Issues: Whether a secured creditor with a security interest registered with CERSAI has priority over an unregistered CGST charge and whether the restraint on issuance of NOC for the secured assets was valid.

Analysis: Section 26E of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 accords first priority to the dues of a secured creditor whose security interest is registered with CERSAI. The petitioner bank's security interest stood registered from 20.12.2020, whereas the revenue authority failed to establish registration of its charge with CERSAI. The provisional attachment under Section 83 of the Central Goods and Services Tax Act, 2017 did not displace the bank's statutory priority.

Conclusion: The petitioner bank's registered security interest has priority over the revenue dues, and the letter restraining issuance of NOC in respect of the secured flats was invalid.

Issues: (i) Whether the Supreme Court's deferral direction concerning delayed adjudication required the writ petition to remain pending; (ii) Whether, following the adjudication orders, the petitioner should be relegated to the statutory appellate remedy.

Issue (i): Whether the Supreme Court's deferral direction concerning delayed adjudication required the writ petition to remain pending.

Analysis: The deferral direction was issued in the context of matters concerning pending adjudication and the larger issue of delay. The provisional assessments in question had culminated in adjudication orders, including an order that pre-dated the writ petition. The controversy was therefore no longer confined to delayed finalisation of provisional assessments.

Conclusion: The issue was answered in the negative; the writ petition was not required to remain pending awaiting the Supreme Court proceedings.

Issue (ii): Whether, following the adjudication orders, the petitioner should be relegated to the statutory appellate remedy.

Analysis: Section 128(1) of the Customs Act, 1962 provides an efficacious appeal against the adjudication orders. The appellate forum can consider the legality of those orders, the legal effect of the alleged delay, and consequential claims concerning the securities furnished. No exceptional circumstance justified bypassing that remedy. The material non-disclosure of the pre-existing adjudication order also supported refusal of discretionary writ jurisdiction.

Conclusion: The issue was answered in the affirmative; the challenges and available contentions must be pursued through the statutory appellate remedy.

Final Conclusion: The legality of the adjudication orders, the consequences of any delay in their making, and related claims concerning bank guarantees remain open for determination by the competent appellate forum in accordance with law.

Ratio Decidendi: Where appealable adjudication orders have been passed and no exceptional circumstance is shown, writ jurisdiction should not bypass an efficacious statutory appellate remedy.

Issues: Whether interest on the refund of amounts deposited during investigation is payable from the date of deposit until the date of refund, notwithstanding that the Revenue's challenge to the order setting aside the demand was dismissed subsequently.

Analysis: The confirmed demand had been set aside, with the result that the investigation deposit was not payable from inception. The amount was deposited in 2008 and retained until its refund in 2024. Applying the established principle governing interest on delayed refund of investigation deposits, the subsequent dismissal of the Revenue's challenge did not justify retention of money that was never lawfully due without interest for the period of such retention.

Conclusion: Interest is payable to the assessee on the refunded investigation deposit from the date of deposit until the date of refund.

Issues: Whether the Supreme Court ruling concerning State legislative competence over intoxicating liquors supported an additional ground challenging the service-tax demand on job-work production.

Analysis: The constitutional ruling relied upon concerned the respective legislative fields relating to intoxicating liquors, including the scope of State power under Entry 8 of List II and Parliamentary control over industries under Entry 52 of List I. It did not determine the levy of service tax on services used for production of goods on a job-work basis. A precedent governs what it actually decides and cannot be extended to a distinct service-tax issue not considered therein. Reliance on an otherwise relevant decision could also be made during hearing without a separate application.

Conclusion: The cited constitutional ruling did not establish that the service-tax demand or jurisdiction to levy service tax on the job-work service was invalid.

Issues: Whether the Tribunal had jurisdiction to entertain an appeal concerning gold chains brought into India by an international passenger.

Analysis: The first proviso to Section 129A(1) expressly excludes the Tribunal's appellate jurisdiction over orders relating to goods imported or exported as baggage. The gold chains were brought by the appellant as an arriving international passenger; their recovery from his person, alleged non-declaration, intended use, concealment, invoice, or duty-evasion allegations concern the merits and do not change the goods' character as baggage. Section 129DD provides revision before the Central Government for such orders.

Conclusion: The impugned order related to goods imported as baggage, and the Tribunal therefore lacked appellate jurisdiction; the available recourse is revision under Section 129DD of the Customs Act, 1962.

