Issues: Whether delay in filing the statutory GST appeal should be condoned and the appeal entertained for adjudication on merits.

Analysis: Although the Appellate Authority is bound by the limitation framework under Section 107, the circumstances preventing timely filing were found to be beyond the petitioner's control. Denial of adjudication on merits in those circumstances would cause grave injury and prejudice. The consistent approach permitting delayed appeals to be considered on merits was applied.

Conclusion: The delay in filing the appeal was condoned, and the Appellate Authority was directed to entertain and adjudicate the appeal on merits if filed within the stipulated period.

Issues: (i) Whether penalty for misreporting of income could be sustained when the show cause notices and penalty order did not disclose the basis or reasons for characterising the under-reporting as misreporting; (ii) Whether the computation of tax sought to be evaded for imposing penalty required reconsideration.

Issue (i): Whether penalty for misreporting of income could be sustained when the show cause notices and penalty order did not disclose the basis or reasons for characterising the under-reporting as misreporting.

Analysis: Section 270A distinguishes misreporting from under-reporting and prescribes a substantially higher penalty for misreporting, while Section 270AA excludes immunity where misreporting is involved. Misreporting entails misrepresentation or other bad faith and is exhaustively confined to the categories specified in Section 270A(9). In view of these serious consequences, the notice must identify the factual basis on which misreporting is alleged, enabling a meaningful response. The notices either made a bare assertion of misreporting or merely referred to Section 270A, and the penalty order recorded misreporting without reasons.

Conclusion: The penalty order characterising the income as misreported was unsustainable and was set aside, in favour of the assessee.

Issue (ii): Whether the computation of tax sought to be evaded for imposing penalty required reconsideration.

Analysis: The assessed normal income reflected in the intimation under Section 143(1) and the assessment order under Section 143(3) differed only to the stated extent, whereas the penalty was computed by reference to the entire assessed normal income. The recorded figure of tax sought to be evaded therefore required reconsideration.

Conclusion: The computation underlying the penalty could not be sustained and requires reconsideration, in favour of the assessee.

Final Conclusion: The invalid penalty proceedings do not preclude fresh proceedings in accordance with law, with all contentions remaining available to the assessee.

Ratio Decidendi: A penalty for misreporting of income cannot be imposed unless the statutory basis and factual particulars establishing misrepresentation or other bad faith are specifically disclosed in the notice and supported by reasons in the penalty order.

Issues: Whether foreign exchange fluctuation loss on year-end restatement of an external commercial borrowing used for capital purposes and subsequently converted into equity shares is allowable as a revenue deduction.

Analysis: The borrowing was obtained from the parent company for acquisition of capital assets and therefore belonged to the capital field. The exchange loss arising from restatement of that liability likewise retained a capital character. The materially identical issue in the assessee's own earlier assessment years had been decided on the same basis, and no distinguishing facts or change in law was established.

Conclusion: The foreign exchange fluctuation loss is a capital loss and is not allowable as a business-revenue deduction; the issue is decided against the assessee.

Issues: Whether the petitioner should be permitted to pursue the statutory appellate remedy against the order-in-original despite delay.

Analysis: The petitioner elected to pursue an appeal and sought consideration of any delay. No merits of the challenge to the order-in-original were adjudicated. Liberty was granted to file an appeal with the statutory pre-deposit and a delay-condonation application; the appellate authority was left to assess delay and, if satisfied, decide the appeal in accordance with law.

Conclusion: The petitioner may avail the appellate remedy, with consideration of delay left to the appellate authority.

Issues: Whether assessments initiated under Section 153C on the basis of one common satisfaction note for multiple assessment years were valid.

Analysis: A separate satisfaction note was required for each assessment year. The Assessing Officer had instead recorded a common satisfaction note for six assessment years. This defect vitiated the assumption of jurisdiction and initiation of proceedings under Section 153C.

Conclusion: The Section 153C assessments were invalid and were annulled in favour of the assessees.

Issues: (i) Whether interest paid to partners on their running capital accounts was allowable despite debit balances at the beginning and end of the year and credit through year-end journal entries; (ii) Whether disallowance of interest under section 40(a)(ia) was sustainable where tax had been deducted at source and the recipient had recognised the income.

Issue (i): Whether interest paid to partners on their running capital accounts was allowable despite debit balances at the beginning and end of the year and credit through year-end journal entries.

Analysis: The partnership deed authorised interest on partners' capital accounts. The documentary record established that interest was computed on daily running credit balances after accounting for transactions and reversal entries, rather than solely on opening or closing balances. The Revenue identified no error in the running-account computations. Under the mercantile system, accrual of interest liability may validly be recognised by crediting the payee's account; a journal entry at year-end does not by itself render the expenditure fictitious. The recipient partners had also recognised the interest income and tax had been deducted at source.

