Issues: (i) Whether the addition could be made on a ground outside the show-cause notice; (ii) whether the loan repayments justified an addition as unexplained expenditure; (iii) whether the first appellate authority relied on additional evidence without giving the assessing officer an opportunity under Rule 46A.

Issue (i): Whether the addition could be made on a ground outside the show-cause notice.

Analysis: The notice proposed an addition based on discrepancies in the books and gross receipts. After the assessee responded, no addition was made on that proposal; the assessment instead added loan repayments as unexplained expenditure.

Conclusion: The addition on a ground outside the notice was unwarranted. The issue was decided in favour of the assessee.

Issue (ii): Whether the loan repayments justified an addition as unexplained expenditure.

Analysis: Section 69C concerns unexplained expenditure. The repayments were supported by confirmations, returns, ledger accounts and bank statements showing payments through banking channels. The source of the loans and repayments was not in dispute, and the evidence had been available to the assessing officer.

Conclusion: The addition was not sustainable. The issue was decided in favour of the assessee.

Issue (iii): Whether the first appellate authority relied on additional evidence without giving the assessing officer an opportunity under Rule 46A.

Analysis: The first appellate authority recorded that the relevant documents had already been supplied during assessment proceedings but had been overlooked. Revenue offered no rebuttal to that finding.

Conclusion: No violation of Rule 46A was established. The issue was decided in favour of the assessee.

Final Conclusion: The deletion of the unexplained-expenditure addition stands, and the objection to consideration of the repayment evidence fails.

Ratio Decidendi: An addition on a ground outside the subject matter of the show-cause notice is unwarranted.

Issues: Whether further disallowance of expenditure relating to exempt income under section 14A and Rule 8D was justified.

Analysis: The assessee reported exempt dividends from mutual funds purchased and sold during the year, but no dividend from its equity investments. The order also stated that no exempt income was earned during the year. The assessee had voluntarily disallowed expenditure of Rs. 5,16,500. Its interest-free funds exceeded its investments, giving rise to a presumption that the investments were made from those funds. For the years in question, disallowance was restricted to investments yielding exempt income. The 2022 amendment to section 14A was treated as prospective.

Conclusion: Further disallowance was not justified; the disallowance was restricted to the amount voluntarily offered by the assessee.

Ratio Decidendi: For the years preceding the 2022 amendment, disallowance relating to investments is restricted to those yielding exempt income; investments are presumed to be made from interest-free funds where those funds exceed the investments and there is no contrary evidence.

Issues: Whether bank deposits of Rs. 3,69,92,943 could be assessed as unexplained money under section 69A of the Income-tax Act, 1961.

Analysis: The bank statements showed deposits at locations across the country and substantial withdrawals. The transaction pattern did not warrant rejection of the stated cash-handling activity. The preceding year's scrutiny assessment recorded commission income, although res judicata does not apply to income-tax proceedings. No evidence showed that the assessee had business activity capable of generating the deposited sums.

Conclusion: The addition of Rs. 3,69,92,943 is deleted.

Issues: Whether the assessee had reasonable cause for failing to obtain a tax audit report within the prescribed time, so as to avoid penalty.

Analysis: Section 273B of the Income-tax Act, 1961 protects an assessee from penalty under section 271B where reasonable cause for the failure is proved. The assessee was a small co-operative society whose accounts had been audited under the applicable State co-operative societies legislation. Its explanation was that it believed in good faith that this audit satisfied the tax audit requirement under section 44AB.

Conclusion: The assessee established reasonable cause, and the penalty was deleted.

Ratio Decidendi: A bona fide belief that an audit under co-operative societies legislation satisfies the tax audit requirement can constitute reasonable cause for failure to obtain the prescribed tax audit report in time, precluding penalty.

Issues: (i) Whether the excise duty exemption is a capital receipt excluded from normal taxable income and minimum alternate tax book profits; (ii) whether the claim for share issue expenses is allowable; (iii) whether a unanimously pronounced decision could be changed by a later dissent without notice to the parties.

Issue (i): Whether the excise duty exemption is a capital receipt excluded from normal taxable income and minimum alternate tax book profits.

Analysis: The statutory definition of income enumerates forms of government assistance but does not expressly name an exemption. The earlier decision distinguished an excise duty exemption from a subsidy, and the third member adopted the interpretation favourable to the assessee in view of divergent High Court decisions.

Conclusion: The excise duty exemption is a capital receipt excluded from normal taxable income and minimum alternate tax book profits, in favour of the assessee.

Issue (ii): Whether the claim for share issue expenses is allowable.

Analysis: The adopted earlier decision allocated the expenses according to the use of the issue proceeds: the portion attributable to working capital was treated as revenue expenditure, while the portion attributable to capital purposes qualified for amortisation. The current-year claim included the relevant amortisation instalment.

