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Case Laws
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AI Text Quick Glance by AI Headnote
AI TextQuick Glance (AI)Headnote
GST demand confirmation cannot exceed the tax, interest or penalty amounts proposed in the show-cause notice.
Section 75(7) of the Uttar Pradesh GST Act and the CGST Act prohibits an adjudicating authority from confirming tax, interest or penalty exceeding the amount proposed in the show-cause notice. Where the adjudication order confirms a higher tax demand or penalty than the notice specified, it exceeds the authority's statutory jurisdiction. The confirmed liability must remain within the scope and amounts put to the taxpayer in the notice.
AI TextQuick Glance (AI)Headnote
Wrong-head GST payments require refund procedures, while correct-head payments need reconciliation and cannot support duplicate recovery or credit.
GST demands alleging wrongful input tax credit recredit must disclose the factual and legal basis of the charge in the show-cause notice, and adjudication must address the taxpayer's explanation through reasoned findings. Tax paid under the wrong IGST or intra-State tax head must follow the prescribed refund mechanism; unilateral recredit through GSTR-3B does not automatically create valid input tax credit. Payments actually made under the correct Central and State tax heads require recognition and reconciliation with the original payment and any recredit, preventing both double taxation and duplicate credit or refund. Interest requires findings of wrongful availment and utilisation, while penalty cannot stand independently where the underlying wrongful-credit charge fails.
AI TextQuick Glance (AI)Headnote
Related-party exclusion bars creditors from CoC rights where contractual control permits policy-making participation despite a non-bona-fide assignment.
Corporate-guarantee liability falls within financial debt even if the guarantee was uninvoked when CIRP began; default is relevant to CIRP commencement rather than the existence of a claim. An individual homebuyer may challenge a creditor's CoC inclusion without acting through the class's authorised representative, whose statutory role is limited to attending meetings and voting. Contractual rights enabling policy-making participation and extensive business supervision may render a financial creditor a related party, excluding it from CoC representation, participation and voting. A post-CIRP assignment that is not bona fide cannot bypass the related-party exclusion.
AI TextQuick Glance (AI)Headnote
Resolution professional claim admission does not acknowledge debt or extend limitation for personal-guarantor insolvency proceedings.
Section 95 insolvency applications against personal guarantors are subject to the three-year limitation period under Article 137, running from expiry of the period stated in the demand invoking the guarantee. Any applicable COVID-19 exclusion must be deducted, but an application instituted after the resulting period expires is time-barred and not maintainable. Extension under Section 18 requires a conscious, unequivocal acknowledgment of subsisting liability by the debtor or an authorised person before limitation expires. A resolution professional's admission of a creditor's claim is an administrative act of collating and recording claims, not an admission of liability by the corporate debtor; it therefore neither acknowledges debt nor renews limitation.
Quick Glance (AI)Headnote
Anticipatory bail under money-laundering law remains undecided after dismissal of a delayed petition without merits review.
Anticipatory bail under the Prevention of Money Laundering Act, including the statutory twin bail conditions and the necessity of custodial interrogation, was in issue. The Supreme Court did not determine those bail issues on their merits, finding no good reason to entertain the Special Leave Petition after an inordinate delay of 480 days. The petition was consequently dismissed solely on the ground of delay.
AI TextQuick Glance (AI)Headnote
Service by affixture validates notice and triggers the limited statutory appeal period; delayed first appeals remain barred.
Service of an order-in-original by affixture at the registered premises, recorded through a panchnama, constitutes reliable evidence of service where postal communications are repeatedly returned and the address remains in use. Under section 85(3A) of the Finance Act, 1994, an appeal must be filed within two months, with condonation available for only one further month on sufficient cause. A first appeal filed after that maximum statutory period is time-barred and cannot be entertained.
AI TextQuick Glance (AI)Headnote
Statutory limitation bars reopening deemed VAT assessments; requests for assessment records cannot revive reassessment jurisdiction.
Deemed assessments arising from filed VAT returns, prescribed documents and proof of tax payment may be reopened for escaped turnover or wrongly availed input tax credit only within the applicable six-year statutory limitation. A dealer's later request for copies of assessment records does not extend, enlarge or revive that period. Reopening proceedings commenced after six years, and consequential assessment orders, are therefore barred by limitation and beyond statutory jurisdiction.
