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Issues: Whether an adjudication order may confirm a GST demand exceeding the amount proposed in the show-cause notice.
Analysis: Section 75(7) of the Uttar Pradesh Goods and Services Tax Act, 2017 and the Central Goods and Services Tax Act, 2017 prohibits confirmation of a demand exceeding that proposed in the show-cause notice. The notice proposed tax, interest and penalty at specified amounts, whereas the adjudication order confirmed a substantially higher tax demand and penalty. Such confirmation exceeded the statutory authority conferred on the adjudicating authority.
Conclusion: An adjudicating authority cannot confirm tax, interest or penalty beyond the amount proposed in the show-cause notice; an order doing so is without jurisdiction.
Issues: (i) Whether the tax demand could be sustained when the show-cause notice did not disclose the material factual and legal basis for treating the February 2020 entry as wrongful input tax credit and the orders gave no reasoned answer to the restoration explanation; (ii) Whether a payment of IGST under the wrong tax head could be corrected by unilateral recredit in GSTR-3B, and how the correct-head payments must be treated; and (iii) Whether the consequential interest and penalty were sustainable.
Issue (i): Whether the tax demand could be sustained when the show-cause notice did not disclose the material factual and legal basis for treating the February 2020 entry as wrongful input tax credit and the orders gave no reasoned answer to the restoration explanation.
Analysis: Section 73(1) of the Central Goods and Services Tax Act, 2017, read with Sections 75(6) and 75(7), requires the notice to disclose the factual and legal basis of the proposed demand and confines confirmation to the stated grounds. Although the notice identified the amount and month, it did not specify which condition under Section 16(2) failed or distinguish a fresh claim of credit on inward supplies from restoration of credit earlier used for output-tax payment under a wrong head. The subsequent reliance on supplier-related defaults and the refund-procedure objection did not cure this omission. The adjudication and appellate orders also did not reconcile the original IGST debit with the correct-head payments or give a reasoned answer to the explanation. This denied natural justice and resulted in non-speaking orders on material issues.
Conclusion: The demand founded on the deficient show-cause notice and unsupported by reasoned findings was unsustainable, in favour of the assessee.
Issue (ii): Whether a payment of IGST under the wrong tax head could be corrected by unilateral recredit in GSTR-3B, and how the correct-head payments must be treated.
Analysis: Section 19(1) of the Integrated Goods and Services Tax Act, 2017 and Rule 89(1A) of the Central Goods and Services Tax Rules prescribe refund as the statutory mechanism for IGST paid on a supply subsequently found to be intra-State; Section 77(2) of the Central Goods and Services Tax Act, 2017 excludes interest on the correct Central and State tax liability. Output tax paid under the wrong head does not automatically become fresh input tax credit under Section 16 merely through a GSTR-3B entry. However, the payments made under the correct Central and State tax heads through DRC-03 were established and had to be recognised. The framework required reconciliation of the original IGST payment, the correct-head payments and any benefit obtained through recredit, so as to give effect to revenue neutrality and avoid double taxation without permitting duplicate credit or refund.
Conclusion: Unilateral recredit through GSTR-3B was not automatically lawful; nevertheless, the correct-head tax payments had to be recognised and fiscally reconciled without any duplicate credit or refund, partly in favour of the assessee.
Issue (iii): Whether the consequential interest and penalty were sustainable.
Analysis: Interest under Section 50(3) and Rule 88B of the Central Goods and Services Tax Rules requires findings on wrongful availment and utilisation of input tax credit, including the relevant ledger balance, utilisation and period of benefit. Section 77(2) also protected the correct Central and State tax payment from interest. Penalty under Section 73(11) could not independently survive once the finding of wrongful credit and the underlying demand failed.
Conclusion: The consequential interest and penalty were unsustainable, in favour of the assessee.
Final Conclusion: A correction involving payment of tax under a wrong head must follow the statutory refund framework, but the Department must recognise tax actually paid under the correct heads and cannot sustain recovery on an inadequately disclosed charge or an unreasoned rejection of the taxpayer's explanation.
