TaxTMI Updates e-Newsletter
Jan 05,2023

Writ of mandamus - Tax exemption policy for drugs for rare diseases - Judicial review of executive policy decision - Non-justiciability of fiscal policy - Customs duty and GST exemption - Regulatory requirement of Centre of Excellence for drug import - Discretionary relief in public interest litigation

Writ of mandamus - Tax exemption policy for drugs for rare diseases - Non-justiciability of fiscal policy - Customs duty and GST exemption - Whether a writ of mandamus can be issued directing the Union of India to exempt drugs for treatment of rare diseases from IGST, CGST, SGST and customs duty. - HELD THAT: - The Court held that the decision to exempt particular goods from the levy of indirect taxes and customs duty is a policy decision vested in the Government. Such fiscal and taxation choices are matters of executive policy and administration; the Court will not issue a mandamus to the Union to adopt a specific tax-exemption. The petitioners' request for a direction compelling the Union to completely exempt drugs for treatment of rare diseases from IGST, CGST, SGST and customs duty was therefore declined as beyond the scope of judicial compulsion.

No mandamus can be issued directing the Union to exempt the drugs from payment of tax or customs duty; prayer (a) dismissed.

Writ of mandamus - Regulatory requirement of Centre of Excellence for drug import - Discretionary relief in public interest litigation - Judicial review of executive policy decision - Whether a writ of mandamus can be issued directing the respondents to permit import of drugs for treatment of SMA directly without approaching the Centre of Excellence. - HELD THAT: - The Court declined to direct that imports be permitted without clearance or involvement of the Centre of Excellence. The order recognises that there may be multiple legitimate reasons for regulatory or administrative requirements involving the Centre of Excellence, and the Court will not substitute its judgment for executive or regulatory arrangements by issuing a mandamus to bypass established procedures. Accordingly, the petitioners' prayer for direct import without approaching the Centre of Excellence could not be granted.

No mandamus can be issued to permit direct importation without approaching the Centre of Excellence; prayer (b) dismissed.

Final Conclusion: The petition under Article 32 seeking mandamus for tax exemption of rare-disease drugs and for permitting direct import without Centre of Excellence clearance is dismissed; petitioners are at liberty to make a representation to the Union of India/Ministry of Health.

Eligibility criteria for budgetary support under GST regime - strict construction of exemption notifications - power to rescind or modify notifications - withdrawal of fiscal exemption in public interest - doctrine of promissory estoppel and legitimate expectation - interpretation of exemption clauses in taxing statutes - budgetary support under GST regime - role of administrative circulars as elucidation of notifications

Eligibility criteria for budgetary support under GST regime - strict construction of exemption notifications - Petitioner-unit was not an eligible unit under Para 4.1 of the Budgetary Support Notification dated 5th October 2017 and therefore was not entitled to issue of Unique ID or budgetary support. - HELD THAT: - The Scheme defines an "Eligible Unit" as one which was eligible under the earlier excise exemption notifications and "was availing the said exemption immediately before 1st day of July, 2017." The impugned administrative order records that petitioner's earlier entitlement under Notification No.56/2002-CE ceased on 9th February 2017 and that petitioner declared commencement of commercial production as 25th September 2017. Applying the plain language of Para 4.1, the unit was not availing the exemption immediately before 1st July 2017 and thus falls outside the Scheme. The Court emphasised that exemption notifications in fiscal statutes must be strictly construed and a claimant must fulfil the conditions expressly laid down; where the statutory language is plain, strict interpretation controls and purposive or liberal readings are inappropriate. [Paras 10]

Application for Unique ID rejected and petitioner is not entitled to budgetary support under the 2017 Scheme.

Power to rescind or modify notifications - withdrawal of fiscal exemption in public interest - Rescission of earlier central excise exemption notifications and introduction of the Budgetary Support Scheme with effect from 1st July 2017 is within governmental power and not susceptible to being struck down on grounds urged by petitioner. - HELD THAT: - The Court observed that upon introduction of GST the earlier exemption notifications ceased to apply and the Central Government, in exercise of its statutory powers, notified a new scheme to provide budgetary support as a measure of goodwill. Withdrawal or modification of exemptions in public interest is a matter of policy and the courts will not bind the Government to continue a policy indefinitely where the Government is satisfied that a change is necessary in public interest. Reliance on general principles recognising that an authority having power to issue a notification may rescind or modify it was accepted; fiscal policy decisions and resultant changes in exemption regimes cannot be lightly interfered with by the courts. [Paras 7, 12]

Rescission and replacement by the 2017 Scheme are valid exercises of governmental power and do not invalidate the impugned notifications.

Doctrine of promissory estoppel and legitimate expectation - withdrawal of fiscal exemption in public interest - Doctrine of promissory estoppel/legitimate expectation does not entitle petitioner to continuation of exemption or budgetary support in the factual and legal matrix of this case. - HELD THAT: - The Court held that promissory estoppel cannot be invoked in the abstract against a change of policy made in public interest. Equity considerations may require the doctrine to yield where public interest or other compelling factors so demand. Further, representations or promises contrary to law cannot be enforced. Given the Government's lawful exercise to withdraw prior exemptions on transition to GST and introduce a different Scheme with explicit eligibility conditions, it would be inequitable and legally impermissible to enforce an expectation in favour of petitioner when the conditions of the new Scheme are not met. [Paras 12]

Promissory estoppel and legitimate expectation do not operate to grant petitioner the claimed relief.

Role of administrative circulars as elucidation of notifications - interpretation of exemption clauses in taxing statutes - Circular No.1060/9/2017-CX dated 27th November 2017 is an elucidation of the main Notification and does not introduce independent terms; no interference with the circular was warranted. - HELD THAT: - The Court noted that the Circular explains the position under the prior Central Excise regime and the effect of transition to GST, and it does not add fresh terms to the Budgetary Support Scheme. As such, the circular is consistent with the impugned Notification and need not be interfered with. The Court reiterated that exemption notifications and related instruments should be read as a whole and construed strictly in favour of the revenue where ambiguity exists. [Paras 11]

Circular is an elucidation of the Scheme and is not liable to be quashed.

Final Conclusion: Petitions dismissed: the petitioner-unit does not satisfy the express eligibility conditions of the 2017 Budgetary Support Scheme, the rescission of earlier exemption notifications and promulgation of the new Scheme are valid exercises of governmental power, promissory estoppel does not afford relief in the circumstances, and the contested circular is an elucidation of the Scheme; interim directions vacated.

GSTR-2A as facilitator for self-assessment - condonation of delay/limitation in filing appeal - remand to appellate authority for fresh decision on merits - pre-deposit for stay/release of bank account

Condonation of delay/limitation in filing appeal - GSTR-2A as facilitator for self-assessment - Permission to approach the appellate authority despite lapse of the statutory limitation and the role of Form GSTR-2A in self-assessment. - HELD THAT: - The Court, having regard to the decision in Union of India v. Bharti Airtel Ltd. that Form GSTR-2A is only a facilitator for taking an informed decision while doing self-assessment, and in view of the petitioner's personal circumstances, permitted the petitioner to approach the appellate authority notwithstanding the delay in filing the appeal. The appellate authority was directed not to raise the objection of limitation and to decide the matter on merits. The Court thereby dispensed with the bar that would otherwise operate under the statutory limitation for filing an appeal and required the matter to be considered on substantive grounds by the appellate forum. [Paras 4, 9]

Petitioner permitted to file appeal before the appellate authority; appellate authority shall decide the matter on merits without taking a limitation objection.

Remand to appellate authority for fresh decision on merits - Remand of the dispute to the appellate authority for consideration on merits. - HELD THAT: - The High Court remitted the matter to the appellate authority for fresh adjudication on merits, thereby leaving the question of entitlement to input tax credit and the alleged mismatch between GSTR-3B and GSTR-2A to be examined afresh by that authority. The Court's direction was to consider the merits of the claim without being precluded by limitation objections and to entertain the petitioner's explanations regarding non-filing of returns by suppliers and other factual contentions. [Paras 9]

The matter is remitted to the appellate authority to be decided on merits.

Pre-deposit for stay/release of bank account - Pre-deposit and procedure for release of frozen bank account pending the appeal. - HELD THAT: - The Court directed the petitioner to make a pre-deposit as a condition for pursuing the remedial route: an amount specified by the Court was to be deposited within two weeks. Upon such deposit, the petitioner was entitled to request the release of his bank account before the appellate authority, which was directed to decide that request within one week. This constituted the interim financial condition and procedural timetable imposed by the Court to secure a balance between the revenue interest and the petitioner's need for relief. [Paras 10]

Petitioner to deposit the directed pre-deposit within two weeks; upon deposit, the appellate authority shall consider the request for release of the bank account within one week.

Final Conclusion: Writ petition allowed to the extent that the petitioner is permitted to approach the appellate authority which shall decide the matter on merits without raising limitation objections; petitioner directed to make the prescribed pre-deposit within two weeks, after which the appellate authority shall decide the request for release of the bank account within one week.

