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Issues: (i) Whether the Committee of Creditors may withdraw its approval of a resolution plan after such approval but before the Adjudicating Authority approves it. (ii) What is the scope of the Adjudicating Authority's scrutiny of the pending applications for approval of the resolution plan and termination of the corporate insolvency resolution process?
Issue (i): Whether the Committee of Creditors may withdraw its approval of a resolution plan after such approval but before the Adjudicating Authority approves it.
Analysis: A resolution plan acquires statutory binding force between the Committee of Creditors and the successful resolution applicant upon approval by the Committee under Section 30(4). Section 12A and Regulation 30A must be read within the broader scheme of Sections 30 and 31, under which withdrawal remains available only until the Committee approves the plan. The Committee's continued existence until implementation, including under Regulation 18(2), does not authorise it to affect, modify, or withdraw a plan already submitted for approval.
Conclusion: The Committee of Creditors cannot withdraw its approval of a resolution plan after approving it and placing it before the Adjudicating Authority for approval.
Issue (ii): What is the scope of the Adjudicating Authority's scrutiny of the pending applications for approval of the resolution plan and termination of the corporate insolvency resolution process?
Analysis: Section 31(1) requires satisfaction that the Committee-approved plan fulfils the mandatory requirements of Section 30(2). The pending applications must be considered together, with verification of the corporate debtor's current financial position and cash balance against the plan terms. Increased profitability or an improved financial position, without more, does not displace the statutory requirement to approve a compliant plan.
Conclusion: The Adjudicating Authority must determine the pending applications under Sections 30(2) and 31(1), and cannot refuse plan approval solely because the corporate debtor's profitability has improved.
Final Conclusion: The statutory framework preserves the binding character of a Committee-approved resolution plan while requiring the Adjudicating Authority to determine the pending applications by reference to the prescribed approval requirements.
Ratio Decidendi: A resolution plan approved by the Committee of Creditors is statutorily binding on the Committee and the successful resolution applicant, and cannot be withdrawn or altered after approval pending adjudication except as permitted by the Insolvency and Bankruptcy Code, 2016.
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: (i) Validity of the sanction granted under Section 151(i) on 1 April 2022 after expiry of three years, including the temporal operation of the Finance Act 2023 proviso to Section 151; (ii) Whether third-party survey material established a live link between the assessee and alleged unaccounted sale consideration.
Issue (i): Validity of the sanction granted under Section 151(i) on 1 April 2022 after expiry of three years, including the temporal operation of the Finance Act 2023 proviso to Section 151.
Analysis: Sections 149(1)(a), 149(2), and 151 of the Income-tax Act, 1961 prescribe the limitation framework and identify the specified authority competent to approve reassessment. The three-year period for the relevant assessment year ended on 31 March 2022. Approval granted on 1 April 2022 by the authority under Section 151(i) did not meet the requirement applicable after expiry of that period. The time allowed for response under Section 148A(b) could not cure the jurisdictional defect under the unamended Section 151. The proviso inserted in Section 151 with effect from 1 April 2023 altered the computation of the three-year threshold for identifying the approving authority; it was a substantive jurisdictional change and was expressly prospective.
Conclusion: The sanction under Section 151(i) was without jurisdiction, and the Finance Act 2023 proviso to Section 151 did not retrospectively validate it. The issue is decided in favour of the assessee.
Issue (ii): Whether third-party survey material established a live link between the assessee and alleged unaccounted sale consideration.
Analysis: The impounded loose papers from a third-party survey contained neither the assessee's name nor particulars directly connecting her with the alleged on-money. The assessee had not sold the land to the person whose statement was relied upon, and no material established that person as her broker or otherwise connected her to the third-party transaction. The material was impounded nearly two years after the sale, without any demonstrated nexus to the assessee.
Conclusion: The third-party material did not establish a live link with the assessee or provide a sustainable basis for reassessment. The issue is decided in favour of the assessee.
Final Conclusion: The statutory safeguard governing approval for reassessment remained applicable under the law in force on the relevant date, and the evidentiary foundation for reopening was independently insufficient.
Ratio Decidendi: A statutory amendment altering the computation for identifying the competent reassessment-sanctioning authority cannot retrospectively cure a jurisdictionally invalid sanction unless the legislature clearly provides for retrospective operation.
