Issues: (i) Whether the extended period of limitation could be invoked for the service-tax demand founded on differences between Form 26AS and ST-3 Returns; (ii) Whether the show cause notice was vitiated by non-compliance with mandatory pre-show cause notice consultation; (iii) Whether penalty for delayed filing of ST-3 Returns was sustainable.

Issue (i): Whether the extended period of limitation could be invoked for the service-tax demand founded on differences between Form 26AS and ST-3 Returns.

Analysis: The demand was based exclusively on statutory records available to the Revenue, without an independent investigation into the nature or taxability of the differential receipts. A mere variance between Form 26AS and ST-3 Returns did not establish fraud, collusion, wilful misstatement, suppression of facts, or intent to evade tax. The delayed filing of returns did not, in the absence of cogent evidence of conscious concealment, satisfy the jurisdictional conditions for invoking the extended period. Once that period was unavailable, the notice issued on 30.12.2020 was beyond the normal thirty-month limitation period, which had expired by 05.03.2020 even for the last relevant return. Pandemic-related limitation extensions could not revive an already time-barred demand.

Conclusion: The extended period was not invocable; the entire service-tax demand, interest under Section 75, and penalty under Section 78 were barred by limitation and set aside, in favour of the assessee.

Issue (ii): Whether the show cause notice was vitiated by non-compliance with mandatory pre-show cause notice consultation.

Analysis: At the date of the notice, the applicable Board instructions required pre-show cause notice consultation for demands exceeding Rs.50 lakhs, except preventive or offence-related matters. The proceedings did not fall within an exception, and no consultation was afforded. The later circular dispensing with consultation in specified suppression-related cases could not retrospectively validate a notice issued contrary to the instructions then in force. Non-compliance with this mandatory procedural safeguard vitiated the initiation of proceedings.

Conclusion: The show cause notice and consequential proceedings were independently unsustainable for failure to undertake mandatory pre-show cause notice consultation, in favour of the assessee.

Issue (iii): Whether penalty for delayed filing of ST-3 Returns was sustainable.

Analysis: Timely filing of statutory returns is an independent procedural obligation. The delays in filing the ST-3 Returns were admitted and established on record. Although those delays did not prove suppression or intent to evade tax for limitation purposes, they constituted a default attracting the distinct penalty provision.

Conclusion: The penalty of Rs.10,000 under Section 77 for delayed filing of ST-3 Returns was upheld, against the assessee.

Final Conclusion: The fiscal demand and its tax-evasion consequences fail as time-barred and procedurally vitiated, while the separate penalty for delayed statutory compliance remains enforceable.

Ratio Decidendi: A demand based solely on statutory return data and Form 26AS cannot attract the extended limitation period without affirmative evidence of fraud, wilful suppression, or intent to evade tax; mandatory pre-show cause notice consultation applicable when the notice was issued cannot be retrospectively dispensed with.

Issues: Whether grouping, pinning and plugging imported photocopier modules in a warehouse according to customer specifications amounted to manufacture under Section 2(f) of the Central Excise Act, 1944 and Note 6 to Section XVI of the First Schedule to the Central Excise Tariff Act, 1985.

Analysis: Manufacture requires transformation resulting in a new and distinct marketable article having a distinctive name, character or use; labour, skill, value addition, or mere processing is insufficient where the commodity remains commercially the same. Note 6 applies only where an incomplete or unfinished article having the essential character of a finished article is converted into the complete article. The imported goods had been classified and assessed as complete machines and were cleared from the warehouse in sets and original packing. The evidence did not establish physical assembly at the warehouse: the alleged components were factory-fitted abroad, and the activity was confined to unpacking, grouping, pinning and plugging modules for customer-specific dispatch. Rule 2(a) is a classification rule and does not determine whether a subsequent process constitutes manufacture. The Revenue also failed to produce evidence displacing the Tribunal's factual findings.

Conclusion: The warehouse activity did not amount to manufacture under Section 2(f) of the Central Excise Act, 1944, and Note 6 to Section XVI of the First Schedule to the Central Excise Tariff Act, 1985 was inapplicable.

Issues: (i) Whether Papad Khar is classifiable under heading 2501 or heading 2102 at 5% GST, or under sub-heading 28362090 at 18% GST; (ii) Whether Papad Khar is entitled to GST exemption as an ingredient used in exempt papad or under the cited exemption entries.

