Issues: Whether ad interim stay of the impugned judgment should be granted in the appeal, and whether the objections based on jurisdiction, delay, and applicability of insolvency law justified interference at the interlocutory stage.

Analysis: The challenge to jurisdiction was held to be prima facie untenable because the winding-up proceedings had already reached an advanced and effectively irreversible stage, and the Company Court retained control over the proceedings and related assets under the statutory scheme. The consent orders and subsequent directions had shifted control away from the Official Liquidator to Special Officers and a Board of Management, making the Company Court's scrutiny of those orders maintainable. The objection based on delay was treated as of limited force because the impugned acts were said to form part of a continuing course of conduct and the underlying allegations were of fraud. The plea based on the Insolvency and Bankruptcy Code was also not accepted at this stage, since no separate insolvency resolution process had been initiated and the Company Court was exercising its own powers to correct alleged abuse and mismanagement. On balance of convenience, the Court found that granting stay would effectively preserve the very state of affairs under challenge and would amount to premature interference with the impugned judgment.

Conclusion: Ad interim stay was refused.

Ratio Decidendi: A Company Court may, in an appropriate case, retain and exercise jurisdiction to examine and correct post-winding-up orders and actions affecting the liquidation estate where the proceedings have advanced to a stage that is not practically reversible, and interlocutory stay should not be granted when it would preserve the challenged arrangement and pre-empt the appeal.

Issues: Whether recovery by debiting the electronic credit ledger could be undertaken before expiry of the appeal period and without recorded reasons justifying departure from the statutory waiting period under Section 78 of the Central Goods and Services Tax Act, 2017.

Analysis: The challenge was treated as similar to pending matters in which interim protection had already been granted. The Court accepted that recovery action was taken before the prescribed appeal period had expired and that the statutory scheme under Section 78 of the Central Goods and Services Tax Act, 2017 contemplates a three-month period from service of the order before recovery proceedings may be initiated, save where reasons are recorded for an earlier action. In the absence of shown reasons to depart from that period, the debit of the electronic credit ledger and allied recovery steps were found to warrant interim protection.

Conclusion: Interim relief was granted in favour of the petitioner, including stay of the impugned appellate order and direction for re-credit of the amount debited in the electronic credit ledger.

Issues: Whether the blocking of the electronic credit ledger could continue beyond the one-year period prescribed under Rule 86A(3) of the Central Goods and Services Tax Rules, 2017, and whether the blocked credit was required to be unblocked.

Analysis: Rule 86A(3) expressly limits the operation of a restriction on the electronic credit ledger to one year from the date of imposition. The restriction in question was imposed on 16 February 2024, and the statutory period had expired by February 2025. Once that period elapsed, the restriction could not continue in law. The entitlement to restoration of credit followed directly from the rule, and the departmental affidavit also acknowledged the same legal position. Consequences arising from cancellation of registration and any further action under the Act and Rules were left open.

Conclusion: The blocking of the credit ledger had ceased to operate by efflux of time, and the impugned attachment was liable to be set aside with the credit unblocked.

Issues: (i) Whether the writ petition was maintainable despite the contractual nature of the dispute and the availability of the statutory dispute-redressal mechanism under the procurement law; (ii) Whether the order dated 07.01.2021 inserting Clause 36E in the Public Works Financial & Accounts Rules, Part-II applied to the respondent corporation; (iii) Whether denial of refund of the differential 6% GST was arbitrary and discriminatory, and whether the petitioner was entitled to refund with interest.

Issue (i): Whether the writ petition was maintainable despite the contractual nature of the dispute and the availability of the statutory dispute-redressal mechanism under the procurement law?

Analysis: The dispute arose from a government-linked contract, but the relief claimed involved interpretation of a State-issued amendment affecting contractual tax liability. The Court held that writ jurisdiction is not barred merely because the matter arises from contract, especially where the challenge is to State action said to be arbitrary or discriminatory. The Court also held that the internal dispute-redressal mechanism under the procurement framework did not oust writ jurisdiction in the facts of the case.

Conclusion: The writ petition was held to be maintainable.

Issue (ii): Whether the order dated 07.01.2021 inserting Clause 36E in the Public Works Financial & Accounts Rules, Part-II applied to the respondent corporation?

