Issues: (i) Whether the extended period of limitation could be invoked for recovery of service tax on undisclosed receipts and wrongly claimed threshold exemption; (ii) Whether cum-tax benefit was available on the receipts of the unregistered second firm; (iii) Whether unutilised Cenvat credit could be allowed at the appellate stage.

Issue (i): Whether the extended period of limitation could be invoked for recovery of service tax on undisclosed receipts and wrongly claimed threshold exemption.

Analysis: The taxable receipts of both firms were higher than those declared in the ST-3 returns. The receipts of the second firm were not reported, the receipts of the registered firm were understated, and the threshold exemption was admittedly claimed without supporting eligibility. The second firm was also unregistered. These omissions established suppression of taxable value with intent to evade service tax, attracting the extended period under Section 73(1) of the Finance Act, 1994.

Conclusion: The extended period was validly invoked and the service-tax demand based on the actual taxable receipts was sustainable, against the assessee.

Issue (ii): Whether cum-tax benefit was available on the receipts of the unregistered second firm.

Analysis: The sample bills relied upon to establish that service tax had not been separately collected lacked essential particulars and covered only a negligible part of the receipts. No further documentary evidence was produced to substantiate the claim.

Conclusion: Cum-tax benefit was not available, against the assessee.

Issue (iii): Whether unutilised Cenvat credit could be allowed at the appellate stage.

Analysis: The credit had not been availed within the prescribed time through the ST-3 returns. No fresh evidence was produced to establish entitlement to the claimed credit.

Conclusion: The claim for unutilised Cenvat credit was rightly denied, against the assessee.

Final Conclusion: The confirmed service-tax liability, interest and penalties remain legally sustainable, with no entitlement to cum-tax adjustment or the claimed Cenvat credit.

Issues: Whether CENVAT credit could be denied on allegations of receipt of invoices without goods, primarily founded on third-party statements and investigation material not validly established against the assessee.

Analysis: Rule 14 of the Cenvat Credit Rules, 2004 permits recovery only of credit wrongly taken or utilised. Statements recorded during investigation could be relied upon only upon compliance with the mandatory procedure under Section 9D of the Central Excise Act, 1944: the maker must be examined before the adjudicating authority, the statement must be admitted by a reasoned opinion in the interests of justice, and an opportunity for cross-examination must follow. The adjudication gave general findings concerning numerous noticees without addressing the assessee's individual case, evidence, or specific defence. The material showed that the broker and transporter stated that goods were supplied under invoices, while there was no evidence connecting the assessee with any manipulation by the alleged suppliers. No stock verification or other corroborative investigation established non-receipt of inputs. Statements of witnesses not produced for cross-examination, and statements contradicted during cross-examination, could not be relied upon without compliance with Section 9D.

Conclusion: The allegation that the assessee availed CENVAT credit without receiving goods was not established by legally admissible and corroborated evidence; the denial of credit, interest and penalty was unsustainable in favour of the assessee.

Issues: (i) Whether entire claimed purchases, including the GST component, could be added under Section 69C where sales were accepted and purchase evidence was partly available; (ii) Whether the addition for discrepancy in income from other sources was sustainable.

Issue (i): Whether entire claimed purchases, including the GST component, could be added under Section 69C where sales were accepted and purchase evidence was partly available.

Analysis: Section 69C concerns expenditure whose source or explanation is not satisfactorily established. The declared sales were accepted and the trading results were not disturbed. Purchase invoices, GST returns and stock records were available, but critical evidence of actual movement and delivery of goods, including transport documents, e-way bills and delivery challans, was not furnished. The material therefore did not justify either complete acceptance of the purchases or their total disallowance.

Conclusion: The addition for alleged bogus purchases was restricted to Rs. 6,00,000, being 10% of Rs. 60,13,941, in favour of the assessee.

Issue (ii): Whether the addition for discrepancy in income from other sources was sustainable.

Analysis: The addition arose from the difference in income from other sources as compared with the original return. The material and submissions on record did not support its retention.

Conclusion: The addition of Rs. 16,146 was deleted, in favour of the assessee.

Final Conclusion: The adjustment relating to disputed purchases is confined to Rs. 6,00,000, and the separate addition for income from other sources does not survive.

Issues: Whether the Revenue may retain recoveries exceeding 20% of the disputed demand, or adjust future refunds, during pendency of the first appeal without recorded reasons for departing from the CBDT norm.