Ratio Decidendi: Where a GST demand treats a recredit as wrongly availed input tax credit, the show-cause notice must disclose the factual and legal basis of that charge and adjudication must address the taxpayer's actual explanation; the prescribed refund process for a wrong-head payment does not permit disregard of tax already paid under the correct heads.
Issues: (i) Whether a corporate guarantor's liability is a financial debt despite the guarantee not having been invoked before commencement of CIRP; (ii) Whether an individual homebuyer may object to inclusion of creditors in the CoC without proceeding through the authorised representative; (iii) Whether the lender, debenture trustee, and a recent assignee were related parties barred from CoC participation.
Issue (i): Whether a corporate guarantor's liability is a financial debt despite the guarantee not having been invoked before commencement of CIRP.
Analysis: Section 5(8) encompasses liability under a corporate guarantee. A financial creditor under Section 5(7) is a person to whom financial debt is owed and need not establish an existing default for lodging a claim in CIRP. Default under Section 3(12) is material to commencement of CIRP under Section 7(1), not to the existence of financial debt.
Conclusion: A corporate guarantor's liability is a financial debt even where the guarantee was not invoked before CIRP commenced, and the claims could be lodged. In favour of the appellants.
Issue (ii): Whether an individual homebuyer may object to inclusion of creditors in the CoC without proceeding through the authorised representative.
Analysis: The authorised representative of creditors in a class has a limited statutory role of attending CoC meetings and voting on their behalf. That role does not prevent an individual homebuyer from challenging the inclusion of a related party in the CoC. An earlier direction permitting resubmission of claims without hearing other financial creditors does not operate as res judicata against their subsequent objection.
Conclusion: An individual homebuyer had locus to raise the related-party objection; representation through the authorised representative was unnecessary for that purpose. In favour of the respondents.
Issue (iii): Whether the lender, debenture trustee, and a recent assignee were related parties barred from CoC participation.
Analysis: Section 5(24)(m)(i) requires association through participation in the corporate debtor's policy-making processes. This enquiry is less exacting than the positive and proactive control required for disqualification under Section 29A. The contractual rights to appoint a nominee director, resolve deadlocks, approve and modify construction budgets, regulate key managerial personnel, oversee project implementation, appoint sales agents, and control project revenues and escrow accounts established pervasive participation in policy-making and business supervision. The post-CIRP assignment was not a bona fide assignment and could not be used to defeat the related-party exclusion.
Conclusion: The lender was a related party; it, the debenture trustee acting for its debenture interest, and the recent assignee could not be represented, participate, or vote in the CoC. In favour of the respondents.
Final Conclusion: Although the corporate-guarantee claims constituted financial debt, the related-party exclusion precluded the lender, trustee, and assignee from CoC rights, and the individual homebuyer's objection was maintainable.
Ratio Decidendi: A financial creditor whose contractual rights enable participation in a corporate debtor's policy-making processes is a related party and cannot obtain CoC representation through a post-CIRP assignment that is not bona fide.
Issues: (i) Whether the application under Section 95(1) of the Insolvency and Bankruptcy Code, 2016 against the personal guarantor was filed within the applicable limitation period; and (ii) Whether admission of a creditor's claim by a resolution professional constitutes an acknowledgment extending limitation under Section 18 of the Limitation Act, 1963.
Issue (i): Whether the application under Section 95(1) of the Insolvency and Bankruptcy Code, 2016 against the personal guarantor was filed within the applicable limitation period.
Analysis: Article 137 of the Limitation Act, 1963 prescribed a three-year period. The limitation period commenced upon expiry of the period specified in the demand invoking the personal guarantee. After excluding the period directed to be excluded during the COVID-19 pandemic, the limitation period expired before the application was instituted.
Conclusion: The application was barred by limitation and was not maintainable, in favour of the appellant.
Issue (ii): Whether admission of a creditor's claim by a resolution professional constitutes an acknowledgment extending limitation under Section 18 of the Limitation Act, 1963.
