Outcome: Delay condoned; the special leave petition was disposed of with liberty to prefer a statutory appeal.

Issues: Whether fines and penalties in lieu of confiscation were sustainable for excess or unaccounted stock discovered during surveys of business premises.

Analysis: Section 35 of the GST Acts requires registered persons to maintain true and correct accounts and provides for determination of tax on unaccounted goods as though supplied, applying sections 73 or 74. Binding High Court decisions address excess stock discovered during surveys by reference to those assessment provisions rather than confiscation proceedings.

Conclusion: No. The confiscation proceedings and resulting fines and penalties were unsustainable, and their setting aside was upheld. The issue was decided in favour of the assessees.

Ratio Decidendi: Where excess or unaccounted stock is found during a survey of business premises, tax is to be determined under sections 73 or 74 rather than through direct confiscation proceedings under section 130.

Issues: Whether transportation under an expired e-way bill justified the GST penalty.

Analysis: Section 129 of the GST enactments addresses detention and penalties, while Rule 138 governs e-way bills. The e-way bill had expired and recorded a vehicle registration different from the vehicle carrying the goods, although the goods and other documents matched. Repair slips for the alleged breakdown were produced during adjudication rather than at interception, the driver had not reported a breakdown, and no FASTag movement was shown. Fiscal penalties were treated as civil liabilities, while intention to evade tax under section 129 was stated to be ascertainable from the surrounding circumstances.

Conclusion: The expired e-way bill amounted to no valid e-way bill, and the penalty was justified against the assessee.

Ratio Decidendi: Transportation under an expired e-way bill may attract a GST penalty where the surrounding circumstances support an inference of intention to evade tax.

Issues: (i) Whether the appeals involving place of supply fall within the Principal Bench's jurisdiction. (ii) Whether the support and software services qualify as exports rather than intermediary services. (iii) Whether additional grounds for rejecting one refund claim were sustainable.

Issue (i): Whether the appeals involving place of supply fall within the Principal Bench's jurisdiction.

Analysis: Section 109 of the Central Goods and Services Tax Act, 2017 reserves cases involving an issue relating to place of supply to the Principal Bench. The intermediary classification affects whether the place of supply is in India or outside India under Section 13 of the Integrated Goods and Services Tax Act, 2017.

Conclusion: The appeals fall within the Principal Bench's jurisdiction, in favour of the assessee.

Issue (ii): Whether the support and software services qualify as exports rather than intermediary services.

Analysis: The definition of intermediary requires facilitation of a separate supply between other persons and excludes supplies made on the supplier's own account. The agreements established a principal-to-principal relationship, without agency or authority to bind the overseas recipient. Applying ejusdem generis, the expression covering other persons was read in the context of brokers and agents. The export requirements include an overseas place of supply and receipt of payment in convertible foreign exchange. The separately incorporated parent and subsidiary were not merely establishments of a distinct person.

Conclusion: The services are exports, not intermediary services, and qualify for refund of unutilised input tax credit, in favour of the assessee.

Issue (iii): Whether additional grounds for rejecting one refund claim were sustainable.

Analysis: The notice did not specify the alleged mismatches, missing invoice details or lack of input nexus sufficiently, and the first appellate authority recorded no reasoned findings on them. Rejection on those grounds went beyond the notice and violated natural justice.

Conclusion: The additional grounds for rejection are unsustainable, in favour of the assessee.

Final Conclusion: The classification and additional objections do not bar refund of the unutilised credit with statutory interest.

Ratio Decidendi: A service supplied on the supplier's own account on a principal-to-principal basis is not an intermediary service merely because it facilitates the recipient's business.

Issues: Whether construction services supplied to Indian Railways qualified as a composite supply of works contract taxable at 12% rather than 18% GST.