GST liability on tender amount - inclusion of taxes in bid price - e tender system auto calculation - bid evaluation and acceptance - price schedule as admissible evidence

GST liability on tender amount - inclusion of taxes in bid price - e tender system auto calculation - price schedule as admissible evidence - Whether the petitioner was entitled to avoid payment of 18% GST over the tender/bid amount on the ground that the bid as entered on the e tender site already reflected the amount inclusive of taxes. - HELD THAT: - The court examined the tender document and determined that only two fields were operable for a bidder: bidder's name and the basic rate to be entered in column No.13. A test entry of Rs.1,61,74,260/- in column No.13 was accepted by the e tender system and the identical figure was reflected in column No.53 (total amount with taxes), demonstrating that the site did not auto generate or auto correct the basic rate by adding 18% GST. The petitioner's contention that the site auto calculated GST upon entry of a basic rate was thus rejected. Further, the price schedule of another successful bidder showed the same pattern-identical figures in columns No.13 and No.53-reinforcing that the amount entered as the basic rate appeared unchanged in the total with taxes field. On these findings the court held that there was no irregularity in the respondents' demand for GST at 18% over the tender amount and that the petitioner remained liable for the statutory tax demand. [Paras 9, 10, 11, 12, 13]

Petition dismissed; demand for payment of GST @ 18% on the tender amount upheld.

Final Conclusion: The High Court found no illegality in the respondents' demand for GST over the tender amount, concluded that the e tender system did not auto compute or include GST in the basic rate entered, and dismissed the petition leaving parties to bear their own costs.

Composite supply - works contract - original works pertaining to railways - Scheme of Classification of Services (SAC 9954 / 995421) - applicability of notification for reduced GST rate - binding effect of advance ruling

Composite supply - works contract - original works pertaining to railways - Whether the construction contract awarded to the applicant qualifies for the reduced rate under Sl. No. 3(v)(a) of Notification No. 11/2017-Central Tax (Rate) up to 17.7.2022. - HELD THAT: - The Authority examined the constituent conditions of Sl. No. 3(v)(a): (i) the supply must fall under SAC for construction services; (ii) it must be a composite supply as defined in Section 2(30) of the CGST Act; (iii) it must be a works contract within the meaning of Section 2(119) of the CGST Act (i.e., contract for immovable property involving transfer of property in goods); and (iv) it must be construction, erection, commissioning or installation of original works pertaining to railways. The documents on record (letter of acceptance, tripartite agreement and drawings) establish that the works are new constructions falling within the SAC for construction services and that they are original works. However, the Authority found on the available record that (a) there is no substantive evidence demonstrating that the supply, as contracted, constitutes a composite supply (no details showing the natural bundling of goods and services and identification of the principal supply); (b) though the works appear to be immovable constructions, the requirement of transfer of property in goods in execution of the contract (an essential element of statutory works contract) is not established by the materials furnished; and (c) the project, being construction of a CBD station and commercial complexes on land owned by Nava Raipur Atal Nagar Vikas Pradhikaran, was not found to be works "pertaining to railways" in the sense of being for the public carriage of passengers or goods or directly in connection with a Government or non-Government railway (the Authority distinguished the facts from rulings relied upon by the applicant and applied the definition of "railway" in the Railways Act). On these findings the Authority concluded that the applicant had not satisfied the cumulative conditions of Sl. No. 3(v)(a) for entitlement to the reduced rate. [Paras 9, 10]

Up to 17.7.2022 the applicant's entitlement to the reduced rate under Sl. No. 3(v)(a) is conditional on establishing that the supply is a composite supply, qualifies as a works contract (with transfer of property in goods) and that the works pertain to railways; on the materials before the Authority these conditions are not satisfied and the works attract GST at the residual rate under Sl. No. 3(xii) (18%).

Applicability of notification for reduced GST rate - Effect of the amendment to Notification No. 11/2017 (Notification No. 03/2022) effective from 18.7.2022 on the applicant's claim. - HELD THAT: - The Authority noted that Notification No. 03/2022 dated 13.7.2022 omitted items including Sl. No. 3(v)(a) from Notification No. 11/2017 with effect from 18.7.2022. Consequently, irrespective of whether the earlier conditions could be satisfied, the specific concessional entry relied upon by the applicant ceased to exist from 18.7.2022. The Authority therefore applied the residual entry for construction services under Sl. No. 3(xii) of the Notification as amended. [Paras 9, 10]

With effect from 18.7.2022 the exemptive/concessional entry relied upon (Sl. No. 3(v)(a)) stands omitted and the applicant's construction services will attract GST at the residual rate under Sl. No. 3(xii) (18%).

Final Conclusion: The Authority ruled that until 17.7.2022 the applicant could qualify for the reduced entry at Sl. No. 3(v)(a) of Notification No. 11/2017 only if it establishes that the supply is a composite supply, constitutes a works contract involving transfer of property in goods and that the works pertain to railways; on the record before the Authority those conditions were not satisfied and GST at 18% applies. Further, from 18.7.2022 the concessional entry was omitted by Notification No. 03/2022 and the construction services unambiguously attract GST at 18% under the residual entry.

Assessment in name of deceased - Validity of assessment proceedings - Obligation under section 159(2) to bring legal heir on record - Assessment void ab initio for failure to bring legal heir on record - Ex parte assessment under section 144

Assessment in name of deceased - Obligation under section 159(2) to bring legal heir on record - Assessment void ab initio for failure to bring legal heir on record - Ex parte assessment under section 144 - Whether the assessment completed in the name of the deceased assessee, without bringing the legal heir on record after being informed of the death, is valid. - HELD THAT: - Scrutiny proceedings had been initiated and notices under section 143(2) and 142(1) were issued while the assessee was alive. The assessee's wife informed the Assessing Officer by letter dated 26/06/2013 that the assessee had expired on 17/04/2013 and that she could not respond to the queries. Thereafter no statutory notices were issued to, nor was the legal heir brought on record, and the AO proceeded to conclude the assessment ex parte under section 144 in the name of the deceased. The Tribunal held that where the assessee dies before completion of assessment, it is incumbent on the AO under section 159(2) to bring the legal heir on record and proceed accordingly. The AO's failure to do so, and the passing of an assessment order in the name of the deceased despite being informed of the death, renders the assessment order void ab initio. Having quashed the assessment for this reason, other grounds raised were not considered as they became academic. [Paras 7]

Assessment passed in the name of the deceased without bringing the legal heir on record is void ab initio; assessment set aside.

Final Conclusion: Appeal allowed: the assessment order for AY 2011-12 passed in the name of the deceased assessee is quashed because the AO did not bring the legal heir on record as required after being informed of the death; other issues left open as academic.

Revision u/s 263 - lack of enquiry with regard to claim of deduction made by the assessee u/s 80IB(10) - Whether the Tribunal was correct in holding that the order under Section 263 of the Act is not sustainable in view of insertion of Section 13(8) of the Act? - as per HC [2020 (8) TMI 477 - KARNATAKA HIGH COURT] instant case was a case of lack of enquiry and not inadequate enquiry with regard to claim of the assessee with regard to deduction under Section 80IB(10) of the Act also as not expressed any opinion with regard to claim of the assessee for deduction under Section 80IB(10) of the Act and direct the Assessing Officer to deal with the aforesaid claim of the assessee afresh in accordance with law.

HELD THAT:- The High Court by its impugned order directed the Assessing Officer to deal with the claim of the assessee afresh in accordance with law.

Petitioner submits that in view of the observations made by the High Court, the consequences of the retrospective amendment in Section 13(8) may not be considered by the Assessing Officer.

We make it clear that it shall be open for the Assessing Officer to consider all the pleas of the assessee including the consequences of the retrospective amendment in accordance with law irrespective of the observations made by the High Court or the ITAT.

Subject to above observations, we are not inclined to entertain this petition. The special leave petition is, accordingly, dismissed.

Delayed payments made to EPF and ESI - Whether allowable as a deduction under Section 37? - HELD THAT:-The first question stands covered by a judgment of this Court delivered in Checkmate Services P.Ltd. [2022 (10) TMI 617 - SUPREME COURT] This appeal was dismissed along with four other appeals by a common judgment. The first question has been answered against the assessee(s) in the aforesaid judgment. We, thus, grant leave to the appellant in this proceeding but such leave shall be confined to examining the judgment under appeal only on the second question.

The appeal shall be heard on this question alone.

Disallowance u/s 36(1)(ii) of bonus paid to Directors- substantial question of law - As per AO bonus was paid to avoid payment of dividend distribution tax - whether the amount paid to the two directors/shareholders in the assessment years 2011-12 and 2014-15 should be allowed as a deduction or should be included in the income of the company? - as decided by HC [2022 (4) TMI 693 - DELHI HIGH COURT] there is no substantial question of law in the present cases. The assessing officer and CIT (A) have given a concurrent finding that the assessee has paid the bonus in lieu of the dividend and therefore, the above sum is disallowed u/s 36 (1) (ii) - ITAT also after considering the findings of the assessing officer and the CIT (A) had inter alia held that the payment of bonus or commission is not allowable as deduction under Section 36 (1) (ii) of the Act in the hands of the assessing company. In the absence of any substantial question of law, the appeals are liable to be dismissed

HELD THAT:- There is a concurrent finding of fact by the Assessing Officer, CIT (Appeal) and Income Tax Appellate Tribunal, Delhi which has been duly affirmed by the High Court, disallowing the payment of bonus to the two Directors of the petitioner – company No case to interfere with the impugned Order passed by the High Court of Delhi is made out.

