Issues: Whether the blocking of input tax credit under Rule 86-A of the Central Goods and Services Tax Rules, 2017 could be sustained when the electronic credit ledger had a negative balance and the statutory preconditions for invocation of the power were not satisfied.

Analysis: The power under Rule 86-A is confined to blocking use of credit available in the electronic credit ledger, and its exercise depends on satisfaction of the prescribed conditions, including formation of the requisite opinion on fraudulently availed or ineligible credit. On the facts, the ledger reflected a negative balance, so there was no available credit to block. In those circumstances, the impugned blocking exceeded the scope of Rule 86-A and could not be sustained.

Conclusion: The blocking of input tax credit was invalid and the negative balance was directed to be restored to the extent of Rs. 1.42 crores.

Ratio Decidendi: Rule 86-A permits blocking only of credit available in the electronic credit ledger, and the power cannot be exercised where no such available credit exists.

Issues: Whether the adjudication order and recovery notice issued by the Bengaluru North West Commissionerate were liable to be set aside for want of jurisdiction.

Analysis: The challenge was confined to the competence of the Bengaluru North West Commissionerate to proceed against the petitioner for the relevant financial years. The respondent accepted the jurisdictional objection. The dispute therefore turned on whether the impugned order and consequential recovery notice could survive when issued by an authority lacking territorial jurisdiction, notwithstanding the liberty of the proper jurisdictional authority to continue proceedings.

Conclusion: The impugned adjudication order and recovery notice were set aside for want of jurisdiction.

Final Conclusion: The proceeding was disposed of by annulling the impugned actions of the Bengaluru North West Commissionerate, while leaving the competent authority free to proceed in accordance with law.

Ratio Decidendi: An order passed by an authority without territorial jurisdiction cannot be sustained, and any consequential recovery notice founded on such order must also fall.

Issues: Whether a single composite assessment order covering more than one assessment year was legally sustainable under the GST framework, and whether the assessment had to be set aside with liberty to initiate separate proceedings year-wise.

Analysis: The challenge was confined to the legality of passing one assessment order for multiple financial years. The Court followed the previously decided view that a single show-cause notice or composite assessment order cannot be issued in relation to more than one tax period in the manner contemplated by the GST provisions. Since the petitioner pressed only this primary ground, the Court did not adjudicate the remaining grounds and disposed of the writ petition on this basis.

Conclusion: The composite assessment order was unsustainable and was set aside. The matter was remanded with liberty to the respondents to commence fresh proceedings separately for each assessment year, and the period specified by the Court was excluded for limitation purposes.

Final Conclusion: The petitioner succeeded on the challenge to the composite nature of the assessment, while the Department was permitted to proceed afresh year-wise.

Ratio Decidendi: A composite assessment or show-cause proceeding covering multiple tax periods is impermissible where the statutory scheme requires period-specific proceedings, and such an order is liable to be set aside with remand for separate year-wise action.

Issues: Whether the petitioner was entitled to a direction for supply of the inspection material and for consideration of the application seeking revocation of cancellation of GST registration, along with adjudication of the pending show cause notice.

Analysis: The cancellation of registration had been challenged after the petitioner filed a revocation application. The records referred to inspection material and related correspondence that had not been furnished to the petitioner. In these circumstances, the petitioner was required to be supplied the material gathered during inspection and the connected documents, and the revocation application had to be considered after giving the petitioner an opportunity to supplement the reply. The pending proposal under the show cause notice was also required to be adjudicated on merits after considering the reply already filed.

Conclusion: The petitioner obtained a direction for disclosure of the relevant material and for consideration of the revocation application and the pending tax notice, after hearing the petitioner.

Final Conclusion: The writ petition was disposed of by issuing procedural directions that enabled reconsideration of the cancellation and adjudication of the pending tax proceedings.

Ratio Decidendi: When cancellation of GST registration is under challenge and a revocation application is pending, the affected person must be furnished the material relied upon and given an effective opportunity before the application and connected proceedings are decided.

Issues: (i) Whether comparables could be excluded on the basis of persistent loss filter and functional dissimilarity for transfer pricing purposes; (ii) whether foreign exchange fluctuation gain was operating in nature for computing the profit level indicator; (iii) whether risk adjustment required reconsideration; and (iv) whether credit of self-assessment tax and tax collected at source was to be allowed.

Issue (i): Whether comparables could be excluded on the basis of persistent loss filter and functional dissimilarity for transfer pricing purposes.