Analysis: Entry 3(v)(a) of Notification No. 11/2017-Central Tax (Rate), as amended, provides a concessional rate for qualifying composite works contracts supplied to railways. The taxpayer bore the burden of establishing that the services involved construction relating to immovable property and constituted a composite works contract. The invoices described the services as general construction, and the record lacked structural proof and billing breakups establishing the claimed classification.

Conclusion: The services did not qualify for the 12% rate and were taxable at 18% GST. The issue was decided in favour of Revenue.

Ratio Decidendi: Entitlement to the concessional rate for railway works contracts requires proof that the supply is a composite works contract involving construction relating to immovable property.

Issues: (i) Whether interest is payable on an admissible refund delayed beyond sixty days; (ii) whether interest may be denied because the disputed tax was paid through the electronic credit ledger and subsequently re-credited; (iii) whether payment of the entire disputed demand rather than the minimum statutory pre-deposit defeats a claim for interest on its refund.

Issue (i): Whether interest is payable on an admissible refund delayed beyond sixty days.

Analysis: Section 56 provides for interest when an eligible refund is not made within sixty days of receipt of the refund application. The record established a delay in sanctioning the refund, which the department did not dispute.

Conclusion: Interest is payable for the qualifying delay beyond sixty days, in favour of the assessee.

Issue (ii): Whether interest may be denied because the disputed tax was paid through the electronic credit ledger and subsequently re-credited.

Analysis: Section 49 recognises statutory electronic ledgers for payment. Input tax credit debited against the disputed demand remained unavailable for use until it was restored, and no provision was identified that denied delayed-refund interest solely because payment was made through the credit ledger.

Conclusion: Interest cannot be denied merely because payment was made through the electronic credit ledger and subsequently re-credited, in favour of the assessee.

Issue (iii): Whether payment of the entire disputed demand rather than the minimum statutory pre-deposit defeats a claim for interest on its refund.

Analysis: Section 107 prescribes a minimum pre-deposit for an appeal and provides for a stay of recovery of the balance. It does not prohibit payment of the full demand or treat such payment as a waiver of statutory refund or interest rights. Payment in full may also avoid interest consequences if a demand is ultimately confirmed.

Conclusion: Payment of the entire disputed demand does not, by itself, extinguish the statutory claim for interest on its refund, in favour of the assessee.

Final Conclusion: The taxpayer's statutory entitlement survives both the mode and amount of payment, with the interest calculation to be examined and the amount payable disbursed by the proper officer.

Ratio Decidendi: Statutory interest on an eligible delayed tax refund cannot be denied solely because the disputed demand was paid in full through an electronic credit ledger and subsequently re-credited.

Issues: Whether the determinations of suppressed turnover could be sustained without entry-wise verification and reasoned computation.

Analysis: A determination of suppressed turnover requires an evidentiary basis for assessment, including identification of disputed entries, examination of their nature, reconciliation with books and returns, and a transparent computation. Neither order adequately identified and analysed the relevant entries or explained its computation. Non-production of invoices during the initial investigation did not by itself establish suppression; their subsequent production also required verification against the diaries, books and returns. A speaking order must record the evidence, explanations and reasons for the determination.

Conclusion: Neither determination could be sustained. The suppressed turnover and consequential tax and penalty liability remain to be determined afresh.

Ratio Decidendi: A determination of suppressed taxable turnover based on seized records must identify and assess the relevant entries and provide an evidence-based computation supported by reasons.

Issues: Whether delay in filing a statutory appeal against the ex parte assessment could be condoned and an opportunity to appeal granted.

Analysis: The statutory limitation period had expired. In exercising its writ jurisdiction under Article 226 of the Constitution of India to do complete justice, the Court relied on the petitioner's offer to deposit half of the assessed liability.

Conclusion: The delay was condoned subject to deposit of 50% of the assessed liability, amounting to Rs. 4,08,885.84. An appeal filed within one month of receipt of the order must be decided on its merits.

Issues: (i) Whether the departmental appeal was maintainable despite the monetary limit in the applicable circular; (ii) whether penalty could be imposed for non-completion of Part B of the e-way bill without an established intention to evade tax.