Conclusion: The disallowance of interest paid to the partners was deleted, in favour of the assessee.

Issue (ii): Whether disallowance of interest under section 40(a)(ia) was sustainable where tax had been deducted at source and the recipient had recognised the income.

Analysis: Form No. 16A established deduction of tax at source on the interest credited to the lender, and the recipient's records established recognition of the corresponding income. No finding disputed the genuineness of the certificate or deposit of tax. Section 40(a)(ia) does not impose a separate requirement that accrued interest, once credited and subjected to tax deduction, must also be transferred through banking channels. Further, where the recipient has included the sum in its taxable income and discharged tax liability, disallowance in the payer's hands is unavailable.

Conclusion: The disallowance under section 40(a)(ia) was deleted, in favour of the assessee.

Final Conclusion: The interest expenditure to the partners and the interest paid to the lender were held allowable on the evidentiary record.

Ratio Decidendi: Interest liability accrued under mercantile accounting cannot be disallowed merely because it is credited through year-end journal entries or because opening and closing account balances are debit, where daily running credit balances, contractual authority, and supporting records establish the liability; disallowance for failure to deduct tax is unavailable where deduction and deposit of tax are established and the recipient has offered the income to tax.

Issues: Whether the applicant was entitled to bail in a prosecution alleging fraudulent availment and passing on of input tax credit.

Analysis: The investigation stood completed and a complaint had been filed; the prosecution rested substantially on documentary evidence. No charge had been framed, the trial before the Magistrate was unlikely to conclude within a reasonable time, and the maximum punishment under the invoked offence was five years. The applicant had remained in custody since 12.02.2026 and had no criminal antecedents. No exceptional circumstance, risk of absconding, witness intimidation, evidence tampering, or subversion of justice was shown. Pending assessment proceedings under Sections 73 and 74 had not been initiated, though criminal proceedings could independently continue. Presumption of innocence, personal liberty, and the requirement that pre-trial detention not become punitive supported release on bail.

Conclusion: The applicant was entitled to bail, subject to conditions safeguarding the trial and investigation.

Issues: Whether reassessment initiated after four years of the relevant assessment year was valid where the assessee had disclosed interest expenditure and investments during the original scrutiny assessment and the proposed disallowance was based on re-examination of the same records.

Analysis: The original assessment was completed after scrutiny, during which the disallowance issue had been specifically examined. The recorded reasons did not identify any failure by the assessee to make a full and true disclosure of material facts, nor did they rely on tangible material obtained subsequent to the original assessment. The proposed reassessment rested on a fresh examination of the disclosed interest expenditure and investments and was therefore founded on a change of opinion.

Conclusion: The reassessment notice was invalid and was quashed, in favour of the assessee.

Issues: Whether the extended limitation period for recovery of customs duty could be invoked where the classification of wireless Bluetooth earphones, earbuds, headphones and headsets was subject to divergent Tribunal views.

Analysis: Section 28(1) prescribes the ordinary two-year period for issuing a demand notice, while Section 28(4) permits a five-year period only where non-levy or short-levy arises from collusion, wilful misstatement or suppression of facts with intent to evade duty. The classification dispute involved conflicting decisions of coordinate Benches and had been referred for consideration by a Larger Bench. The assessee's claimed classification and exemption claim consequently reflected a bona fide interpretative position, rather than any deliberate misstatement or suppression. The Department did not establish the statutory ingredients necessary to invoke the extended period.

Conclusion: The extended period under Section 28(4) of the Customs Act, 1962 was not invocable; duty demands beyond the normal limitation period, along with redemption fine and penalties, were set aside. The classification issue was left open.

Issues: Whether CENVAT credit was admissible on staff health insurance, club membership, rent-a-cab and travel agent services used in connection with the manufacture of excisable goods for the periods before and after 1 April 2011.

Analysis: For the pre-amendment period, the services were connected with business activities, their expenditure was recorded in the accounts, and the assessable value of the final products was determined taking such expenditure into account. They consequently fell within the expression activities relating to business in the inclusive part of the definition of input service. For the post-amendment period, credit remained available where the services were not meant for employees' personal use. There was no material establishing personal consumption; the services were availed for employees in the course of business.

Conclusion: CENVAT credit on the disputed services was admissible to the assessee for both periods.

Issues: Whether insolvency proceedings, moratorium and subsequent liquidation of the company bar or warrant quashing of prosecution against its directors/persons in charge for cheque dishonour.

