Issues: Whether the arrest and judicial custody of the petitioner for alleged GST evasion were illegal for non-compliance with the statutory conditions and safeguards governing arrest.

Analysis: The arrest-power must not be exercised routinely or mechanically; credible material, necessity for investigation, and risks of tampering with evidence or influencing witnesses are material considerations under the departmental circular and the statutory scheme. The grounds of arrest supplied to the petitioner recorded alleged facilitation of online-money-gaming transactions through fictitious entities, suppression of taxable value, routing and layering of funds, personal financial benefit, non-cooperation, and apprehended interference with the investigation. Those grounds also recorded reasons justifying custody and were found adequate. The governing principles applicable to offences under special enactments permit arrest for cognizable offences carrying a sentence below seven years where reasons and necessity for arrest are recorded.

Conclusion: The arrest was lawful and in conformity with the applicable statutory requirements and arrest guidelines; the petitioner's custody was not illegal.

Issues: Whether confiscated gold forming part of undeclared passenger baggage could be permitted to be re-exported by exercising the redemption power under Section 125 notwithstanding non-compliance with the declaration and detention requirements under Sections 77 and 80 of the Customs Act, 1962.

Analysis: Section 77 mandates a truthful declaration of baggage. Section 80 is a special provision governing detention and subsequent return or re-export of dutiable or prohibited passenger baggage, and makes that benefit conditional on a true declaration under Section 77. Section 125 confers a general and discretionary power to grant redemption of prohibited confiscated goods on payment of fine; it does not independently confer a right to re-export or override the special baggage regime. Reading Section 125 to permit re-export despite non-compliance with Section 80 would render the declaration condition under Section 77 and the safeguards under Section 80 ineffective. The petitioner neither declared the gold nor sought its detention before being intercepted after crossing the Green Channel. The revisional correction of the erroneous re-export direction consequently fell within the power under Section 129DD.

Conclusion: Re-export of confiscated undeclared passenger baggage cannot be granted under Section 125 where the conditions for re-export under Sections 77 and 80 are not satisfied; the finding is against the assessee.

Issues: (i) Whether the importer's letter relinquishing the SAFTA preferential-duty claim precluded a challenge to reassessment; (ii) Whether the valid SAFTA Certificate of Origin entitled the imported goods to concessional duty; (iii) Whether confiscation, redemption fine and penalty were sustainable.

Issue (i): Whether the importer's letter relinquishing the SAFTA preferential-duty claim precluded a challenge to reassessment.

Analysis: The relinquishment letter followed prolonged customs detention, mounting demurrage and the urgent need to clear goods required for manufacture. The contemporaneous replies and prompt appellate challenge established that the importer had consistently maintained its eligibility and had not voluntarily abandoned the preferential claim. A letter obtained under those circumstances did not amount to relinquishment contemplated by Section 28DA(4).

Conclusion: The relinquishment letter did not bar the importer from appealing the reassessment or pursuing the SAFTA benefit, in favour of the assessee.

Issue (ii): Whether the valid SAFTA Certificate of Origin entitled the imported goods to concessional duty.

Analysis: The goods were accompanied by a Certificate of Origin issued by Bangladesh's designated authority, certifying them as wholly produced or obtained there. Its authenticity was not disputed, it complied with the prescribed format and was produced within validity. The prescribed SAFTA verification procedure, including a retrospective check by the exporting State where doubt existed, was not followed. The Certificate therefore supported entitlement to preferential treatment.

Conclusion: The importer was entitled to the SAFTA concessional rate under Notification No. 99/2011; the differential duty and interest arising from denial of that benefit were unsustainable, in favour of the assessee.

Issue (iii): Whether confiscation, redemption fine and penalty were sustainable.

Analysis: Physical examination revealed no mismatch in quality, classification or valuation, and the goods were not seized. Since the preferential claim was valid and no misdeclaration or fraud was established, the basis for confiscation and the consequential monetary sanctions failed.

Conclusion: Confiscation, redemption fine and penalty were unsustainable and were set aside, in favour of the assessee.

