Issues: (i) Whether taxability and classification are determined by the physical form of goods at the time of sale or by their later end product or end use; (ii) Whether GRD Powder and GRD Mix are classifiable as non-alcoholic drinks and beverages or under the residuary entry.

Issue (i): Whether taxability and classification are determined by the physical form of goods at the time of sale or by their later end product or end use.

Analysis: Taxing statutes require strict construction, and the taxable event is the sale or supply of goods in the form in which they are supplied. A consumer's subsequent choice to mix a powder with milk or water, or to use it in a solid preparation, does not alter the taxable identity of the goods. Common-parlance, functional-character, or basic-nature tests cannot be used to import an end-use criterion where the statutory entry classifies goods by their physical form.

Conclusion: Tax liability and classification are determined by the form in which the goods are sold, not by their possible later end use.

Issue (ii): Whether GRD Powder and GRD Mix are classifiable as non-alcoholic drinks and beverages or under the residuary entry.

Analysis: Entry 20(ii) associates beverages with syrups, cordials, distilled juices, ark and essences, which constitute a class of liquid goods. Applying ejusdem generis, the expression "beverages" takes its meaning from those associated liquid preparations. The expression "including" does not extend the entry to goods of a materially different physical form, and the entry contains no deeming inclusion of powders, concentrates or biscuits used to prepare drinks.

Conclusion: GRD Powder and GRD Mix, being sold as powder and biscuit, are not non-alcoholic drinks or beverages and fall under the residuary entry.

Final Conclusion: Products sold in powder or biscuit form remain subject to the residuary classification notwithstanding their possible subsequent preparation as drinks.

Ratio Decidendi: For fiscal classification, the taxable identity of goods is determined by their physical form at the time of sale, and a later consumer end use cannot convert a powder or solid product into a beverage where the specific entry contextually covers liquid goods.

Issues: (i) Whether acquittal in a separate prosecution for criminal breach of trust and cheating extinguishes the independently acknowledged legally enforceable debt supporting the cheque-dishonour prosecution; (ii) Whether the drawer rebutted the statutory presumptions by a probable defence based on an uncorroborated claim that the cheque leaf was snatched; (iii) Whether the statutory demand-notice requirements were met despite the drawer's plea of non-service; and (iv) Whether the concurrent findings warranted interference in revisional jurisdiction.

Issue (i): Whether acquittal in a separate prosecution for criminal breach of trust and cheating extinguishes the independently acknowledged legally enforceable debt supporting the cheque-dishonour prosecution.

Analysis: A prosecution for cheque dishonour is founded upon the independently enforceable monetary liability underlying the cheque. The written declaration and notarized agreement acknowledging liability supplied an independent basis for the debt. An acquittal in the separate criminal prosecution because of deficiencies in proof of its distinct penal ingredients did not negate that written acknowledgment or the monetary liability.

Conclusion: The separate acquittal did not extinguish the legally enforceable debt underlying the cheque. The issue is decided against the petitioner.

Issue (ii): Whether the drawer rebutted the statutory presumptions by a probable defence based on an uncorroborated claim that the cheque leaf was snatched.

Analysis: Upon proof of drawing, presentation and dishonour of the cheque, the statutory presumption of consideration and liability arose. Although the reverse onus could be discharged on a preponderance of probabilities, a bare statement under Section 313, unsupported by defence evidence, a contemporaneous police report or intimation to the bank, did not amount to a probable defence.

Conclusion: The statutory presumptions remained unrebutted, as the snatched-cheque defence was not probable. The issue is decided against the petitioner.

Issue (iii): Whether the statutory demand-notice requirements were met despite the drawer's plea of non-service.

Analysis: Dispatch of the notice by registered post to the drawer's admitted correct address attracted the presumption of due service. No reliable material established incarceration at the relevant delivery time. Further, receipt of court summons with the complaint afforded an opportunity to pay the cheque amount within fifteen days; failure to do so precluded reliance on an alleged defect in notice service.

Conclusion: The statutory notice requirements were satisfied. The issue is decided against the petitioner.

Issue (iv): Whether the concurrent findings warranted interference in revisional jurisdiction.

Analysis: Revisional jurisdiction is not a second appellate review and is exercisable only where concurrent findings are perverse, unsupported by evidence, or affected by gross illegality or procedural miscarriage. The findings rested on the cheque, dishonour memo, notice materials, written acknowledgment and the unrebutted statutory presumptions, without any demonstrated patent perversity or legal infirmity.

Conclusion: No ground for revisional interference was established. The issue is decided against the petitioner.