Analysis: The CBDT Office Memoranda prescribe recovery of 20% of the disputed demand as the ordinary condition for stay pending first appeal. The stay order acknowledged that more than 20% had already been recovered, while no exceptional circumstances, lack of prima facie sustainability, or other recorded reasons justified recovery beyond that threshold. Continued retention of the excess, or further adjustment of refunds during the subsisting stay, would defeat the protection granted by the stay order.

Conclusion: The Revenue may retain only 20% of the disputed demand pending appeal; any amount recovered or adjusted beyond that level must be verified and refunded with applicable interest. The issue is decided in favour of the assessee.

Issues: Whether a co-operative society is entitled to deduction of interest income under section 80P(2)(d) on investments made with co-operative banks despite section 80P(4) of the Income-tax Act, 1961.

Analysis: Section 80P(2)(d) grants deduction for interest or dividend income derived by a co-operative society from investments with another co-operative society. A co-operative bank remains a co-operative society for this purpose. The exclusion under section 80P(4) applies to a co-operative bank's own entitlement to deduction and does not disqualify another co-operative society from claiming deduction on interest earned from investments with that bank. The settled interpretation of these provisions therefore covered the claim.

Conclusion: The deduction under section 80P(2)(d) is available to the assessee on interest earned from investments with co-operative banks, and no substantial question of law arises.

Issues: Whether excess customs duty paid on imports of crude soybean oil qualifying under the tariff rate quota scheme was refundable.

Analysis: The applicable tariff rate quota framework extended the concessional benefit to imports supported by bills of lading dated on or before 31 March 2023, where the goods landed before 30 June 2023. The importer's claim concerned the same product and period already governed by the prior ruling granting refund, and the Revenue did not dispute that settled position.

Conclusion: The rejection of the refund claim was quashed, and the excess customs duty is refundable in accordance with law.

Issues: Whether writ jurisdiction should be exercised against cancellation of GST registration and rejection of its revocation despite an available statutory appeal.

Analysis: The petitioner did not satisfactorily establish that its reply to the show-cause notice had been filed within the stipulated time. The record also disclosed allegations of transactions and input-tax-credit claims involving firms whose registrations had been cancelled. A statutory appeal under Section 107 of the Central Goods and Services Tax Act, 2017 was available, and the tax statute provided a complete remedial mechanism.

Outcome: Writ relief was declined in view of the efficacious statutory appellate remedy.

Issues: Whether the petitioner should be enlarged on bail pending trial for the alleged offences.

Analysis: The request for bail under the statutory bail jurisdiction was assessed with reference to the filing of the charge sheet, custody since 15.07.2026, absence of flight risk and criminal antecedents, the maximum prescribed punishment of five years, and the absence of a need for further undertrial detention. The pending investigation concerning co-accused was safeguarded through stringent conditions.

Conclusion: The petitioner was entitled to bail on stringent conditions.

Issues: Whether the accused was entitled to bail in a prosecution under the Central Goods and Services Tax law.

Analysis: Article 21 of the Constitution of India protects personal liberty through a just, fair and reasonable procedure, and pre-conviction detention is not punitive. Bail is directed to securing attendance at trial, while prolonged custody, absence of criminal antecedents, parity with similarly placed co-accused, completion of investigation, absence of charge framing, the limited maximum sentence, and absence of material suggesting flight risk, witness intimidation or evidence tampering support release. The absence of assessment proceedings under Sections 73 and 74 of the Central Goods and Services Tax Act, 2017 could also bear upon the criminal prosecution. The prosecution was substantially documentary, the alleged offences were triable by a Magistrate, and the trial was not likely to conclude within a reasonable time.

Conclusion: The accused was entitled to bail.

Issues: Whether a notice for reassessment could be issued directly under Section 148, without prior notice under Section 148A(b), where the underlying third-party search occurred before 1 September 2024.

Analysis: Section 152(3) preserves the pre-Finance (No. 2) Act, 2024 regime under Sections 147 to 151 where a search was initiated between 1 April 2021 and 1 September 2024. As the third-party search occurred on 4 January 2024, the pre-amendment provisions, including Explanation 2(iv) to Section 148, remained applicable notwithstanding its subsequent omission. The statutory framework deemed the Assessing Officer to possess information suggesting escaped income and permitted direct issuance of notice under Section 148 in the stated circumstances.