Analysis: The Court found that the respondent corporation was a Government of Rajasthan undertaking under substantial governmental control, that its contracts were governed by the Public Works Financial & Accounts Rules and related governmental circulars, and that no separate contractual regime excluding those rules had been shown. On that basis, the Court concluded that the amendment introducing Clause 36E governed the respondent corporation as well.

Conclusion: The order dated 07.01.2021 and Clause 36E were held applicable to the respondent corporation.

Issue (iii): Whether denial of refund of the differential 6% GST was arbitrary and discriminatory, and whether the petitioner was entitled to refund with interest?

Analysis: The Court held that Clause 45.1 did not deal with tax revision during performance of the contract, whereas Clause 36E expressly provided equitable adjustment where tax rates changed during performance. Since the GST rate increased while the work was ongoing, and similar benefit was being extended in comparable government contracts, refusal to extend the same benefit to the petitioner was held to be discriminatory and contrary to Article 14. The Court also rejected the estoppel objection.

Conclusion: The petitioner was held entitled to refund of the differential 6% GST with interest.

Final Conclusion: The petition succeeded on the footing that the State-issued amendment governing tax escalation applied to the contract, and the refusal to extend the corresponding GST adjustment was unlawful.

Ratio Decidendi: A State instrumentality engaged in contractual dealings remains bound by Article 14, and where a later governmental amendment expressly provides equitable tax adjustment during performance of the contract, denial of that adjustment to similarly situated contractors is arbitrary and unsustainable.

Outcome: Delay condoned. Special Leave Petition dismissed. Pending application(s), if any, disposed of.

Outcome: Delay condoned. Civil appeal dismissed and the interlocutory application(s), if any, disposed of.

Issues: (i) Whether the extended period of limitation could be invoked on the basis of a mismatch between Form 26AS / Income Tax Returns and ST-3 Returns without independent verification and proof of suppression or wilful misstatement; (ii) Whether the second show cause notice for a subsequent period on the same issue was maintainable after the first notice had already invoked the extended period.

Issue (i): Whether the extended period of limitation could be invoked on the basis of a mismatch between Form 26AS / Income Tax Returns and ST-3 Returns without independent verification and proof of suppression or wilful misstatement.

Analysis: The demand was founded only on comparison of departmental data with the returns filed by the appellant. The records showed that the appellant was registered, filing ST-3 returns regularly, and had produced books of account and related documents during audit. No independent inquiry was made to ascertain the taxability of the differential amounts, and no material was brought on record to establish fraud, suppression, or wilful misstatement with intent to evade tax. In such circumstances, the ingredients necessary to trigger the extended period under Section 73 of the Finance Act, 1994 were absent.

Conclusion: The extended period of limitation was not invocable, and the demand was barred by limitation.

Issue (ii): Whether the second show cause notice for a subsequent period on the same issue was maintainable after the first notice had already invoked the extended period.

Analysis: The material facts were already within the knowledge of the department when the first show cause notice was issued. Once the department had raised a demand by invoking the extended period on the same issue, a further demand for the subsequent period could not again be sustained by resorting to the extended period on identical facts. The later notice was therefore legally impermissible.

Conclusion: The proceedings initiated by the second show cause notice were not maintainable.

Final Conclusion: The demands of service tax, interest, and penalties could not survive, and the impugned orders were set aside with consequential relief.

Ratio Decidendi: The extended period under Section 73 of the Finance Act, 1994 cannot be invoked unless suppression, fraud, or wilful misstatement is established by substantive evidence, and a subsequent notice on the same issue cannot again rely on the extended period when the material facts were already known to the department.

Issues: Whether goods imported into a unit situated in a Special Economic Zone for authorised operations were entitled to exemption from entry tax under the West Bengal Special Economic Zone Act, 2003, and whether the assessment order and demand notices could survive after the administrative decision granting such exemption.

Analysis: The competent authority, in compliance with the earlier direction, determined that the goods imported into the unit located in the Falta Special Economic Zone for authorised operations were eligible for exemption from entry tax under Section 27(i) read with Section 30 of the West Bengal Special Economic Zone Act, 2003. Once that decision was taken, there remained no live controversy requiring further adjudication on the levy. The Court also noted that any future inquiry by the department regarding goods not entering the SEZ would be a matter for the department to examine in appropriate proceedings.

Conclusion: The exemption claim was accepted and the assessment order ceased to survive, along with the demand notices.