Issues: (i) Whether software imported and supplied to educational institutions was customized software eligible for exemption or packaged software; (ii) Whether RSP/MRP assessment applied to such software despite the institutional or industrial consumer claim; (iii) Whether RSP could be determined from downstream invoices under the valuation rules; (iv) Whether extended limitation, confiscation, and penalties were justified.
Issue (i): Whether software imported and supplied to educational institutions was customized software eligible for exemption or packaged software.
Analysis: The material from software suppliers, educational institutions, and the importer's personnel established that the products were standard electronic-design and simulation tools with common functionality, supplied to varied users. Customer consultations, installation, training, and technical support did not establish client-specific development or alteration of the software. The products consequently met the definition of packaged or canned software under the applicable exemption notification.
Conclusion: The educational software was packaged software, not customized software, and was ineligible for the customized-software exemption; against the assessee.
Issue (ii): Whether RSP/MRP assessment applied to such software despite the institutional or industrial consumer claim.
Analysis: Retail sale under the Legal Metrology framework includes distribution or delivery through agencies or other instrumentalities for consumption by a group of individuals; it is not confined to sales through retail shops. The software was delivered as such to varied customers and was capable of off-the-shelf sale. After the relevant amendment, institutional or industrial consumer treatment additionally required a "not for retail sale" declaration on the package, which was absent. RSP-based assessment was therefore attracted under Section 4A of the Central Excise Act, 1944, read with Section 3(2) of the Customs Tariff Act, 1975.
Conclusion: RSP/MRP-based assessment validly applied to the imported packaged software; against the assessee.
Issue (iii): Whether RSP could be determined from downstream invoices under the valuation rules.
Analysis: Sales invoices of distributors and sub-resellers supplied contemporaneous market evidence of the maximum price at which the software was sold. The invoices did not segregate alleged support-service charges, while customer confirmations indicated that installation and training were provided without separate charge. Those invoices could consequently be used for RSP determination under Rule 6, with the prescribed abatement.
Conclusion: The RSP re-determination based on downstream sales invoices was valid; against the assessee.
Issue (iv): Whether extended limitation, confiscation, and penalties were justified.
Analysis: The absence of the mandatory "not for retail sale" declaration, coupled with commencement of MRP declarations after departmental objection and the established nature of the software as packaged software, supported an intention to evade duty. These circumstances sustained invocation of the extended period and the consequential confiscation and penalties.
Conclusion: The extended period, confiscation, and penalties were rightly sustained; against the assessee.
Final Conclusion: The RSP-based CVD re-determination and the related fiscal liabilities remain legally sustainable.
Ratio Decidendi: Standard software developed for varied users does not become customized software merely because customer consultations, installation, training, or technical support are provided; where it is capable of off-the-shelf sale and statutory retail-package requirements apply, it is assessable on the RSP basis.
Issues: Whether the service-tax demand on unaccounted cash receipts from flat purchasers was sustainable on the basis of recovered pen-drive data, signed printouts, and statements of the accounts manager and director.
Analysis: The pen drives were recovered under panchnama from the accounts manager, who explained their contents and signed the printouts. His statement was reaffirmed after eleven months and was also confirmed by the company director. Under Section 106 of the Indian Evidence Act, the burden of proof concerning facts within their exclusive knowledge rested on persons maintaining the records. The statements recorded under Section 14 of the Central Excise Act, 1944 were voluntary statements and remained usable evidence; their retraction only in the reply to the show-cause notice was a delayed retraction and an afterthought. The recovered electronic records and signed printouts provided corroborative documentary evidence of cash receipts, notwithstanding the absence of bank entries or buyer statements.
Conclusion: The unaccounted cash receipts and consequent service-tax liability were established; the order setting aside the demand was erroneous, and the original order confirming the demand, interest, and penalties was restored.
Issues: (i) Whether supplying food from premises provided by a hospital constituted taxable outdoor catering service notwithstanding payment of VAT; (ii) Whether the extended limitation period and penalties were sustainable.
Issue (i): Whether supplying food from premises provided by a hospital constituted taxable outdoor catering service notwithstanding payment of VAT.
Analysis: Under Sections 65(24), 65(76a), and 65(105)(zzt) of the Finance Act, 1994, a person supplying food in connection with catering from premises provided by the recipient falls within outdoor catering service. The food was supplied from hospital premises, bringing the activity within the expanded definition applicable from 16.06.2005. Payment of VAT established taxation of the goods component alone; statutory abatements had already excluded the permissible goods value from the taxable value. The earlier exemption for outdoor caterers in medical establishments had also been rescinded with effect from 01.03.2006.