Issue (i): Whether the departmental appeal was maintainable despite the monetary limit in the applicable circular.

Analysis: The circular excepted cases which, in the Commissioner's opinion, required contest in the interest of justice or revenue. Where an appeal is based on that opinion, the Commissioner need not state its grounds or reasons, and the opinion cannot be challenged.

Conclusion: The monetary-limit objection was rejected, against the assessee.

Issue (ii): Whether penalty could be imposed for non-completion of Part B of the e-way bill without an established intention to evade tax.

Analysis: Section 129 of the GST enactments was applied in light of the principle that mens rea is necessary for a penalty where the violation is technical. The transaction was supported by genuine commercial documents, and the e-invoice was generated on the portal before movement. Neither the penalty order nor the departmental grounds identified an intention to evade tax.

Conclusion: The penalty could not be sustained, in favour of the assessee.

Final Conclusion: The assessee remains relieved of the penalty despite rejection of the monetary-limit objection.

Ratio Decidendi: A technical e-way bill violation alone cannot sustain a penalty under section 129 without an intention to evade tax.

Issues: Whether the penalty and appellate orders could be sustained without adequate verification of the transactions and an effective opportunity for the taxpayer to be heard.

Analysis: The appellate authority had not adequately examined whether the taxpayer discharged the burden of substantiating the transactions, while the original proceedings were ex parte. Closure of the premises after the claimed discontinuance of business, subsequent cancellation of a supplier's registration, or the absence of a particular document was not conclusive by itself. The available evidence required collective evaluation, and an effective hearing was necessary to permit the taxpayer to respond and produce supporting records.

Conclusion: Neither order could be sustained. The genuineness of the transactions and ultimate penalty liability remain undecided.

Ratio Decidendi: A finding of fictitious transactions requires evaluation of the available evidence as a whole; where material facts remain unresolved following ex parte proceedings, an effective hearing is necessary before an adverse finding.

Issues: Whether non-consecutive tax invoice numbering warrants detention or a penalty under section 129, or a general penalty under section 125.

Analysis: Rule 46 requires consecutive invoice numbering. The interstate movement was supported by valid documents, and the quantity and description of the goods matched. No other discrepancy, unaccounted transaction or tax evasion was alleged. The numbering lapse was treated as a technical irregularity in a revenue-neutral transaction. Section 125 was identified as the appropriate provision for a technical infraction, with deliberate noncompliance required for its imposition.

Conclusion: The numbering lapse did not justify detention or a penalty under section 129; a general penalty under section 125 was not established on the facts. The issue was decided in favour of the assessee.

Ratio Decidendi: A technical invoice-numbering lapse, without a substantive contravention or tax evasion, does not justify detention and penalty for goods in transit.

Issues: (i) Whether a fraud-based penalty could be imposed when the notice proposed a non-fraud penalty; (ii) Whether undisputed transitional credit could be denied for late filing of a return caused by a departmental portal failure; (iii) Whether invocation of the fraud-based demand provision was justified.

Issue (i): Whether a fraud-based penalty could be imposed when the notice proposed a non-fraud penalty.

Analysis: The notice proposed a penalty under section 122(2)(a) of the Central Goods and Services Tax Act, 2017, while the authorities applied section 122(2)(b) read with section 74. Section 75(7) prohibits confirmation of a demand on grounds not specified in the notice. The notice also combined a fraud-based demand provision with a non-fraud penalty provision.

Conclusion: The fraud-based penalty was impermissible.

Issue (ii): Whether undisputed transitional credit could be denied for late filing of a return caused by a departmental portal failure.

Analysis: Section 140 requires the relevant returns for the six months preceding the appointed date, while Rule 117 of the Central Goods and Services Tax Rules, 2017 provides for the transitional declaration. The credit balance and timely declaration were undisputed. A departmental portal failure prevented filing of one return despite diligent efforts, and the return was filed at the first available opportunity. The principle that law does not compel the impossible and the concept of substantial compliance informed the interpretation of the filing requirement.