Conclusion: The claim for share issue expenses was upheld in favour of the assessee.

Issue (iii): Whether a unanimously pronounced decision could be changed by a later dissent without notice to the parties.

Analysis: The signed open-court record recorded a unanimous pronouncement, and no objection or denial of hearing was established. The Tribunal's rules permit pronouncement immediately after hearing. The applicable precedents treat delivery as operative and require notice and, where necessary, a rehearing for a proposed change.

Conclusion: The pronounced decision could not be changed by the later dissent without notice to the parties.

Dissenting Opinion: Accountant Member Avdhesh Kumar Mishra considered the subsidy taxable under the amended definition of income and would have partly allowed the Revenue's appeal. He also questioned the manner of pronouncement.

Final Conclusion: The capital-receipt treatment and share issue expense relief remain effective; the subsequent unnotified dissent could not alter the pronounced decision.

Ratio Decidendi: An excise duty exemption treated as a capital receipt does not fall within the statutory definition of income governing government assistance and is excluded from normal taxable income and minimum alternate tax book profits.

Issues: Whether the seized gold was liable to confiscation and the appellants to penalties for alleged smuggling.

Analysis: Reasonable belief sufficient to shift the burden under section 123 of the Customs Act, 1962 requires material beyond suspicion or foreign markings. The appellants produced domestic procurement, delivery and payment records that had not been shown to be unreliable. Gold is a fungible commodity traded by weight and purity, and cut pieces cannot necessarily be correlated with original bar numbers. The valuation report recorded purity and markings without disclosed methodology or established competence to determine origin. No evidence established the requisite nexus with illicit importation or unauthorised removal from a customs area or warehouse. The penalties depended on liability to confiscation.

Conclusion: The gold was not liable to confiscation, and the corresponding penalties could not stand.

Ratio Decidendi: Reasonable belief of smuggling requires more than foreign markings; once credible evidence of domestic procurement discharges the statutory burden, confiscation and consequential penalties require evidence establishing the relevant illicit importation or unauthorised removal.

Issues: (i) Whether the Indian EPC contractor or the foreign project employer was the recipient of the subcontracted services? (ii) Whether the place of provision of the subcontracted services was India or Ethiopia? (iii) Whether the subcontracted services qualified as an export of service? (iv) Whether the extended period of limitation was invocable for the service tax demand?

Issue (i): Whether the Indian EPC contractor or the foreign project employer was the recipient of the subcontracted services?

Analysis: Identification of the service recipient turned on the commercial relationship, contractual obligations and flow of consideration. The subcontract was with the Indian EPC contractor, invoices were raised on it and payment was made through its authorised arrangement. The foreign employer's approval of the subcontractor did not establish privity or a direct payment obligation. The contractor's business establishment was located in New Delhi under Rule 2 of the Place of Provision of Services Rules, 2012.

Conclusion: The Indian EPC contractor was the service recipient. The issue was decided against the assessee.

Issue (ii): Whether the place of provision of the subcontracted services was India or Ethiopia?

Analysis: Rule 4 did not apply because the contract was for a composite industrial installation and the goods were not made available by the contractual recipient. Rule 5 did not apply because immovable property was not the direct object of the mechanical works contract. Rule 8 applied where both provider and recipient were located in the taxable territory. Even if Rules 4 or 5 also merited consideration, Rule 14 gave precedence to the later Rule 8.

Conclusion: The place of provision was India. The issue was decided against the assessee.

Issue (iii): Whether the subcontracted services qualified as an export of service?

Analysis: Rule 6A of the Service Tax Rules, 1994 requires cumulative satisfaction of the export conditions, including a recipient located outside India and a place of provision outside India. Physical performance abroad does not by itself satisfy those requirements.

Conclusion: The services did not qualify as an export of service. The issue was decided against the assessee.

Issue (iv): Whether the extended period of limitation was invocable for the service tax demand?

Analysis: The service receipts were omitted from the self-assessed returns and emerged through investigation. The assessee also availed CENVAT credit on tax charged by its own subcontractor for the same activity while treating its onward supply as outside the taxable territory. These circumstances were treated as suppression of facts with intent to evade tax rather than a disclosed interpretative error.

Conclusion: The extended period was rightly invoked. The issue was decided against the assessee.

Final Conclusion: The domestic subcontract attracted service tax notwithstanding overseas performance, and the demand was not time-barred.

Ratio Decidendi: Where provider and recipient are both located in the taxable territory, Rule 8 determines the place of provision; if Rules 4 or 5 also merit equal consideration, Rule 14 gives precedence to Rule 8.

Issues: Constitutional challenge to the entry tax law and objections to the assessment; neither was adjudicated on merits.

Outcome: The constitutional challenge was not pressed. The petitioners were permitted to pursue a statutory appeal, with directions concerning consideration of delay. Interim orders were vacated.