Conclusion: The supply constituted taxable outdoor catering service, and payment of VAT did not displace service-tax liability on the service component. The finding is against the assessee.
Issue (ii): Whether the extended limitation period and penalties were sustainable.
Analysis: The demand was founded on records maintained by the assessee. Mere failure to declare facts did not establish wilful suppression; invocation of the extended period required deliberate conduct intended to evade tax. The existence of reasonable cause under Section 80 of the Finance Act, 1994 also precluded penalties for the relevant period.
Conclusion: The demand for the extended period and all penalties were unsustainable. The finding is in favour of the assessee.
Final Conclusion: Service-tax liability remains confined to the normal limitation period with applicable interest, while penalties do not survive.
Ratio Decidendi: Food supplied under an institutional arrangement from premises provided by the recipient falls within outdoor catering service, and VAT paid on the goods component does not preclude service tax on the separately taxable service component.
Issues: (i) Whether an application for refund filed on 04.06.2024 was within limitation where the appellate order was physically communicated on 08.03.2022 but its summary in FORM GST APL-04 was uploaded on 03.06.2024; (ii) Whether interest is payable on the directed refund.
Issue (i): Whether an application for refund filed on 04.06.2024 was within limitation where the appellate order was physically communicated on 08.03.2022 but its summary in FORM GST APL-04 was uploaded on 03.06.2024.
Analysis: Section 54(1), read with Explanation 2(d), ordinarily makes the date of communication of the appellate order the relevant date for a refund arising from that order. Rule 113(1) treats FORM GST APL-04 as a summary of the appellate order, while Rule 89(1) and FORM GST RFD-01 permit a refund application based on an order received physically; consequently, the physical communication on 08.03.2022 would ordinarily govern limitation.
Analysis: The appellate order had set aside the demand and specifically directed refund. The departmental delay in uploading the statutory summary, followed by the refund application on the next day, made it inappropriate to allow a procedural limitation to defeat that substantive relief. Continued retention of an amount unsupported by a subsisting demand would offend the constitutional safeguards against collection without authority of law and deprivation of property without authority of law.
Conclusion: In the peculiar circumstances, 03.06.2024 was treated as the relevant date; the refund application was timely and the assessee is entitled to the directed refund. This is in favour of the assessee.
Issue (ii): Whether interest is payable on the directed refund.
Analysis: Section 56 provides for interest where a refund consequent upon a final appellate order remains unpaid beyond sixty days from the refund application. The refund claim was treated as having been validly made on 04.06.2024, and the interest direction balanced the delayed claim process with the subsisting appellate direction for refund.
Conclusion: The assessee is entitled to interest at 6% per annum on the refundable amount from 15.08.2024 until payment, with 9% per annum applicable upon non-compliance beyond the stipulated implementation period. This is in favour of the assessee.
Final Conclusion: The appellate direction granting refund remains enforceable, and belated administrative uploading of its statutory summary cannot result in continued retention of an amount no longer supported by a valid demand.
Ratio Decidendi: A belated departmental upload of the statutory appellate-order summary may exceptionally be treated as the relevant date for a refund claim where necessary to give effect to a final refund direction and prevent retention of tax without legal authority.
Issues: (i) Whether the audit report dated 02.08.2024 was completed within the three-month period under Section 65(4) of the Central Goods and Services Tax Act, 2017; (ii) Whether the show-cause notices issued under Section 74(1) of the Central Goods and Services Tax Act, 2017 should be quashed at the writ stage.
Issue (i): Whether the audit report dated 02.08.2024 was completed within the three-month period under Section 65(4) of the Central Goods and Services Tax Act, 2017.
Analysis: Section 65(4) requires completion of an audit within three months from its commencement. The Explanation fixes commencement as the later of the date on which the required records are made available and the date on which the audit is actually instituted at the registered person's place of business. Since the completeness of documents supplied was disputed and the audit was actually instituted at the place of business on 19.06.2024, that later event governed commencement. The report issued on 02.08.2024 was therefore within time. Although the authorities should intimate outstanding documents within a reasonable time, their failure to do so did not invalidate the audit under the statutory framework.
Conclusion: In favour of Revenue, the audit report was completed within the prescribed period and remains valid.
Issue (ii): Whether the show-cause notices issued under Section 74(1) of the Central Goods and Services Tax Act, 2017 should be quashed at the writ stage.