Issues: (i) Whether e-governance portal and data-digitisation services provided to government departments and educational institutions were taxable as OIDAR, business auxiliary, or business support services before 1 July 2012; (ii) Whether portal services supplied to universities and educational institutions after 1 July 2012 were exempt from service tax; and (iii) Whether interest earned on fixed deposits from temporarily retained collections was liable to service tax.

Issue (i): Whether e-governance portal and data-digitisation services provided to government departments and educational institutions were taxable as OIDAR, business auxiliary, or business support services before 1 July 2012.

Analysis: OIDAR requires the service provider to provide access to data possessed by it. The appellant merely created and operated a network enabling government officers and citizens to access data owned by the State Government; it did not provide access to its own data. The support rendered to State departments, universities, and educational institutions was directed to governmental and educational functions and was not supplied to entities engaged in business or commerce.

Conclusion: The services were not taxable as OIDAR, business auxiliary, or business support services for the pre-negative-list period, in favour of the assessee.

Issue (ii): Whether portal services supplied to universities and educational institutions after 1 July 2012 were exempt from service tax.

Analysis: Although services were generally taxable after the negative-list regime commenced, portal services supplied to universities and educational institutions fell within Entry 9(d) of Exemption Notification No. 25/2012-ST dated 20.06.2012.

Conclusion: The portal services provided to universities and educational institutions were exempt from service tax after 1 July 2012, in favour of the assessee.

Issue (iii): Whether interest earned on fixed deposits from temporarily retained collections was liable to service tax.

Analysis: The fixed-deposit interest arose because amounts collected towards government fees, educational fees, utility bills, and premiums were remitted after the stipulated short interval. Interest represented the time value of money paid by the bank for the deposits and was not consideration for any service rendered by the appellant.

Conclusion: Fixed-deposit interest was not exigible to service tax under either the pre-negative-list or post-negative-list regime, in favour of the assessee.

Final Conclusion: The disputed e-governance and educational-service receipts either did not constitute taxable services or were exempt, while fixed-deposit interest lay outside the charge of service tax.

Issues: (i) Whether separately billed food and beverages supplied by room/grand-room service were taxable restaurant or accommodation services; (ii) Whether consideration for exclusive branding and display of liquor brands constituted taxable sponsorship/promotional activity; (iii) Whether electricity charges recovered at actual consumption from tenants formed taxable consideration; (iv) Whether the demand beyond the normal limitation period was sustainable.

Issue (i): Whether separately billed food and beverages supplied by room/grand-room service were taxable restaurant or accommodation services.

Analysis: Section 65(105)(zzzzv) of the Finance Act, 1994 confined restaurant service to serving food or beverages in the premises of an air-conditioned restaurant licensed to serve alcohol. Hotel rooms were not restaurant premises, and the food was separately invoiced without evidence that its value formed part of the room tariff. Such separately charged food was a sale/transfer of goods excluded from service under Section 65B(44) of the Finance Act, 1994.

Conclusion: The room and grand-room food and beverage receipts were not taxable services. In favour of the assessee.

Issue (ii): Whether consideration for exclusive branding and display of liquor brands constituted taxable sponsorship/promotional activity.

Analysis: The agreements required exclusive branding and promotion of specified liquor brands and mandatory display of branded accessories. The receipts were therefore consideration for promotional and branding activity, rather than trade margins arising solely from liquor sales. For the pre-negative-list period, the arrangements fell within the statutory scope of sponsorship; for the post-negative-list period, they were services under Section 65B(44) of the Finance Act, 1994 and were not covered by Section 66D of that Act.

Conclusion: The branding-related receipts constituted taxable promotional activity and not mere trading income. Against the assessee.

Issue (iii): Whether electricity charges recovered at actual consumption from tenants formed taxable consideration.

Analysis: The charges represented actual electricity consumption recorded through sub-meters, collected from tenants and remitted to electricity suppliers. They were not consideration for renting services. Rule 5(1) of the Service Tax (Determination of Value) Rules could not include such reimbursement in taxable value, having been held ultra vires.

Conclusion: Electricity charges recovered on actual-consumption basis were not taxable consideration. In favour of the assessee.

Issue (iv): Whether the demand beyond the normal limitation period was sustainable.

Analysis: The notice did not invoke the proviso to Section 73(1) of the Finance Act, 1994, and the record did not establish a deliberate act of suppression or other conduct evidencing intent to evade tax. Mere non-declaration or omission did not establish wilful suppression.

Conclusion: Recovery beyond the normal limitation period was unsustainable; the sponsorship-service demand could survive only for the normal period. In favour of the assessee.

Final Conclusion: Only the service-tax liability on sponsorship/promotional activity for the normal limitation period survives; the remaining impugned demands are set aside.