Issues: (i) Whether penalty was justified for availing ineligible input tax credit; (ii) Whether interest was leviable on input tax credit claimed to have been reversed without utilisation.

Issue (i): Whether penalty was justified for availing ineligible input tax credit.

Analysis: The credit was admittedly ineligible. The penalty appeared to have been imposed under Section 73 of the applicable GST enactments; a penalty under Section 122 would not materially differ in the amount imposed.

Conclusion: The penalty was upheld, against the assessee.

Issue (ii): Whether interest was leviable on input tax credit claimed to have been reversed without utilisation.

Analysis: Interest depends on utilisation of the credit, rather than mere availment. The credit was claimed to have remained in the electronic credit ledger and to have been reversed without utilisation.

Conclusion: Interest is not leviable if the credit was not utilised. The interest levy was set aside for conditional reconsideration, in favour of the assessee.

Final Conclusion: The penalty remains payable, while the interest liability requires fresh consideration.

Ratio Decidendi: Availing ineligible input tax credit justifies penalty, whereas interest on that credit requires its utilisation.

Issues: Whether proceedings founded on discrepancies noticed upon scrutiny of returns could be initiated without prior notice in Form GST ASMT-10, despite the taxpayer's subsequent participation.

Analysis: Section 61 of the Assam Goods and Services Tax Act and Rule 99 of the Assam Goods and Services Tax Rules require discrepancies noticed during scrutiny to be communicated to the registered person for an explanation before further action. The proposed demand arose from examination and comparison of returns and related records; no independent source was demonstrated. A reply in subsequent proceedings serves a different purpose from the statutory safeguard at the scrutiny stage.

Conclusion: No. The notice and consequential adjudication order are set aside in favour of the petitioner.

Ratio Decidendi: Where proceedings for tax determination are founded on discrepancies noticed during scrutiny of returns, the prescribed scrutiny notice must precede those proceedings; subsequent participation does not waive that statutory safeguard.

Issues: Whether the order for the financial year 2018-19 was passed within the prescribed limitation period.

Analysis: Section 73 of the Assam Goods and Services Tax Act, 2017 prescribes a three-year period from the due date for the annual return. Under Section 44 and Rule 80, the return for 2018-19 was due by 31 December 2019. A notification under Section 168A extended the deadline for the order to 31 March 2024; the order was passed on 24 April 2024.

Conclusion: The order was time-barred and was set aside and quashed.

Ratio Decidendi: An order passed after the applicable limitation period, including its statutory extension, cannot be sustained.

Issues: Whether the adjudication order and its summary should be set aside to afford an opportunity to respond to the show cause notice.

Analysis: The adjudication order under Section 74 of the Central and Karnataka Goods and Services Tax Acts followed non-response to the notice. Records showed that the petitioner had been diagnosed with a terminal illness, undergone surgery and received prolonged treatment. These circumstances demonstrated bona fides for the non-participation.

Conclusion: The adjudication order and its summary were quashed, and the petitioner was permitted to respond to the notice within the stipulated or extended time.

Issues: (i) Whether the original order could be rectified to exclude the GST component or in light of a subsequent order in another case. (ii) Whether amounts attributable to homebuyers could be deposited in the Consumer Welfare Funds instead of refunded directly.

Issue (i): Whether the original order could be rectified to exclude the GST component or in light of a subsequent order in another case.

Analysis: Rule 31 confines rectification to clerical, arithmetical or factual mistakes apparent from the record and does not confer a general power of review. The GST component had been expressly addressed in the original order, and payment of GST was distinct from the obligation to pass on the input tax credit benefit. The subsequent order in separate proceedings was not material available when the original order was passed.

Conclusion: The rectification application was not maintainable; neither the GST component nor the original determination was altered. This issue was against the assessee.

Issue (ii): Whether amounts attributable to homebuyers could be deposited in the Consumer Welfare Funds instead of refunded directly.

Analysis: Rule 133 of the Central Goods and Services Tax Rules, 2017, read with Section 57 of the Central Goods and Services Tax Act, 2017, permits deposits where an eligible person does not claim the amount or is not identifiable. Missing bank details alone do not establish either condition. The principle that the law does not compel the impossible requires evidence of genuine inability despite reasonable efforts and cannot override statutory requirements. Direct refunds remain required where payment can be made, with documented homebuyer-wise efforts and compliance with the allocation and interest requirements for eligible deposits.

Conclusion: Deposits in the Consumer Welfare Funds were permitted to the limited extent that the statutory conditions were satisfied. The original complainant must be refunded directly. This issue was partly in favour of the assessee.

Final Conclusion: The original profiteered amount, GST component and interest remain payable, with limited flexibility in the manner of disbursement.

Ratio Decidendi: Rectification under Rule 31 is confined to apparent clerical, arithmetical or factual mistakes and cannot reopen an adjudicated issue merely because a subsequent decision in separate proceedings is relied upon.