Analysis: The notices permit a response in the statutory adjudicatory process, and a statutory appellate remedy is available under Section 107 of the Central Goods and Services Tax Act, 2017.
Conclusion: Against the assessee, the show-cause notices are not quashed at the writ stage.
Final Conclusion: The audit remains effective, and the statutory proceedings initiated on its basis may continue.
Ratio Decidendi: For an audit under Section 65 of the Central Goods and Services Tax Act, 2017, commencement is determined by the later of the availability of records and actual institution of audit at the registered person's place of business.
Issues: (i) Whether the DGAP's methodology of comparing pre-GST credit and post-GST ITC against corresponding purchase values is legally and factually sustainable? (ii) Whether the Commencement Certificate dated 04.09.2017 precludes consideration of pre-GST purchase and credit data for determining additional ITC benefit? (iii) Whether the revised computation of profiteering based on the total project area, eligible sold area and per-square-foot benefit is factually and legally sustainable? (iv) Whether penalty under Section 171(3A) of the Central Goods and Services Tax Act, 2017 is attracted?
Issue (i): Whether the DGAP's methodology of comparing pre-GST credit and post-GST ITC against corresponding purchase values is legally and factually sustainable?
Analysis: Section 171 requires the benefit of additional input tax credit to be passed on through a commensurate reduction in price. A turnover-based methodology is unsuitable for real-estate projects because buyer receipts, construction activity and ITC accrual do not necessarily correspond during a project's life cycle. The purchase-value methodology instead used actual pre-GST Service Tax and VAT credit and actual post-GST ITC against the corresponding project expenditure, quantified the project-level savings, and distributed it as a per-square-foot benefit. This project-specific methodology had a rational nexus with the credit benefit to be quantified. The 1.70% incremental ITC benefit was derived from the assessee's own credit and purchase-value data.
Conclusion: The methodology and the 1.70% additional ITC benefit were accepted. Against the assessee.
Issue (ii): Whether the Commencement Certificate dated 04.09.2017 precludes consideration of pre-GST purchase and credit data for determining additional ITC benefit?
Analysis: The Commencement Certificate established the date of formal authorisation to commence construction, but did not by itself establish that no project-related goods or services were procured before GST. The pre-GST credit and purchase figures were drawn from certified statutory returns and records supplied by the assessee. No material established that those transactions lacked project nexus or related to another project.
Conclusion: The post-GST commencement date did not render the pre-GST purchase and credit data inadmissible or irrelevant for the Section 171 determination. Against the assessee.
Issue (iii): Whether the revised computation of profiteering based on the total project area, eligible sold area and per-square-foot benefit is factually and legally sustainable?
Analysis: The revised exercise was undertaken to address the discrepancy between the earlier project area and the area reflected in the Occupancy Certificate. Although the total built-up area included common facilities and could not automatically be equated with saleable area, the assessee did not furnish the directed detailed reconciliation. The revised computation consistently adopted total project area of 5,36,891 sq. ft. and eligible sold area of 3,34,570 sq. ft., yielding a per-square-foot benefit of Rs. 43.56 and a base profiteered amount of Rs. 1,45,73,861. GST collected on the excess realisation formed part of the profiteered amount.
Conclusion: The revised computation of Rs. 1,63,22,724 inclusive of GST was accepted. Against the assessee.
Issue (iv): Whether penalty under Section 171(3A) of the Central Goods and Services Tax Act, 2017 is attracted?
Analysis: The penalty provision came into force on 01.01.2020, and the investigation period extended beyond that date until 31.03.2023.
Conclusion: Penalty liability under Section 171(3A) arises, subject to the statutory exemption where the profiteered amount is deposited within thirty days. Against the assessee.
Final Conclusion: The project-specific additional ITC benefit is enforceable through commensurate price reduction and proportionate passing on to eligible homebuyers, together with applicable interest; GST collected on the excess realisation forms part of that benefit.
Ratio Decidendi: In a real-estate anti-profiteering determination, actual pre-GST credit and post-GST ITC may be compared against corresponding purchase values, rather than turnover, to quantify project-level savings and derive a per-square-foot benefit, provided the underlying transactions have a project nexus.
Issues: Whether the applicant was entitled to bail pending trial for alleged fraudulent availment or passing of input tax credit.