Final Conclusion: The importer retained its preferential-duty entitlement on the strength of the valid SAFTA Certificate of Origin, and the reassessment and associated sanctions founded on denial of that entitlement could not stand.

Ratio Decidendi: A preferential-duty claim supported by an undisputed and valid Certificate of Origin cannot be denied without following the applicable origin-verification procedure, and an involuntary relinquishment obtained under coercive clearance circumstances does not extinguish the importer's right to challenge the assessment.

Issues: Whether service tax could be demanded on receipts reflected in Form 26AS where the underlying road-construction works were exempt and the Department had not independently established taxability.

Analysis: Road-construction works executed for the Public Works Department for general public utility fell within the exemption under Serial No. 13(a) of Notification No. 25/2012-ST dated 20.06.2012. The demand was founded solely on third-party Form 26AS data, without enquiry into the nature of the receipts, available exemption, or the appellant's supporting records. The taxing authority bore the burden to establish taxable activity and could not presume that every receipt reported in Form 26AS represented taxable consideration.

Conclusion: The service-tax demand was unsustainable; the associated interest and penalties were consequently liable to be set aside.

Issues: (i) Whether sale of packaged information technology software was liable to service tax merely because the conditions of Notification No. 11/2016-ST dated 01.03.2016 were not established; (ii) Whether late fee for delayed filing of service tax returns for three quarters was sustainable.

Issue (i): Whether sale of packaged information technology software was liable to service tax merely because the conditions of Notification No. 11/2016-ST dated 01.03.2016 were not established.

Analysis: Software recorded on media and marketed possesses the attributes of goods under Article 366(12) of the Constitution of India. A transaction involving its sale is a deemed sale and falls outside the definition of service under Section 65B(44) of the Finance Act, 1994. The notification conditions concerning valuation, duties and invoice declaration could not convert an otherwise sale-of-goods transaction into a taxable service.

Conclusion: The packaged software sale was not liable to service tax; the duty demand, consequential interest and penalty relating to that transaction were set aside in favour of the assessee.

Issue (ii): Whether late fee for delayed filing of service tax returns for three quarters was sustainable.

Analysis: The returns for three quarters were not filed within the prescribed period after registration. The late fee was imposed under the applicable return-filing provisions.

Conclusion: The late fee of Rs.60,000 was sustained against the assessee.

Final Conclusion: The fiscal liability on the software-sale component does not survive, while the statutory consequence for delayed return filing remains enforceable.

Ratio Decidendi: A marketed copy of information technology software on media, constituting goods and a deemed sale, is excluded from taxable service; non-fulfilment of an exemption notification's conditions does not alter that character.

Issues: (i) Whether the extended period of limitation could be invoked for the service-tax demand founded on differences between Form 26AS and ST-3 Returns; (ii) Whether the show cause notice was vitiated by non-compliance with mandatory pre-show cause notice consultation; (iii) Whether penalty for delayed filing of ST-3 Returns was sustainable.

Issue (i): Whether the extended period of limitation could be invoked for the service-tax demand founded on differences between Form 26AS and ST-3 Returns.

Analysis: The demand was based exclusively on statutory records available to the Revenue, without an independent investigation into the nature or taxability of the differential receipts. A mere variance between Form 26AS and ST-3 Returns did not establish fraud, collusion, wilful misstatement, suppression of facts, or intent to evade tax. The delayed filing of returns did not, in the absence of cogent evidence of conscious concealment, satisfy the jurisdictional conditions for invoking the extended period. Once that period was unavailable, the notice issued on 30.12.2020 was beyond the normal thirty-month limitation period, which had expired by 05.03.2020 even for the last relevant return. Pandemic-related limitation extensions could not revive an already time-barred demand.

Conclusion: The extended period was not invocable; the entire service-tax demand, interest under Section 75, and penalty under Section 78 were barred by limitation and set aside, in favour of the assessee.

Issue (ii): Whether the show cause notice was vitiated by non-compliance with mandatory pre-show cause notice consultation.

