Right to trade and commerce preserved: GST registration may be restored subject to compliance and payment of pending dues.
GST provisions must not be interpreted to deny the right to trade and commerce; where cancellation of GST registration for non-filing occurred due to pandemic-linked hardship and statutory appeal failed on a technical ground, constitutional jurisdiction may be exercised to restore registration subject to filing outstanding returns and payment of pending dues with applicable interest, penalty and fees, balancing the taxpayer's livelihood and the state's revenue interests. (AI Summary)

Natural justice: cancellation orders lacking stated reasons violate procedural fairness and require reasoned notices before registration cancellation.
Cancellation of GST registration based on a show cause notice that does not disclose the basis for initiation and results in a non-speaking, cryptic order violates natural justice. Authorities must reference SCN contents, engage with the petitioner's reply, and articulate intelligible reasons before cancelling registration; failure to do so renders the proceedings invalid and permits re-issuance of notice in compliance with procedural requirements. (AI Summary)

Dissolution of corporate debtor limited to liquidator's application; liquidation follows when no resolution plan emerges
An IRP cannot properly seek dissolution of a corporate debtor during CIRP because the Code contemplates dissolution only after assets are completely liquidated and on an application by the liquidator; where no resolution plan is received the adjudicating authority must proceed to liquidation and may appoint a liquidator who must follow statutory directions including public announcement, investigations, statutory intimation, commencement of liquidation moratorium, and filing of reports. (AI Summary)

Applicability of transfer pricing to capital goods purchases requires ALP only when depreciation affects taxable income.
Applicability of transfer pricing provisions to purchase of depreciable capital assets depends on whether the transaction gives rise to income chargeable under the substantive heads of the Income Tax Act; Chapter X is a machinery provision and cannot be applied independent of a charging section. Determination of the ALP for such a purchase is triggered only when the transaction affects a chargeable head through depreciation. TNM method is unsuitable for capital goods purchases that do not enter the profit and loss account except via depreciation, and parties must maintain information under Section 92D. (AI Summary)

Transfer of property: unregistered instruments don't substitute for sale deeds, triggering short term capital gain treatment.
Transfer of property for capital gains arises only on transfer of possession or execution of a sale deed; unregistered instruments like a Banakhat or power of attorney do not substitute for a sale deed. Sale of land within the short term holding period results in short term capital gain and reinvestment exemptions for residential purchase are not available. The tribunal also upheld ex parte disposal where the appellant failed to appear and treated the unregistered Banakhat as an afterthought absent mention in the sale deed. (AI Summary)

Seizure under GST Section 67(2): seizure limited to goods and relevant documents; cash not ordinarily seizable.
Section 67(2) of the GST Act limits seizure to goods liable for confiscation and to documents, books or things useful or relevant to proceedings; cash does not prima facie qualify as goods or as a retainable "thing." Retention under the proviso is limited to the time necessary for examination and inquiry. Search and seizure powers are draconian and must be exercised strictly; forcible dispossession of currency from premises is not authorised by Section 67(2) where the statutory conditions for seizure are not met. (AI Summary)

Business income classification prevents withholding on outsourced payroll payments, leaving taxation to the recipient's treaty jurisdiction.
Payments to a foreign affiliate for outsourced payroll and related human-resources services qualified as business income of the foreign affiliate, not as technical services; absent a permanent establishment in India and in view of the treaty allocation of taxing rights, such payments were not subject to domestic withholding tax and the payer could not be treated as an assessee in default for failing to deduct tax. (AI Summary)

Cancellation of GST registration: procedural safeguards, show cause requirements, and continuing input tax liabilities clarified.
The document sets out the cancellation regime for GST registration: registrants may apply for cancellation (Form GST REG 16) for reasons like cessation or change of business; the proper officer may issue a show cause notice (Form GST REG 17) and suspend registration pending adjudication. Orders (Forms GST REG 19/20) must afford an opportunity to be heard; officers may fix retrospective effective dates for cancellation for contraventions or fraud. Cancellation does not relieve pre cancellation tax liabilities, and registrants must pay tax or reverse input tax credit on stock and capital goods as prescribed. (AI Summary)

Service of Show Cause Notice: penalty cannot be imposed without proper SCN service; fresh SCN and hearing required.
The court held that a penalty order cannot validly be passed without service of a Show Cause Notice (SCN) and an opportunity to be heard as required by Section 153 of the Customs Act. The petitioner established nonreceipt of the SCN, and in the absence of material proving service in the prescribed modes, the penalty order was set aside for violation of natural justice. The revenue may issue a fresh SCN and consider appropriate orders after affording a proper hearing. (AI Summary)

Affiliation fees as taxable supply: affiliation services not exempt when not tied to admissions or conduct of examinations.
Affiliation services provided by a university to colleges that do not relate to student admission or to examinations conducted for admission constitute a supply and are not covered by the exemption entry; therefore amounts collected as affiliation fees are not exempt under the notification and must be treated as taxable. (AI Summary)