Conclusion: The transitional credit was admissible.

Issue (iii): Whether invocation of the fraud-based demand provision was justified.

Analysis: Section 74 requires fraud, wilful misstatement or suppression of facts to evade tax, supported by foundational facts in the notice. The filing difficulty had been disclosed to the department, and the notice identified no supporting facts or undisclosed information. Mere perceived wilfulness did not establish the requisite intent. A subsequent GST instruction requiring supporting evidence in the notice was treated as consistent with that interpretation.

Conclusion: Invocation of section 74 was unjustified.

Final Conclusion: The transitional credit remains available, with consequential relief from the associated interest and penalty.

Ratio Decidendi: Otherwise admissible transitional credit cannot be denied for delayed filing of a required return where a diligent taxpayer is prevented from timely filing by a departmental portal failure and files at the first available opportunity.

Issues: (i) Whether the return mismatch and non-production of certificates justified denial of input tax credit for the relevant period. (ii) Whether integrated-tax credit on an inter-State supply was wrongly availed when recorded under central and state tax heads.

Issue (i): Whether the return mismatch and non-production of certificates justified denial of input tax credit for the relevant period.

Analysis: Section 16 required possession of an invoice, receipt of services, actual payment of the tax to the Government and furnishing of a return; Section 155 placed the burden of proving eligibility on the claimant. The later invoice-reflection requirement did not apply to the relevant period. The record included the invoices' integrated-tax entries in GSTR-2A, reconciliation and bank records, with no material showing non-payment by the supplier. The circular prescribed certificates as a means of verification, not an additional eligibility condition. Its certificate mechanism addressed specified supplier-reporting discrepancies and was not engaged where the integrated tax on the invoices was reflected in GSTR-2A. The prescribed preliminary inquiry into the invoices and statutory conditions was not shown to have been undertaken.

Conclusion: No. The mismatch and non-production of certificates did not justify denial of the credit. The issue is in favour of the assessee.

Issue (ii): Whether integrated-tax credit on an inter-State supply was wrongly availed when recorded under central and state tax heads.

Analysis: Supplies by a special economic zone unit are treated as inter-State supplies, while Section 73 addresses wrongly availed credit. The integrated tax on the invoices corresponded to credit entered under the central and state tax heads. A reasoned higher-court construction of Section 73 was followed, and the statutory text was independently applied. The provisions concerning tax paid under the wrong head address tax paid on a transaction, not credit claimed by its recipient. The alleged state revenue loss was unquantified, and revenue neutrality was not established.

Conclusion: No. The credit was not wrongly availed merely because it was recorded under the central and state tax heads. The issue is in favour of the assessee.

Final Conclusion: The credit remains available, the related interest and penalty cannot survive, and consequential pre-deposit relief, including statutory interest, follows.

Ratio Decidendi: Where the statutory conditions for input tax credit are satisfied, inadvertent reporting of eligible integrated-tax credit under central and state tax heads does not constitute wrongful availment; a verification certificate under an administrative circular is not an independent condition of eligibility.

Outcome: The special leave petitions were dismissed on the grounds of delay and merits.

Issues: Whether penalties for concealment or furnishing inaccurate particulars are sustainable on estimated additions for alleged bogus purchases.

Analysis: The penalties were imposed under section 271(1)(c) of the Income-tax Act, 1961 on additions for alleged bogus purchases that were successively assessed at 100%, reduced to 5% and ultimately sustained at 6%. Judicial discipline and consistency required adherence to coordinate-bench decisions on identical estimated additions, in the absence of distinguishing features or a subsequent contrary ruling.

Conclusion: The penalties on the estimated additions are unsustainable and must be deleted.

Issues: Whether the belated suspension of a customs broker's licence pending inquiry was justified.