Issue (i): Whether Papad Khar is classifiable under heading 2501 or heading 2102 at 5% GST, or under sub-heading 28362090 at 18% GST.

Analysis: Heading 2501 covers sodium chloride and specified forms of salt, whereas Papad Khar is manufactured by mixing sodium chloride with sodium carbonate and sodium bicarbonate and is not crude or merely processed salt within Chapter 25. It is neither common salt nor rock salt and does not satisfy the conditions for classification under that heading. Heading 2102 covers yeasts and prepared baking powders. Papad Khar is an alkaline salt mixture used to impart crispness and elasticity to traditional snacks; it is neither yeast nor prepared baking powder. Its functionally active constituents are sodium carbonate and sodium bicarbonate, which are covered by heading 2836. The product is therefore classifiable under sub-heading 28362090 and falls under Entry 35 of Schedule II to Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025.

Conclusion: Papad Khar is classifiable under sub-heading 28362090 and is chargeable to GST at 18% (9% CGST and 9% SGST), against the assessee.

Issue (ii): Whether Papad Khar is entitled to GST exemption as an ingredient used in exempt papad or under the cited exemption entries.

Analysis: The exemption applicable to papad does not extend automatically to its inputs or ingredients. Inputs and finished goods are independently classified and taxed according to their respective tariff entries and rate notifications. Papad Khar is not covered by the asserted exemption entries or any other identified exemption notification.

Conclusion: Papad Khar does not qualify for GST exemption, against the assessee.

Final Conclusion: The product remains taxable as an inorganic carbonate/bicarbonate preparation under the applicable tariff and rate schedule, without exemption based on its use in manufacturing papad.

Ratio Decidendi: Classification and rate of an input must be determined by its own composition, functional character and applicable tariff entry; exemption of the finished product does not by itself confer exemption on its raw materials or ingredients.

Issues: Whether offset-printing job work performed on Kraft Paper and Duplex Paper supplied by principal manufacturers is taxable at 5% or 18% GST.

Analysis: The printing activity, together with cutting, sorting, plate preparation, drying, finishing, quality checking, packing and return of the printed material, comprises naturally bundled supplies in the ordinary course of business. Offset printing is the principal supply; accordingly, the entire job-work supply is a composite supply taxable as the principal supply under Section 8(a). The concessional entry for printing job work on goods under Chapters 48 or 49 applies only where the goods undergoing job work attract central tax at 2.5% or nil. Kraft paper and duplex paper are taxable at 9% CGST under the applicable goods-rate notification, so the concessional entry is unavailable. The residual job-work entry applies.

Conclusion: GST at 18% (9% CGST and 9% SGST) applies to the composite supply of offset-printing job work on Kraft Paper and Duplex Paper, against the assessee.

Issues: Classification and GST rate of the applicant's semi-detergent oil-base and detergent soap bars/cakes used for washing clothes.

Analysis: The products were assessed on the composition, form and stated use available on record. Their use was to remove stains and deodorise apparel, and their composition contained substantial fillers, without features associated with soaps specifically designed for washing the body, hands or face. The definition of "toilet preparation" under a statute enacted for a different purpose could not govern GST tariff classification. Applying the common-parlance meaning of toilet soap and the tariff framework under heading 3401, the products were treated as laundry soaps rather than toilet soaps.

Conclusion: The applicant's laundry soap bars/cakes are classifiable under HSN 34011942 and taxable at 18% GST under Entry 66 of Schedule II to Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025, against the assessee.

Issues: Whether personal penalties imposed on the appellants for alleged misdeclaration of MRP/RSP of imported goods could survive after the underlying duty demand and penalties against the main noticee and other co-noticees had been set aside or dropped.

Analysis: The underlying adjudication order had already been set aside in relation to the main noticee and other co-noticees, with the duty demand and associated penalties dropped. Since the foundation for the personal penalties no longer subsisted, the penalties imposed on the appellants could not be sustained.

Conclusion: The personal penalties are unsustainable and are dropped, in favour of the assessee.

Issues: Whether penalties for alleged involvement in the smuggling of mis-declared cigarettes could be sustained against the respondent on the basis of a witness statement where the witness, during cross-examination, denied the respondent's involvement.

Analysis: The penalty proceedings rested on the statement of the IEC holder recorded during investigation. At cross-examination, the witness stated that the respondent had no role in the imports, could not produce substantial material establishing the respondent's ownership of the goods, and acknowledged a friendly relationship with the respondent. The cross-examination testimony was admissible; the witness's earlier statement, without supporting evidence, did not establish the respondent's participation in smuggling.