Analysis: At the date of the notice, the applicable Board instructions required pre-show cause notice consultation for demands exceeding Rs.50 lakhs, except preventive or offence-related matters. The proceedings did not fall within an exception, and no consultation was afforded. The later circular dispensing with consultation in specified suppression-related cases could not retrospectively validate a notice issued contrary to the instructions then in force. Non-compliance with this mandatory procedural safeguard vitiated the initiation of proceedings.

Conclusion: The show cause notice and consequential proceedings were independently unsustainable for failure to undertake mandatory pre-show cause notice consultation, in favour of the assessee.

Issue (iii): Whether penalty for delayed filing of ST-3 Returns was sustainable.

Analysis: Timely filing of statutory returns is an independent procedural obligation. The delays in filing the ST-3 Returns were admitted and established on record. Although those delays did not prove suppression or intent to evade tax for limitation purposes, they constituted a default attracting the distinct penalty provision.

Conclusion: The penalty of Rs.10,000 under Section 77 for delayed filing of ST-3 Returns was upheld, against the assessee.

Final Conclusion: The fiscal demand and its tax-evasion consequences fail as time-barred and procedurally vitiated, while the separate penalty for delayed statutory compliance remains enforceable.

Ratio Decidendi: A demand based solely on statutory return data and Form 26AS cannot attract the extended limitation period without affirmative evidence of fraud, wilful suppression, or intent to evade tax; mandatory pre-show cause notice consultation applicable when the notice was issued cannot be retrospectively dispensed with.

Issues: Whether grouping, pinning and plugging imported photocopier modules in a warehouse according to customer specifications amounted to manufacture under Section 2(f) of the Central Excise Act, 1944 and Note 6 to Section XVI of the First Schedule to the Central Excise Tariff Act, 1985.

Analysis: Manufacture requires transformation resulting in a new and distinct marketable article having a distinctive name, character or use; labour, skill, value addition, or mere processing is insufficient where the commodity remains commercially the same. Note 6 applies only where an incomplete or unfinished article having the essential character of a finished article is converted into the complete article. The imported goods had been classified and assessed as complete machines and were cleared from the warehouse in sets and original packing. The evidence did not establish physical assembly at the warehouse: the alleged components were factory-fitted abroad, and the activity was confined to unpacking, grouping, pinning and plugging modules for customer-specific dispatch. Rule 2(a) is a classification rule and does not determine whether a subsequent process constitutes manufacture. The Revenue also failed to produce evidence displacing the Tribunal's factual findings.

Conclusion: The warehouse activity did not amount to manufacture under Section 2(f) of the Central Excise Act, 1944, and Note 6 to Section XVI of the First Schedule to the Central Excise Tariff Act, 1985 was inapplicable.

Issues: Whether the petitioner should be permitted to pursue the statutory appellate remedy against the assessment order.

Outcome: The writ petition was disposed of by granting liberty to file an appeal within two weeks along with the statutory pre-deposit and an application for condonation of delay.

Issues: (i) Whether an Ophthalmic Binocular Surgical Microscope is classifiable under tariff heading 9018 of the First Schedule to the Customs Tariff Act, 1975; (ii) Whether the product falls under Entry No. 483 of Schedule I of Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025.

Issue (i): Whether an Ophthalmic Binocular Surgical Microscope is classifiable under tariff heading 9018 of the First Schedule to the Customs Tariff Act, 1975.

Analysis: Heading 9011 covers compound optical microscopes generally used by amateurs, teachers, industry and research laboratories, while its HSN notes expressly exclude ophthalmic binocular-type microscopes. Heading 9012 concerns non-optical microscopes, including electron and proton microscopes and diffraction apparatus. The product is a specialised, electrically powered stereoscopic instrument designed exclusively for ophthalmic examination and delicate eye surgeries. Heading 9018 and its HSN notes cover instruments used in medical or surgical practice, including ophthalmic binocular-type microscopes mounted on adjustable supports for eye examination.