AI TextQuick Glance (AI)Headnote
Enhanced Additional Court Fee Applies Prospectively Only When Tax Litigation Commences After the Effective Date
Enhanced additional court fee applies prospectively where the taxing lis commenced on or after 1 April 2016, because a higher court-fee condition imposed after commencement cannot burden the vested right of appeal without express or necessarily implied retrospective operation. The taxing lis commences when the assessing authority, dissatisfied with the return, seeks material or evidence, including through a pre-assessment notice; the assessment year, assessment order date, and appeal filing date do not determine commencement. Appeals and revisions arising from earlier proceedings remain subject to the prior rate, and the appellate or revisional authority must determine an unestablished commencement date.
AI TextQuick Glance (AI)Headnote
Binding approved resolution plans prevent Committee withdrawal merely because the corporate debtor's financial position improves.
An approved resolution plan becomes binding between the Committee of Creditors and the successful resolution applicant upon approval under Section 30(4), before Adjudicating Authority approval under Section 31(1). Section 12-A and Regulations 30-A and 18(2) permit withdrawal only until the Committee approves the plan. The Committee's continuing role in implementation does not permit alteration or withdrawal of a plan submitted for approval. The Adjudicating Authority examines statutory compliance under Sections 30(2) and 31(1); improved financial performance alone does not justify rejecting a compliant plan.
AI TextQuick Glance (AI)Headnote
IBC moratorium permits arbitration on a corporate debtor's counterclaim where pre-insolvency contractual termination lacks CIRP nexus.
IBC moratorium under Section 14(1)(a) does not bar arbitral proceedings initiated by a corporate debtor through a counterclaim, because an unsuccessful counterclaim creates no pecuniary liability and a successful one may augment the estate. A pre-CIRP termination of a development agreement for non-performance does not make the terminated agreement estate property protected by the moratorium. Interim arrangements may therefore be reconsidered in aid of the surviving counterclaim. Section 60(5)(c) grants only limited residuary insolvency jurisdiction; where contractual termination predates and is unrelated to CIRP, the required nexus is absent, Section 63 creates no jurisdictional bar, and arbitral jurisdiction continues. An inaccurate description of a Section 29A extension does not alter that result if the application concerns the counterclaim.
AI TextQuick Glance (AI)Headnote
Job-work fabric processing does not constitute manufacture for textile cess when fabrics are returned to handloom or powerloom suppliers.
For textile cess under Section 5A of the Textiles Committee Act, bleaching, dyeing and other job-work processing of fabrics supplied by handloom or powerloom manufacturers do not constitute manufacture when the processed fabrics are returned to those manufacturers. As the Act does not define manufacture, a specialised definition in another enactment cannot be imported without legislative reference, incorporation, or statutes being in pari materia. In common parlance and within the statutory context, such processing refines existing fabric rather than producing a new textile; the job-worker is therefore not liable to textile cess.
AI TextQuick Glance (AI)Headnote
Equitable full and final debt settlement preserves a running concern while disputed NPA classification and assignment issues remain unresolved.
Equitable balancing to preserve a running concern supports a conclusive full and final settlement of an assignee's debt claims while challenges to NPA classification, debt assignment, and compensation valuation remain unresolved. Payment of a specified additional sum within 12 weeks, beyond amounts already paid, requires release of securities, guarantees, and title deeds and disposes of pending insolvency and debt-recovery proceedings. Default permits revival of those proceedings and withdrawal of the settlement benefits.
AI TextQuick Glance (AI)Headnote
Bona fide bookkeeping delays do not constitute unaccounted goods or justify confiscation where contemporaneous stock records support the transactions.
Confiscation under Section 130(1)(ii) requires facts establishing deliberate tax evasion through unaccounted goods, not a short bona fide delay in recording genuine stock transactions. A pre-survey invoice, subsequent verification in regular books and statutory returns, and an accountant's temporary absence support the conclusion that delayed posting differs from non-accountal intended for clandestine removal. Physical-stock allegations based on visual approximation rather than standard weighment are also unreliable. Where assessment proceedings substantially accept the stock explanation and identify only minor discrepancies, treating the same transactions as both reconcilable and confiscable is legally inconsistent.
AI TextQuick Glance (AI)Headnote
Personal hearing in tax adjudication requires a further opportunity before an ex parte determination where the notified hearing remains inconclusive.