Analysis: Regulation 16 of the Customs Brokers Licensing Regulations, 2018 provides for immediate suspension pending inquiry; Regulation 17 governs disciplinary proceedings. Preventive suspension requires a demonstrated need for urgent action. The licensing authority received an offence report containing allegations against the broker three to four months before suspension. The suspension order identified no additional information in the later documents establishing a need for urgency. Separate action for revocation remains subject to the applicable procedure and timelines.

Conclusion: The suspension was unjustified and is set aside.

Ratio Decidendi: Immediate suspension of a customs broker's licence pending inquiry cannot be sustained where the authority delays acting on an offence report without demonstrating a subsequent need for urgent action.

Issues: (i) Whether confiscation of the tea and imposition of a redemption fine were justified; (ii) whether penalties on the owner and transporter were justified.

Issue (i): Whether confiscation of the tea and imposition of a redemption fine were justified.

Analysis: Section 119 of the Customs Act, 1962 concerns confiscation of goods used to conceal confiscable goods. The tea was in the vehicle's rear, while the contraband was recovered from the driver's cabin. The evidence did not establish that the tea was dispatched as a guise for moving the contraband.

Conclusion: In favour of the assessees: the confiscation and redemption fine are set aside. The recovered fine is to be refunded with interest.

Issue (ii): Whether penalties on the owner and transporter were justified.

Analysis: Section 114 of the Customs Act, 1962 governs penalties relating to goods liable to confiscation. The driver's immediate statement and the call records did not implicate either appellant. The driver had been engaged by the vehicle owner, and defects in transport documents did not provide cohesive evidence of the appellants' involvement. Revenue was required to provide cogent evidence linking them to the alleged perpetrators.

Conclusion: In favour of the assessees: the penalties on both appellants are set aside.

Final Conclusion: The tea and the appellants are relieved of the challenged confiscation, fine and penalties, with refund of the recovered fine and interest.

Ratio Decidendi: Co-transportation of legitimate goods with contraband, without cogent evidence of a connection, is insufficient to establish their use as concealment or justify penalties against their owner or transporter.

Issues: (i) Whether the personal-guarantor insolvency application was barred by limitation; (ii) Whether resignation and subsequent changes to credit arrangements discharged the earlier guarantee by novation; (iii) Whether disputed signatures on later documents warranted rejecting or staying the insolvency application; (iv) Whether non-enforcement of collateral discharged the guarantor.

Issue (i): Whether the personal-guarantor insolvency application was barred by limitation.

Analysis: Section 18 of the Limitation Act provides for a fresh limitation period following a written acknowledgment of subsisting liability made before expiry of the existing period. The borrower's settlement proposals in 2018 and 2021 were made within the respective running periods; rejection of a proposal does not itself negate an acknowledgment. The guarantee made acknowledgments by the borrower or its authorised agent binding on the guarantor. A surety's liability is co-extensive with the principal debtor's unless the contract otherwise provides.

Conclusion: The application was not barred by limitation.

Issue (ii): Whether resignation and subsequent changes to credit arrangements discharged the earlier guarantee by novation.

Analysis: Section 62 of the Indian Contract Act addresses substitution of a contract, while Section 133 addresses discharge of a surety following variation without consent. The admitted continuing guarantee expressly preserved the guarantor's obligations despite variations to the loan or security documents. Resignation from directorship and revised credit facilities did not establish an agreement substituting the earlier guarantee or a release from it.

Conclusion: The earlier guarantee was not discharged by novation.

Issue (iii): Whether disputed signatures on later documents warranted rejecting or staying the insolvency application.

Analysis: The guarantor bore the burden of proving forgery. Absence from the bank's attendance records was not conclusive, and the private forensic report was not accepted as proof. Insolvency proceedings are summary in nature; the admitted earlier guarantees provided an independent basis for establishing debt and default.