Final Conclusion: The independently acknowledged liability, unrebutted statutory presumptions and valid notice process sustain the conviction and sentence for dishonour of cheque.

Issues: (i) Whether dates appearing in Forms GST DRC-01 and GST DRC-07 govern limitation for issuance of show cause notices and adjudication orders under Sections 74(2) and 74(10) of the Central Goods and Services Tax Act, 2017; (ii) Whether challenges to the invocation of Section 74 and the evidentiary basis of the demand should be entertained in writ jurisdiction despite an available statutory appeal.

Issue (i): Whether dates appearing in Forms GST DRC-01 and GST DRC-07 govern limitation for issuance of show cause notices and adjudication orders under Sections 74(2) and 74(10) of the Central Goods and Services Tax Act, 2017.

Analysis: Section 74(2) requires issuance of the substantive notice under Section 74(1), while Section 74(10) requires issuance of the substantive order under Section 74(9) within the stipulated periods. Rule 142(1)(a) treats Form GST DRC-01 as an electronic summary accompanying the notice, and Rule 142(5) treats Form GST DRC-07 as an electronic summary of the order. The substantive notices and orders bore dates preceding the asserted limitation cut-off dates; the later dates on the electronic summaries could not replace or alter the dates of the substantive instruments.

Conclusion: Forms GST DRC-01 and GST DRC-07 do not determine limitation under Sections 74(2) and 74(10), and their later dates do not render the substantive notices or orders time-barred.

Issue (ii): Whether challenges to the invocation of Section 74 and the evidentiary basis of the demand should be entertained in writ jurisdiction despite an available statutory appeal.

Analysis: The objections concerning fraud, wilful misstatement, suppression, knowledge or collusion, admissibility of input tax credit, computation, penalty, and sufficiency of departmental material require factual examination and appreciation of evidence. Section 107 provides an efficacious appellate remedy competent to address those questions of law and fact. No denial of hearing or patent jurisdictional defect was established, and the limitation objection did not justify bypassing that remedy.

Conclusion: The merits challenges are not to be entertained in writ jurisdiction and may be urged before the statutory Appellate Authority under Section 107.

Final Conclusion: Timely substantive notices and adjudication orders are not invalidated by subsequent electronic summaries, and factual challenges to the demand must be pursued through the statutory appellate mechanism.

Ratio Decidendi: For limitation under Section 74 of the Central Goods and Services Tax Act, 2017, the relevant dates are those of the substantive show cause notice and adjudication order; Forms GST DRC-01 and GST DRC-07 are consequential electronic summaries and do not substitute those instruments.

Issues: (i) Whether the computer printouts and private or third-party records were admissible and sufficiently linked to the assessee to establish clandestine manufacture and under-invoicing; (ii) Whether abnormal electricity consumption and alleged theft of electricity established unaccounted manufacture and clearance; (iii) Whether the alleged clandestine production was sustainable in view of the installed furnace capacity; (iv) Whether statements relied upon for the demand could be admitted without compliance with the prescribed procedure.

Issue (i): Whether the computer printouts and private or third-party records were admissible and sufficiently linked to the assessee to establish clandestine manufacture and under-invoicing.

Analysis: Electronic records require compliance with the safeguards under Section 36B, including the prescribed certification concerning their production and device. The separately captioned computer folder, records not bearing the assessee's name, and documents recovered from dealer premises lacked independent verification linking the transactions to the assessee. There was also no tangible corroboration through raw-material consumption, transport, buyers, financial flow-back, or actual excess production.

Conclusion: The computer printouts and private or third-party records were inadmissible or insufficient to establish clandestine manufacture or under-invoicing, in favour of the assessee.

Issue (ii): Whether abnormal electricity consumption and alleged theft of electricity established unaccounted manufacture and clearance.

Analysis: Electricity consumption may vary because of operational and technical factors. Without a scientifically established plant-specific consumption norm and independent evidence linking consumption to quantified unaccounted production and clearance, electricity data and an allegation of electricity theft could not substantiate excise evasion.

Conclusion: Abnormal electricity consumption and alleged theft of electricity did not establish unaccounted manufacture or clearance, in favour of the assessee.

Issue (iii): Whether the alleged clandestine production was sustainable in view of the installed furnace capacity.

Analysis: A charge of clandestine manufacture must be tested against the physical capacity of the plant. The alleged production was not shown to be achievable even with both operational furnaces, and no undisclosed manufacturing facility was established.

Conclusion: The alleged clandestine production was not sustainable in view of the unaddressed capacity constraint, in favour of the assessee.