Conclusion: The Ophthalmic Binocular Surgical Microscope is classifiable under tariff heading 9018 of the First Schedule to the Customs Tariff Act, 1975, in favour of the assessee.

Issue (ii): Whether the product falls under Entry No. 483 of Schedule I of Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025.

Analysis: Entry No. 483 covers goods of heading 9018, namely instruments and appliances used in medical, surgical, dental or veterinary sciences. Since the product is classified under heading 9018, it is covered by that entry.

Conclusion: The product falls under Entry No. 483 of Schedule I of Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025 and is taxable at 5%, in favour of the assessee.

Final Conclusion: The specialised ophthalmic surgical microscope attracts the concessional rate applicable to medical and surgical instruments of heading 9018.

Ratio Decidendi: A microscope specially designed and used for ophthalmic examination and surgery is classifiable as an ophthalmic medical instrument under heading 9018, notwithstanding its magnification function.

Issues: (i) Whether the addition for unexplained investment in immovable property was sustainable; (ii) Whether the addition for unexplained cash deposits in bank accounts was justified.

Issue (i): Whether the addition for unexplained investment in immovable property was sustainable.

Analysis: Section 69 applies where an investment is not recorded and the assessee offers no satisfactory explanation of its nature and source. The assessee established the sources through confirmations, income-tax returns, financial statements, ledger accounts, bank statements and a fund-flow statement. The principal parties responded to notices under Section 133(6) of the Income-tax Act, 1961, and the receipts were directly correlated with payments to the property seller through banking channels. After the assessee discharged the initial burden, the Revenue produced no independent material to discredit the evidence, establish accommodation entries, or show that the funds belonged to the assessee.

Conclusion: The investment source was satisfactorily explained; the addition under Section 69 of the Income-tax Act, 1961 was deleted in favour of the assessee.

Issue (ii): Whether the addition for unexplained cash deposits in bank accounts was justified.

Analysis: The cash deposits were substantially supported by professional receipts, interest income and rental income that had been disclosed in the return. Cash already accounted for and offered to tax could not be treated again as unexplained money merely because it was later deposited in bank accounts, absent contrary evidence. However, the claimed opening cash balance lacked sufficient contemporaneous substantiation through a cash book or supporting records. A reasonable acceptance of 50% of that opening balance was warranted.

Conclusion: Cash deposits were explained except for Rs. 5,12,700, representing 50% of the unsubstantiated opening cash balance; the addition under Section 69A of the Income-tax Act, 1961 was restricted to that amount, partly in favour of the assessee.

Final Conclusion: The unexplained-investment addition was eliminated, while only the unsubstantiated portion of the opening cash balance remained taxable as unexplained money.

Ratio Decidendi: Once an assessee substantiates the source and movement of funds through credible documentary evidence and banking records, the Revenue must bring cogent contrary material before treating the investment as unexplained; disclosed income deposited in a bank cannot ordinarily be taxed again as unexplained money.

Issues: Whether penalty for non-compliance with notices could be sustained where the assessee established reasonable cause.

Analysis: The notices were issued during the COVID-19 pandemic, and the assessee, an educational trust, explained that the disruption prevented effective compliance. No independent material established deliberate or wilful disregard of the notices. The assessee's bona fide belief regarding exemption, its subsequent participation in assessment proceedings, and the remand of the quantum proceedings supported the explanation. Penalty proceedings are independent of assessment proceedings, and a technical or venial default does not warrant penalty where reasonable cause is established.

Conclusion: The assessee had reasonable cause under Section 273B of the Income-tax Act, 1961; consequently, penalty under Section 271(1)(b) of the Income-tax Act, 1961 was unsustainable and was directed to be deleted.

Issues: Whether cash payments towards credit-card dues incurred for trading purchases could be assessed in their entirety as unexplained money when the assessee had disclosed business income under the presumptive-taxation scheme.

Analysis: The credit cards were used for business purchases, and there was no material that they funded capital acquisitions or personal expenditure. Where cash payments are intrinsically connected with business transactions, taxing the entire payment would amount to taxing gross receipts rather than real income. The assessee had disclosed profit at 20.2% of gross receipts under the presumptive scheme, and the Revenue produced no material showing that this rate did not fairly represent the business profitability.