Analysis: The comparables excluded by the lower authorities did not suffer continuous losses in the relevant three-year period, as profit was recorded in one of the years, and therefore they could not be rejected merely on the basis of a persistent loss filter. The comparables introduced by the transfer pricing authorities were found to be functionally dissimilar to the assessee, to have significant turnover differences or extraordinary events, and to lack segmental information for software development services.

Conclusion: The exclusion of the two loss-year comparables was set aside and they were directed to be included, while the functionally dissimilar comparables were directed to be excluded. The issue was decided in favour of the assessee.

Issue (ii): Whether foreign exchange fluctuation gain was operating in nature for computing the profit level indicator.

Analysis: Foreign exchange gains arose from realization of receivables connected with the core export of services and were directly linked to the assessee's business operations. Such gains were therefore part of operating income for transfer pricing computation.

Conclusion: Foreign exchange fluctuation gain was held to be operating in nature. This issue was decided in favour of the assessee.

Issue (iii): Whether risk adjustment required reconsideration.

Analysis: The claim for risk adjustment was not finally adjudicated on merits and required examination by the lower tax authorities in accordance with law.

Conclusion: The issue was restored to the file of the Assessing Officer and the Transfer Pricing Officer for fresh consideration.

Issue (iv): Whether credit of self-assessment tax and tax collected at source was to be allowed.

Analysis: The assessee was entitled to credit of tax paid and tax collected at source subject to verification as per law.

Conclusion: The credit claims were directed to be granted after due verification. This issue was decided in favour of the assessee.

Final Conclusion: The transfer pricing adjustment was reduced on the identified issues, certain comparables were excluded while others were restored or included as directed, and the assessment was required to be modified accordingly.

Ratio Decidendi: A comparable cannot be excluded on a persistent loss filter unless it has incurred losses in all the relevant successive years, and foreign exchange gains arising directly from export/service receivables constitute operating income for transfer pricing purposes.

Issues: (i) Whether certain companies selected as comparables were liable to be excluded on the ground of functional dissimilarity and failure to satisfy the applied filters; (ii) Whether the final assessment order was time-barred under section 144C(13) of the Income-tax Act, 1961.

Issue (i): Whether certain companies selected as comparables were liable to be excluded on the ground of functional dissimilarity and failure to satisfy the applied filters.

Analysis: The transfer pricing adjustment was examined in the context of the assessee's back-office support services under the transactional net margin method. The challenged comparables were found either to be engaged in highly specialised research and development or in activities materially different from the assessee's functions. Two other comparables were also found to have failed the filters applied in the transfer pricing analysis, including the related party transactions filter and the employee cost or service income filters. Comparable selection had to reflect functional similarity and compliance with the filters used in benchmarking.

Conclusion: The impugned comparables were directed to be excluded, and the transfer pricing grounds were allowed in favour of the assessee.

Issue (ii): Whether the final assessment order was time-barred under section 144C(13) of the Income-tax Act, 1961.

Analysis: The directions of the Dispute Resolution Panel triggered the statutory timeline for completion of the final assessment. The Assessing Officer was required to pass the order within one month from the end of the month in which the directions were received. The final order was passed beyond that period. The statutory timeline was treated as mandatory, and an order passed in breach of that limitation could not be sustained.

Conclusion: The final assessment order was held to be barred by limitation and was quashed in favour of the assessee.

Final Conclusion: The transfer pricing adjustment could not be sustained on the comparability objections, and the assessment itself failed on the independent ground of limitation, resulting in complete relief to the assessee.

Ratio Decidendi: In transfer pricing matters, comparables must be functionally similar and satisfy the applied filters, and an assessment order under section 144C(13) must be completed within the prescribed statutory time limit, failing which it is invalid.

Issues: Whether the appellant could claim bona fide belief and avoid invocation of the extended period of limitation for non-payment of service tax on commission income after the amendment of the exemption notification with effect from 09.07.2004.

Analysis: The exemption under Notification No. 13/2003-ST was narrowed by Notification No. 08/2004-ST with effect from 09.07.2004, and only commission agents dealing in sale or purchase of agricultural produce continued to remain exempt. The appellant was not covered by that carve-out. In these circumstances, the statutory position was held to be clear and not susceptible to ambiguity. Non-payment of tax on the ground that tax had not been charged, and the plea that tax was paid only on receipt of consideration, were held insufficient to establish bona fide belief. The plea that the extended period could not be invoked was rejected.