Conclusion: The penalties were rightly dropped; the issue is decided in favour of the assessee.

Issues: Whether a scheduled-offence case could be committed to the designated Special Court under Section 44(1)(c) of the Prevention of Money Laundering Act, 2002 when that Special Court had not taken cognizance of the money-laundering complaint.

Analysis: Section 44(1)(c) applies where the court handling the scheduled offence and the Special Court handling the money-laundering complaint have both taken cognizance and are different courts. Cognizance by the Special Court is an express statutory precondition, not an anticipated or dispensable formality. A pre-cognizance notice under Section 223 of the Bharatiya Nagarik Suraksha Sanhita, 2023 does not amount to cognizance. The absence of the sanction required under Section 197(1) of the Code of Criminal Procedure, 1973 also prevented cognizance against the former public servant. Further, committal is discretionary and intended to avoid delay and inconsistent findings; it could not justifiably be used to displace a scheduled-offence trial that had substantially concluded, thereby prejudicing the accused's right to speedy trial.

Conclusion: The committal application was premature and was rightly refused; the issue is decided against the petitioner.

Issues: Whether the petitioner should be permitted to pursue the statutory appellate remedy against the assessment order.

Outcome: The writ petition was disposed of by granting liberty to file an appeal within two weeks along with the statutory pre-deposit and an application for condonation of delay.

Issues: (i) Whether an Ophthalmic Binocular Surgical Microscope is classifiable under tariff heading 9018 of the First Schedule to the Customs Tariff Act, 1975; (ii) Whether the product falls under Entry No. 483 of Schedule I of Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025.

Issue (i): Whether an Ophthalmic Binocular Surgical Microscope is classifiable under tariff heading 9018 of the First Schedule to the Customs Tariff Act, 1975.

Analysis: Heading 9011 covers compound optical microscopes generally used by amateurs, teachers, industry and research laboratories, while its HSN notes expressly exclude ophthalmic binocular-type microscopes. Heading 9012 concerns non-optical microscopes, including electron and proton microscopes and diffraction apparatus. The product is a specialised, electrically powered stereoscopic instrument designed exclusively for ophthalmic examination and delicate eye surgeries. Heading 9018 and its HSN notes cover instruments used in medical or surgical practice, including ophthalmic binocular-type microscopes mounted on adjustable supports for eye examination.

Conclusion: The Ophthalmic Binocular Surgical Microscope is classifiable under tariff heading 9018 of the First Schedule to the Customs Tariff Act, 1975, in favour of the assessee.

Issue (ii): Whether the product falls under Entry No. 483 of Schedule I of Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025.

Analysis: Entry No. 483 covers goods of heading 9018, namely instruments and appliances used in medical, surgical, dental or veterinary sciences. Since the product is classified under heading 9018, it is covered by that entry.

Conclusion: The product falls under Entry No. 483 of Schedule I of Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025 and is taxable at 5%, in favour of the assessee.

Final Conclusion: The specialised ophthalmic surgical microscope attracts the concessional rate applicable to medical and surgical instruments of heading 9018.

Ratio Decidendi: A microscope specially designed and used for ophthalmic examination and surgery is classifiable as an ophthalmic medical instrument under heading 9018, notwithstanding its magnification function.

Issues: (i) Whether the addition for unexplained investment in immovable property was sustainable; (ii) Whether the addition for unexplained cash deposits in bank accounts was justified.

Issue (i): Whether the addition for unexplained investment in immovable property was sustainable.

Analysis: Section 69 applies where an investment is not recorded and the assessee offers no satisfactory explanation of its nature and source. The assessee established the sources through confirmations, income-tax returns, financial statements, ledger accounts, bank statements and a fund-flow statement. The principal parties responded to notices under Section 133(6) of the Income-tax Act, 1961, and the receipts were directly correlated with payments to the property seller through banking channels. After the assessee discharged the initial burden, the Revenue produced no independent material to discredit the evidence, establish accommodation entries, or show that the funds belonged to the assessee.

Conclusion: The investment source was satisfactorily explained; the addition under Section 69 of the Income-tax Act, 1961 was deleted in favour of the assessee.

Issue (ii): Whether the addition for unexplained cash deposits in bank accounts was justified.