Conclusion: The addition could be made only to the extent of the 20.2% profit element in the cash payments; the balance of the addition was liable to be deleted, in favour of the assessee.

Issues: Whether a charitable trust's exemption is wholly denied under section 11 upon loans or advances to trustees attracting section 13, or is restricted only to the income or benefit attributable to the violation.

Analysis: Section 13(1)(c), read with sections 13(2)(a) and 13(3), addresses application of trust income or property for the benefit of specified persons. The settled interpretation, reinforced by CBDT Circular No. 387 dated 06.07.1984, confines taxation at the maximum marginal rate to the portion of income that has enured for the benefit of such persons; the remaining income remains eligible for section 11 exemption. The subsequent statutory amendment was treated as recognising this established position. The contrary reliance on CBDT Circular No. 5P dated 19.06.1968 and the decision concerning Bharat Diamond Bourse was not accepted as requiring forfeiture of exemption over the entire charitable income.

Conclusion: Even if the trustee advances constitute a section 13 violation, denial of section 11 exemption is limited to the value of the benefit, if any, conferred on the trustees; exemption for the balance income remains available subject to other statutory conditions.

Issues: (i) Whether the difference between opening Capital Work-in-Progress and the amount capitalised could be assessed as revenue expenditure or taxable income; (ii) Whether the reduction in Pre-operative Expenses could be treated as amortisation and added to taxable income.

Issue (i): Whether the difference between opening Capital Work-in-Progress and the amount capitalised could be assessed as revenue expenditure or taxable income.

Analysis: The reconciliation established that the full opening Capital Work-in-Progress balance was accounted for through capitalisation into fixed-asset accounts and reversal of duplicate entries. Transfers from Capital Work-in-Progress to fixed assets were balance sheet reclassifications, while correction of duplicate entries neither created taxable income nor constituted allowable expenditure. No part of the disputed amount was debited to the Profit and Loss Account or claimed as a deduction, and the Revenue produced no contrary accounting material.

Conclusion: The difference did not represent revenue expenditure or taxable income; deletion of the addition was sustained in favour of the assessee.

Issue (ii): Whether the reduction in Pre-operative Expenses could be treated as amortisation and added to taxable income.

Analysis: The Pre-operative Expenses ledger reflected project-related capital expenditure transferred to fixed-asset accounts on capitalisation, along with reversals of duplicate entries. These were confined to balance sheet accounts and did not constitute amortisation charged to the Profit and Loss Account. A reduction in a balance sheet asset cannot itself justify an income addition unless it is shown to be an inadmissible expenditure, a deduction claimed, a taxable remission or cessation, or income under a charging or deeming provision. No such basis was established.

Conclusion: The adjustment was not amortisation of expenditure and did not give rise to taxable income; deletion of the addition was sustained in favour of the assessee.

Final Conclusion: Both disputed accounting adjustments were held to be non-taxable balance sheet entries, comprising capitalisation transfers and rectification of duplicate entries.

Ratio Decidendi: A balance sheet adjustment or reclassification cannot be assessed as income or revenue expenditure merely from a numerical movement in accounts, absent evidence of a Profit and Loss Account charge, a claimed deduction, or another statutory basis for taxation.

Issues: Whether penalty for underreporting of income could be sustained where deduction was claimed under a bona fide belief and had initially been accepted in assessment and rectification proceedings; and whether a penalty notice and order not specifying the applicable limb of the penalty provision could sustain the levy.

Issue (i): Whether penalty for underreporting of income could be sustained where deduction was claimed under a bona fide belief and had initially been accepted in assessment and rectification proceedings.

Analysis: The deduction claim had been accepted in the scrutiny assessment and again in an earlier rectification order. This supported the genuineness of the assessee's explanation and bona fide belief in making the claim. The statutory exclusion for a genuine explanation applied, and the discretionary nature of penalty required consideration of the particular facts rather than automatic imposition.