Issue (iv): Whether statements relied upon for the demand could be admitted without compliance with the prescribed procedure.

Analysis: Statements recorded during investigation cannot prove the truth of their contents unless the mandatory procedure under Section 9D is followed. The required statutory exercise was not undertaken, and the statements had not been tested in the prescribed manner.

Conclusion: The untested statements could not be read in evidence against the assessee, in favour of the assessee.

Final Conclusion: The cumulative absence of admissible electronic evidence, independently corroborated material, capacity-based proof, and legally usable statements left no sustainable evidentiary basis for excise liability, interest, or penalty.

Ratio Decidendi: A charge of clandestine manufacture, clearance, or under-invoicing cannot rest on uncertified electronic records, unverified private or third-party documents, untested statements, or electricity consumption alone; it requires legally admissible and independently corroborated evidence.

Issues: Whether the demand notice dated 15.07.1997 for sales tax assessment year 1991-92 was barred by the five-year limitation prescribed under Section 12 of the Rajasthan Sales Tax Act, 1994.

Analysis: The earlier demand notice dated 06.03.1997 concerning the same assessment year had been issued within the prescribed five-year period. The subsequent notice dated 15.07.1997 was in continuity of that earlier notice and related to the same sales-tax demand.

Conclusion: The demand notice dated 15.07.1997 was not barred by limitation and was valid. The issue was decided against the assessee.

Issues: (i) Whether a Look Out Circular issued at a creditor bank's request can continue against personal guarantors merely due to a debt recovery certificate or pending personal-guarantee proceedings, and whether their overseas travel can be conditioned on permission or disclosure of travel plans; (ii) Whether the writ challenge was barred by laches because of knowledge of the Look Out Circular in 2021.

Issue (i): Whether a Look Out Circular issued at a creditor bank's request can continue against personal guarantors merely due to a debt recovery certificate or pending personal-guarantee proceedings, and whether their overseas travel can be conditioned on permission or disclosure of travel plans.

Analysis: The freedom of movement within India and the right to travel abroad under Articles 19 and 21 of the Constitution of India may be restricted only in accordance with law; those constitutional rights cannot be waived through a guarantee or other private agreement. A Look Out Circular is intended to secure a person's appearance before an investigating authority or court, and cannot operate as a coercive debt-recovery device. There was no allegation of fraud or criminal proceedings, the debt recovery certificate had not been executed, and no legal authority under the applicable recovery mechanism empowered the bank to procure a Look Out Circular merely upon obtaining that certificate. Pending personal-guarantee proceedings did not contain a travel-restraint order. No law required the petitioners to disclose travel plans to their creditor, and compelled disclosure in these circumstances would intrude upon privacy. The constitutional validity of the executive arrangement permitting banks to seek Look Out Circulars was not adjudicated.

Conclusion: The Look Out Circular could not continue on the existing facts and was liable to be revoked, in favour of the petitioners.

Issue (ii): Whether the writ challenge was barred by laches because of knowledge of the Look Out Circular in 2021.

Analysis: Each prevention of foreign travel by reason of the Look Out Circular gave rise to a fresh cause of action.

Conclusion: The plea of delay and laches failed, in favour of the petitioners.

Final Conclusion: In the absence of criminal process, a subsisting judicial travel-restraint order, or lawful statutory authority, a personal guarantor's debtor status and an unexecuted debt recovery certificate do not justify continued restraint on foreign travel through a Look Out Circular.

Ratio Decidendi: A creditor-requested Look Out Circular cannot curtail the constitutional right to travel abroad merely to facilitate debt recovery unless the restraint is supported by law or a competent judicial order.

Issues: Whether an ex parte ad-interim injunction should restrain further circulation of allegedly false and defamatory online reports concerning the plaintiff and require their removal and de-indexing pending the suit.

Analysis: Ex parte relief is exceptional and requires a prima facie case, balance of convenience and irreparable injury. The pleaded material indicated that the plaintiff had not been summoned or served with any process or complaint, while the impugned reports portrayed him as an accused and referred to attachment of his shares. The material was prima facie found to be unfair reporting capable of creating sensationalism, shaping public perception and causing continuing reputational harm. The recent and continuing publications did not establish acquiescence. The balance between reputation and dignity under Article 21 and freedom of speech and expression under Article 19(1)(a) required reporting to remain accurate and non-sensational, subject to the limitations recognised by Article 19(2).

Outcome: Ex parte ad-interim restraints, takedown, de-indexing and preservation directions were issued in respect of the identified content and substantially similar subsequently identified content, pending the suit.