The Special Leave Petitions are, accordingly, dismissed.

Re-opening of assessment - reassessment notice - subjective satisfaction - validity of reassessment proceedings - setting aside reassessment - condonation of delay

Re-opening of assessment - reassessment notice - subjective satisfaction - validity of reassessment proceedings - setting aside reassessment - Validity of reassessment where reasons for reopening were recorded after issuance of the reassessment notice. - HELD THAT: - The Court agreed with the High Court's conclusion that the reasons to re-open the assessment were recorded only after the reassessment notice had been issued. Consequently, at the time the notice was issued there was no subjective satisfaction to justify reopening. On this basis the reassessment proceedings were held to be invalid and the High Court's order setting aside the reassessment was affirmed. The Special Leave Petition was dismissed.

High Court order setting aside reassessment proceedings upheld; Special Leave Petition dismissed.

Final Conclusion: The Supreme Court affirmed the High Court's decision that reassessment was invalid because reasons were recorded after issuance of the reassessment notice, there being no subjective satisfaction at the time of issuance; the Special Leave Petition was dismissed and delay was condoned.

Income Declaration Scheme, 2016 - benefit under notification dated 13.12.2019 - entitlement to relief upon deposit of taxed amount with interest - remittance of court-deposited amount with accrued interest

Benefit under notification dated 13.12.2019 - entitlement to relief upon deposit of taxed amount with interest - Appellant's entitlement to relief in terms of the Ministry of Finance notification dated 13.12.2019 where the defaulted amount with interest had been deposited. - HELD THAT: - The Court recorded that learned counsel for the respondents admitted that the notification dated 13.12.2019 had been issued and that the appellant had deposited the amount with interest in the Court in pursuance of an earlier order. Given the respondents' concession on the existence of the notification and the fact of deposit, the appellant was held entitled to relief in terms of that notification. The Court declined further adjournment sought by respondents to obtain instructions, noting that issuance of the notification precluded withholding of the relief sought by the appellant.

Appellant entitled to relief under the notification dated 13.12.2019 because the requisite amount with interest has been deposited.

Remittance of court-deposited amount with accrued interest - Income Declaration Scheme, 2016 - Direction for remittance of the amount deposited in Court (together with interest accrued) to the respondents and grant of the benefit of the Income Declaration Scheme, 2016 to the appellant. - HELD THAT: - Having found entitlement under the notification and on account of the deposit already made in Court along with interest, the Court directed that the deposited amount together with any further accrued interest be remitted to the respondents; particulars to be furnished by respondents' counsel. The Court further held that, as a consequence of the above, the appellant would be entitled to the benefit of the Income Declaration Scheme, 2016. The civil appeal was allowed to this extent.

Deposited amount with interest to be remitted to respondents; appellant to receive benefit under the Income Declaration Scheme, 2016; appeal allowed to that extent.

Final Conclusion: The appeal is allowed insofar as the appellant is held entitled to relief under the Ministry of Finance notification dated 13.12.2019; the amount deposited in Court with interest is directed to be remitted to the respondents (particulars to be supplied by respondents' counsel), and the appellant is granted the benefit of the Income Declaration Scheme, 2016.

Non-speaking order - remand for fresh consideration - duty to pass a reasoned and speaking order - decide the writ petition on merits

HELD THAT: - Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court of Judicature at Bombay in Writ Petition [2022 (1) TMI 1319 - BOMBAY HIGH COURT]by which the High Court has dismissed the said writ petition in the most casual and cursory manner and the order is a non-speaking order and nothing has been discussed on merits at all and the recent decision of this Court in the case of Vishal Ashwin Patel [2022 (3) TMI 1296 - SUPREME COURT] by which this Court has set aside the similar order passed by the very Bench and remanded the matter to the High Court, we set aside the impugned order passed by the High Court dismissing the writ petition. We remand the matter to the High Court to decide and dispose of the writ petition in accordance with law and on merits and to pass a reasoned and speaking order.

The present Appeal is accordingly allowed to the aforesaid extent.

Classification of payments to doctors as salary or professional fees - treatment of retainership/consultancy agreements as professional service contracts - obligation to deduct tax at source irrespective of recipient's exemption status - preferential adoption of view favourable to assessee where two views are possible

Classification of payments to doctors as salary or professional fees - treatment of retainership/consultancy agreements as professional service contracts - Payments made to doctors under retainership/consultancy agreements are professional fees and not salary for the purposes of TDS classification. - HELD THAT: - The Division Bench accepted the position in Escorts Heart Institute & Research Centre Ltd. that a retainership or service contract with doctors, which does not impose the restrictions and service conditions of employment (such as prohibition on private practice), is contractual professional/service engagement and not an employer-employee relationship. The Court noted that retainerships are honorary or professional agreements distinct from contracts of employment; consequently payments under such retainerships are to be treated as professional fees rather than salary. Applying that precedent, the appeal was disposed of in favour of the assessee on this classification point.

The Tribunal order in favour of the assessee on classification of payments as professional fees is upheld and the appeal dismissed.

Obligation to deduct tax at source irrespective of recipient's exemption status - An assessee's obligation to deduct TDS is not absolved by a recipient's claim or prior conditional exemption; TDS liability under the relevant provisions arises irrespective of the recipient's tax exemption unless a certificate under the statute is furnished. - HELD THAT: - The cited decision observed that an order granting exemption to a recipient subject to conditions does not relieve the payer of the statutory duty to deduct tax at source, because the payer cannot in advance ensure the recipient's compliance with exemption conditions. The underlying principle is that TDS liability is independent of the recipient's tax liability or entitlement to exemption unless the payer is furnished with an appropriate certificate under the governing provision. While this principle was discussed in the precedent, the adjudicatory outcome in the present proceedings followed the earlier Division Bench conclusions and resulted in dismissal of the Department's appeal.

The legal principle that TDS obligation is not negated by recipient's conditional exemption was recognized in the discussion, but on facts and precedent the appeal was dismissed.

Final Conclusion: The Department's D.B. Income Tax Appeal challenging the Tribunal's dismissal was dismissed by the High Court: the payments under retainerships with doctors are treated as professional fees (not salary), the Court relied on existing Division Bench precedent, and the appeal was dismissed accordingly.

No incriminating material found during search disentitles addition under section 153A for unabated assessment - unabated assessment - applicability of territorial precedent of the High Court in determining sustainabilty of additions under section 153A

No incriminating material found during search disentitles addition under section 153A for unabated assessment - unabated assessment - applicability of territorial precedent of the High Court in determining sustainabilty of additions under section 153A - Whether an addition made under section 153A is sustainable where the assessment was unabated and no incriminating material was found during the search. - HELD THAT: - The Tribunal found on the admitted facts that the assessment was an unabated assessment (original return filed) and that no incriminating material was discovered during the search. The Revenue did not dispute the absence of incriminating material. The Tribunal applied the precedent of the jurisdictional High Court relied upon by the assessee to hold that, in such circumstances, an addition under section 153A cannot be sustained. The Tribunal also noted that the case was under the New Delhi jurisdiction (centralized) and therefore the Delhi High Court decision was applicable on the facts. Because the jurisdictional defect was decisive, the Tribunal declined to consider the Revenue's merits-based grounds as academic and treated them as infructuous. [Paras 8, 11, 12]

Assessee's cross objection allowed; addition under section 153A set aside on jurisdictional ground (no incriminating material in search) and Revenue's appeal treated as infructuous.

Final Conclusion: The Tribunal allowed the assessee's cross objection, holding that in an unabated assessment where no incriminating material was found during the search the addition under section 153A is not sustainable; accordingly the Revenue's appeal was rendered infructuous.

Deduction under section 54B - Deduction under section 54F - Deposit of unutilised capital gains in capital gains deposit scheme - Time limit for utilisation/deposit under sections 54B and 54F - Condonation of delay in filing appeal - Scope of appellate interference with factual appreciation

Condonation of delay in filing appeal - Condonation of delay of four days in filing the appeal was allowed and the appeal was admitted. - HELD THAT: - The assessee filed an affidavit attributing the delay to the health of the authorised representative and the Revenue raised no objection. The Tribunal exercised discretion to condone the short delay and admitted the appeal for adjudication. [Paras 3]

Delay of four days condoned and appeal admitted.