Conclusion: The extended period of limitation was validly invoked and the plea of bona fide belief failed, against the assessee.

Ratio Decidendi: Where an exemption notification is expressly restricted by amendment and the assessee falls outside the exempted class, ignorance of the clear tax liability does not constitute bona fide belief and can sustain invocation of the extended period of limitation.

Issues: Whether the delay of 84 days in filing the GST appeal should be condoned and the appeal directed to be heard on merits.

Analysis: The Appellate Authority was bound by the limitation prescribed under Section 107 of the Rajasthan Goods and Services Tax Act, 2017, but the delay was found to have occurred due to circumstances beyond the petitioner's control. The Court followed its earlier coordinate bench decisions on similar facts and noted that refusal to consider the appeal on merits would cause grave prejudice to the petitioner.

Conclusion: The delay of 84 days was condoned, the appellate order dismissing the appeal on limitation was set aside, and the appeal was directed to be entertained and decided on merits in favour of the petitioner.

Issues: Whether writ relief should be granted against the GST demand and consequential attachment order when no appeal was filed and the petitioner claimed lack of knowledge of the proceedings.

Analysis: The petitioner had been served with a GST demand order under section 74 of the GST enactment and no appeal was preferred against it. Instead of pursuing the appellate remedy, the petitioner sought rectification and later approached the Court after the bank account was attached. The Court found the plea of non-communication and lack of knowledge unconvincing, noting that the petitioner continued to hold a GST registration and was required to file periodic returns and annual returns. On those facts, the Court held that the reliance on an earlier decision permitting delayed appeals was misplaced, as the present matter involved no attempt to file an appeal at all.

Conclusion: The Court declined to grant any indulgence and held that the petitioner was not entitled to relief.

Final Conclusion: The challenge to the GST demand and attachment failed, and the proceedings were dismissed.

Ratio Decidendi: A writ court will not grant relief against a finalized GST demand where the petitioner bypasses the appellate remedy and the plea of lack of knowledge is not credibly established on the record.

Issues: Whether exemption under section 11 of the Income-tax Act, 1961 could be denied solely because Form 10B was filed after the due date.

Analysis: The returns were processed under section 143(1) and the exemption was disallowed only on the ground of belated filing of the audit report in Form 10B. The Tribunal noted that the assessee had obtained the audit report and filed it, though belatedly, and that the issue was covered by co-ordinate bench and High Court decisions treating the filing of Form 10B as a procedural requirement. On that basis, the delay in filing the audit report was not treated as fatal to the claim for exemption under section 11.

Conclusion: The belated filing of Form 10B did not justify denial of exemption under section 11, and the exemption was held allowable in favour of the assessee.

Ratio Decidendi: A belated audit report in Form 10B, when otherwise available and filed, is a directory procedural lapse and cannot by itself defeat exemption under section 11.

Issues: Whether the impugned customs order governing provisional release of the seized goods required modification by replacing the departmental conditions with the conditions adopted in the earlier similar matter.

Analysis: The writ petition challenged the refusal to release the imported goods except on stringent conditions including re-determined duty, bond and bank guarantee. The Court accepted the respondents' stand that the conditions imposed in the earlier similar order should be followed. It therefore modified the impugned order and directed provisional release on the petitioner remitting the entire declared duty, paying 50% of the differential duty, and executing bonds in the amounts specified by the Court instead of furnishing a bank guarantee. The Court also required cooperation with the ongoing investigation and directed expeditious completion of the inquiry.

Conclusion: The provisional release conditions were modified in favour of the petitioner, but only to the extent indicated by the Court, and the goods were directed to be released on compliance with the substituted conditions.

Final Conclusion: The writ petition succeeded only to the limited extent of securing provisional release on revised conditions, and the matter was disposed of accordingly.

Ratio Decidendi: In matters of provisional release of seized imported goods, the Court may substitute the departmental conditions with judicially determined conditions that balance release of goods against protection of revenue and continuation of investigation.

Issues: Whether the respondent-assessee was entitled to registration under the Income-tax Act, 1961 on the ground that its activities were charitable in nature, notwithstanding income generation through activities alleged to be business activities.