Issues: (i) Whether the arm's length price of intra-group GHO Non-IT, GHO IT and RHO services could be determined at nil; (ii) Whether assessed income had to be computed after giving effect to the CPC rectification order; (iii) Whether the employee-contribution disallowance was sustainable; (iv) Whether a further depreciation adjustment was warranted where book depreciation had already been added back and tax depreciation claimed.

Issue (i): Whether the arm's length price of intra-group GHO Non-IT, GHO IT and RHO services could be determined at nil.

Analysis: Section 92C of the Income-tax Act, 1961 and Rule 10AB of the Income-tax Rules, 1962 require determination of the arm's length price through an applicable prescribed benchmarking method. On materially identical facts, the receipt of India-specific intra-group services had been established through supporting material, while the nil valuation did not result from the required Rule 10AB exercise. The rule of consistency required following the binding position already settled for identical transactions.

Conclusion: The nil arm's length price and the transfer-pricing adjustment for the GHO and RHO services were deleted, in favour of the assessee.

Issue (ii): Whether assessed income had to be computed after giving effect to the CPC rectification order.

Analysis: The original intimation under Section 143(1) of the Income-tax Act, 1961 was superseded in relevant part by the subsequent rectification order under Section 154 of the Income-tax Act, 1961, which recomputed the total income. The final assessment could not proceed on the unrevised figure in the original intimation.

Conclusion: Assessed income was directed to be recomputed after giving effect to the rectification order, in favour of the assessee.

Issue (iii): Whether the employee-contribution disallowance was sustainable.

Analysis: Under Section 36(1)(va) of the Income-tax Act, 1961, the relevant ESI contribution was paid before its stipulated due date. The contrary date in the tax-audit report was treated as an inadvertent reporting error.

Conclusion: The employee-contribution disallowance was deleted, in favour of the assessee.

Issue (iv): Whether a further depreciation adjustment was warranted where book depreciation had already been added back and tax depreciation claimed.

Analysis: The computation showed that book depreciation had been added back and depreciation allowable under the Income-tax Act, 1961 had been claimed. Verification of the stated computation was required before giving consequential effect.

Conclusion: The depreciation adjustment was directed to be verified and consequential effect given, in favour of the assessee.

Final Conclusion: The transfer-pricing addition and employee-contribution disallowance could not be retained, and the assessed income was required to reflect the rectified computation and the verified depreciation claim.

Ratio Decidendi: Where actual receipt of intra-group services is established, the arm's length price cannot be determined at nil without undertaking the prescribed benchmarking analysis.

Issues: (i) Whether the manufacturing-segment transfer-pricing adjustment required consideration of adjustments for capacity underutilisation and customs-duty differences, and re-evaluation of comparables under Rule 10B(3) of the Income-tax Rules, 1962; (ii) Whether the ECB interest adjustment based on a single comparable with materially different credit, scale and risk attributes could be sustained.

Issue (i): Whether the manufacturing-segment transfer-pricing adjustment required consideration of adjustments for capacity underutilisation and customs-duty differences, and re-evaluation of comparables under Rule 10B(3) of the Income-tax Rules, 1962.

Analysis: Rule 10B(3) requires an uncontrolled transaction to be treated as comparable only where differences do not materially affect profit, or reasonably accurate adjustments can eliminate their material effects. The first year of commercial operations involved a substantially higher depreciation ratio owing to underutilised capacity and a substantially higher customs-duty burden than the selected comparables. The claims were rejected without examining audited data to determine whether quantified adjustments could neutralise these differences. Functional comparability of the final set of comparables also required fresh examination.

Conclusion: The manufacturing-segment adjustment was set aside for fresh determination of the arm's length price after examination of material differences, quantified comparability adjustments, and functional comparability.

Issue (ii): Whether the ECB interest adjustment based on a single comparable with materially different credit, scale and risk attributes could be sustained.

Analysis: Benchmarking under Section 92C of the Income-tax Act, 1961 remains necessary despite compliance with RBI all-in-cost ceilings. A single comparable transaction involving an entity with fundamentally different credit profile, scale and risk attributes could not provide a reliable benchmark for the ECB interest rate.

Conclusion: The ECB interest adjustment was set aside for fresh arm's length benchmarking after considering an appropriate set of comparable transactions.

Final Conclusion: Both transfer-pricing determinations require fresh, fact-specific comparability analysis after affording the assessee a reasonable opportunity to substantiate its claims.

Ratio Decidendi: Material operational or credit-risk differences affecting transfer-pricing margins or price must be evaluated through reasonably accurate comparability adjustments, and a benchmark founded on a materially dissimilar single comparable cannot be sustained.