Analysis: The cash deposits were substantially supported by professional receipts, interest income and rental income that had been disclosed in the return. Cash already accounted for and offered to tax could not be treated again as unexplained money merely because it was later deposited in bank accounts, absent contrary evidence. However, the claimed opening cash balance lacked sufficient contemporaneous substantiation through a cash book or supporting records. A reasonable acceptance of 50% of that opening balance was warranted.

Conclusion: Cash deposits were explained except for Rs. 5,12,700, representing 50% of the unsubstantiated opening cash balance; the addition under Section 69A of the Income-tax Act, 1961 was restricted to that amount, partly in favour of the assessee.

Final Conclusion: The unexplained-investment addition was eliminated, while only the unsubstantiated portion of the opening cash balance remained taxable as unexplained money.

Ratio Decidendi: Once an assessee substantiates the source and movement of funds through credible documentary evidence and banking records, the Revenue must bring cogent contrary material before treating the investment as unexplained; disclosed income deposited in a bank cannot ordinarily be taxed again as unexplained money.

Issues: Whether penalty for non-compliance with notices could be sustained where the assessee established reasonable cause.

Analysis: The notices were issued during the COVID-19 pandemic, and the assessee, an educational trust, explained that the disruption prevented effective compliance. No independent material established deliberate or wilful disregard of the notices. The assessee's bona fide belief regarding exemption, its subsequent participation in assessment proceedings, and the remand of the quantum proceedings supported the explanation. Penalty proceedings are independent of assessment proceedings, and a technical or venial default does not warrant penalty where reasonable cause is established.

Conclusion: The assessee had reasonable cause under Section 273B of the Income-tax Act, 1961; consequently, penalty under Section 271(1)(b) of the Income-tax Act, 1961 was unsustainable and was directed to be deleted.

Issues: Whether cash payments towards credit-card dues incurred for trading purchases could be assessed in their entirety as unexplained money when the assessee had disclosed business income under the presumptive-taxation scheme.

Analysis: The credit cards were used for business purchases, and there was no material that they funded capital acquisitions or personal expenditure. Where cash payments are intrinsically connected with business transactions, taxing the entire payment would amount to taxing gross receipts rather than real income. The assessee had disclosed profit at 20.2% of gross receipts under the presumptive scheme, and the Revenue produced no material showing that this rate did not fairly represent the business profitability.

Conclusion: The addition could be made only to the extent of the 20.2% profit element in the cash payments; the balance of the addition was liable to be deleted, in favour of the assessee.

Issues: Whether a charitable trust's exemption is wholly denied under section 11 upon loans or advances to trustees attracting section 13, or is restricted only to the income or benefit attributable to the violation.

Analysis: Section 13(1)(c), read with sections 13(2)(a) and 13(3), addresses application of trust income or property for the benefit of specified persons. The settled interpretation, reinforced by CBDT Circular No. 387 dated 06.07.1984, confines taxation at the maximum marginal rate to the portion of income that has enured for the benefit of such persons; the remaining income remains eligible for section 11 exemption. The subsequent statutory amendment was treated as recognising this established position. The contrary reliance on CBDT Circular No. 5P dated 19.06.1968 and the decision concerning Bharat Diamond Bourse was not accepted as requiring forfeiture of exemption over the entire charitable income.

Conclusion: Even if the trustee advances constitute a section 13 violation, denial of section 11 exemption is limited to the value of the benefit, if any, conferred on the trustees; exemption for the balance income remains available subject to other statutory conditions.

Issues: (i) Whether the difference between opening Capital Work-in-Progress and the amount capitalised could be assessed as revenue expenditure or taxable income; (ii) Whether the reduction in Pre-operative Expenses could be treated as amortisation and added to taxable income.

Issue (i): Whether the difference between opening Capital Work-in-Progress and the amount capitalised could be assessed as revenue expenditure or taxable income.

Analysis: The reconciliation established that the full opening Capital Work-in-Progress balance was accounted for through capitalisation into fixed-asset accounts and reversal of duplicate entries. Transfers from Capital Work-in-Progress to fixed assets were balance sheet reclassifications, while correction of duplicate entries neither created taxable income nor constituted allowable expenditure. No part of the disputed amount was debited to the Profit and Loss Account or claimed as a deduction, and the Revenue produced no contrary accounting material.

Conclusion: The difference did not represent revenue expenditure or taxable income; deletion of the addition was sustained in favour of the assessee.