Analysis: A valid acknowledgment under Section 18 must be made by the person against whom the right is claimed, or an authorised person, before expiry of limitation, and must consciously and unequivocally admit the subsisting liability. Admission of a claim by a resolution professional is an administrative act of collating and recording claims, not an adjudicatory admission of liability by the corporate debtor.
Conclusion: Admission of the claim by the resolution professional did not amount to an acknowledgment and could not extend or renew limitation, in favour of the appellant.
Final Conclusion: The limitation objection prevailed because no valid acknowledgment existed to preserve the claim beyond the applicable limitation period for initiating the personal-guarantor insolvency process.
Ratio Decidendi: A resolution professional's administrative admission of a claim is not an acknowledgment of debt capable of extending a subsisting limitation period under Section 18 of the Limitation Act, 1963.
Issues: Whether the appeal before the Commissioner (Appeals) was barred by limitation, having regard to service of the order-in-original by affixture and the restricted power to condone delay.
Analysis: The order-in-original was sent to the registered address and, after postal return, was served by chaspa on that premises under a panchnama. The same registered address continued to be used in subsequent proceedings, while postal communications were repeatedly returned because no person was available. The recorded service by affixture was accepted as reliable evidence of service. Section 85(3A) of the Finance Act, 1994 prescribes two months for filing an appeal and permits condonation only for a further one month on sufficient cause. The statutory maximum period cannot be extended beyond that limit.
Conclusion: The first appeal, filed beyond the maximum statutory period after valid service by affixture, was time-barred and could not be entertained; the finding is against the assessee.
Issues: Whether proceedings to reopen deemed assessments under Section 27 of the Tamil Nadu Value Added Tax Act, 2006 were barred by limitation, and whether the dealer's request for copies of assessment records could extend the statutory period.
Analysis: The returns having been filed with the prescribed documents and proof of tax payment, the assessments stood deemed completed under Section 22(2) of the Tamil Nadu Value Added Tax Act, 2006. The power to reopen such assessments for escaped turnover or wrong availment of input tax credit under Section 27 was subject to the six-year statutory limitation. The dealer's subsequent communication seeking copies of assessment records could neither extend, enlarge nor revive that limitation; statutory jurisdiction cannot be enlarged by correspondence or conduct.
Conclusion: The reopening proceedings and consequential assessment orders, having been initiated beyond the prescribed six-year period, were barred by limitation and without jurisdiction, in favour of the assessee.
Issues: Whether the enhanced additional court fee at 1% under the notification effective from 01.04.2016 applies to tax appeals and revisions in which the taxing lis commenced before that date.
Analysis: Section 76(1) authorises levy of additional court fee, while the notification enhancing its rate took effect from 01.04.2016 and contains no express or necessarily implied retrospective operation. The obligation to pay court fee as a condition of appeal forms part of the vested right of appeal and cannot be made more onerous after commencement of the lis. In tax proceedings, the lis commences when, upon dissatisfaction with the return, the assessing authority calls for material or evidence, including through a pre-assessment notice; it does not depend merely on the assessment year, the date of assessment order, or the date of filing the appeal.
Conclusion: The enhanced 1% additional court fee is payable only where the taxing lis commenced on or after 01.04.2016; appeals or revisions arising from a lis commenced before that date remain governed by the earlier rate. Where the commencement date is not established, the concerned appellate or revisional authority must determine it.
Ratio Decidendi: An enhanced court-fee condition affecting a vested right of appeal operates prospectively, absent express or necessarily implied retrospectivity, and its applicability in tax matters is determined by the date on which the lis commenced.
Issues: Whether the Committee of Creditors may withdraw an approved resolution plan before its approval by the Adjudicating Authority on the ground that the corporate debtor's financial position has subsequently improved.
Analysis: A resolution plan approved under Section 30(4) derives binding force from the statutory insolvency framework between the Committee of Creditors and the successful resolution applicant even before approval under Section 31(1). Section 12-A, read with Regulations 30-A and 18(2), permits withdrawal only until approval of the plan by the Committee of Creditors; the Committee's continued role pending implementation does not extend to decisions affecting a plan already placed before the Adjudicating Authority. The commercial wisdom of the Committee cannot override this binding effect. The Adjudicating Authority's review remains confined to statutory compliance under Sections 30(2) and 31(1), and improved profitability alone does not justify refusal of an otherwise compliant plan.