Conclusion: The income was not underreported income in the circumstances, and penalty was not leviable. This issue was decided in favour of the assessee.

Issue (ii): Whether a penalty notice and order not specifying the applicable limb of the penalty provision could sustain the levy.

Analysis: The notice and penalty order referred only to the general penalty provision without identifying the relevant sub-clause or limb under which the penalty was imposed. Such non-specification rendered the penalty unsustainable.

Conclusion: The penalty could not be sustained for failure to specify the applicable limb. This issue was decided in favour of the assessee.

Final Conclusion: The penalty imposed for alleged underreporting was deleted.

Ratio Decidendi: A penalty for underreporting cannot be imposed automatically where the assessee's claim rests on a genuine bona fide explanation accepted by the assessing authority in prior proceedings; the penalty notice and order must also specify the applicable statutory limb.

Issues: Whether the period during which the Interim Board for Settlement lacked quorum and was incapable of exercising jurisdiction must be excluded in computing the time limit for disposal of settlement applications under Section 127C(8A), as extended under Section 127C(12), of the Customs Act, 1962.

Analysis: The statutory settlement framework and its timelines must be read as a whole, consistently with the object of expeditious and effective settlement. The prescribed period necessarily assumes the continued existence of a duly constituted Interim Board capable of performing its statutory adjudicatory functions. A distinction exists between delay despite a competent forum being available and inability to decide because the forum lacks the legally required quorum. Treating both situations alike would make the statutory remedy dependent on administrative contingencies beyond the applicant's control and produce an arbitrary, unworkable result. The applicant had completed all required steps and the proceedings had been heard and reserved before the Board became non-functional.

Conclusion: The period from 01.10.2025 until the date of judgment, during which the Interim Board lacked quorum, must be excluded from computation of the statutory period. The settlement proceedings did not abate, and the abatement communications were unsustainable. This conclusion is in favour of the assessee.

Issues: Whether the petitioner should be permitted to seek rectification of the impugned assessment order under the statutory rectification mechanism.

Outcome: The writ petition was disposed of with liberty to seek rectification before the Proper Officer.

Issues: Whether cancellation of GST registration for non-existence at the declared principal place of business should be restored where the address discrepancy resulted from a genuine mistake and no GST demand was outstanding.

Analysis: The registered-address discrepancy concerned different offices in the same building and was attributed to redevelopment of the earlier premises. No GST dues were outstanding. Restoration, conditional upon payment of applicable charges, late fees and penalty, would enable lawful business operations while protecting revenue interests.

Conclusion: The cancelled GST registration is to be restored upon payment of applicable charges, late fees and penalty.

Issues: Whether the petitioner could seek interest on the refund released pursuant to the appellate order.

Analysis: Section 56 provides interest where a refund ordered under Section 54(5) is not made within sixty days of receipt of the refund application. Its proviso also covers a refund arising from a final order of an adjudicating authority, appellate authority, appellate tribunal or court, where the consequential refund application is not processed within sixty days.

Conclusion: The petitioner may apply to the competent authority for interest under Section 56, which must decide the application in accordance with law.

Issues: Whether the writ petition challenging the GST demand and appellate order should be entertained despite the statutory appellate remedy before the GST Appellate Tribunal.

Analysis: The MGST/CGST statutory scheme provides a complete appellate mechanism. Exercise of jurisdiction under Article 226 is discretionary and ordinarily inappropriate where an efficacious statutory remedy exists, particularly where resolution requires detailed examination of evidence. No established denial of natural justice, jurisdictional defect, or material indicating bias arose merely because the officer authorising inspection later acted as appellate authority; authorisation of inspection was distinct from adjudicatory functioning. The controversies concerning whether seized records represented suppressed sales or estimates, the applicable tax rate, and reconciliation of bank deposits and returns with the seized material were disputed factual matters requiring evidentiary appreciation.

Conclusion: The writ petition was not maintainable in the absence of exceptional grounds warranting bypass of the statutory appellate remedy.