Issues: (i) Taxability of pre-July 2012 construction services and entitlement to abatement and recipient-side tax liability; (ii) Valuation of post-July 2012 works contract services under Rule 2A and entitlement to abatement and recipient-side tax liability; (iii) Inclusion of free-of-cost materials supplied by customers in the taxable value of works contracts; (iv) Classification of the services treated as exclusive service contracts; (v) Appropriation of service tax allegedly deposited during investigation; (vi) Validity of penalty for non-payment of service tax and non-filing of returns.

Issue (i): Taxability of pre-July 2012 construction services and entitlement to abatement and recipient-side tax liability.

Analysis: Construction of a hospital is commercial or industrial construction service unless evidence establishes that it was intended to be a charitable hospital. The applicable abatement had already been extended, and the tax liability was correspondingly reduced wherever the recipient was required to discharge part of the tax.

Conclusion: The demand for the pre-July 2012 period was sustained; against the assessee.

Issue (ii): Valuation of post-July 2012 works contract services under Rule 2A and entitlement to abatement and recipient-side tax liability.

Analysis: Rule 2A of the Service Tax (Determination of Value) Rules, 2006 permits exclusion of the actual value of goods where established, or valuation on the prescribed presumptive basis. The assessment had allowed the applicable abatement and reduced provider-side liability wherever reverse-charge liability applied. No material established that the actual value of goods exceeded the abatement already allowed.

Conclusion: The valuation and demand for the post-July 2012 works contract services were sustained; against the assessee.

Issue (iii): Inclusion of free-of-cost materials supplied by customers in the taxable value of works contracts.

Analysis: Materials supplied free of cost by customers do not form part of the gross amount charged for determining the taxable value of a works contract.

Conclusion: The service tax demand attributable to free-of-cost customer-supplied materials was set aside; in favour of the assessee.

Issue (iv): Classification of the services treated as exclusive service contracts.

Analysis: The assertion that the services classified as exclusive service contracts were works contracts was unsupported by material in the appeal.

Conclusion: The classification and corresponding demand were sustained; against the assessee.

Issue (v): Appropriation of service tax allegedly deposited during investigation.

Analysis: The alleged deposits require verification as to whether they were paid as service tax.

Conclusion: Any amounts verified as service tax deposits shall be appropriated against the confirmed demand; in favour of the assessee to that extent.

Issue (vi): Validity of penalty for non-payment of service tax and non-filing of returns.

Analysis: The assessee neither paid service tax nor filed returns or declared the services, and the transactions emerged only through investigation.

Conclusion: The penalty under Section 76 of the Finance Act, 1994 was sustained; against the assessee.

Final Conclusion: The tax component attributable to customer-supplied free-of-cost materials is excluded, while the remaining valuation, classification, and penalty findings stand, with adjustment of verified tax deposits.

Ratio Decidendi: Free-of-cost materials supplied by the recipient cannot be included in the gross amount charged for valuation of works contract service.

Issues: Whether the reassessment order and notice were valid when approval was obtained from the Principal Commissioner after more than three years had elapsed from the end of the relevant assessment year.

Analysis: Under the substituted reassessment regime, Section 151 specifies the authority whose prior approval is required. The applicable authority after three years was the higher authority specified in Section 151(ii), rather than the Principal Commissioner. Binding precedent treated approval by the specified authority as a prerequisite to reassessment jurisdiction.

Conclusion: The order under Section 148A, the notice under Section 148 and the consequential reassessment order were quashed.

Ratio Decidendi: Where reassessment action requires prior approval from the higher authority specified after expiry of three years, approval from a different authority does not confer jurisdiction.

Issues: (i) Whether reopening after four years was validly approved; (ii) whether unrelated income could be assessed when no addition was made for the recorded reason for reopening; (iii) whether the addition of commodity trading loss resulted in double taxation.

Issue (i): Whether reopening after four years was validly approved.

Analysis: Section 151 required approval from the Principal Commissioner or Commissioner for the reopening after four years. Approval was instead obtained from a range-level authority.

Conclusion: The reopening notice and consequent assessment were invalid, in favour of the assessee.

Issue (ii): Whether unrelated income could be assessed when no addition was made for the recorded reason for reopening.

Analysis: The recorded reasons concerned commodity-exchange transactions and profit, but no addition was made for those items. The reassessment instead added back a speculation loss that was not part of the recorded reasons. The applicable reassessment principle requires the income forming the basis of reopening to be assessed before other income discovered during reassessment can be independently assessed.