Analysis: The registration claim had to be tested on the factual matrix, including the assessee's memorandum of association and the manner in which its income was applied. The Commissioner had accepted that the solar panel installation unit and medical stores were in tune with the assessee's objects, and had also recorded a very low net profit ratio. The Court held that the decisive consideration was the use of income for the assessee's objects and the welfare of ex-servicemen and their families, and that the mere fact that income was generated through activities capable of being viewed as business did not, on these facts, displace the charitable character already found by the authorities below.

Conclusion: The assessee's activities were held to be charitable in nature, and the refusal to interfere with the Tribunal's grant of registration was in favour of the assessee.

Issues: Whether long-term capital gains arising from the joint development agreement were taxable in the assessee's hands, in view of the treatment accorded to the other co-owners who were parties to the same agreement.

Analysis: The addition arose from the assessee's share in the joint development agreement dated 10.07.2015. The same agreement involved the other co-owners, and on identical facts the Revenue had already accepted in two cases that no transfer had taken place and no addition was warranted, while in another case the appellate authority deleted the addition holding that no capital gains arose. The Court applied the principle that where the Revenue has accepted the position in the case of other assessees on identical facts, it cannot take a different stand without just cause. On that basis, the Court held that the assessee's share in the agreement could not be brought to tax as capital gains.

Conclusion: The addition towards long-term capital gains was not sustainable and was directed to be deleted.

Issues: Whether reassessment framed pursuant to a return filed in response to notice under section 148 was invalid for failure to issue notice under section 143(2) within the prescribed time.

Analysis: A return filed in response to notice under section 148 is to be treated as a return for the purposes of the Act, and the machinery for completing the reassessment requires compliance with section 143(2). The notice under section 143(2) in reassessment proceedings is mandatory and goes to the validity of the assumption of jurisdiction. A notice issued beyond the statutory time limit is ineffective in law, and the defect is not cured by participation of the assessee or by section 292BB, which does not enlarge the period prescribed for issuance of a mandatory notice.

Conclusion: The reassessment was invalid for want of a timely notice under section 143(2), and the assessment was liable to be quashed.

Issues: (i) whether penalty was imposable for breach of EPCG licence conditions when duty and interest had been paid, and (ii) whether the redemption fine required reduction.

Issue (i): whether penalty was imposable for breach of EPCG licence conditions when duty and interest had been paid.

Analysis: The coordinate Bench decision relied upon by the appellant was accepted. On that basis, the payment of duty and interest by the importer under the EPCG scheme was treated as sufficient to negate imposition of penalty in the circumstances of the case.

Conclusion: Penalty was not imposable and the penalty amount was set aside in favour of the assessee.

Issue (ii): whether the redemption fine required reduction.

Analysis: The basis for fixing the redemption fine was not indicated. In the absence of a stated basis, the fine was considered excessive and liable to be reduced.

Conclusion: The redemption fine was reduced in favour of the assessee.

Final Conclusion: The appeal succeeded on the penalty issue and also secured reduction of the redemption fine, resulting in partial relief to the appellant.

Issues: (i) whether GST paid on transfer of leasehold rights was hit by the blocked credit provision as consideration for construction of an immovable property on the assessee's own account; (ii) whether the Air Separation Plant qualified as plant and machinery so as to fall outside the credit restriction.

Issue (i): whether GST paid on transfer of leasehold rights was hit by the blocked credit provision as consideration for construction of an immovable property on the assessee's own account.

Analysis: The transaction was not treated as a bare lease of land. It was held to be an inward supply enabling the assessee to secure long-term leasehold rights together with existing shed and superstructures for establishing a manufacturing facility. The expression "construction" in the blocked-credit provision was construed broadly to include re-construction, renovation, additions or alterations to the extent of capitalisation. On that basis, the service received from IPL was found to be integrally connected with construction of the manufacturing facility on the assessee's own account and the capitalised cost formed part of the project cost.

Conclusion: The restriction under Section 17(5)(d) applied, and the credit was not admissible on this ground.

Issue (ii): whether the Air Separation Plant qualified as plant and machinery so as to fall outside the credit restriction.

Analysis: The definition of plant and machinery under the GST law was applied strictly, requiring apparatus, equipment or machinery fixed to earth by foundation or structural support and used for outward supplies, while excluding land, building and other civil structures. The Plant was found to be an integrated industrial installation erected on a long-term leased site, intended for permanent beneficial enjoyment of the land, and not merely detachable equipment fixed for operational stability. The criteria of annexation, object of annexation, intendment and marketability were applied, and the installation was held not to answer the statutory description of plant and machinery.