Issue (ii): Whether the reduction in Pre-operative Expenses could be treated as amortisation and added to taxable income.

Analysis: The Pre-operative Expenses ledger reflected project-related capital expenditure transferred to fixed-asset accounts on capitalisation, along with reversals of duplicate entries. These were confined to balance sheet accounts and did not constitute amortisation charged to the Profit and Loss Account. A reduction in a balance sheet asset cannot itself justify an income addition unless it is shown to be an inadmissible expenditure, a deduction claimed, a taxable remission or cessation, or income under a charging or deeming provision. No such basis was established.

Conclusion: The adjustment was not amortisation of expenditure and did not give rise to taxable income; deletion of the addition was sustained in favour of the assessee.

Final Conclusion: Both disputed accounting adjustments were held to be non-taxable balance sheet entries, comprising capitalisation transfers and rectification of duplicate entries.

Ratio Decidendi: A balance sheet adjustment or reclassification cannot be assessed as income or revenue expenditure merely from a numerical movement in accounts, absent evidence of a Profit and Loss Account charge, a claimed deduction, or another statutory basis for taxation.

Issues: Whether penalty for underreporting of income could be sustained where deduction was claimed under a bona fide belief and had initially been accepted in assessment and rectification proceedings; and whether a penalty notice and order not specifying the applicable limb of the penalty provision could sustain the levy.

Issue (i): Whether penalty for underreporting of income could be sustained where deduction was claimed under a bona fide belief and had initially been accepted in assessment and rectification proceedings.

Analysis: The deduction claim had been accepted in the scrutiny assessment and again in an earlier rectification order. This supported the genuineness of the assessee's explanation and bona fide belief in making the claim. The statutory exclusion for a genuine explanation applied, and the discretionary nature of penalty required consideration of the particular facts rather than automatic imposition.

Conclusion: The income was not underreported income in the circumstances, and penalty was not leviable. This issue was decided in favour of the assessee.

Issue (ii): Whether a penalty notice and order not specifying the applicable limb of the penalty provision could sustain the levy.

Analysis: The notice and penalty order referred only to the general penalty provision without identifying the relevant sub-clause or limb under which the penalty was imposed. Such non-specification rendered the penalty unsustainable.

Conclusion: The penalty could not be sustained for failure to specify the applicable limb. This issue was decided in favour of the assessee.

Final Conclusion: The penalty imposed for alleged underreporting was deleted.

Ratio Decidendi: A penalty for underreporting cannot be imposed automatically where the assessee's claim rests on a genuine bona fide explanation accepted by the assessing authority in prior proceedings; the penalty notice and order must also specify the applicable statutory limb.

Issues: Whether the period during which the Interim Board for Settlement lacked quorum and was incapable of exercising jurisdiction must be excluded in computing the time limit for disposal of settlement applications under Section 127C(8A), as extended under Section 127C(12), of the Customs Act, 1962.

Analysis: The statutory settlement framework and its timelines must be read as a whole, consistently with the object of expeditious and effective settlement. The prescribed period necessarily assumes the continued existence of a duly constituted Interim Board capable of performing its statutory adjudicatory functions. A distinction exists between delay despite a competent forum being available and inability to decide because the forum lacks the legally required quorum. Treating both situations alike would make the statutory remedy dependent on administrative contingencies beyond the applicant's control and produce an arbitrary, unworkable result. The applicant had completed all required steps and the proceedings had been heard and reserved before the Board became non-functional.

Conclusion: The period from 01.10.2025 until the date of judgment, during which the Interim Board lacked quorum, must be excluded from computation of the statutory period. The settlement proceedings did not abate, and the abatement communications were unsustainable. This conclusion is in favour of the assessee.

Issues: Whether the petitioner should be permitted to seek rectification of the impugned assessment order under the statutory rectification mechanism.

Outcome: The writ petition was disposed of with liberty to seek rectification before the Proper Officer.

Issues: Whether cancellation of GST registration for non-existence at the declared principal place of business should be restored where the address discrepancy resulted from a genuine mistake and no GST demand was outstanding.

Analysis: The registered-address discrepancy concerned different offices in the same building and was attributed to redevelopment of the earlier premises. No GST dues were outstanding. Restoration, conditional upon payment of applicable charges, late fees and penalty, would enable lawful business operations while protecting revenue interests.

Conclusion: The cancelled GST registration is to be restored upon payment of applicable charges, late fees and penalty.