Analysis: Article 21 of the Constitution of India requires that deprivation of personal liberty follow a just, fair and reasonable procedure. The presumption of innocence operates at the pre-conviction stage, and pre-trial detention is not punitive; bail is the rule and jail the exception. Investigation had concluded, the complaint had been filed, charges had not been framed, and the prosecution did not establish criminal antecedents, exceptional circumstances, or a concrete risk of absconding, witness intimidation, or evidence tampering. The alleged offence was triable by a Magistrate, carried a maximum sentence of five years, and the trial was not likely to conclude within a reasonable time.
Conclusion: Continued pre-trial custody was unwarranted, and the applicant was entitled to bail pending trial.
Ratio Decidendi: Pre-trial detention cannot operate as punishment; where investigation is complete and no concrete risk to the trial process is shown, personal liberty, the presumption of innocence, and the right to speedy trial support release on bail.
Issues: Whether the provisional reversal of input tax credit in GSTR-3B constituted a self-assessed GST liability so as to justify rejection of its refund merely because the reversal was voluntary and an investigation into an alleged stock shortage was pending.
Analysis: Section 39 of the Central Goods and Services Tax Act, 2017 distinguishes the reporting of output-tax liability from input-tax-credit particulars. The amount was disclosed in Table 4(B)(2) of GSTR-3B, while no liability relating to the alleged stock shortage was declared in Table 3.1. The contemporaneous communication expressly described the reversal as provisional, and no quantified liability had then been determined under the statutory demand mechanism or unequivocally admitted.
Analysis: A voluntary reversal, without more, does not establish tax legally payable under Section 59 of the Central Goods and Services Tax Act, 2017. Pending investigation is not a determination of liability and cannot by itself support retention of an amount as tax, consistently with Article 265 of the Constitution of India. The subsequently passed demand order, which remained under challenge in separate proceedings, could not retrospectively cure the stated grounds for refund rejection or establish that the earlier reversal was payment towards that demand. The claim nevertheless remains subject to satisfaction of the applicable requirements under Section 54 of the Central Goods and Services Tax Act, 2017.
Conclusion: In favour of the assessee, the reversal of Rs. 14.35 crore was not a self-assessed GST liability, and refund could not be rejected merely because it was voluntarily disclosed in GSTR-3B or because investigation into the alleged stock shortage was pending.
Issues: Whether a first appeal pending for more than six years must be prioritised and decided expeditiously under Section 250(6A) of the Income-tax Act, 1961.
Analysis: Section 250(6A) manifests a legislative intent that appellate proceedings should ordinarily be heard and decided within one year from the end of the relevant financial year, where possible. The expression "where it is possible" cannot be used to indefinitely defer an appeal. An appeal remaining undecided beyond that period falls within the category of genuine hardship recognised in the Central Board of Direct Taxes guidelines for priority disposal.
Conclusion: The long-pending appeal is required to be decided within three months from receipt of the order.
Issues: (i) Whether Inshell Walnuts are covered by the relevant generic input descriptions under SION E-1, E-5, E-126 and E-132 for exemption under Notification No. 25/2023-Cus.; (ii) Whether percentage-based CIF value caps and an Actual User Condition introduced solely through a public notice can deny exemption under a transferable DFIA.
Issue (i): Whether Inshell Walnuts are covered by the relevant generic input descriptions under SION E-1, E-5, E-126 and E-132 for exemption under Notification No. 25/2023-Cus.
Analysis: The exemption is available against a valid DFIA where the imported material corresponds to the description, quantity and value endorsed in the authorisation. Under the DFIA framework, a generic or alternative input requires declaration of the specific input and quantity in the export documents; correlation of technical characteristics, quality and specifications is required only for sensitive inputs. Inshell Walnuts fall within the relevant generic descriptions, subject to the description endorsed in the particular DFIA and compliance with its quantity, value, validity and notification conditions.
Conclusion: In favour of the applicant: Inshell Walnuts are eligible for consideration under the relevant SION input descriptions and may receive the exemption where covered by a valid transferable DFIA and all applicable conditions are met.
Issue (ii): Whether percentage-based CIF value caps and an Actual User Condition introduced solely through a public notice can deny exemption under a transferable DFIA.
Analysis: Conditions that curtail substantive DFIA entitlement, including an Actual User Condition or a percentage-based value cap, require lawful imposition through a notification in the Official Gazette. Notification No. 25/2023-Cus. does not independently prescribe the disputed percentage-based CIF caps, and restrictions introduced only through Public Notice No. 41/2015-2020 cannot independently restrict duty-free import under an otherwise valid DFIA.