Deduction under section 54B - Deposit of unutilised capital gains in capital gains deposit scheme - Time limit for utilisation/deposit under sections 54B and 54F - Claim for deduction under section 54B was disallowed as the unutilised sale proceeds were not deposited in the capital gains deposit scheme and the purchase/consideration payments fell beyond the due date for filing return. - HELD THAT: - The assessing officer found the appellant had not deposited unutilised sale consideration in the capital gains deposit scheme and that the agreement and payment schedule for the purported purchase of new agricultural land (agreement dated 28.06.2010 and subsequent payments) fell after the due date for filing the return under section 139(1). The CIT(A) applied the ratio of the jurisdictional High Court decision in Humayun Suleman Merchant to hold that, in these circumstances, the section 54B deduction could not be allowed. The Tribunal found the CIT(A)'s factual findings on non deposit and the timing of purchase/payments to be based on proper appreciation of record and declined to interfere. [Paras 12]

Deduction under section 54B disallowed.

Deduction under section 54F - Deposit of unutilised capital gains in capital gains deposit scheme - Time limit for utilisation/deposit under sections 54B and 54F - Scope of appellate interference with factual appreciation - Deduction under section 54F was restricted to the amount actually invested in construction before the due date for filing the return; the remainder was disallowed for non deposit of unutilised proceeds within the stipulated time. - HELD THAT: - The CIT(A) recorded that only a limited sum had been spent on construction before the due date for filing the return and that the balance consideration and further payments were made after that due date, with no deposit of unutilised proceeds in the capital gains deposit scheme as required by subsection (4) of section 54F. On these factual findings the CIT(A) allowed exemption only to the extent of investment made before the due date. The Tribunal agreed that the CIT(A)'s decision applied the governing legal principle correctly and that there was no reason for appellate interference with the factual appreciation. [Paras 12]

Deduction under section 54F restricted to amount invested before the due date; remaining claim disallowed.

Scope of appellate interference with factual appreciation - General and consequential grounds of appeal were dismissed as they did not require separate adjudication. - HELD THAT: - The Tribunal observed that certain grounds were general in nature and others consequential; those grounds did not call for independent consideration and were therefore dismissed. [Paras 10, 11]

General and consequential grounds dismissed.

Final Conclusion: The Tribunal condoned the short delay, found no infirmity in the CIT(A)'s factual and legal conclusions rejecting the bulk of the section 54B and section 54F claims (allowing only the amount invested before the due date under section 54F), dismissed other general and consequential grounds, and accordingly dismissed the appeal.

Revision under section 263 - erroneous and prejudicial to the interests of the Revenue - application of mind by Assessing Officer - enquiries or verification required under Explanation to section 263 - reliance on investigation report - principles of natural justice - raising new issues not mentioned in notice - Vivad se Vishwas settlement and finality

Revision under section 263 - erroneous and prejudicial to the interests of the Revenue - application of mind by Assessing Officer - enquiries or verification required under Explanation to section 263 - Validity of the Principal Commissioner's revision orders under section 263 that set aside the assessments on the ground that the assessing officer's orders were erroneous and prejudicial to revenue - HELD THAT: - Having applied the principles laid down by the Supreme Court and the High Courts (including Malabar and Grasim), the Tribunal examined whether the Assessing Officer had made enquiries and applied his mind or whether the assessment was passed without the requisite verification so as to be 'erroneous' within the meaning of section 263. The assessment records show the AO conducted enquiries into the payments to Shri Deepak Kochhar, commented on lack of supporting evidence, agreements, reports and on circular movement of funds, and took a view (including estimating commission income) without disallowing the consultancy fees. The Principal Commissioner (Pr. CIT) proceeded to hold the assessment erroneous essentially because, in his opinion, additional enquiries or a different disallowance should have been made. The Tribunal held that where the AO has in fact conducted enquiries and has taken a possible view on the materials, the Pr. CIT cannot substitute his judgment merely because he would have taken a different view. The Pr. CIT did not himself conduct independent enquiries or make findings to show the AO's view was unsustainable in law; reliance on the fact that a different conclusion could be reached is insufficient to sustain revision under section 263. On this basis the Tribunal found the statutory condition for exercise of revision jurisdiction was not satisfied and the revision orders could not be upheld. [Paras 21, 22, 24]

The revision orders under section 263 are unsustainable because the AO had made enquiries and taken a possible view; the Pr. CIT failed to show the AO's order was erroneous after independent verification.

Reliance on investigation report - principles of natural justice - raising new issues not mentioned in notice - Vivad se Vishwas settlement and finality - Whether the Pr. CIT could set aside assessments by relying solely on the Investigation wing's report, rely on statements not supplied to the assessee, or introduce and decide an issue under section 68 that was not specified in the revision notice - HELD THAT: - The Tribunal noted the Pr. CIT's notice and order repeatedly relied upon the DDIT (Inv.) report which 'conclusively' characterised payments as accommodation entries. The Investigation report is recommendatory and the AO, as quasi judicial authority, is entitled to form his own view based on material on record. The Pr. CIT did not conduct independent enquiries or verification to demonstrate that the AO's conclusions were erroneous; nor did he supply or confront the assessee with the investigation statements relied upon so as to satisfy principles of natural justice. Further, the Pr. CIT discussed applicability of section 68 (treatment of loans) though that issue was not specified in the revision notice and no opportunity appears to have been given to the assessee to meet that new contention. The Tribunal held that reliance solely on the DDIT (Inv.) report and dealing with a new issue not put to the assessee were impermissible steps in exercise of revision jurisdiction. As to the Vivad se Vishwas settlement, the Pr. CIT's order correctly recognised that the specific addition admitted under VSV had become final and directed AO not to re make that addition; however, VSV did not operate as a blanket bar to consider other matters - a point the Pr. CIT emphasized but did not cure by independent enquiry. [Paras 14, 16, 23]

The Pr. CIT could not validly set aside the assessments by merely relying on the investigation report or by deciding an unnotified issue without giving opportunity; those aspects render the revision orders unsustainable.

Final Conclusion: The impugned revision orders passed by the Principal Commissioner under section 263 were quashed: the Assessing Officer had conducted enquiries and taken a possible view, the Pr. CIT relied unduly on the investigation report without independent verification or enquiries and dealt with an issue not notified to the assessee; all appeals allowed.

Deemed dividend under Section 2(22)(e) - revision under Section 263 - error in assessment order prejudicial to the interest of revenue - judicial discipline and binding nature of appellate orders

Deemed dividend under Section 2(22)(e) - revision under Section 263 - judicial discipline and binding nature of appellate orders - Validity of the Principal Commissioner of Income Tax's revision under Section 263 setting aside the assessment for AY 2015-16 on the ground that the Assessing Officer failed to invoke Section 2(22)(e), in view of an earlier Tribunal decision in the assessee's own case for AY 2013-14. - HELD THAT: - The Tribunal found that the PCIT, in framing the revision, selectively reproduced the assessee's submissions and omitted reference to the assessee's explicit reliance on the Coordinate Bench's ITAT decision for AY 2013-14 which had deleted an addition under Section 2(22)(e) on identical facts. The revenue could not show that the ITAT order had been stayed or that any higher forum had disturbed it. The Tribunal applied the principle of judicial discipline that subordinate revenue authorities must follow binding appellate orders, citing the Supreme Court in Union of India v. Kamlakshi Finance Corporation. Because the PCIT did not accord due weight to the prior ITAT decision in the assessee's own case and proceeded to set aside the assessment as erroneous and prejudicial without addressing the binding appellate finding, the exercise of power under Section 263 was improper. The Tribunal therefore quashed the revision order and allowed the appeal. [Paras 7, 8, 9, 10, 11]

Revision order dated 19.03.2020 is quashed and the appeal is allowed; the PCIT's direction to re-open the assessment on the issue of deemed dividend under Section 2(22)(e) is set aside.

Final Conclusion: The Tribunal allowed the assessee's appeal, quashed the PCIT's revision order under Section 263 for AY 2015-16 for failing to give effect to the Coordinate Bench's ITAT decision on identical facts for AY 2013-14, and restored the assessment as completed.

Deduction under section 80IA(4) of the Income-tax Act - Return filed in response to notice under section 153A - Repetition of claim previously adjudicated in assessee's own case - Binding effect of earlier Tribunal order in the same assessee's case

Deduction under section 80IA(4) of the Income-tax Act - Repetition of claim previously adjudicated in assessee's own case - Claim for deduction under section 80IA(4) made in the return filed in response to notice under section 153A was not allowable. - HELD THAT: - The assessee reiterated the claim for deduction under section 80IA(4) in the return filed pursuant to notice under section 153A. The Tribunal observed that an identical claim had earlier been considered and rejected in the assessee's own case by ITA No.377/PUN/2015 decided on 06.04.2017. Having regard to the reasons recorded in that earlier Tribunal order, the present claim could not be accepted afresh. The appellate contention did not persuade the Tribunal to depart from the earlier conclusion, and the grounds of appeal were therefore dismissed.

Claim for deduction under section 80IA(4) disallowed and related grounds of appeal dismissed.