Reasonable opportunity of personal hearing is required in tax adjudication. Where a notified hearing does not conclude proceedings, an ex parte determination based on a written reply cannot follow months later without a further hearing notice or date; it breaches natural justice and requires fresh adjudication. A belated jurisdictional challenge to a show-cause notice, raised after participation in proceedings and where a statutory remedy is available, need not be entertained in writ jurisdiction, leaving the objection for statutory adjudication.
AI TextQuick Glance (AI)Headnote
BSNL VRS compensation exemption requires recomputation of taxable income and consequent refunds under the Income-tax Act.
Compensation received by BSNL employees under the 2019 Voluntary Retirement Scheme is exempt under Section 10(10B) of the Income-tax Act. Earlier coordinate-bench decisions accepting identical exemption claims support the same treatment where Revenue identifies no factual or legal distinction. Tax authorities should not deny an otherwise lawful tax relief merely because the taxpayer was unaware of the entitlement. Taxable income and any consequential refund require recomputation after giving effect to the exemption.
AI TextQuick Glance (AI)Headnote
Misreporting penalties require statutory grounds; delayed employees' PF/ESI disallowance alone cannot justify penal action under tax law.
Penalty for misreporting requires delayed employees' PF/ESI contributions to fall within a specified statutory category of misreporting. Mere disallowance of a claim, without evidence that the conduct meets one of those categories, does not establish misreporting. Accordingly, disallowance of employees' PF/ESI contributions solely for delayed payment cannot by itself support a misreporting penalty, which is unsustainable absent the prescribed statutory basis.
AI TextQuick Glance (AI)Headnote
FOB value re-determination under binding remand directions cannot reopen settled misdeclaration findings and requires compliance with valuation procedure.
FOB value re-determination following an unchallenged remand order is limited to applying the prescribed valuation procedure; findings that declared values were doubtful, misdeclaration was established, and re-determination was required cannot be reopened. Application of Rules 5 to 8 of the Valuation Rules, 1988 requires examination of the values of the relevant goods. Re-determined FOB values consistent with binding remand directions require no interference.
AI TextQuick Glance (AI)Headnote
Prospective builder service tax treatment excludes pre-amendment construction but taxes covered services from the effective date.
The Finance Act 2010 deeming provisions treated specified construction intended for sale as taxable service only prospectively from 1 July 2010. Before the effective date, a builder's construction activity was treated as self-service and was not taxable either as construction of residential complex service or works contract service; related demands and penalties did not survive. Covered builder services supplied from 1 July 2010 fell within the service-tax net, leaving post-effective-date service-tax liability enforceable with applicable interest.
AI TextQuick Glance (AI)Headnote
Works contract valuation: composite maintenance agreements became taxable only after introduction, using percentage valuation where goods value is indeterminable.
Composite maintenance-and-repair contracts involving both services and materials constitute works contracts and were not chargeable under pre-existing taxable-service categories before 1 June 2007. For the later period, where no composition-scheme option was established and the value of transferred goods was indeterminable, maintenance and repair work is valued at 70% of the gross amount charged under the prescribed valuation method. Free supplies from the service recipient are excluded, but subcontractor payments cannot reduce taxable value. Cum-tax treatment and adjustment of tax already paid apply. Non-disclosure of full gross receipts may constitute suppression, supporting extended limitation and penalties, while an unrebutted verification report does not by itself breach natural justice.
AI TextQuick Glance (AI)Headnote
Transitional cash refund for service tax on unrendered services is not limited by Section 11B.
Service tax paid on invoices for a period in which no service was rendered may be taken as credit under Rule 6(3) of the Service Tax Rules without a prescribed time limit. Following repeal of the service-tax regime, the corresponding amount is refundable in cash under the CGST transitional provision where credit would otherwise have been available. Section 11B limitation does not bar that transitional cash refund. No credit note is required where no contract, service, or payment from the recipient existed.

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2025 (2) TMI 1113 - HC - Service Tax

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Calcutta HC upholds retrospective application of amended Section 35F pre-deposit requirements despite earlier show cause notices
Calcutta HC dismissed the appeal challenging the Tribunal's order which rejected the assessee's appeal for non-compliance with amended Section 35F of the ... Summary

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Acts Income Tax