Conclusion: The unrelated addition could not be made and was directed to be deleted, in favour of the assessee.

Issue (iii): Whether the addition of commodity trading loss resulted in double taxation.

Analysis: The return and computation showed that the assessee had already added back the commodity trading loss and carried it forward, rather than adjusting it against income. The assessment treated the loss as having been adjusted and added it back again.

Conclusion: The further addition resulted in double taxation and was directed to be deleted, in favour of the assessee.

Final Conclusion: The reassessment and resulting addition do not survive.

Ratio Decidendi: Other income discovered during reassessment cannot be independently assessed where the income forming the recorded reason for reopening is not assessed.

Issues: Whether the omission of Rule 96(10) of the Central Goods and Services Tax Rules, 2017 applies to proceedings pending on the date of omission.

Outcome: Delay was condoned and the special leave petition was dismissed. No independent adjudication of the issue was made.

Issues: Whether employee benefit and labour expenses could be disallowed on an ad hoc percentage basis without verification of the expenditure.

Analysis: Under section 37 of the Income-tax Act, 1961, the assessee must substantiate the genuineness and business purpose of the expenditure. The disallowances were based on deficiencies in supporting evidence and possible inflation, without identification of specific bogus payments. The proposed alternative rate of 3% was also unsupported by material.

Conclusion: The ad hoc percentage disallowances cannot stand, and the proposed 3% is not accepted. Allowability remains subject to fresh verification.

Issues: (i) Whether the arm's-length price of interest on compulsorily convertible debentures could be determined at nil by treating the instruments as equity; (ii) Whether an alternative disallowance of the interest under Sections 36(1)(iii) and 37(1) was sustainable.

Issue (i): Whether the arm's-length price of interest on compulsorily convertible debentures could be determined at nil by treating the instruments as equity.

Analysis: The CCDs carried an express pre-conversion coupon of 14% per annum, subject to an initial moratorium. Although the principal was compulsorily convertible, the conversion price and corresponding number of shares were to be determined with reference to fair market value on the conversion date and were not fixed at issuance. Absence of an ordinary cash-redemption right, long tenor, and compulsory conversion were relevant pricing characteristics requiring suitable comparability analysis or adjustments; they did not, without more, establish that the price of the subsisting interest obligation was nil.

Analysis: Under Sections 92(1) and 92(2) of the Income-tax Act, 1961 and Rule 10AB of the Income-tax Rules, an arm's-length result required reference to the price paid or payable in the same or a similar uncontrolled transaction under similar circumstances. No comparable uncontrolled transaction showing a nil pre-conversion return was identified, nor was it established that an arm's-length interest rate could not be determined. Exceptional departure from the actual transaction required foundational facts showing that its economic substance differed from its legal form or that reliable pricing was impracticable; those facts were absent.

Conclusion: The nil arm's-length price determination and the resulting transfer-pricing adjustment were unsustainable and were directed to be deleted. The issue was decided for the assessee.

Issue (ii): Whether an alternative disallowance of the interest under Sections 36(1)(iii) and 37(1) was sustainable.

Analysis: The alternative disallowance rested substantially on the rejected premise that unconverted CCDs were presently issued equity and therefore could not constitute capital borrowed. No independent and supported basis established that the interest expenditure lacked business nexus or that the funds were used for a non-business purpose warranting disallowance under Sections 36(1)(iii) or 37(1) of the Income-tax Act, 1961.

Conclusion: The alternative disallowance was set aside. The issue was decided for the assessee.

Final Conclusion: Contractual interest on CCDs cannot be assigned a nil arm's-length price merely because the principal will compulsorily convert into equity in the future; its pricing must be determined through the prescribed transfer-pricing methodology. Consequential treatment of the interest limitation computation and statutory interest must conform to the revised assessment.

Ratio Decidendi: Compulsory future conversion of a debenture into equity does not, by itself, justify recharacterising a subsisting contractual interest obligation as equity or determining its arm's-length price at nil without prescribed-method comparability analysis.

Issues: Whether an arrest under Section 26 of the Health Security and National Security Cess Act, 2025 is lawful when the recorded reasons to believe of the competent officer were not communicated to the arrestees before arrest.

Analysis: Section 26 establishes a two-stage arrest process: the competent officer must first record reasons to believe based on material and evidence, following which another authorised officer may execute the arrest. Communication of those reasons to the person proposed to be arrested is necessary to enable an effective challenge and pursuit of anticipatory bail. This requirement applies to arrests predating the judicial pronouncement that elucidated it, since constitutional adjudication declares the existing law unless its operation is expressly made prospective. Production of the reasons before the Magistrate at remand does not substitute their communication to the arrestees.