Issues: Whether coercive recovery could be continued pending consideration of the petitioner's application before the appellate authority on compliance with the pre-deposit requirement under the Maharashtra Value Added Tax Act.

Analysis: The petitioner had already filed an appeal and a stay application before the appellate authority and had also moved a separate application asserting compliance with the pre-deposit requirement. That application had not yet been decided. In these circumstances, the Court considered it appropriate that the appellate authority first decide the application expeditiously and in accordance with law, and granted interim protection against coercive recovery till such decision.

Conclusion: Coercive recovery was restrained until the appellate authority decided the pending application, and the petitioner obtained interim relief.

Issues: Whether anticipatory bail should be granted where the alleged GST offence was found to relate to a liability below the statutory monetary threshold and was therefore treated as a non-cognizable and bailable offence.

Analysis: The application was moved under Section 482 of the Bharatiya Nagarik Suraksha Sanhita, 2023 on the basis of an apprehension of arrest in GST proceedings. On the material placed before the Court, the total GST liability was found to be Rs. 1,16,22,215/-, with the recoverable amount from the applicant's firm being Rs. 74,89,846/-. The Court treated the case as relating to an amount below Rs. 5 crore and applied the statutory position under Section 132 of the GST law that offences involving an amount below that threshold are non-cognizable and bailable. In that view, the apprehension of arrest did not justify invocation of anticipatory bail.

Conclusion: Anticipatory bail was declined and the application was rejected.

Ratio Decidendi: Where the alleged GST offence, on the Court's assessment, falls below the monetary threshold that makes it non-cognizable and bailable, anticipatory bail on the basis of apprehended arrest is not maintainable on merits.

Issues: Whether the impugned adjudication and appellate orders were liable to be quashed and the matter remanded in view of the admitted factual position regarding reversal and reclassification of the input tax credit before the show cause notice.

Analysis: The petitioner invoked writ jurisdiction under Article 226 to challenge the orders passed under the Central Goods and Services Tax regime. The respondent's counsel confirmed the correctness of the petitioner's factual assertion that the relevant credit had been reversed and claimed under the proper head before issuance of the show cause notice. In light of that confirmation, the basis on which the authorities had proceeded required reconsideration. The Court therefore set aside the impugned orders and directed a fresh adjudication, expressly clarifying that no finding was returned on the merits of the claim.

Conclusion: The impugned orders were quashed and the matter was remanded to the adjudicating authority for fresh consideration.

Issues: Whether the writ petition challenging the assessment order under the GST laws was maintainable in view of the statutory remedy of appeal.

Analysis: The petitioner challenged the assessment primarily on merits and on grounds of violation of natural justice, but an appellate remedy was available under the GST enactments and the petition had been filed before expiry of the appeal period. The Court declined to examine the factual and evidentiary objections to the assessment in writ jurisdiction, holding that such matters are more appropriately considered by the appellate authority. It also noted that the Assessing Officer's jurisdiction to proceed under the GST laws was not in question, and therefore no reason existed to bypass the statutory appeal mechanism.

Conclusion: The writ petition was not entertained and the petitioner was relegated to the statutory appellate remedy.

Final Conclusion: The challenge to the assessment order was rejected at the threshold on the ground of availability of an efficacious statutory appeal, leaving the merits open for consideration before the appellate authority.

Ratio Decidendi: Where an efficacious statutory appeal is available, the writ court will ordinarily decline to examine disputed factual and evidentiary issues arising from a tax assessment.

Issues: Whether microfinance activities, carried on with commercial elements and interest-bearing lending, could be treated as charitable activity so as to sustain approval or registration under the Income-tax Act, 1961.

Analysis: The petitioner's objects included providing microfinance and credit to poorer sections for socioeconomic development. Under Section 2(15) of the Income-tax Act, 1961, charitable purpose includes relief of the poor and advancement of any other object of general public utility, but the proviso excludes activities in the nature of trade, commerce or business, or services rendered for consideration, where the activity crosses the statutory threshold. The recorded findings showed that the petitioner did not disclose the lending model, rate of interest, or other operational particulars, and the proposed microfinance was not shown to be free from commercial considerations. On that basis, the activity was treated as business-like rather than charitable.

Conclusion: Microfinance activities, on the facts found, were not charitable in nature and the rejection of exemption or registration was justified.