Share premium exemption for venture capital fund; valuation and retainership fees recognised as deductible business expenses.
The tribunal upheld deletion of an addition for share premium because issuance to a venture capital fund falls within the proviso to Section 56(2)(viib), so the excess consideration was not taxable; it also sustained the appellate finding that retainership and valuation fees paid to a CA firm are revenue expenditures deductible under Section 37(1). (AI Summary)

Supply of goods: customer specified tooling sold on supplier's account is treated as goods supply, not a composite supply.
Design, development and procurement of manufacture of customer specified tooling, followed by invoicing and transfer of ownership to an overseas purchaser, constitutes a supply of goods. The supplier performed design work, engaged a third party manufacturer who invoiced the supplier, then invoiced the overseas customer and retained physical possession while transferring ownership; the supplier acted on its own account and did not merely facilitate a supply, so the transaction is not a composite supply. (AI Summary)

Input tax credit restriction: GST bars ITC on goods or services used for corporate social responsibility obligations under the Companies Act.
The Finance Bill, 2023 amends the GST disallowance list to provide that input tax credit shall not be available for goods or services received by a taxable person which are used or intended to be used for activities relating to obligations under corporate social responsibility, creating a categorical exclusion for CSR related inputs and raising interpretive issues about scope, timing and applicability. (AI Summary)

Failure to consider a reply to a show cause notice can render GST registration cancellation procedurally invalid, allowing restoration.
Cancellation of GST registration is procedurally unsustainable where the cancellation order refers to but does not consider the assessee's reply to the Show Cause Notice; when overdue returns were later filed and tax and penalty paid, the non-consideration of that reply constituted a decisive procedural defect, warranting administrative restoration of registration and reinforcing that cancellation must record and address any explanation furnished by the registrant. (AI Summary)

Payment before notice bars extended-period service tax demand when tax and interest were paid prior to initiation of proceedings.
The tribunal held that where an assessee has paid service tax and interest prior to issuance of a show cause notice and declared such payment in returns, the statutory pre-notice payment mechanism operates to preclude a notice and demand for the amounts so paid; accordingly, an extended-period demand was not sustainable while any tax due for the normal period remained recoverable with interest and penalties were set aside insofar as the pre-notice payment provision applied. (AI Summary)

Assessment order precedence: demands or penalty notices issued before a signed assessment order are void and may be objected to.
A valid assessment regime requires a signed assessment order to be issued before computation sheets, demand notices or penalty notices; documents prepared or signed prior to the assessment order lack authority and are void ab initio. Taxpayers should verify chronological sequencing and digital-signature authenticity and lodge objections to vacate invalid demands and withdraw penalty proceedings. (AI Summary)

Aggregate turnover determines GST registration and composition eligibility, excluding taxes, cess and reverse-charge inward supplies.
Aggregate turnover, computed on an all India PAN basis, comprises the value of taxable supplies, exempt supplies (including nil and zero rated supplies), exports and inter State supplies by persons with the same PAN, but excludes central/State/UT/ integrated tax and compensation cess and inward supplies on which tax is payable by the recipient under the reverse charge mechanism; it determines registration thresholds, Composition Scheme eligibility, and ties into e invoicing, QRMP and HSN reporting obligations. (AI Summary)

Rule of reading down: construe provisions narrowly to preserve validity while avoiding judicial legislation.
The rule of reading down construes potentially invalid statutory provisions narrowly to preserve their validity as a form of harmonious construction, permitting courts to smooth textual defects without adding new legislative content. Its use is constrained: courts must avoid introducing words or effects absent from the statute and may only read provisions down to prevent statutory rights from becoming illusory. Reading down can allow limited judicial exceptions-such as permitting discretion to grant interim relief and requiring reasoned orders when departing from normal procedures-provided such constructions remain textually and purposively justified. (AI Summary)

Refund claim verification: erroneous vehicle-registration finding cannot render refund claims dubious; refund ordered under eligibility rules.
The court found that the review order's adverse finding-that vehicle numbers in two invoices were not reflected on the e vahan portal-was erroneous; the petitioner had furnished returns and necessary details to establish entitlement under Section 16(2)(a), there was no tangible reason to doubt invoice particulars, the appellate disallowance was set aside, and the previously sanctioned refund was directed to be disbursed. (AI Summary)

ESOP expense deductibility: discounted share issuance treated as remuneration-related expenditure, allowing tax deduction when liability is ascertained.
Discounts on shares issued under ESOPs, computed against SEBI-based market value, have been characterised by authorities as an ascertained liability linked to employee remuneration; when the obligation crystallises at grant with only quantification pending, such discounts have been treated as business expenditure deductible under general deductibility principles because the primary object is to secure employee services to earn profits rather than to affect capital. (AI Summary)