Conclusion: The Committee of Creditors cannot withdraw its approved resolution plan after its submission to the Adjudicating Authority merely because the corporate debtor's financial position has improved; such improvement alone cannot warrant refusal of approval where the plan satisfies Section 30(2).
Issues: (i) Whether the IBC moratorium barred the arbitral tribunal from entertaining the second application under Section 17 and modifying the status quo arrangement while the corporate debtor's counterclaim was pending. (ii) Whether the tribunal's erroneous statement of the scope of the Section 29A extension order invalidated the impugned order. (iii) Whether the Adjudicating Authority had exclusive jurisdiction under Section 60(5)(c) read with Section 63 of the IBC.
Issue (i): Whether the IBC moratorium barred the arbitral tribunal from entertaining the second application under Section 17 and modifying the status quo arrangement while the corporate debtor's counterclaim was pending.
Analysis: Section 14(1)(a) of the Insolvency and Bankruptcy Code, 2016 prohibits proceedings against a corporate debtor, but does not prohibit proceedings initiated by it. A counterclaim by the corporate debtor may augment its estate if successful and does not impose a pecuniary liability upon it if unsuccessful. The expression "by or against" in Section 60(6) cannot be read into Section 14(1)(a) to create a bar on the counterclaim. The termination of the development agreement preceded the CIRP; the contractual conditions for possession had not been fulfilled, and the terminated agreement was not property of the corporate debtor protected by Section 14(1)(d). The interim status quo arrangement was a voluntary pro tem measure and could be reconsidered as an arbitral interim measure in aid of the surviving counterclaim.
Conclusion: The moratorium did not deprive the arbitral tribunal of jurisdiction to entertain the second Section 17 application and modify the status quo arrangement in relation to the counterclaim. The issue is decided against the petitioner.
Issue (ii): Whether the tribunal's erroneous statement of the scope of the Section 29A extension order invalidated the impugned order.
Analysis: The Section 29A extension order had attained finality and permitted continuation of the corporate debtor's counterclaim, not the claim against it. Although the impugned order incorrectly described that order as permitting both claims to proceed, the second interim application was referable to the counterclaim. The misstatement therefore did not affect the tribunal's jurisdiction to determine the appropriate interlocutory arrangement.
Conclusion: The erroneous description of the Section 29A order did not invalidate the impugned order. The issue is decided against the petitioner.
Issue (iii): Whether the Adjudicating Authority had exclusive jurisdiction under Section 60(5)(c) read with Section 63 of the IBC.
Analysis: Section 60(5)(c) confers limited residuary jurisdiction over disputes arising out of or relating to insolvency resolution. That jurisdiction is unavailable for a contractual termination founded on pre-insolvency non-performance and unconnected with the CIRP. Since the termination notice preceded the CIRP and was not occasioned by insolvency, the necessary nexus for invoking the Adjudicating Authority's jurisdiction was absent. Consequently, the jurisdictional bar under Section 63 did not arise.
Conclusion: The Adjudicating Authority did not have exclusive jurisdiction, and the arbitral tribunal's jurisdiction was not ousted. The issue is decided against the petitioner.
Final Conclusion: The arbitral process may continue on the corporate debtor's counterclaim, with interlocutory measures remaining within the arbitral tribunal's competence; the IBC moratorium neither preserves the terminated development agreement as estate property nor transfers this contractual dispute exclusively to the Adjudicating Authority.
Ratio Decidendi: The IBC moratorium and the Adjudicating Authority's residuary jurisdiction do not displace arbitral adjudication of a corporate debtor's own counterclaim where the contractual termination preceded, and is unrelated to, the CIRP.