Issues: Whether the ex parte adjudication could stand where the show-cause notice and adjudication order were uploaded only under the GST portal's "Additional Notice and Orders" tab without separate intimation, preventing the petitioner from replying.

Analysis: Proceedings under Section 73 require observance of principles of natural justice, including adequate notice and a meaningful opportunity to respond. Uploading the show-cause notice and adjudication order only under the specified portal tab, without separate intimation, prevented the petitioner from responding to the notice and constituted a breach of natural justice.

Conclusion: The ex parte adjudication order was quashed for violation of principles of natural justice, with a direction to permit a reply and undertake fresh reasoned adjudication after affording a hearing.

Issues: Whether the concurrent finding that the creditors lacked creditworthiness for purposes of the unsecured-loan addition under Section 68 was perverse.

Analysis: Section 68 places the initial burden on the assessee to establish the identity of the creditor, the creditor's financial capacity, and the genuineness of the transaction through cogent evidence. Confirmations or cheque payments do not by themselves establish creditworthiness where the creditors deny the loans or cannot satisfactorily explain the source of funds and preceding cash deposits. The concurrent factual appreciation by the assessing and appellate authorities disclosed failure to discharge that burden.

Conclusion: The finding on lack of creditworthiness was not perverse; the question was answered against the assessee and in favour of the Revenue.

Issues: (i) Whether transfer of the entire business undertaking without consideration to a distinct registered person constitutes a supply under GST. (ii) Whether the transfer is a supply of goods or a supply of services. (iii) Whether the transfer is covered by Serial No. 2 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. (iv) Whether stock and fixed assets are taxable where the business does not qualify as a going concern.

Issue (i): Whether transfer of the entire business undertaking without consideration to a distinct registered person constitutes a supply under GST.

Analysis: Section 7 of the Central Goods and Services Tax Act, 2017 has an inclusive scope and encompasses specified supplies made without consideration. The proposed arrangement transfers the entire undertaking, including assets, liabilities, employees, rights, customers and operations, from one registered person to another. Such comprehensive transfer was treated as a supply notwithstanding that it is without consideration and is not in the ordinary course of business.

Conclusion: The transfer of the entire business undertaking constitutes a supply under GST.

Issue (ii): Whether the transfer is a supply of goods or a supply of services.

Analysis: Entry 4(c) of Schedule II excludes a business transferred as a going concern from deemed supply-of-goods treatment on cessation of taxable person status. A business undertaking transferred as a whole is not movable property qualifying as goods under Section 2(52); being neither goods, money nor securities, it falls within services under Section 2(102).

Conclusion: The transfer of the business undertaking amounts to a supply of services.

Issue (iii): Whether the transfer is covered by Serial No. 2 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.

Analysis: Serial No. 2 grants nil-rate treatment to services by way of transfer of a going concern as a whole or an independent part thereof. Although the arrangement provides for continuity of operations, employees, assets and liabilities, no documentary evidence was furnished to establish that the business satisfies the requirements of a going concern.

Conclusion: The transfer is covered by Serial No. 2 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 only if the business qualifies as a going concern.

Issue (iv): Whether stock and fixed assets are taxable where the business does not qualify as a going concern.

Analysis: Under Entry 4(c) of Schedule II, goods forming part of business assets are deemed supplied immediately before cessation of taxable person status unless the business is transferred as a going concern. The going-concern exception is therefore unavailable where that condition is not met.

Conclusion: Stock, closing stock and other business assets are supplies of goods and are taxable at the rates applicable to the respective goods if the business does not qualify as a going concern.

Final Conclusion: A comprehensive transfer of the undertaking is characterised as a supply of services, with nil-rate treatment dependent upon proof that the undertaking is transferred as a going concern; otherwise, the transferred business goods attract tax as deemed supplies.

Ratio Decidendi: Transfer of a business undertaking as a going concern is a supply of services eligible for the Serial No. 2 exemption, whereas failure of the going-concern condition results in deemed supply-of-goods treatment for business assets upon cessation.

Issues: Whether a complete e-rickshaw kit supplied in completely knocked down condition is classifiable as the finished electrically operated vehicle and taxable at 5% GST.