Conclusion: The disputed signatures did not warrant rejection or stay of the insolvency application. Their authenticity remains for appropriate proceedings.

Issue (iv): Whether non-enforcement of collateral discharged the guarantor.

Analysis: Sections 134 and 139 of the Indian Contract Act require the relevant conditions for discharge, including release of the principal debtor or impairment of the surety's remedies, to be established. The material did not show that the securities were lost, surrendered or impaired, or that the principal debtor was released.

Conclusion: Non-enforcement of the collateral did not discharge the guarantor.

Final Conclusion: The admitted earlier guarantee remained enforceable, and the challenges did not displace the basis for personal-guarantor insolvency proceedings.

Ratio Decidendi: A written acknowledgment of a subsisting debt made within limitation by a borrower extends time against a guarantor where the guarantee makes the borrower's acknowledgment binding on the guarantor.

Issues: Whether a forensic audit of the creditor's records could be directed to ascertain when the corporate debtor's security deposit was appropriated.

Analysis: The creditor gave conflicting dates for appropriation, one before commencement of the insolvency resolution process and the other during the moratorium. The dispute required verification of relevant accounting records and electronic data. The audit was confined to determining the actual date of appropriation.

Conclusion: The limited forensic audit was permissible.

Ratio Decidendi: A limited forensic audit may be directed to verify the date of appropriation of a corporate debtor's security deposit where the creditor gives conflicting dates material to the insolvency process.

Issues: (i) Whether the corporate applicant fraudulently or maliciously initiated insolvency proceedings, warranting recall and a penalty; (ii) whether the initiation of insolvency proceedings was validly authorised; (iii) whether non-joinder of the resolution applicant or approval of its plan by the committee of creditors prevented recall of the insolvency admission order.

Issue (i): Whether the corporate applicant fraudulently or maliciously initiated insolvency proceedings, warranting recall and a penalty.

Analysis: Sections 10 and 65 of the Insolvency and Bankruptcy Code, 2016 require a truthful disclosure of liabilities and address proceedings initiated fraudulently or maliciously for a purpose other than bona fide insolvency resolution. A recent decree was omitted from the application, and its proximity to the authorising resolution and filing supported an inference of deliberate concealment. A further decree was also omitted. The absence of disclosed recovery steps for a substantial write-off, disputed statutory amounts and doubtful corporate authorisation added to the evidence of improper purpose. A delayed creditor claim could not cure concealment at initiation.

Conclusion: The proceedings were fraudulently and maliciously initiated. Recall of the admission order, termination of the process and the Rs. 5 lakh penalty were upheld.

Issue (ii): Whether the initiation of insolvency proceedings was validly authorised.

Analysis: The dispute concerned whether the persons who convened the meeting continued to hold office, not merely a failure to file an appointment form. The record did not establish regularisation of the directors relied upon; one was recorded as having ceased before the meeting. Section 176 of the Companies Act, 2013 did not protect acts performed after the company knew that an appointment had terminated.

Conclusion: The meeting and special resolution authorising initiation were invalid.

Issue (iii): Whether non-joinder of the resolution applicant or approval of its plan by the committee of creditors prevented recall of the insolvency admission order.

Analysis: Under Section 31 of the Insolvency and Bankruptcy Code, 2016, a resolution plan becomes binding upon approval by the adjudicating authority. The plan had received committee approval but not adjudicating authority approval. The resolution applicant was fully heard on appeal, leaving no prejudice from its earlier non-joinder. Fraud at initiation affected the authority to continue the process; the proposed revision and party consent arose subsequently.

Conclusion: Neither non-joinder nor committee approval prevented recall. Subsequent consent could not sustain the process or the plan.

Final Conclusion: The corporate debtor remains restored to its pre-insolvency position, and creditors may pursue their claims in accordance with law.

Ratio Decidendi: An insolvency process initiated through fraudulent concealment cannot be sustained by subsequent committee approval of a resolution plan or consent of the parties.