Final Conclusion: The appeal is dismissed; the claim for deduction under section 80IA(4) for assessment year 2011-12, reiterated in the return filed under section 153A, is not allowable in view of the earlier Tribunal decision in the assessee's own case.

Admissibility of additional evidence under Rule 46A(3) of the Income Tax Rules, 1962 - unexplained cash credit and burden to prove identity, genuineness and creditworthiness under the doctrine applied to section 68 - treatment of receipts from letting out plant and machinery as business income - entitlement to higher rate of depreciation for assets used in the business of hiring - evaluation of unsupported enhancement of sale consideration and estimation in appeals under section 68

Admissibility of additional evidence under Rule 46A(3) of the Income Tax Rules, 1962 - Whether the CIT(A) erred in admitting and relying upon additional evidence in violation of sub-Rule (3) of Rule 46A. - HELD THAT: - The Revenue alleged that the first appellate authority entertained additional evidence contrary to sub-Rule (3) of Rule 46A but did not identify specific items of evidence or place a paper book before the Tribunal. The Tribunal therefore found no material before it demonstrating that the CIT(A) had admitted evidence without affording the Assessing Officer an opportunity, and, on that basis, held that the ground lacked merit. [Paras 3]

The ground is rejected for lack of particulars and supporting material.

Unexplained cash credit and burden to prove identity, genuineness and creditworthiness under the doctrine applied to section 68 - Whether the addition of Rs. 42,00,000 as unexplained loan under section 68 deserved to be deleted by the CIT(A). - HELD THAT: - The Assessing Officer traced a chain of transactions showing that share application money received by a company controlled by the assessee was routed through entities and ultimately credited as an unsecured loan to the assessee's proprietorship, and the assessee failed to produce the alleged individual investors or documentary proof of source. The CIT(A) accepted the assessee's production of creditor details and treated proof up to two degrees as sufficient. The Tribunal examined the factual matrix and concluded that the transactions were staged and that the assessee had not satisfactorily proven the genuineness and creditworthiness of the source of funds. The Tribunal held that proving identity alone was insufficient where the surrounding facts indicated a managed routing of funds and that the Assessing Officer was justified in probing root source of funds. [Paras 5, 6, 7]

The deletion by the CIT(A) is set aside; the addition of Rs. 42,00,000 as unexplained cash credit under section 68 is restored and confirmed.

Treatment of receipts from letting out plant and machinery as business income - entitlement to higher rate of depreciation for assets used in the business of hiring - Whether receipts from hiring Cranes to Oil India Ltd. constitute business income of the assessee and whether higher rate of depreciation (@30%) is allowable. - HELD THAT: - The Assessing Officer treated crane-hire receipts as income from other sources and allowed lower depreciation, while the CIT(A) found that letting out Cranes was a continuous, organized and complex activity of the assessee involving running, maintenance and provision of operators and related expenses, supported by audited accounts showing crane running expenses. The Tribunal concurred with the CIT(A)'s approach that an activity carried on continuously in an organized manner with a view to profit amounts to business; once the assessee lets out the Cranes as part of his hiring activity, the assets are used in the business and are eligible for higher rate of depreciation. The Tribunal rejected the Assessing Officer's requirement that the third party lessee must in turn use the assets for hire. [Paras 9, 10, 11]

The CIT(A)'s finding is upheld: crane-hire receipts are business income and depreciation at the higher rate is allowable.

Evaluation of unsupported enhancement of sale consideration and estimation in appeals under section 68 - Whether the CIT(A) was justified in restricting the unsupported enhancement of sale consideration (originally disallowed by the AO) to a lesser amount on the basis of earlier audited accounts and estimation. - HELD THAT: - The assessee sold a plot and claimed an additional cash consideration on account of sale of building materials; the Assessing Officer disallowed the enhancement for lack of proof. The CIT(A) examined the audited accounts of an earlier year which recorded purchase of building materials and, while accepting the possibility of sale of those materials, found lack of full evidence for the claimed amount and made an estimate applying discretion to accept a portion of the claim. The Tribunal found no reason to interfere with the appellate authority's exercise of judgment where the assessee had debited the earlier purchase in regular books and the CIT(A) reasonably estimated the realizable value. [Paras 12, 13, 14, 15]

The CIT(A)'s estimation and partial allowance is sustained; the Revenue's appeal on this point is rejected.

Final Conclusion: The Revenue appeal is partly allowed: the CIT(A)'s admission of additional evidence challenge is dismissed; the Assessing Officer's addition of Rs. 42,00,000 under section 68 is restored; the CIT(A)'s findings treating crane-hire receipts as business income and allowing higher-rate depreciation are upheld; and the CIT(A)'s restriction of the unsupported enhancement of sale consideration is sustained. Overall, the Revenue's appeal succeeds on the unexplained cash credit issue and is otherwise dismissed.

Penalty under Section 271D for contravention of Section 269SS - penalty under Section 271E for contravention of Section 269T - reasonable cause under Section 273B - journal entries as mode of receipt/repayment - cash deposits on behalf of transacting parties - precedential effect of Bombay High Court decision in Triumph International Finance and subsequent orders of the Supreme Court

Journal entries as mode of receipt/repayment - penalty under Section 271D for contravention of Section 269SS - reasonable cause under Section 273B - precedential effect of Bombay High Court decision in Triumph International Finance and subsequent orders of the Supreme Court - Deletion of penalty under Sections 271D and 271E in respect of loans/deposits recorded and settled by journal entries made prior to the Bombay High Court decision in Triumph International Finance. - HELD THAT: - The Tribunal accepted the view of the CIT(A) that, although receiving deposits/loans through journal entries is hit by Section 269SS, transactions undertaken prior to the clarifying decision of the Hon'ble Bombay High Court in Triumph International Finance (and while contrary Tribunal/High Court decisions were still holding the field) attract the defence of reasonable cause under Section 273B. The Tribunal relied on the Bombay High Court's order dated 06.02.2018 in the group matters and subsequent dismissal by the Supreme Court of Special Leave Petitions challenging that order. In that legal matrix the assessee is deemed to have had reasonable cause to transact by journal entries, and therefore penalty under Section 271D (and by parity Section 271E) could not be levied for the journal-entry transactions. The Tribunal followed coordinate decisions and the jurisdictional High Court ruling and upheld the CIT(A)'s deletion of penalty in respect of journal-entry transactions. [Paras 9, 20]

Penalty deleted for transactions effected by journal entries made prior to the Triumph decision; grounds of revenue rejected in this respect.

Cash deposits on behalf of transacting parties - penalty under Section 271D for contravention of Section 269SS - penalty under Section 271E for contravention of Section 269T - Liability to penalty for transactions involving actual cash deposits (i.e., not genuine journal-entry adjustments). - HELD THAT: - The CIT(A) found that certain transactions could not be treated as journal entries because they involved depositing cash on behalf of transacting parties; those transactions cannot be said to have been effected by book adjustments alone. For such cash transactions the assessee had not explained any reasonable cause, and the CIT(A) upheld levy of penalty limited to the extent of such cash deposits, directing the Assessing Officer to verify and ascertain the total amount so deposited. The Tribunal did not disturb this factual and verification direction of the CIT(A) and left the matter for factual ascertainment by the AO. [Paras 9]

Penalty upheld in respect of transactions involving cash deposits; Assessing Officer directed to verify amounts and restrict penalties to that extent.

Final Conclusion: The appeal by the Revenue is dismissed. The Tribunal upholds deletion of penalties under Sections 271D/271E insofar as loans/deposits were received/repayed by journal entries effected prior to the Bombay High Court's clarifying decision (reasonable cause under Section 273B), while sustaining the CIT(A)'s treatment of transactions involving cash deposits and directing factual verification by the Assessing Officer.

Maintainability of appeal under Section 129A - Scope of 'order' or 'decision' by adjudicating authority - Finality of adjudication and prohibition on revisiting confirmed demands - Application of Section 72 - goods improperly removed from warehouse - Interaction between Section 69 (re-export) and Section 72 - Requirement of extension under Section 61 for permitting re-export - Validity and scope of Board Circular No.03/2003-Cus dated 14.01.2003 - Doctrine of strict construction of taxing statutes

Maintainability of appeal under Section 129A - Scope of 'order' or 'decision' by adjudicating authority - Whether appeal to the Appellate Tribunal under Section 129A was maintainable against the Chief Commissioner's communication dated 07.03.2019 - HELD THAT: - The communications of 19.12.2018 and 07.03.2019 merely recorded that the respondent's representations for extension of warehousing had been considered not maintainable since the matter had attained finality; the signatory did not exercise adjudicatory powers in the sense required by Section 129A. Section 129A confines appeals to orders/decisions passed by the Principal Commissioner/Commissioner as adjudicating authority or by Commissioner (Appeals). A taxing statute is to be strictly construed and jurisdiction cannot be conferred by consent or implication. The Court therefore held that the impugned communication did not fall within the statutory category of an appealable 'order' under Section 129A and the Tribunal lacked jurisdiction to entertain an appeal against that communication. [Paras 23, 24, 27, 28]

Appeal under Section 129A against the Chief Commissioner's communication was not maintainable; substantial question No.(i) answered in favour of Revenue.