Analysis: Rule 2(a) governing interpretation of the Import Tariff permits classification of a complete article supplied unassembled where the goods retain the essential character of that article. Tariff item 87038040 covers three-wheeled vehicles propelled solely by an electric motor, and Serial No. 441 of Schedule I to Notification No. 11/2017-Central Tax (Rate) prescribes 5% GST for electrically operated vehicles. Classification as an e-rickshaw in CKD condition requires cumulative satisfaction of four conditions: all components necessary for one complete e-rickshaw must be supplied together as a single identifiable kit; the kit must require only assembly without addition of an essential component; the purchase order, invoice, packing list and contemporaneous records must consistently describe an e-rickshaw in CKD/SKD condition; and the actual consignment must correspond with those records.

Conclusion: On fulfilment of all four conditions, the CKD kit is classifiable as the finished electrically operated three-wheeled vehicle under tariff item 87038040 and attracts GST at 5% (2.5% CGST and 2.5% SGST) on its composite value. Failure to fulfil any condition results in classification as individual parts taxable at the rate applicable to those parts.

Issues: (i) Whether the milling, fortification and packing of Government-supplied food grains for distribution through the Public Distribution System is a composite supply eligible for exemption under Serial No. 3A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017; (ii) The GST rate applicable to that composite supply if the value of goods exceeds the 25% threshold under Serial No. 3A.

Issue (i): Whether the milling, fortification and packing of Government-supplied food grains for distribution through the Public Distribution System is a composite supply eligible for exemption under Serial No. 3A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.

Analysis: The contractual arrangement required milling of wheat, fortification with micronutrients and packaging of the resultant flour for delivery to the State Government. These supplies were naturally bundled, with milling being the principal supply and fortification and packaging being ancillary supplies; therefore, the arrangement constituted a Composite Supply under Section 2(30) of the Central Goods and Services Tax Act, 2017.

Analysis: The agreed Value of Supply was Rs. 260.48 per 100 kilograms of wheat, including cash payment and the agreed Non-Cash Consideration represented by retention of gunny bags, bran and refractor. The goods component, comprising fortification and packing materials, was Rs. 60, or 23.03% of the total value. Distribution through the Public Distribution System is covered by Entry 28 of the Eleventh Schedule and is a Function Entrusted to a Panchayat under Article 243G of the Constitution of India. Circular No. 153/09/2021-GST requires the 25% goods-value condition to be determined on the facts of each case.

Conclusion: On the stated valuation, the composite supply qualifies for exemption under Serial No. 3A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, provided that the value of goods does not exceed 25% of the value of the composite supply.

Issue (ii): The GST rate applicable to that composite supply if the value of goods exceeds the 25% threshold under Serial No. 3A.

Analysis: Exceeding the prescribed 25% value threshold renders the composite milling supply ineligible for the Serial No. 3A exemption. The applicable rate in that event is prescribed under Serial No. 26(i)(f) of Notification No. 11/2017-Central Tax (Rate).

Conclusion: Where the value of goods exceeds 25% of the value of the composite supply, GST is chargeable at 5% on the total consideration, comprising CGST at 2.5% and SGST at 2.5%.

Final Conclusion: Milling, fortification and packing of food grains for Public Distribution System distribution remains exempt while the goods component stays within the 25% statutory threshold; otherwise, the supply is taxable at the specified concessional rate.

Ratio Decidendi: A naturally bundled Government supply of milling, fortification and packaging for the Public Distribution System is eligible for the Serial No. 3A exemption only where the value of goods used in the composite supply does not exceed 25% of its total value.

Issues: Whether fees charged for university diploma and certificate programmes constitute exempt educational services under Entry No. 66(a) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.

Analysis: Entry No. 66(a) exempts services supplied by an educational institution to its students. Under clause 2(y)(ii), the institution must provide education as part of a curriculum leading to a qualification recognised by law. A structured diploma or certificate course is education forming part of a curriculum. The statutory power to institute diplomas and certificates, together with the powers to regulate courses, curricula and syllabi, establishes that qualifications awarded through the approved programmes are recognised by law. The applicable circulars distinguish long-duration programmes leading to recognised qualifications from short-duration programmes or participation certificates. Diploma and certificate programmes must therefore have a duration of one year or more to fall within the exemption.

Conclusion: Fees for diploma and certificate programmes of one year or more are consideration for exempt educational services supplied to students. Fees for short-duration diploma or certificate programmes are not covered by the exemption.

Issues: Whether the assessments under the combined ambit of Sections 143 and 147 were invalid because the returns and profit and loss accounts had not been rejected and the books of account were unavailable.

Analysis: The assessments were not made by the best judgment method under Section 144, but under the combined ambit of Sections 143 and 147. The books of account and supporting documents were not produced despite opportunities, while the profit and loss accounts reflected expenditure variations grossly disproportionate to the turnover increase. In these circumstances, reliance on industry-standard income and profit parameters for determining taxable income was justified.