Conclusion: In favour of the applicant: the percentage-based CIF value caps and Actual User Condition introduced solely through the public notice cannot be enforced to deny the exemption.
Final Conclusion: A valid transferable DFIA covering Inshell Walnuts supports duty-free import under the applicable notification, subject to compliance with the authorisation and express statutory conditions, without enforcement of restrictions deriving solely from the public notice.
Ratio Decidendi: A restriction curtailing substantive entitlement under the DFIA Scheme is unenforceable when imposed solely by a public notice rather than through the legally prescribed notification mechanism.
Issues: Whether implementation of GST resulted in an additional input tax credit benefit that was required to be passed on by commensurate reduction of prices, thereby attracting Section 171 of the Central Goods and Services Tax Act, 2017.
Analysis: The pre-GST and post-GST input tax credit-to-purchase-value ratios were compared for the relevant project and investigation period. The ratio reduced from 6.55% in the pre-GST period to 5.77% in the post-GST period. The recalculation based on actual procurement savings disclosed no additional input tax credit benefit after GST implementation. The investigation findings and computations were accepted by both the Respondent and the Applicant.
Conclusion: No additional input tax credit benefit accrued to the Respondent; consequently, Section 171 of the Central Goods and Services Tax Act, 2017 was not contravened.
Issues: (i) Whether cryptic show-cause notices and non-speaking adjudication orders denying input tax credit violate the principles of natural justice; (ii) Whether an Appellate Authority may dismiss a statutory appeal for non-prosecution without independently deciding the documentary evidence and merits; (iii) Whether the proceedings require fresh de novo adjudication without deciding the substantive admissibility of input tax credit.
Issue (i): Whether cryptic show-cause notices and non-speaking adjudication orders denying input tax credit violate the principles of natural justice.
Analysis: Although the claimant bears the burden of establishing eligibility for input tax credit under Sections 16(2) and 155, that burden must be determined through a valid and fair adjudicatory process. The notices did not disclose specific grounds for the proposed disallowance, and the original orders mechanically confirmed the demand without transaction-specific findings or reasons. Retrospective cancellation of suppliers' registrations, without independent verification and a meaningful opportunity to meet the allegations, could not by itself support the demand.
Conclusion: The cryptic notices and non-speaking original orders violated principles of natural justice and could not sustain the input tax credit demands, in favour of the assessee.
Issue (ii): Whether an Appellate Authority may dismiss a statutory appeal for non-prosecution without independently deciding the documentary evidence and merits.
Analysis: Sections 107(11) and 107(12) require the Appellate Authority to make necessary inquiry and issue a written order stating the points for determination, its decision, and reasons. Non-attendance at hearings does not relieve the Appellate Authority of its statutory obligation to evaluate the grounds and material already placed on record.
Conclusion: A statutory appeal cannot be dismissed for non-prosecution without a merits-based determination of the evidence and grounds, in favour of the assessee.
Issue (iii): Whether the proceedings require fresh de novo adjudication without deciding the substantive admissibility of input tax credit.
Analysis: The foundational defects in the notices and original orders were not cured at the appellate stage. The substantive eligibility for credit, including the evidence concerning receipt of supplies and fulfilment of statutory conditions, had not been properly adjudicated and was expressly kept open.
Conclusion: The defective proceedings must be reconsidered through fresh de novo adjudication after disclosure of specific grounds, adequate hearing, examination of corroborative evidence, and a reasoned order.
Final Conclusion: The assessee's substantive input tax credit eligibility remains open for determination through a lawful and reasoned adjudicatory process.
Ratio Decidendi: A statutory adjudication affecting input tax credit must be founded on disclosed grounds and a reasoned decision after fair opportunity, and an appellate authority cannot dismiss the statutory appeal merely for non-prosecution without deciding its merits.
Issues: Whether partial refund rejection without the prescribed notice and pre-decisional hearing under Rule 92(3), and the effect of an appellate-stage hearing, renders the rejection invalid.
Analysis: Rule 92(3) makes issuance of notice in FORM GST RFD-08 and an opportunity of hearing mandatory before any part of a refund claim is rejected. This statutory procedure embodies Audi Alteram Partem and the Principles of Natural Justice, requiring disclosure of the precise grounds to enable a meaningful reply with supporting evidence. A post-decisional hearing at the appellate stage cannot cure the denial of the prescribed pre-decisional opportunity. The original rejection was consequently void ab initio, making examination of the alleged ITC mismatch unnecessary at that stage.