Conclusion: The notice under Section 148 was validly issued without first issuing a notice under Section 148A(b), and the jurisdictional challenge fails.

Issues: Whether reassessment proceedings concerning domain-registration receipts should be stayed pending adjudication of the challenge to the reassessment action.

Analysis: Prior determinations on the characterisation of the receipts, the absence of a permanent establishment, and the history of scrutiny assessments were noted. The reassessment action was prima facie viewed as overlooking objectivity, certainty, and finality in tax adjudication.

Outcome: Notice was issued and the reassessment proceedings were stayed pending the next hearing.

Issues: Whether service tax could be demanded from a goods transport agency solely on Form 26AS data without verifying whether the service recipients had discharged tax under the reverse charge mechanism.

Analysis: Service tax on goods transport agency services was payable by service recipients under the reverse charge mechanism. Although details of the recipients were furnished during adjudication, no inquiry was made with the persons reflected in Form 26AS to ascertain whether they had received the services and discharged the corresponding tax liability. Form 26AS data without such verification could not substantiate the demand against the service provider.

Conclusion: The allegations and service-tax demand against the goods transport agency were unsustainable.

Issues: Whether the extended period of limitation could be invoked where service tax returns were regularly filed and service tax had been paid, but an incorrect registration number was inadvertently stated.

Analysis: The ST-3 return for the relevant period was filed on time. The error concerned the registration number of a different unit, while payment of service tax was not disputed. The error did not justify invocation of the extended period of limitation.

Conclusion: The extended period of limitation was not invokable and the proceedings were quashed in favour of the assessee.

Issues: Whether CENVAT credit could be denied where the relevant invoices supporting the credit were furnished and available on record.

Analysis: The relevant invoices were supplied in response to the audit objection and formed part of the record. The denial had not taken those supporting documents into account.

Conclusion: The CENVAT credit was correctly availed and could not be denied; no penalty was imposable.

Issues: Whether a repeated show-cause notice and retrospective cancellation of GST registration could be sustained when earlier proceedings on identical registration-fraud allegations had been dropped and the cancellation relied upon allegations concerning fraudulent availment and passing of input tax credit that were not stated in the notice.

Analysis: The earlier cancellation proceedings had been dropped after the assessee responded to a notice founded on the allegation that registration had been obtained through fraud, wilful misstatement, or suppression of facts. The subsequent notice was founded on the same allegation and substantially identical intelligence material. The cancellation order nevertheless relied on alleged fraudulent availment and passing of ineligible input tax credit, although the assessee had not been required to answer those allegations in the show-cause notice. This reflected non-application of mind and denied the assessee an opportunity to respond to the grounds ultimately relied upon. The merits of the allegations were left open.

Conclusion: The repeated show-cause notice and the registration-cancellation order were set aside. The authorities may initiate fresh proceedings through a proper notice and after affording an opportunity of hearing.

Issues: Whether partial rejection of refund claims for unutilised input tax credit without affording a hearing or recording reasons was valid.

Analysis: Refund applications under Section 54(3) were partly rejected without a prior opportunity of hearing and without any reasons being assigned for the rejected portion. These deficiencies constituted a breach of the principles of natural justice and the duty to issue a reasoned decision.

Conclusion: The partial rejection of the refund claims was invalid for violation of the principles of natural justice.

Issues: Whether interest on an income-tax refund under Section 244A of the Income-tax Act, 1961 is eligible for a nil rate under the MFN clause in the Protocol to the India-Netherlands DTAA by reference to Article 11(3)(c) of the India-USA DTAA or Article 12 of the India-Italy DTAA, or is taxable at 10% under Article 11(2) of the India-Netherlands DTAA.

Analysis: An MFN benefit requires a notification under Section 90(1) of the Income-tax Act, 1961 for its domestic enforcement. Notification No. S.O. 693(E) dated 30.08.1999 modified Article 11(2) of the India-Netherlands DTAA only by reducing source taxation of interest from 15% to 10% for beneficial owners. It did not import the exemption for government-approved debt claims under Article 11(3)(c) of the India-USA DTAA or any comparable exemption under the India-Italy DTAA. No specific notification extended a nil rate to such interest under the India-Netherlands DTAA.

Conclusion: Interest received under Section 244A of the Income-tax Act, 1961 is taxable at 10% under Article 11(2) of the India-Netherlands DTAA, and the claimed nil-rate MFN benefit is unavailable.