Conclusion: The assessments under Sections 143 and 147 were valid, and the question is answered against the assessee.

Issues: (i) Whether unsecured loans were assessable as unexplained cash credits under section 68 of the Income-tax Act, 1961; (ii) Whether 6% of contractual and labour payments could be disallowed on an ad hoc basis; (iii) Whether alleged cash loans inferred from third-party search material could be assessed under section 69D of the Income-tax Act, 1961 through sections 147 and 148 rather than section 153C; (iv) Whether purchases and alleged related commission were disallowable under sections 37(1) and 69C of the Income-tax Act, 1961; (v) Whether section 50CA of the Income-tax Act, 1961 applied to a shareholder's buyback receipt covered by sections 10(34A) and 115QA of the Income-tax Act, 1961; (vi) Whether seized cash recorded in the cash books could be treated as unexplained money under section 69 of the Income-tax Act, 1961; and (vii) Whether penalty under section 271D of the Income-tax Act, 1961 could be imposed for an alleged contravention of section 269SS of the Income-tax Act, 1961.

Issue (i): Whether unsecured loans were assessable as unexplained cash credits under section 68 of the Income-tax Act, 1961.

Analysis: The lenders' identity, financial capacity, confirmations, audited accounts, bank statements, loan ledgers and subsequent repayments were evidenced. No defect in this material or contrary inquiry was shown. The evidence satisfied the requirements governing an Unexplained Cash Credit, and the assessee discharged the Onus of Proof, which the Revenue did not rebut.

Conclusion: The unsecured-loan additions under section 68 were unsustainable, in favour of the assessee.

Issue (ii): Whether 6% of contractual and labour payments could be disallowed on an ad hoc basis.

Analysis: The payments were supported by contractual records, bills, work orders, tax deduction, banking records, labour records and responses to verification notices. The services and payments were accepted, while the audited books and financial results remained intact. Absent Rejection of Books of Account, an Ad Hoc Disallowance merely to guard against a perceived revenue leakage had no evidentiary basis.

Conclusion: The estimated 6% disallowances of contractual and labour expenditure were unsustainable, in favour of the assessee.

Issue (iii): Whether alleged cash loans inferred from third-party search material could be assessed under section 69D of the Income-tax Act, 1961 through sections 147 and 148 rather than section 153C.

Analysis: The third-party receipts did not identify the assessee, the alleged multiplication of the recorded amounts was conjectural, and no supporting material was found in the assessee's search. No effective opportunity of cross-examination was provided. Further, for the impugned third-party search material, section 153C provided the special statutory mechanism, requiring the prescribed satisfaction and transfer of material. The principle that a Special Provision Prevails Over General Provision precluded recourse to reassessment provisions without complying with section 153C.

Conclusion: The alleged cash-loan additions under section 69D lacked both evidentiary foundation and lawful jurisdiction, in favour of the assessee.

Issue (iv): Whether purchases and alleged related commission were disallowable under sections 37(1) and 69C of the Income-tax Act, 1961.

Analysis: Invoices, lorry receipts, e-way bills, material-receipt notes and banking evidence established delivery and use of the goods in project work. The seized notings did not displace these records or establish unexplained commission expenditure.

Conclusion: The purchases were genuine and neither the purchase addition nor the estimated commission addition could survive, in favour of the assessee.

Issue (v): Whether section 50CA of the Income-tax Act, 1961 applied to a shareholder's buyback receipt covered by sections 10(34A) and 115QA of the Income-tax Act, 1961.

Analysis: Income from the qualifying buyback was exempt to the shareholder under section 10(34A), while the company undertaking the buyback had paid the statutory tax under section 115QA. Section 50CA is a machinery provision for Deemed Consideration in computing chargeable capital gains and could not apply where the buyback receipt was statutorily exempt in the shareholder's hands.

Conclusion: Section 50CA did not apply to the buyback receipt, in favour of the assessee.

Issue (vi): Whether seized cash recorded in the cash books could be treated as unexplained money under section 69 of the Income-tax Act, 1961.

Analysis: The cash advance and corresponding balance were recorded in the cash book and cash day book seized by the Department. The alleged link between unrelated electronic messages and the seized cash was not established. Section 69 applies only to money not recorded in the books, and Suspicion Cannot Replace Evidence.

Conclusion: The seized cash was not unexplained money under section 69, in favour of the assessee.

Issue (vii): Whether penalty under section 271D of the Income-tax Act, 1961 could be imposed for an alleged contravention of section 269SS of the Income-tax Act, 1961.