Conclusion: Non-communication of the reasons to believe rendered the arrest unlawful and violative of Articles 21 and 22 of the Constitution; the arrest was quashed and the petitioners were directed to be released if not required in any other case.

Issues: Whether receipts from the sale of flats constructed on land held by the assessee were taxable as capital gains eligible for deduction under Section 54, or as business income from an adventure in the nature of trade.

Analysis: The character of a transaction depends on the total effect of the relevant facts, including the nature and quantity of the asset, improvement undertaken to enhance its saleability, the manner of financing and sale, and the intention disclosed by surrounding circumstances. Although the land had been held for about sixteen years and the assessee was not a regular property trader, twelve flats were constructed on it, the substantial construction cost was financed through advances from prospective purchasers before construction, and eight flats were sold to unrelated persons. These circumstances were consistent with commercial development and sale by a real-estate developer. A single transaction may constitute an adventure in the nature of trade; regularity of similar transactions is not determinative. The cited instances involving mere plotting of land or development through an independent builder were materially distinguishable.

Conclusion: The sale of flats constituted an adventure in the nature of trade and was taxable as business income, not capital gains. Deduction under Section 54 was unavailable; however, the proportionate cost of land and construction attributable to the flats sold was deductible in computing the business income.

Issues: Whether penalty under Section 271(1)(c) of the Income-tax Act, 1961 survives after the sole underlying unexplained cash-credit addition under Section 68 is deleted.

Analysis: The addition under Section 68 had already been deleted in the quantum appeal. That addition was the sole foundation for the penalty, and its deletion left no basis to sustain the penalty.

Conclusion: The penalty under Section 271(1)(c) cannot survive and is directed to be deleted, in favour of the assessee.

Issues: Whether the entire value of alleged suppressed sales, inferred from a shortage in stock, could be added as income where the underlying stock represented explained opening stock.

Analysis: Although non-production of books of account justified their rejection, the computation of alleged suppressed sales commenced with the opening stock disclosed in the audited accounts. There was no finding that the jewellery allegedly sold outside the books represented an undisclosed investment. The allegation was of unrecorded sales rather than excess or unexplained stock. Accordingly, the sale proceeds could not wholly constitute undisclosed income; only the profit embedded in those transactions was taxable. The gross-profit rate of 2.32%, already adopted in the assessment, was considered appropriate.

Conclusion: Addition was sustainable only to the extent of 2.32% of the alleged suppressed sales; the balance addition representing the value of jewellery sold was deleted.

Issues: (i) Whether bank credits representing transfers between the assessee's own bank accounts could be treated as unexplained money under Section 69A; and (ii) Whether the assessee could claim the 30% standard deduction from admitted rental income despite not filing a return of income.

Issue (i): Whether bank credits representing transfers between the assessee's own bank accounts could be treated as unexplained money under Section 69A.

Analysis: The bank statements established that the impugned credits were transfers between the assessee's Deutsche Bank and ICICI Bank accounts. The source of the transfers was salary income credited in the assessee's account, on which tax had been deducted at source. The credits were therefore duly explained.

Conclusion: The bank credits could not be treated as unexplained money under Section 69A, and the addition was deleted in favour of the assessee.

Issue (ii): Whether the assessee could claim the 30% standard deduction from admitted rental income despite not filing a return of income.

Analysis: Section 24 permits the statutory standard deduction from rental income, and the Income-tax Act does not bar that claim merely because the return of income was not filed. Since the rental receipts were admitted, the deduction was allowable against such receipts.

Conclusion: The assessee was entitled to the 30% standard deduction from rental income; the rental-income addition was sustained only after allowing that deduction, partly in favour of the assessee.

Final Conclusion: The unexplained-money addition was wholly deleted, while the rental-income addition was reduced by the statutory deduction.

Issues: Whether transactions recorded in an impounded diary could be assessed wholly as unexplained income or were business receipts liable to income estimation.

Analysis: The diary entries were found to reflect cash sales, bank deposits and movement of business cash of an ice-cream and milk-products business. Although complete transaction-wise correlation was unavailable, the entries were accepted as business proceeds rather than independent unexplained income. Applying presumptive taxation, income was estimated at 8% of the recorded sums under Section 44AD of the Income-tax Act, 1961.

Conclusion: The additions were restricted to estimated income of Rs. 84,800 for assessment year 2015-16 and Rs. 3,16,432 for assessment year 2016-17, with the remaining additions deleted, in favour of the assessee.