Issues: (i) Whether assignment of contractual rights and rights under a decree to acquire immovable property constituted transfer of a capital asset taxable under the head Capital Gains; (ii) Whether the indexed cost of improvement claim required verification and fresh adjudication; (iii) Whether the claim for exemption under Section 54F required fresh adjudication; (iv) Whether the sale proceeds from shares could be assessed as unexplained cash credit under Section 68.

Issue (i): Whether assignment of contractual rights and rights under a decree to acquire immovable property constituted transfer of a capital asset taxable under the head Capital Gains.

Analysis: Section 2(14) of the Income-tax Act, 1961 covers property of every kind. An assignable contractual right to obtain conveyance of immovable property, including one enforced through a decree for specific performance, is property and therefore a capital asset. Its assignment for consideration amounts to a transfer under Section 2(47), and cannot be assessed under the residuary head under Section 56 merely because title or possession of the underlying land had not passed.

Conclusion: The assigned contractual and decree rights were a capital asset, and their assignment was taxable under the head Capital Gains and not as Income from Other Sources, in favour of the assessee.

Issue (ii): Whether the indexed cost of improvement claim required verification and fresh adjudication.

Analysis: Ledger accounts, bank withdrawal entries, advocate bills and court-fee receipts supporting the improvement expenditure had been furnished but were not examined by the lower authorities. Verification of those materials is necessary for determining the allowable indexed cost in accordance with law.

Conclusion: The indexed cost of improvement claim requires fresh verification and adjudication; no final entitlement was determined.

Issue (iii): Whether the claim for exemption under Section 54F required fresh adjudication.

Analysis: The exemption claim depended on verification of the asserted deposit and withdrawal of funds under the Capital Gains Account Scheme and their utilisation for purchase of land and construction of a residential house. The relevant documents, including the registered conveyance deed, were required to be considered while applying Section 54F of the Income-tax Act, 1961.

Conclusion: The Section 54F exemption claim requires fresh adjudication after considering the relevant evidence and contentions; no final eligibility was determined.

Issue (iv): Whether the sale proceeds from shares could be assessed as unexplained cash credit under Section 68.

Analysis: In alleged penny stock transactions, genuineness may be tested on the preponderance of probabilities from the surrounding circumstances. Although banking records, demat statements, contract notes and payment of securities transaction tax existed, the cumulative circumstances-an unusual off-market acquisition, abnormal price and volume movement, the investee company's lack of supporting fundamentals, suspension of trading, and absence of a credible investment rationale-shifted the burden to the assessee. Those circumstances independently supported the finding that the transactions were not genuine; cross-examination was not indispensable because no third-party statement was the sole basis of the addition.

Conclusion: The share-sale proceeds were rightly treated as unexplained cash credit under Section 68, against the assessee.

Final Conclusion: Consideration for assigning the enforceable right to obtain conveyance must be assessed as capital gains, while the improvement-cost and Section 54F claims require factual verification, and the addition relating to the penny stock share transactions remains sustainable.

Ratio Decidendi: An assignable contractual right, reinforced by a decree, to obtain conveyance of immovable property is property constituting a capital asset, and its assignment for consideration is a transfer chargeable under the head Capital Gains.

Issues: Whether cash deposits arising from cash sales recorded in the assessee's books of account could be assessed as unexplained money under Section 69A.

Analysis: Section 69A applies where the assessee is found to own money not recorded in the books of account. The cash sales and corresponding bank deposits were recorded in the books, and the books were neither rejected nor were the related purchases, stock position, or sales disputed. The cash sales had already been disclosed as income.

Conclusion: Section 69A was inapplicable to the recorded cash deposits, and deletion of the addition was sustained.

Issues: Whether criminal prosecution for failure to deposit tax deducted at source could be sustained against a person treated as the principal officer on the erroneous premise that she was a director of the deductor company.

Analysis: The show-cause notice, order treating the petitioner as principal officer, sanction for prosecution, and complaint each proceeded on the assertion that she was a director of the company. The Revenue acknowledged that she had never been a director. The foundational fact used to attribute principal-officer status and criminal responsibility was therefore incorrect.

Conclusion: A person who was never a director of the company cannot be subjected to prosecution as its principal officer solely on the erroneous assertion of directorship.