Analysis: The alleged loan receipt was founded on third-party material that neither established a transaction involving the assessee nor identified the relevant amount or counterparty. Actual taking or acceptance of a prohibited loan is the Jurisdictional Fact for penalty under section 271D. The corresponding alleged cash-loan additions had also failed.

Conclusion: The penalty under section 271D had no factual foundation and could not be sustained, in favour of the assessee.

Final Conclusion: The disputed credits, estimated expenditure disallowances, alleged cash-loan assessments, purchase and commission additions, deemed buyback-value computation, unexplained-cash addition, and cash-loan penalty did not survive.

Issues: Whether the disallowance of commission paid to the assessee's wife's proprietary concern as excessive or unreasonable under Section 40A(2)(b) was sustainable.

Analysis: Section 40A(2)(b) applies to payments made to specified related persons, but does not mandate an automatic disallowance. The expenditure must be assessed with reference to the fair market value of the services, the legitimate needs of the business, and the benefit derived by the assessee. The 30% commission benchmark was adopted by comparison with businesses dealing in Ayurvedic products, whereas the assessee's Herbalife distribution and team-building model was materially different. No comparable material was produced to establish that the commission was excessive or unreasonable. Although related-party payments require verification of the actual services and commercial justification, comparison with an unrelated line of business alone could not sustain the disallowance.

Conclusion: The statutory conditions for treating the commission expenditure as excessive or unreasonable were not established; the disallowance under Section 40A(2)(b) was unsustainable.

Issues: Whether survey-disclosed on-money from sale of flats is assessable upon receipt or in the assessment years in which the sale deeds are registered and title is transferred.

Analysis: Under the project-completion method, income from sale of flats accrues upon execution of the sale deed and transfer of title, rather than upon receipt of advance consideration or on-money. The consistent recognition of the disclosed on-money in the respective years of registration, including subsequent disclosures and undertakings to offer the balance within specified years, warranted the same treatment as had been extended for earlier years.

Conclusion: The sustained balance additions were set aside for limited verification. Amounts found to have been offered to tax in the relevant subsequent years are to be deleted, while any portion not so offered may be assessed in the assessment year under appeal; no further deferment beyond the undertaking period is permitted.

Issues: (i) Whether the interest payable on unconverted CCDs could be assigned a nil arm's length price by treating the CCDs as equity; and (ii) Whether the entire CCD interest was alternatively disallowable under sections 36(1)(iii) and 37(1).

Issue (i): Whether the interest payable on unconverted CCDs could be assigned a nil arm's length price by treating the CCDs as equity.

Analysis: The arm's length principle under Chapter X requires pricing of the actual international transaction. Rule 10AB calls for evidence from a comparable uncontrolled transaction or a sufficiently analysed similar transaction. The CCD terms required future conversion but preserved the issuer's pre-conversion coupon obligation; the holder had neither voting nor dividend rights before conversion. The conversion price was linked to fair market value at the conversion date, and no predetermined conversion ratio was established.

Analysis: Future conversion, long tenure and absence of cash redemption may require comparability adjustments, but do not by themselves establish a nil return. Transaction recharacterisation requires established exceptional circumstances, including a divergence between economic substance and legal form or a commercially irrational arrangement that prevents reliable pricing. No evidence showed that the coupon obligation was sham, that the issuer bore no obligation to pay it, or that a comparable uncontrolled transaction warranted a nil price. The assessee's stated or effective coupon rate was not independently affirmed as arm's length.

Conclusion: The nil arm's length price adjustment is deleted, in favour of the assessee.

Issue (ii): Whether the entire CCD interest was alternatively disallowable under sections 36(1)(iii) and 37(1).

Analysis: The alternative denial rested substantially on the premise that the unconverted CCDs already represented issued equity. No separate and supported finding established that the funds lacked business utilisation or that the interest was otherwise inadmissible. Whether interest is currently deductible or requires capitalisation of interest depends on the utilisation of funds and the assessee's records. The consequential reduction of the capital work-in-progress or capital asset base also depended on the unsustainable nil-price premise.

Conclusion: The alternative disallowance of the CCD interest is set aside, in favour of the assessee.

Final Conclusion: Compulsory future conversion cannot, by itself, make a present contractual coupon valueless or sustain the associated alternative denial of the interest claim.

Ratio Decidendi: A compulsorily convertible debenture's future conversion into equity, absent evidence satisfying the exceptional recharacterisation standard and a comparable-based analysis under the prescribed transfer-pricing method, cannot alone justify pricing its pre-conversion contractual interest at nil.