Issues: (i) Whether the respondent, a chartered accountant appointed as concurrent auditor, was guilty of professional misconduct for failing to exercise due diligence in reporting serious banking irregularities; and (ii) whether the proposed penalty of removal from membership for six months was warranted or ought to be modified.

Issue (i): Whether the respondent, a chartered accountant appointed as concurrent auditor, was guilty of professional misconduct for failing to exercise due diligence in reporting serious banking irregularities.

Analysis: The respondent was under a duty to promptly detect and report irregularities, excesses, and sanctioned-limit breaches through flash reports and related audit reporting. The evidence showed that the irregularities were not reported immediately and were instead reported only after the bank's internal inspection, with a delay of nearly two months. The explanation based on family circumstances was not accepted, and the Court held that the absence of mala fides did not prevent the conduct from amounting to professional misconduct where due diligence was not exercised. The Court also held that interference with the disciplinary findings was unwarranted because the inquiry was fairly conducted and no violation of natural justice was shown.

Conclusion: The respondent was held guilty of professional misconduct for failure to exercise due diligence.

Issue (ii): Whether the proposed penalty of removal from membership for six months was warranted or ought to be modified.

Analysis: Although the misconduct finding was upheld, the Court took into account the long lapse of time since the disciplinary proceedings and considered that imposing removal from membership at such a belated stage would be excessive. The Court held that a lesser sanction would adequately serve the ends of justice while still reflecting the proved misconduct.

Conclusion: The proposed penalty of removal from membership for six months was modified to a reprimand.

Final Conclusion: The disciplinary finding was sustained, but the sanction was reduced to a lesser punishment in view of the prolonged delay in the proceedings.

Ratio Decidendi: Failure by a chartered accountant to promptly report material audit irregularities, in breach of the duty of due diligence, constitutes professional misconduct, but the appropriate sanction must remain proportionate to the misconduct and the circumstances of delay.

Issues: Whether cancellation of GST registration for non-filing of returns could be reconsidered and restoration directed when the registered person was willing to furnish all pending returns and pay the tax dues, interest and late fee in terms of the proviso to Rule 22(4) of the CGST Rules, 2017.

Analysis: Section 29(2)(c) empowers cancellation of registration for continuous non-filing of returns, while Rule 22 prescribes the notice-and-reply procedure. The proviso to Rule 22(4) contemplates that where the person, instead of merely replying to the show-cause notice, furnishes all pending returns and makes full payment of tax dues with applicable interest and late fee, the proper officer shall drop the cancellation proceedings and issue the prescribed order. Since cancellation of registration carries serious civil consequences, the Court held that the petitioners' request for restoration deserved consideration by the competent authority upon compliance with the stated requirements.

Conclusion: The petitioners were entitled to have their case considered for restoration of GST registration on filing the requisite application and compliance with the proviso to Rule 22(4), and the competent authority was directed to take necessary steps in accordance with law.

Issues: Whether the addition made by estimating the profit of the contract business at 8% could be sustained, or whether the net profit rate of 6.10% declared by the assessee was to be accepted.

Analysis: The appeal was decided by considering the assessee's past history, the earlier decision in the assessee's own case for a prior assessment year, and the nature of the contract business. The declared net profit rate was found to be reasonable, and the lower authorities had not brought on record any material or evidence to justify variation from the declared results. In these circumstances, the estimation of profit at 8% was not sustained.

Conclusion: The declared net profit rate of 6.10% was accepted and the addition made by estimating profit at 8% was deleted in favour of the assessee.

Final Conclusion: The assessee succeeded on the substantive dispute concerning estimation of business income, and the appeal was allowed.

Ratio Decidendi: In the absence of material evidence to the contrary, a declared profit rate supported by the assessee's past history and the principle of consistency should be accepted, and arbitrary estimation of higher profit is not justified.

Issues: (i) whether depreciation on the solar power plants was allowable on the footing that the assets had been put to use during the relevant year; (ii) whether addition made under section 56(2)(viib) on account of share premium could be sustained by rejecting the assessee's valuation under the Discounted Cash Flow method and substituting the Net Asset Value method; (iii) whether brokerage paid on commodity derivatives attracted disallowance for non-deduction of tax at source and whether the section 14A disallowance was to be restricted.

Issue (i): whether depreciation on the solar power plants was allowable on the footing that the assets had been put to use during the relevant year.