Analysis: The offence had crystallised upon dishonour of the cheques, service of demand notice and failure to pay, all before commencement of the corporate insolvency resolution process. The moratorium protects the corporate debtor and does not extinguish the independent criminal liability of natural persons who were in charge of the company when the offence was committed. Subsequent suspension of the board's powers and liquidation do not erase such pre-existing liability. Proceedings for cheque dishonour are criminal in character, whereas insolvency moratorium postpones civil debt enforcement; parallel insolvency proceedings therefore do not bar the prosecution. Questions concerning the petitioners' responsibility for the company and fulfilment of the statutory ingredients must be determined at trial.

Conclusion: Insolvency proceedings and liquidation do not preclude continuation of the cheque-dishonour prosecution against the petitioners; no case for quashing was established.

Issues: (i) Whether the show cause notice and adjudication order issued against an amalgamating company that had ceased to exist were valid; (ii) Whether the successor transferee company had locus to challenge those proceedings.

Issue (i): Whether the show cause notice and adjudication order issued against an amalgamating company that had ceased to exist were valid.

Analysis: The notice and order were issued and uploaded on the GST portal in the name of the amalgamating entity after it had ceased to exist. The amalgamation had been disclosed to the authorities before initiation of the notice and in the reply to it. A passing reference to the transferee company did not cure proceedings initiated, continued and concluded against the non-existent entity. The adjudication order contained no reasoning that proceedings were validly directed against the successor, and its reasons could not be supplemented through submissions in court. Although liabilities and pending proceedings existing on the effective date of amalgamation devolve upon the transferee, any fresh proceedings to impose or recover pre-amalgamation liabilities must be initiated against the transferee and not the dissolved transferor. Participation by the successor did not validate the jurisdictional defect.

Conclusion: The show cause notice and adjudication order issued against the non-existent amalgamating entity were invalid and were quashed, in favour of the assessee.

Issue (ii): Whether the successor transferee company had locus to challenge those proceedings.

Analysis: The successor was the entity upon which the Revenue sought to fasten any liability resulting from the impugned proceedings. Denying it the right to challenge the order while treating it as liable for its consequences would deprive it of an effective legal remedy and create an unjust anomaly.

Conclusion: The successor transferee company had locus to maintain the writ petition, in favour of the assessee.

Final Conclusion: The Revenue may, if legally entitled, institute fresh proceedings against the successor entity; the merits of any tax liability remain open.

Ratio Decidendi: Proceedings initiated and concluded against an entity that has ceased to exist upon amalgamation are void, and successor participation or devolution of liabilities cannot cure that defect; proceedings for pre-amalgamation liabilities must be initiated against the transferee entity.

Issues: Whether GST registration cancelled for non-response to a show-cause notice could be restored despite dismissal of the statutory appeal as time-barred.

Analysis: Exercising writ jurisdiction under Article 226 of the Constitution of India, the Court treated the matter as identical to prior cases in which restoration was granted upon compliance with return-filing and payment obligations under the Goods and Services Act, 2017. The respondents had accepted restoration for defaulting dealers who completed the requisite statutory compliances.

Conclusion: The GST registration was directed to be restored upon the petitioner approaching the competent authority within seven days and completing the requisite formalities; the petitioner was required to file pending returns and pay tax, penalty and interest within the stipulated period, failing which the restoration order would cease to operate.

Issues: Whether cancellation of GST registration and dismissal of the statutory appeal as time-barred warranted interference and restoration of registration upon settlement of outstanding statutory dues.

Analysis: The appellate authority could not condone delay beyond the outer period prescribed under Section 107. The petitioner had also not pursued revocation or appeal within the prescribed limitation. However, the outstanding tax position, the petitioner's willingness to discharge all tax, interest, late fee and penalty, and the absence of objection from the State subject to such payment justified restoration on terms.

Conclusion: The cancellation and appellate orders were set aside, and registration was directed to be revived upon payment of the quantified tax liability, interest, late fee and penalty within the stipulated period.

Issues: Whether the adjudication order could stand where the assessee had not been afforded adequate opportunity to file a merits reply and participate in the proceedings.

Analysis: The assessee sought time after asserting lack of knowledge of the common show-cause notice, suspended registration, and the need to examine voluminous records concerning input tax credit. It had not filed a reply on merits. There was no established repeated request for adjournment, deliberate avoidance of proceedings, or clear prior service of the notice. In these individual circumstances, denial of a further effective opportunity rendered the adjudication doubtful.