Issues: Whether bleaching, dyeing and processing of fabrics received from handloom or powerloom manufacturers on job-work basis constitute manufacture attracting textile cess under Section 5A of the Textiles Committee Act, 1963.
Analysis: Section 5A levies cess on textiles and textile machinery manufactured in India, while exempting textiles manufactured out of handloom or powerloom industry. As "manufacture" is undefined in the Textiles Committee Act, 1963, its specialised definition under another enactment cannot be imported absent legislative reference, incorporation, or statutes being in pari materia. On its common-parlance meaning in the statutory context, bleaching and dyeing undertaken on job-work basis merely process and refine fabrics supplied by powerloom or handloom manufacturers and returned to them; they do not result in manufacture of a new textile by the processor.
Conclusion: The issue is decided in favour of the assessee: job-work processing of the fabrics does not amount to manufacture under Section 5A of the Textiles Committee Act, 1963, and the processor is not liable to textile cess.
Issues: Whether the appellant's residual liability to the assignee should be fixed for a full and final settlement despite unresolved challenges to the NPA classification and assignment of debt.
Analysis: The validity of the NPA classification, the assignment, and the basis for calculating compensation on debt value or acquisition value were expressly left open. The report had assessed possible returns on the assignee's investment after accounting for payments already made, while relevant financial information and borrowing details were not furnished by the assignee. In the peculiar circumstances, including the need to preserve the running concern, equitable balancing warranted a conclusive monetary settlement rather than adjudication of the disputed legal issues.
Conclusion: The appellant shall pay an additional Rs.125 crores within 12 weeks, over and above Rs.250 crores already paid, as full and final settlement of the assignee's debt claims. Upon payment, the respondents must release the securities and guarantees and return the title deeds; the pending insolvency and debt-recovery proceedings shall stand disposed of. On default, the respondents may revive proceedings and the appellant will lose the benefit of the settlement directions.
Issues: Whether a short administrative delay in posting genuine stock transactions, supported by contemporaneous records and statutory returns, constitutes failure to account for goods warranting confiscation under Section 130(1)(ii).
Analysis: Section 130(1)(ii) imposes the severe consequence of confiscation only where the facts establish deliberate tax evasion through unaccounted goods. The disputed stock was supported by a pre-survey invoice, was subsequently verifiable in the regular books and statutory returns, and the delay in posting was attributable to the accountant's temporary absence. A delayed entry of a genuine commercial transaction is distinct from non-accountal intended for clandestine removal. The physical-stock allegation was also based on visual approximations rather than standard weighment, while the separate assessment under Section 74 substantially accepted the explanation and treated only a minor quantity as discrepant. Treating the same transactions as reconcilable under Section 74 and as confiscable under Section 130 was legally inconsistent.
Conclusion: A short, bona fide bookkeeping delay supported by contemporaneous commercial records does not amount to unaccounted goods or a confiscable offence under Section 130(1)(ii).
Issues: (i) Whether writ jurisdiction should be exercised to entertain a belated jurisdictional challenge to a show-cause notice after participation in adjudication; (ii) Whether the adjudication order was vitiated by denial of a reasonable opportunity of personal hearing.
Issue (i): Whether writ jurisdiction should be exercised to entertain a belated jurisdictional challenge to a show-cause notice after participation in adjudication.
Analysis: The extraordinary writ remedy was declined for a jurisdictional challenge raised after participation in the proceedings and substantial delay, particularly when an alternative statutory remedy was available. The jurisdictional objection was left to be addressed in the statutory adjudicatory process.
Conclusion: The jurisdictional challenge was not entertained, against the assessee.
Issue (ii): Whether the adjudication order was vitiated by denial of a reasonable opportunity of personal hearing.
Analysis: Section 75(5) requires a reasonable opportunity of hearing in adjudication. The notified hearing did not conclude the proceedings, yet no further hearing notice or date was provided for several months before an ex parte order was made on the basis of the reply. This denied the assessee a reasonable opportunity of personal hearing and breached principles of natural justice.
Conclusion: The adjudication order was unsustainable for denial of a reasonable opportunity of personal hearing, in favour of the assessee.