Application of Section 72 - goods improperly removed from warehouse - Interaction between Section 69 (re-export) and Section 72 - Whether, despite adjudication confirming duty, duty becomes payable only when goods are cleared for home consumption (i.e., whether Section 69 could be applied after Section 72 consequences had arisen) - HELD THAT: - Section 72 deems goods which remain in warehouse beyond permitted period to have been improperly removed and empowers the proper officer to demand payment of full duty with interest, penalty and other charges; failure to pay permits sale. Section 69 (clearance for export without payment of duty) operates where export formalities and payment conditions in that section are satisfied and is attracted prior to the deemed removal under Section 72. In the present facts the goods remained beyond permitted period, proceedings under Section 72 crystallised and adjudication confirming duty attained finality. Once liability under Section 72 has arisen, Section 69 cannot be invoked to avoid payment of the duty, interest and penalty already due. The Tribunal erred in treating Section 69 as applicable thereafter. [Paras 29, 30, 31, 32]

Substantial question No.(ii) answered in favour of Revenue; Tribunal's conclusion that duty was payable only on home clearance and that Section 69 applied despite final adjudication under Section 72 is set aside.

Validity and scope of Board Circular No.03/2003-Cus dated 14.01.2003 - Requirement of extension under Section 61 for permitting re-export - Finality of adjudication and prohibition on revisiting confirmed demands - Whether the Tribunal was justified in holding that Board Circular No.03/2003 permits re-export without payment of duty (and consequent extension of warehousing) despite prior adjudication confirming duty - HELD THAT: - The Circular permits consideration of requests to re-export even after permitted bonding period has expired, but expressly conditions such permission on extending the warehousing period under Section 61. Circulars cannot override or be read contrary to statutory provisions. Here the liability to pay duty, interest and penalty had crystallised and attained finality under the adjudication and orders of the authorities; the Circular cannot be read in isolation to nullify that finality or the mandate of Section 72. Section 61 requires payment of duty/interest as applicable; the Circular does not absolve an owner from statutory liabilities already crystallised. Reliance by the Tribunal on paragraph 2 of the Circular, read disjunctively to permit re-export without satisfying Section 61/72 consequences, was therefore impermissible. [Paras 37, 40, 41, 47, 48]

Substantial question No.(iii) answered in favour of Revenue; Tribunal erred in placing reliance on the Circular to permit re-export without payment of duty and extension in the face of final adjudication.

Finality of adjudication and prohibition on revisiting confirmed demands - Maintainability of appeal under Section 129A - Whether the Tribunal was justified in entertaining and allowing an appeal which, in effect, revisited and set aside its own earlier order that had attained finality - HELD THAT: - The earlier adjudications, appellate orders and the Tribunal's prior dismissal of appeals had established finality on the duty demands. The respondent's belated representations seeking re-export years later attempted to revive settled liability. The Tribunal's allowance of the appeal effectively undermined and reviewed its own earlier orders that had attained finality. Given the jurisdictional limitations under Section 129A and the statutory scheme (Sections 61, 69, 72), the Tribunal's decision amounted to impermissibly revisiting final adjudications and was legally untenable. [Paras 9, 34, 35, 47, 48]

Substantial question No.(iv) answered in favour of Revenue; Tribunal was not justified in allowing an appeal that effectively reviewed its earlier final order.

Final Conclusion: Tax Appeal No.504 of 2022 is allowed; the High Court set aside the CESTAT order dated 31.01.2022 in Customs Appeal No.10752 of 2019 and dismissed that appeal. The petition for direction to permit re-export (Special Civil Application No.14527 of 2022) is dismissed. No order as to costs.

Public interest litigation - locus standi - bona fides - busybody / meddlesome interloper - relaxation of locus standi in PIL - judicial caution against abuse of PIL jurisdiction

Public interest litigation - locus standi - bona fides - busybody / meddlesome interloper - Maintainability of the public interest petition filed by a practicing advocate unconnected with the export business challenging notifications imposing fee for Online Queue Management System. - HELD THAT: - The Court examined whether a person who is a stranger to the affected class can initiate a PIL challenging the notifications. Applying the principles laid down by the Supreme Court regarding locus and the permissible scope of public interest litigation, the Court held that a petitioner must have some direct or indirect interest in the outcome, or act bona fide on behalf of persons under a recognized disability or for the public at large with demonstrable concern. The Court reiterated that proceedings instituted by strangers, busybodies or those motivated by private gain or publicity ought to be rejected at the threshold. Given that the petitioner is a practising advocate with no connection to exporters, and that exporters could themselves approach the appropriate forum, the Court found the present petition to be an inadmissible invocation of PIL jurisdiction and an instance where the rule of relaxed locus cannot be invoked. The Court also noted that issues of levy without authority of law are matters for the legitimately aggrieved parties to raise in appropriate proceedings; the present petitioner does not satisfy the required credentials of bona fides and representative standing to maintain this PIL. [Paras 5, 7, 8]

The public interest petition is not maintainable and is dismissed.

Final Conclusion: The writ petition challenging the notifications is dismissed on the ground of non-maintainability of the PIL filed by a person unconnected with the affected exporters; the Court observed that affected parties remain free to approach the competent forum and that any such challenge will be decided on merits without being influenced by observations in this order.

Interim relief - concessional rate of customs duty - project import registration - continuity bond - balance of convenience

Interim relief - concessional rate of customs duty - project import registration - balance of convenience - continuity bond - Grant of interim protection restraining precipitate action in respect of import by the petitioner pending adjudication of the writ petition. - HELD THAT: - The Court found that the petitioner has a prima facie case that registration of the solar power project and earlier communications conferred a right to import items at the concessional rate of customs duty and that, absent interim protection, the import process and letters of credit (to be established in early 2023) could be derailed. The balance of convenience favoured protection because any adverse final decision would merely require payment of differential duty, a financial consequence that can be remedied. The Court noted the petitioner had furnished a substantial continuity bond and a bank guarantee which remain in force, and observed that these securities, together with the potential to pay differential duty if the writ fails, mitigate any prejudice to the respondents. On that basis the Court directed that no precipitate action be taken against the petitioner at the stage of import while expressly stating that this interim protection does not create equity in favour of the petitioner. [Paras 10, 11, 15]

Interim protection granted: respondents restrained from taking precipitate action in respect of the petitioner's imports pending disposal of the writ petition; petitioner to file an affidavit undertaking to pay any differential customs duty within ten days; counter-affidavit to be filed within four weeks; matter listed for further hearing on 26.04.2023.

Final Conclusion: The Court granted limited interim relief restraining precipitate action on the petitioner's imports pending adjudication of the writ petition, on the basis of a prima facie case, balance of convenience and the petitioner's submissions and securities; the petitioner must file an affidavit undertaking to pay any differential duty and the respondents are to file their counter-affidavit within four weeks.

Rejection of declared transaction value and re-determination of FOB value - Requirement to record cogent reasons and communicate grounds before rejecting declared value - Application of market enquiry under the residual method (Rule 6) vis-a -vis comparison with transaction value of like goods (Rule 4) - Acceptance of declared export value where sale proceeds are realised and no evidence of flow-back or related-party manipulation - Penalty under section 114 consequent to confiscation under section 113 (availability and applicability)

Rejection of declared transaction value and re-determination of FOB value - Requirement to record cogent reasons and communicate grounds before rejecting declared value - Validity of the adjudicating authority's rejection of the declared FOB/transaction value and its re-determination on the basis of market enquiry. - HELD THAT: - The Tribunal upheld the Commissioner (Appeals)'s finding that the adjudicating authority failed to follow the two step mandate implicit in the valuation rules: first to record cogent reasons for doubting the truth or accuracy of the declared transaction value and, where required, to communicate those grounds and seek further information; and only thereafter to decide whether to reject the declared value and proceed to re determine value. The adjudicating authority proceeded directly to re determine the FOB without recording contemporaneous reasons showing why the declared transactional value was not acceptable (for example, no finding of related party transaction, cash/flow back, or misdescription). In these circumstances the Commissioner (Appeals) correctly concluded that the rejection under Rule 8 (read with the principles applicable to Rule 12 of import valuation) was not proper or legal and that the declared value should not have been summarily rejected.

Rejection of the declared value was improper for want of recorded cogent reasons; the Commissioner (Appeals) rightly set aside the re determination.

Application of market enquiry under the residual method (Rule 6) vis-a -vis comparison with transaction value of like goods (Rule 4) - Acceptance of declared export value where sale proceeds are realised and no evidence of flow-back or related-party manipulation - Legality of redetermining value solely on the basis of a market enquiry (Rule 6) when invoices and receipt of sale proceeds existed and applicability of Rule 4 was not considered. - HELD THAT: - The Commissioner (Appeals) found that the adjudicating authority erred in invoking the residual market enquiry method under Rule 6 without first demonstrating the non feasibility of applying Rule 4 (comparison with transaction value of like goods exported at or about the same time). The exporter had produced purchase invoices and there was evidence that sale proceeds were realized, and no allegation of hawala or money flow affecting the transaction value was made. The adjudicating authority gave no reasoning why Rule 4 could not be applied and relied solely on a lower mean from the market enquiry to re determine value. In view of those omissions and the absence of any challenge to the reality of the transaction (realization of proceeds and no flow back), the Commissioner (Appeals) correctly held that redetermination based solely on market enquiry was legally untenable and the declared value should be accepted.