Conclusion: The adjudication against the assessee was unsustainable and required fresh consideration after permitting a final reply, applications for relied-upon documents or cross-examination, and a properly notified personal hearing.

Issues: (i) Whether a final assessment could be made against a non-resident eligible assessee without first issuing a draft assessment order under Section 144C; (ii) whether best judgment assessment under Section 144 was valid despite the return and responses having been filed; (iii) whether the Assessing Officer at Gurgaon had jurisdiction to complete the faceless assessment of the non-resident assessee; and (iv) whether the addition for the alleged property purchase could be sustained where duplicate reporting and source of the actual investment had been explained.

Issue (i): Whether a final assessment could be made against a non-resident eligible assessee without first issuing a draft assessment order under Section 144C.

Analysis: The assessee disclosed and substantiated non-resident status through the return, stay calculation and passport records. That status was reflected in the assessment order and computation and was not disputed through any further enquiry. A non-resident other than a company is an eligible assessee. A variation prejudicial to such assessee required prior service of a draft order, preserving the statutory right to approach the Dispute Resolution Panel. The direct final assessment defeated that right and constituted a jurisdictional defect, not a curable procedural irregularity.

Conclusion: The final assessment without a draft order under Section 144C was without jurisdiction and invalid, in favour of the assessee.

Issue (ii): Whether best judgment assessment under Section 144 was valid despite the return and responses having been filed.

Analysis: The return filed in response to reassessment notice was e-verified and was acted upon by issuance of notice under Section 143(2). Although the first notice under Section 142(1) was not answered, the subsequent notice substantially sought the same particulars and was answered with supporting material; subsequent communications were also answered. The statutory preconditions for best judgment assessment, namely failure to file a return or failure to comply with the relevant notices, were therefore absent.

Conclusion: Invocation of Section 144 was invalid, in favour of the assessee.

Issue (iii): Whether the Assessing Officer at Gurgaon had jurisdiction to complete the faceless assessment of the non-resident assessee.

Analysis: The Revenue accepted that an assessee found to be non-resident would fall under the jurisdiction of the International Taxation officer. Since non-resident status stood accepted, the Gurgaon officer lacked jurisdiction. The objection under Section 124(3) was unavailable in the peculiar faceless-assessment setting, where the officer assumed control only at the final stage and allowed less than twenty-four hours to respond.

Conclusion: The Gurgaon Assessing Officer lacked jurisdiction to complete the assessment, in favour of the assessee.

Issue (iv): Whether the addition for the alleged property purchase could be sustained where duplicate reporting and source of the actual investment had been explained.

Analysis: The material showed one agricultural-property purchase for Rs. 50,00,000, while the figure of Rs. 2,04,60,800 resulted from the same stamp-value transaction being reported four times. The purchase document, bank records and remittances into the NRE account explained both the transaction and its source. The assessment disregarded this material and proceeded solely because the limitation period was expiring. No basis existed to remand the matter where the record already established duplicate reporting and explained source.

Conclusion: The addition based on the alleged purchase value was unsustainable, in favour of the assessee.

Final Conclusion: The assessment suffered from mandatory-procedure violations, absence of jurisdictional conditions, lack of proper assessing-officer jurisdiction and arbitrariness in disregarding material establishing the actual transaction and its explained source.

Ratio Decidendi: A prejudicial assessment of a non-resident eligible assessee without a prior draft order under Section 144C, or a best judgment assessment absent its statutory preconditions, is jurisdictionally invalid.

Issues: Whether rejection of the assessee's stay applications without recording reasons was legally sustainable.

Analysis: The impugned orders contained no reasons for refusing stay. Recording reasons is an essential requirement of natural justice applicable to judicial and administrative decisions; it ensures objective decision-making and permits scrutiny of the decision. An unreasoned order cannot be sustained in law.

Conclusion: The rejection of the stay applications without reasons was invalid, in favour of the assessee.

Issues: Whether a transfer-pricing adjustment for advertising, marketing and promotion expenditure could be sustained by applying the Bright Line Test.

Analysis: The adjustment treated AMP expenditure exceeding that of comparables as incurred for building the foreign associated enterprise's brand and computed its arm's length price through the Bright Line Test. The jurisdictional High Court had rejected that method for determining the arm's length price of AMP-related international transactions. Although the Revenue's challenge to that precedent was pending before the Supreme Court, no contrary superior-court ruling or stay of the High Court ruling was shown. The binding jurisdictional precedent therefore governed the assessment.

Conclusion: The Bright Line Test adjustment for AMP expenditure was deleted, in favour of the assessee; both parties remain bound by the outcome of the pending Supreme Court proceedings.