Final Conclusion: Fresh adjudication must be undertaken in accordance with law after affording hearing and addressing the jurisdictional objection under Section 74.
Ratio Decidendi: An adjudication order cannot be sustained where, after the notified hearing does not conclude the proceedings, no further hearing opportunity is given before an ex parte determination is made.
Issues: Whether compensation received under the BSNL Voluntary Retirement Scheme, 2019 is exempt under Section 10(10B) of the Income-tax Act, 1961.
Analysis: Section 10(10B) of the Income-tax Act, 1961 was applied to compensation received under BSNL VRS-2019. Identical claims by similarly placed BSNL employees had been accepted in earlier coordinate-bench decisions, and Revenue did not distinguish those decisions on facts or law. The applicable approach also accords with the obligation of tax authorities not to deny a lawful relief merely because the assessee was unaware of the entitlement.
Conclusion: Compensation received under BSNL VRS-2019 is exempt under Section 10(10B) of the Income-tax Act, 1961; taxable income and consequential refund are to be recomputed accordingly.
Issues: Whether penalty for misreporting under Section 270A of the Income-tax Act, 1961 could be sustained solely on disallowance of employees' PF/ESI contributions.
Analysis: Penalty for misreporting requires that the case fall within a specific category prescribed under Section 270A(9) of the Income-tax Act, 1961. A mere disallowance of a claim does not, by itself, establish misreporting. The record did not demonstrate that the delayed employees' PF/ESI contribution fell within any statutory category of misreporting.
Conclusion: The penalty for misreporting was unsustainable and was deleted, in favour of the assessee.
Issues: Whether the re-determination of FOB value pursuant to the unchallenged remand order, by applying Rules 5 to 8 of the Valuation Rules, 1988, warranted interference.
Analysis: The earlier remand order had attained finality and conclusively determined that the declared FOB values were rightly doubted, that the Revenue had discharged its burden regarding misdeclaration, and that the values required re-determination. The scope of remand was therefore confined to verifying whether the prescribed valuation procedure had been followed; the concluded question of re-determination could not be reopened. The Commissioner had considered the values of the different goods in detail and re-determined them under the applicable valuation rules.
Conclusion: The re-determination of FOB value was in accordance with the binding remand directions and required no interference.
Issues: (i) Whether service tax could be levied on a builder's construction of residential complex or works contract services before 1 July 2010; (ii) Whether service tax was payable on such services rendered from 1 July 2010.
Issue (i): Whether service tax could be levied on a builder's construction of residential complex or works contract services before 1 July 2010.
Analysis: The Explanation inserted in Section 65(105)(zzzzh) and Section 65(105)(zzzzq) by the Finance Act, 2010 treated specified construction intended for sale as a deemed service. The applicable circular treated a builder's pre-1 July 2010 construction as self-service. The deeming fiction widened the tax net and operated prospectively, applying equally to construction-of-complex and works-contract classifications.
Conclusion: No service tax was leviable under either classification for the period before 1 July 2010; the related demands and penalties were set aside, in favour of the assessee.
Issue (ii): Whether service tax was payable on such services rendered from 1 July 2010.
Analysis: From 1 July 2010, the amended statutory scheme brought covered builder services within taxability. The surviving demand related to the period from July 2010 to March 2011.
Conclusion: The service-tax demand of Rs. 9,96,156 with interest for July 2010 to March 2011 was confirmed, against the assessee.
Final Conclusion: The amendment governs builder services prospectively: pre-1 July 2010 demands under the two service categories do not survive, whereas tax liability arising after that date remains enforceable.
Ratio Decidendi: A statutory deeming provision bringing a builder's pre-completion construction for sale within the service-tax net applies prospectively from its stated effective date; before that date, the activity is self-service and cannot be taxed as either construction-of-complex or works-contract service.
Issues: (i) Whether the denial of an opportunity to rebut the verification report breached the principles of natural justice; (ii) Whether non-disclosure of gross receipts justified invocation of the extended period of limitation and imposition of penalties; (iii) Whether the composite maintenance-and-repair contracts were chargeable before 1 June 2007 and, thereafter, the applicable method for valuing the works-contract service.