Redetermination on market enquiry without addressing Rule 4's applicability was unsustainable; declared value to be accepted.

Final Conclusion: The appeal is dismissed. The Commissioner (Appeals) correctly set aside the adjudicating authority's order because the declared export value was rejected and re determined without recording cogent reasons or establishing the necessity of using the residual market enquiry method; accordingly the declared value stands and the order of re determination is quashed.

Unjust enrichment - refund of revenue deposit following setting aside of duty demand - chartered accountant certificate and audited balance sheets as evidentiary proof - burden on department to produce positive evidence to rebut CA certificate

Unjust enrichment - chartered accountant certificate and audited balance sheets as evidentiary proof - refund of revenue deposit - Whether the respondent was entitled to refund of the balance amount withheld on the ground of unjust enrichment in the absence of positive evidence rebutting the Chartered Accountant certificate and audited balance sheets. - HELD THAT: - The Tribunal found that the sum deposited by the respondent pursuant to the earlier confirmed differential duty demand became a revenue deposit payable to the respondent once that demand was set aside. The original authority had allowed the larger part of the refund and had denied only the balance on a presumption that the burden of duty had been passed to buyers. Commissioner (Appeals) accepted the Chartered Accountant certificate and audited balance sheets produced by the respondent and concluded there was no evidence that the duty burden had been passed on. In support, the Tribunal relied on earlier Bench decisions including Akasaka Electronics Ltd. Vs. Commissioner of Customs, Mumbai and Commissioner of C.Ex., Pune-I Vs. DGP Honoday Industries Ltd. , which hold that books of account, balance sheets and a CA certificate constitute sufficient evidence to prove that the incidence of excess duty was not passed on and that, absent positive evidence to the contrary, the bar of unjust enrichment cannot be applied. The Tribunal observed that the department failed to place any documentary evidence on record (invoices or otherwise) to falsify the CA certificate, and that the reviewing authority's adverse inference amounted to presumption and surmise rather than positive proof. Consequently, the findings of Commissioner (Appeals) upholding the CA certificate and allowing the refund were sustained. [Paras 6, 7, 8]

The respondent is entitled to the refund of the balance amount refused earlier on the ground of unjust enrichment; the Appellate Order is upheld.

Final Conclusion: The appeal filed by the department is dismissed and the order of Commissioner (Appeals) allowing the refund (including the balance amount previously directed to be credited to the Consumer Welfare Fund) is affirmed.

Intervention - standing of an intervener - right to oppose withdrawal of an appeal - appeal under Section 61 of the Insolvency and Bankruptcy Code - timelines under the Insolvency and Bankruptcy Code - transposition of parties under Order XXIII Rule 1-A / Order I Rule 10 CPC - effect of withdrawal of an appeal

Intervention - standing of an intervener - appeal under Section 61 of the Insolvency and Bankruptcy Code - Intervener who has not filed an appeal cannot set aside the adjudicating authority's order by way of an intervention application. - HELD THAT: - The Tribunal held that an intervener's role is confined to supporting or opposing a party within the appeal proceedings and an intervener who has not filed a separate appeal cannot directly seek to set aside the impugned order. The Code prescribes a specific remedy of appeal under Section 61, which is time bound; no appeal was filed by the applicant and any attempt to challenge the order by intervention at this stage would be barred by limitation. The Tribunal relied on the principle that proceedings under the IBC operate within strict timelines and parties must be proactive in invoking the statutory appellate remedy; an intervener cannot appropriate for itself the relief of an appellant without complying with the appellate process. [Paras 21, 22, 36]

I.A. No. 2623 of 2021 cannot be used by the intervener to set aside the order dated 08.10.2021; no relief granted on this ground.

Right to oppose withdrawal of an appeal - effect of withdrawal of an appeal - timelines under the Insolvency and Bankruptcy Code - An intervener who has not filed an appeal has no right to successfully oppose the appellant's withdrawal of its appeal under Section 61 of the IBC; the appellant was permitted to withdraw. - HELD THAT: - The Tribunal observed that where an appellant seeks to withdraw an appeal filed under Section 61, an intervener (who has not become an appellant) cannot prevent termination of the appeal proceedings. The special timeliness and procedural regime of the IBC requires adherence to statutory appeal timelines; third parties and interveners retain independent remedies but cannot insist on prosecuting the appellant's appeal once the appellant elects to withdraw. The Tribunal considered precedents on intervention, withdrawal and transposition of parties under civil procedure but found them distinguishable and held that those civil procedure doctrines did not permit the intervener to resist withdrawal in the IBC appellate context. Applying these principles, the Tribunal allowed the appellant's request to withdraw and dismissed the appeal as withdrawn. [Paras 18, 36, 38]

Company Appeal (AT) Ins. No. 880 of 2021 dismissed as withdrawn; I.A. No. 2623 of 2021 rejected.

Final Conclusion: The Tribunal permitted Indiabulls Housing Finance Ltd. to withdraw Company Appeal (AT) Ins. No. 880 of 2021 and dismissed it as withdrawn; the intervention application filed by SREI Equipment Finance Ltd. (I.A. No. 2623 of 2021) was rejected, the Tribunal holding that an intervener who has not filed a time barred appeal cannot set aside the adjudicating authority's order or successfully oppose the appellant's withdrawal.

Remand for fresh consideration - liberty to raise all available factual and legal pleas - principles of natural justice - requirement of a speaking order - no expression of opinion on merits

Remand for fresh consideration - liberty to raise all available factual and legal pleas - principles of natural justice - requirement of a speaking order - no expression of opinion on merits - Whether the appellants' challenge to the impugned order dated 17.10.2022 should be finally adjudicated by this Tribunal or remitted to the Adjudicating Authority for fresh hearing and decision. - HELD THAT: - The Tribunal declined to express any opinion on the merits of the challenge to the impugned order dated 17.10.2022 and instead permitted the appellant to raise all available factual and legal pleas before the Adjudicating Authority in IA/1475/2022 in CP(IB) No.17/9/HDB/2020. The Tribunal directed that the Adjudicating Authority must afford the parties an opportunity of hearing, adhere to the principles of natural justice, and pass a fair, just and reasoned (speaking) order on the merits, uninfluenced by the observations made by this Tribunal in the present appeal. The Tribunal thus remanded the matter for fresh consideration and final disposal by the Adjudicating Authority, allowing the appellant full liberty to press its defences and contentions afresh. [Paras 16, 17]

The appeal is disposed by remitting the controversy to the Adjudicating Authority for a fresh, conclusive hearing and a reasoned speaking order after applying principles of natural justice; no opinion on merits is expressed by this Tribunal.

Closure of connected interlocutory applications - Disposition of connected interlocutory applications listed before this Tribunal. - HELD THAT: - The Tribunal recorded that, consequent to its directions and disposal of the appeal, the connected interlocutory applications IA/1098/2022 (for exemption) and IA/1099/2022 (for stay) are closed. This is a consequential administrative direction tied to the disposal of the main appeal and remand.

Connected IAs IA/1098/2022 and IA/1099/2022 are closed.

Final Conclusion: The appeal is disposed of by remitting the matter to the Adjudicating Authority for a fresh, conclusive hearing of IA/1475/2022 in CP(IB) No.17/9/HDB/2020; the appellant is granted liberty to raise all factual and legal pleas, the Adjudicating Authority must hear the parties in accordance with the principles of natural justice and pass a reasoned speaking order; no opinion on the merits is expressed by this Tribunal. The connected interlocutory applications are closed.

Renting of immovable property - service tax leviability on revenue sharing arrangements - service provider and service recipient relationship - declared service - jurisdiction of issuing authority - limitation - extended period of five years - security deposit not a taxable receipt - tax treatment of advertisement/slide income

Renting of immovable property - service tax leviability on revenue sharing arrangements - service provider and service recipient relationship - declared service - Revenue sharing arrangements between exhibitors and distributors do not, by themselves, constitute provision of 'renting of immovable property' or a taxable service where no service provider-recipient relationship and no consideration flows from the distributor to the exhibitor. - HELD THAT: - The Tribunal examined the agreements and factual matrix and held that where the exhibitor obtains exhibition rights and retains control over use of the theatre (deciding shows, timings, ticket pricing etc.) and the exhibitor pays the distributor (i.e., no consideration flows from distributor to exhibitor), there is no service provided by the exhibitor to the distributor that could be classified as 'renting of immovable property'. The arrangement was characterised as a revenue sharing / joint commercial arrangement in which each party conducts its business independently; therefore the essential element of a service (an activity carried out by a person for another for consideration) is absent. The Tribunal followed earlier Division Bench decisions applying the same reasoning and noted that the Supremo Court declined to interfere with that view in the appeal arising from Inox Leisure Ltd . Consequently, the Principal Commissioner's conclusion - that the revenue sharing arrangements do not attract service tax under the head of renting of immovable property or related declared services - was held to be legally tenable. [Paras 17, 18, 20, 21, 22]

Demand under 'renting of immovable property' and related service heads raised on revenue sharing receipts cannot be sustained; the Principal Commissioner rightly dropped the proceedings on this ground.