Issues: (i) Whether the claim was for unutilised input tax credit or excess tax paid; (ii) whether an SEZ unit could claim a refund of unutilised input tax credit distributed by an input service distributor.

Issue (i): Whether the claim was for unutilised input tax credit or excess tax paid.

Analysis: The claim documents described the balance as unutilised credit in the electronic credit ledger. The alternative characterisation as excess tax paid was unsupported by documentary evidence or law.

Conclusion: The claim was for unutilised input tax credit, not excess tax paid, in favour of the Revenue on characterisation.

Issue (ii): Whether an SEZ unit could claim a refund of unutilised input tax credit distributed by an input service distributor.

Analysis: Section 54 of the Central Goods and Services Tax Act, 2017 and Rule 89 of the associated Rules govern refund claims. Binding jurisdictional precedent addressed credit distributed by an input service distributor where no supplier could claim its refund. No stay of the relevant precedent was shown. The circulars concerning manual refund processing did not alter substantive refund rights.

Conclusion: The SEZ unit could claim the refund of unutilised input tax credit distributed by the input service distributor, in favour of the assessee.

Final Conclusion: The SEZ unit's refund entitlement remains governed by the statutory scheme as interpreted by binding precedent, without curtailment by procedural circulars.

Ratio Decidendi: An SEZ unit may claim a refund of unutilised input tax credit distributed by an input service distributor where no supplier can claim refund of that distributed credit.

Issues: Whether the exclusion of three companies as transfer-pricing comparables raised a substantial question of law.

Analysis: The undisputed functional profiles showed activities beyond software distribution, including software development, research and development, ownership of intellectual property, and other services. The Tribunal had not applied a separate functionality filter. No question or reason alleging perversity in its factual findings was identified.

Conclusion: The exclusion of the comparables stands; no substantial question of law arose. The issue was decided in favour of the assessee.

Ratio Decidendi: A factual finding of functional dissimilarity based on undisputed functional profiles does not raise a substantial question of law where no perversity is alleged or shown.

Issues: Whether a penalty for undisclosed income was leviable on an excess futures and options loss arising from a computational error in the return.

Analysis: Section 271AAB defines undisclosed income by reference to specified assets, entries, documents or transactions found during a search, or a false expense entry that would not have been discovered without the search. The assessee voluntarily reported the excess loss during post-search assessment proceedings. The claim that no document found during the search recorded the excess loss was not negated. An inadvertent mistake was distinguished from a false expense entry, even where scrutiny followed the search.

Conclusion: The penalty was not leviable and was deleted.

Ratio Decidendi: An inadvertent computational error voluntarily corrected after a search does not constitute undisclosed income for a search-related penalty where it is not established through search-discovered material or a false expense entry within the statutory definition.

Issues: Interim custody of the seized vehicle and participation in the confiscation proceedings.

Outcome: The writ petition was disposed of with directions for the competent authority to decide the interim custody application and for the petitioner to participate in the confiscation proceedings. No final determination was made on release or confiscation of the vehicle.

Issues: Whether an appeal against a Tribunal order concerning a refund is maintainable before the High Court when it raises a question of taxability.

Analysis: Section 35G of the Central Excise Act, 1944 excludes appeals involving questions relating to the rate of duty or value of goods for assessment. Section 35L includes determination of taxability or excisability within questions relating to the rate of duty and provides for an appeal to the Supreme Court. Although the dispute concerned a refund, its rejection rested on the asserted taxability of the services, and that question was contested before the Tribunal and raised in the appeal.

Conclusion: The appeal is not maintainable before the High Court.

Ratio Decidendi: An appeal involving determination of taxability for assessment falls outside the High Court's jurisdiction under Section 35G, even where the underlying dispute concerns a refund.

Issues: Whether separate GST penalty proceedings may be initiated against a partner for input tax credit allegedly wrongly claimed by the partnership firm, when proceedings have also been initiated against the firm.

Analysis: The Court observed that separate proceedings against the partner did not appear necessary.

Outcome: Notice was issued on the petition and interim prayer. Further action under the show-cause notice was restrained until the next returnable date. The petition and interim prayer remain pending, with no final adjudication.

Issues: Whether a system-generated show cause notice supported cancellation of GST registration.

Analysis: The notice referred to the jurisdictional office and bore a digital signature of the GST network. The adopted precedent distinguished a notice identifying its issuing authority from a system-generated notice bearing neither the name nor office of that authority. The statutory power to issue a notice rests with an officer, not the system.

Conclusion: The cancellation and appellate orders were set aside. The authorities remain free to issue a fresh notice in accordance with law.

Ratio Decidendi: A system-generated notice for cancellation of GST registration that identifies neither the name nor office of the issuing authority is invalid because the power to issue it vests in an officer, not the system.