Conclusion: The partial refund rejections and the appellate confirmations are invalid; fresh processing must comply with Rule 92(3), with all merits remaining open.
Issues: Whether transfer and centralisation of the assessee's assessment from Ujjain to the Central Circle at Bhopal under Section 127 of the Income-tax Act, 1961, was arbitrary or unwarranted.
Analysis: The search and seizure action under Section 132 of the Income-tax Act, 1961 yielded material connecting the assessee with the searched group and several other entities. Centralisation was directed to enable coordinated and meaningful investigation and assessment of entities arising from the same search. An order under Section 127 is not a final adjudication of tax liability; the assessee retains the opportunity to contest the assessment on merits upon supply of relevant material during assessment proceedings. The transfer therefore caused no prejudice and was supported by the need for coordinated investigation.
Conclusion: The transfer and centralisation of the assessment under Section 127 of the Income-tax Act, 1961, was valid and non-arbitrary.
Issues: (i) Whether initiation of reassessment complied with Section 148A(1) and the limitation under Section 149(2)(b) where foundational information was supplied after the notice; and (ii) Whether Section 56(2)(x) applies to the price difference on proportionately allotted rights shares where the shareholder's percentage holding remains unchanged.
Issue (i): Whether initiation of reassessment complied with Section 148A(1) and the limitation under Section 149(2)(b) where foundational information was supplied after the notice.
Analysis: Section 148A(1) requires the show-cause notice to be accompanied by information suggesting escapement of income, so as to afford an effective opportunity of hearing. A notice merely stating the alleged escaped amount, without disclosing the nature of the transaction, valuation basis, computation, or statutory basis for taxation, does not meet that requirement. The foundational information was supplied only after expiry of the five-year period under Section 149(2)(b). Subsequent disclosure could not retrospectively validate the defective notice within limitation. The separate period for a consequential notice under Section 148 did not cure the absence of a valid proceeding under Section 148A.
Conclusion: The reassessment initiation was invalid and time-barred, and the consequential reassessment action was unsustainable, in favour of the assessee.
Issue (ii): Whether Section 56(2)(x) applies to the price difference on proportionately allotted rights shares where the shareholder's percentage holding remains unchanged.
Analysis: Section 56(2)(x) taxes receipt of specified property from another person for inadequate consideration. Fresh shares arise upon allotment and are distinct from pre-existing shares transferred by another person. A proportionate rights allotment that leaves the shareholder's percentage holding unchanged does not, merely because the subscription price is below the computed market price, establish a disproportionate economic benefit or receipt of property for inadequate consideration. The distinct cost-of-acquisition rules for rights shares reinforce the need to construe the provision harmoniously and consistently with its anti-abuse purpose.
Conclusion: Section 56(2)(x) was inapplicable to the proportionate rights allotment on the stated facts, and the price differential could not support reassessment, in favour of the assessee.
Final Conclusion: The reassessment foundation failed both because the mandatory information was not furnished within the prescribed limitation period and because the proportionate rights allotment did not yield taxable income under Section 56(2)(x).
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Issues: Whether the petitioner was entitled to the benefit of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 despite failure of the online payment on the last date due to technical difficulties, and whether the impugned adjudication order could be quashed.
Analysis: The petitioner had already filed a declaration under the Scheme, the Designated Committee had quantified the amount payable under the Scheme, and the record showed a bona fide attempt to make the payment within the extended time by NEFT, which was returned by the receiving bank. The Court held that the petitioner's inability to complete payment was attributable to technical issues and the pandemic situation, not to any lack of bona fides. Since the object of the Scheme was to reduce legacy litigation and secure voluntary resolution of disputed dues, the substantive benefit of the Scheme could not be denied on procedural grounds where the declarant had made a genuine attempt to comply. The Court further held that the petitioner's case was distinguishable from cases where no bona fide attempt was shown.
Conclusion: The petitioner was held entitled to the benefit of the Scheme, and the authorities were directed to accept the quantified amount with interest and grant the Scheme benefit.
Ratio Decidendi: Where a declarant under a legacy dispute resolution scheme makes a bona fide but unsuccessful attempt to pay the quantified amount within time due to technical failure, the substantive scheme benefit cannot be denied merely on procedural technicalities.
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