 21 CPC cannot be invoked for non-compliance with production orders under Rule 14; only wilful default in discovery or inspection justifies dismissal.