Conclusion: The Air Separation Plant did not qualify as plant and machinery for the purpose of the blocked-credit exception.

Final Conclusion: Input tax credit on the GST charged for transfer of leasehold rights was held to be blocked under the statutory restriction governing construction of immovable property, and the assessee's claim to avail the credit failed.

Ratio Decidendi: Where a service is received to facilitate construction of a manufacturing facility on the recipient's own account, and the resulting installation does not satisfy the statutory definition of plant and machinery, input tax credit is blocked under the specific exclusion provision.

Issues: Whether the proposed contribution of the developed leasehold land, constructed hotel project and associated infrastructure to an LLP in return for partnership interest and profit-sharing rights constitutes a taxable supply of service under GST.

Analysis: The arrangement involved transfer of valuable rights in leasehold land and the constructed project by one taxable person to another distinct person, namely the proposed LLP. Consideration under GST includes non-monetary benefits, and the partnership interest and profit-sharing rights received in return were treated as consideration. The transaction was found to be a structured commercial arrangement undertaken for business purposes, and its true character was determined by its substance rather than its nomenclature as capital contribution. Schedule III did not apply to protect the transaction because the transfer was not treated as a simple sale of completed immovable property; rather, it involved leasehold rights and construction-related elements within a pre-arranged commercial exploitation model. Schedule II was applied to treat the activity as a supply of service.

Conclusion: The contribution to the LLP was held to be a taxable supply of service, and GST was leviable on the transaction.

Outcome: The writ petition was disposed of with liberty to the petitioner to pursue an appeal before the appellate authority. The challenge to the impugned order and the connected notifications was left open to be urged in that appeal, and the appellate forum was directed to grant a personal hearing. The petitioner was also entitled to seek the benefit of Section 14 of the Limitation Act, 1963 if the appeal was filed within the stipulated time.

Issues: (i) Whether the writ petition was maintainable despite the availability of an appellate remedy under the GST statute; (ii) whether the writ petition could be entertained in the absence of complete supporting documents and in view of the plea relating to limitation.

Issue (i): Whether the writ petition was maintainable despite the availability of an appellate remedy under the GST statute.

Analysis: The petition challenged orders passed by the GST authorities, but the statutory appeal mechanism under Section 112 of the Goods and Services Tax Act, 2017 was available before the Tribunal. The Court treated that remedy as the proper course and held that writ jurisdiction should not be invoked to bypass the statutory appellate forum, particularly where the Tribunal had commenced functioning.

Conclusion: The issue was decided against the petitioner. The writ petition was not entertained on the ground of availability of the alternative statutory remedy.

Issue (ii): Whether the writ petition could be entertained in the absence of complete supporting documents and in view of the plea relating to limitation.

Analysis: The petition was filed with only the impugned order, without the complete set of orders required to assess the factual and legal background. The Court also noted that the limitation plea raised by the petitioner was a matter that could be examined in the statutory appeal. In these circumstances, the writ petition did not warrant interference on the record placed before the Court.

Conclusion: The issue was decided against the petitioner. The writ petition was liable to be rejected on this ground as well.

Final Conclusion: The Court declined to exercise writ jurisdiction and left the petitioner to pursue the statutory appellate remedy.

Ratio Decidendi: Where an efficacious statutory appeal is available under the GST framework, writ jurisdiction should ordinarily not be invoked to bypass that remedy, especially when the record is incomplete and the grievance can be examined by the appellate authority.

Issues: Whether the impugned GST order was liable to be quashed and the matter remitted on the ground that the demand confirmed in the order did not tally with the show cause notice and was contrary to Section 75(7) of the GST enactment.

Analysis: The notice and the impugned order were found to relate to the same tax period and the same registration, but the figures and reference particulars did not align. On a prima facie comparison, the order appeared to have gone beyond the scope of the show cause notice. Such a departure was treated as contrary to Section 75(7), which requires that the adjudication remain confined to the matters proposed in the notice and that the assessee be put to notice of the case to be answered.

Conclusion: The impugned order was quashed and the matter was remitted for fresh consideration on merits after further corrigendum and response.

Final Conclusion: The assessee succeeded in obtaining quashing of the demand order, but the adjudication was left open for fresh decision by the authority.

Ratio Decidendi: An adjudication order under GST cannot confirm a demand beyond the scope of the show cause notice, and a breach of that limitation warrants quashing of the order and remand for fresh adjudication.