Analysis: The record contained purchase and installation invoices, generation and sale invoices, bank realisations, and a Chartered Engineer's certificate showing installation and generation of power during the year. The objection that production on the first day was low was treated as a matter of suspicion and not as a basis for rejecting the evidence. The assessee established actual use of the plants and not merely readiness for use.

Conclusion: The depreciation disallowance was not justified and was deleted in favour of the assessee.

Issue (ii): whether addition made under section 56(2)(viib) on account of share premium could be sustained by rejecting the assessee's valuation under the Discounted Cash Flow method and substituting the Net Asset Value method.

Analysis: The assessee had adopted a recognised valuation method and supported it with independent valuation reports. The Revenue did not demonstrate a demonstrably wrong approach, a defect going to the root of the valuation process, or any material justifying rejection of the valuation merely because the projections were later said to be unrealistic. The statutory scheme permitted the assessee to opt for the prescribed method, and the Assessing Officer could not substitute another method on mere apprehension.

Conclusion: The addition under section 56(2)(viib) was deleted and the assessee's valuation was accepted.

Issue (iii): whether brokerage paid on commodity derivatives attracted disallowance for non-deduction of tax at source and whether the section 14A disallowance was to be restricted.

Analysis: Brokerage paid in connection with trading in securities, including commodity derivatives, fell outside the mischief of section 194H as applied by the Tribunal. On the section 14A issue, the disallowance was confined to the amount of exempt income in line with the binding jurisdictional precedent relied on by the Tribunal.

Conclusion: The disallowance under section 40(a)(ia) was deleted and the section 14A disallowance was sustained only to the limited extent already restricted by the lower authority.

Issue (iv): whether the common approval under section 153D was valid and whether the consequent assessment for the relevant year could stand.

Analysis: The approval was granted in a consolidated manner for multiple assessees and assessment years. Prior approval under section 153D must reflect independent application of mind for each assessee and each assessment year. A mechanical, omnibus approval does not satisfy the statutory requirement and vitiates the assessment framed in consequence.

Conclusion: The approval under section 153D and the consequent assessment for the relevant year were quashed in favour of the assessee.

Final Conclusion: The Revenue's appeals failed, and the assessee obtained partial relief, including quashment of the assessment for the relevant year and deletion of the principal additions challenged on merits.

Ratio Decidendi: A recognised share valuation method adopted by the assessee cannot be displaced by the Assessing Officer on mere suspicion without demonstrable defect in the valuation process, and a consolidated approval under section 153D lacking case-specific application of mind is invalid.

Issues: (i) Whether HSCC India Limited was a suitable comparable for benchmarking the assessee's international transactions. (ii) Whether Mitcon Consultancy and Engineering Services Limited was a suitable comparable for benchmarking the assessee's international transactions.

Issue (i): Whether HSCC India Limited was a suitable comparable for benchmarking the assessee's international transactions.

Analysis: HSCC India Limited was found to be a Government of India enterprise engaged in consultancy and project-related services for government bodies, with access to government-linked projects and support that was not available to the assessee. The nature of its work, market access, and risk profile were materially different from the assessee's technical support and payroll administrative services to associated enterprises. The inclusion of HSCC as a comparable was therefore not justified on functional similarity grounds.

Conclusion: HSCC India Limited was not a suitable comparable and had to be excluded, in favour of the assessee.

Issue (ii): Whether Mitcon Consultancy and Engineering Services Limited was a suitable comparable for benchmarking the assessee's international transactions.

Analysis: Mitcon Consultancy and Engineering Services Limited was found to be engaged in diversified activities across multiple sectors, with revenues from several streams and no reliable segmental data in the signed financial statements to isolate the relevant consultancy segment. In the absence of dependable segment-wise information, functional comparability could not be established with the assessee's limited service profile. The company was therefore unsuitable for benchmarking.

Conclusion: Mitcon Consultancy and Engineering Services Limited was not a suitable comparable and had to be excluded, in favour of the assessee.

Final Conclusion: The transfer pricing comparables adopted below were rejected, and the assessee succeeded in its challenge to the impugned inclusion of the two companies.

Ratio Decidendi: A company is not a valid transfer pricing comparable where it is functionally dissimilar, enjoys government-linked advantages affecting its risk profile, or lacks reliable segmental data necessary for comparability.