Issue (i): Whether the denial of an opportunity to rebut the verification report breached the principles of natural justice.
Analysis: The remand directions required a reasonable opportunity of hearing and permitted additional evidence. Four hearings were fixed, and the assessee ultimately requested a decision on the existing written record. The verification report relied only on facts and calculations already forming part of the show-cause notice, and no specific inaccuracy in that report was identified.
Conclusion: No breach of the principles of natural justice was established; this issue is against the assessee.
Issue (ii): Whether non-disclosure of gross receipts justified invocation of the extended period of limitation and imposition of penalties.
Analysis: The receipts reflected in the service recipient's tax-deduction records exceeded the values declared in the service-tax returns. Service tax is chargeable on the gross amount charged and cannot be reduced by payments made to subcontractors. The failure to disclose the full consideration amounted to suppression of value.
Conclusion: The extended period of limitation was validly invoked. Penalties under Sections 76 and 77 remain sustainable, while the penalty under Section 78 is to be recomputed with the redetermined tax; this issue is against the assessee.
Issue (iii): Whether the composite maintenance-and-repair contracts were chargeable before 1 June 2007 and, thereafter, the applicable method for valuing the works-contract service.
Analysis: A composite contract involving services and materials is a works contract. Such contracts were not chargeable under the pre-existing taxable-service categories before works contract service was introduced with effect from 1 June 2007; consequently, the claimed pre-introduction abatement is immaterial. For the subsequent period, the composition scheme was unavailable because no option for it was established. As the value of goods transferred in execution of the contracts was not determinable, Rule 2A(ii) applies, under which maintenance and repair works are valued at 70% of the gross amount charged. Free supplies by the service recipient are excluded from the gross amount, while subcontractor payments are not deductible. The resulting amount is to receive cum-tax treatment, with tax already paid adjusted.
Conclusion: The demand for the period before 1 June 2007 is unsustainable. For the subsequent period, tax is payable on 70% of the gross amount charged, excluding free supplies and allowing cum-tax benefit; this issue is partly in favour of the assessee.
Final Conclusion: The enforceable tax liability is confined to the post-1 June 2007 works-contract period and must be recomputed on the prescribed valuation basis, with consequential revision of the Section 78 penalty.
Ratio Decidendi: A composite contract involving service and materials is chargeable as works contract service only from its statutory introduction; where composition was not elected and the goods value is not determinable, the prescribed percentage valuation applies.
Issues: Whether cash refund of service tax erroneously paid on invoices raised for a period in which no service was rendered is barred by the limitation under Section 11B of the Central Excise Act, 1944, or by the absence of a credit note under Rule 6(3) of the Service Tax Rules, 1994.
Analysis: Although invoices were issued and service tax was paid, no service was rendered during the relevant period. Rule 6(3) of the Service Tax Rules, 1994 permitted credit of tax paid where services were not rendered and imposed no time limit for taking that credit. Following the introduction of GST and repeal of the earlier service-tax regime, Section 142(5) of the Central Goods and Services Tax Act, 2017 required the amount otherwise available as credit to be refunded in cash. The limitation under Section 11B could not apply to such a transitional cash refund. A credit note was unnecessary because there was no contract, service, or payment from the service recipient during the period concerned.
Conclusion: The cash refund was admissible and was neither time-barred under Section 11B nor deniable for want of a credit note.
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Issues: Whether the petitioner's access to furnish Form GSTR-1 on the GST common portal should be restored pending consideration of the departmental proceedings.
Analysis: The request for restoration required consideration of the petitioner's response and supporting documents in the pending departmental adjudication. No finding was rendered on the allegations concerning the registration or on the petitioner's entitlement to portal access.
Outcome: The petitioner was directed to submit a detailed representation to the issuing authority, which must decide it by a reasoned order after personal hearing; portal activation was directed only if the authority finds the petitioner to be a bona fide registered proprietor.
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