Jurisdiction of issuing authority - Show cause notice issued by the Commissioner of Service Tax, Delhi could not sustain demands in respect of receipts attributable to locations (Kaushambi and Lucknow) where the respondent had separate registrations and returns. - HELD THAT: - The Principal Commissioner found that the respondent operated at three distinct locations with separate service tax registrations and returns for each location. The show cause notice was issued by the Commissioner of Service Tax, Delhi; demands pertaining to Kaushambi and Lucknow therefore fell outside the jurisdictional competence of that issuing authority. The Tribunal accepted this factual and legal conclusion and upheld the dropping of demands relating to those locations. [Paras 6]

Demand in respect of revenue attributable to Kaushambi and Lucknow was not sustainable for lack of jurisdiction and was correctly dropped.

Limitation - extended period of five years - Demand for the period beyond five years from the date of issuance of the show cause notice could not be sustained. - HELD THAT: - The Principal Commissioner accepted the respondent's contention that a demand could not be raised beyond five years from the date of the show cause notice. Consequently, the portion of the demand falling for the period 01.04.2008 to 30.09.2008 was treated as time barred and was dropped. The Tribunal found no illegality in this conclusion. [Paras 7]

Demand for the period beyond five years (as identified) was rightly held to be time barred and dropped.

Security deposit not a taxable receipt - Refundable security deposit retained by the respondent did not constitute a taxable receipt liable to service tax. - HELD THAT: - The Principal Commissioner observed that amounts received as refundable security deposits were not consideration for any service and therefore could not be subjected to service tax. The Tribunal endorsed this reasoning and the consequent dropping of any demand based on such deposits. [Paras 8]

Refundable security deposits are not taxable and the demand based thereon was correctly dropped.

Tax treatment of advertisement/slide income - Income from advertisement, slide, signages and hoardings was found to have been subjected to service tax and no further demand was warranted. - HELD THAT: - On scrutiny the Principal Commissioner accepted the respondent's contention that service tax had been discharged on amounts received under heads such as 'advertisement' and 'slide income'. The Tribunal found no infirmity in this acceptance and therefore did not sustain any additional demand under the advertising service head. [Paras 5, 8]

No additional demand on advertisement/slide income; tax already discharged was accepted and the related demand dropped.

Final Conclusion: The Tribunal found no illegality in the Principal Commissioner's order dropping the show cause notice: demands based on revenue sharing were unsustainable as 'renting of immovable property' or taxable services in the absence of a service recipient relationship, jurisdictional defects and time barred portions were correctly excluded, refundable security deposits were not taxable, and advertisement/slide receipts were held to have been taxed; the departmental appeal is dismissed.

Admissibility of Cenvat credit on challan evidencing payment under reverse charge - Interpretation of Rule 9(1)(bb) of Cenvat Credit Rules - Distinction between Rule 9(1)(bb) and Rule 9(1)(e) - Refund denial consequent to disallowance of Cenvat credit - Relevance of reference to Larger Bench on refund under Section 142(3) CGST Act - Ultra vires levy of service tax on ocean freight

Admissibility of Cenvat credit on challan evidencing payment under reverse charge - Interpretation of Rule 9(1)(bb) of Cenvat Credit Rules - Distinction between Rule 9(1)(bb) and Rule 9(1)(e) - Refund denial consequent to disallowance of Cenvat credit - Appellants are entitled to avail Cenvat credit on the basis of challans evidencing payment of service tax under the reverse charge mechanism and the denial of refund on the ground of ineligibility of such credit was incorrect. - HELD THAT: - The Tribunal examined the impugned order which denied refund because it held the appellants not entitled to Cenvat credit invoking Rule 9(1)(bb). The Court held that Rule 9(1)(bb) pertains to a "supplementary invoice, bill or challan issued by a provider of output service" and is not the provision under which credit on a challan evidencing payment by the service recipient is claimed. Rule 9(1)(e) expressly covers "a challan evidencing payment of service tax by the service recipient" and therefore credit taken on the basis of the appellant's own challans evidencing reverse charge payment cannot be disallowed under Rule 9(1)(bb). Reliance on the Bosch Larger Bench reference concerning refund under Section 142(3) CGST Act was held irrelevant because the dispute here turned on admissibility of credit under the Cenvat Credit Rules and not on the CGST provision referred to that reference. The Tribunal further noted absence of any finding or material showing suppression, misdeclaration or collusion; the court also observed the High Court decision holding levy on ocean freight to be ultra vires as contextual support. In view of these conclusions the impugned order was set aside, the appellants held entitled to take the Cenvat credit, and the matter remitted to the original adjudicating authority for fresh consideration in light of the decision.

Impugned order set aside; appellants entitled to Cenvat credit on challans evidencing reverse charge payment; matter remanded to original authority for fresh consideration in light of this conclusion.

Final Conclusion: The appeal succeeds: denial of refund founded on disallowance of Cenvat credit under Rule 9(1)(bb) is incorrect where credit is claimed on challans evidencing reverse charge payment (covered by Rule 9(1)(e)); impugned order set aside and matter remanded for fresh consideration accordingly.

Refund of service tax under Notification 41/2007-ST - proviso excluding benefit where drawback availed - retrospectivity of amendment by Notification 33/2008-ST - availability of drawback as bar to cash refund

Refund of service tax under Notification 41/2007-ST - proviso excluding benefit where drawback availed - availability of drawback as bar to cash refund - Claim for cash refund of service tax paid on specified input services under Notification 41/2007-ST when drawback was availed under Drawback Rules - HELD THAT: - The Tribunal considered claims for refund of service tax paid on specified input services under Notification 41/2007-ST and found that the proviso then in force excluded entitlement to refund where drawback had been availed. Reliance was placed on the earlier CESTAT decision in Bharat Art & Crafts (reproduced at para.2 of that decision) which held that the Drawback Rules required the Government to have regard to average tax on certain input services but did not preclude inclusion of other input services when fixing drawback rates; the existence of the proviso in Notification 41/2007-ST and its subsequent removal by Notification 33/2008-ST indicated the proviso operated to deny refund for periods before the amendment. There was no indication that Notification 33/2008-ST was intended to operate retrospectively. Applying that reasoning, the appellant's refund claims for periods prior to the amendment were not admissible because drawback had been availed on the exported goods. [Paras 4]

Refund claims under Notification 41/2007-ST are not admissible for periods prior to the amendment where drawback was availed; appeal dismissed.

Retrospectivity of amendment by Notification 33/2008-ST - Whether Notification 33/2008-ST (which removed the proviso) operates retrospectively to entitle earlier refunds - HELD THAT: - The Tribunal observed that Notification 33/2008-ST deleting the proviso did not expressly or impliedly provide for retrospective operation. Following the reasoning in the cited CESTAT decision, absent an express retrospective provision the amendment could not be given retrospective effect to validate refund claims for periods before the amendment. [Paras 4]

Notification 33/2008-ST is not retrospective; it does not entitle exporters to refunds for periods prior to the amendment.

Final Conclusion: The appeal is dismissed: refund claims for service tax under Notification 41/2007-ST are barred for periods prior to Notification 33/2008-ST where drawback was availed, and the amendment removing the proviso was not retrospective.

Quashing of show-cause notice for inordinate delay - exercise of power within a reasonable period - extended period of limitation and requirement of positive evidence of fraud, collusion, wilful misstatement or suppression - revival of matters kept in Call Book after unexplained delay

Quashing of show-cause notice for inordinate delay - exercise of power within a reasonable period - revival of matters kept in Call Book after unexplained delay - extended period of limitation and requirement of positive evidence of fraud, collusion, wilful misstatement or suppression - Validity of the Show-Cause Notice dated 3rd February, 2010 and consequent proceedings in view of the Department's long delay and unexplained retrieval from the Call Book - HELD THAT: - The Court found that the Department issued the SCN relating to the period 2004-05 to 2006-07, placed the matter in the Call Book on 7 February 2011, and thereafter waited approximately five years before retrieving the matter and fixing a hearing in 2017. The counter-affidavit did not furnish a satisfactory explanation for the prolonged inaction and the sudden retrieval, stating only correspondence with the Accountant General and reliance on a Board circular. Applying the settled principle that, although no fixed limitation is prescribed, administrative powers must be exercised within a reasonable time, the Court held that inordinate delay in issuance or revival of demand can render a notice unsustainable. The Court further noted the established rule that to invoke the extended limitation under the proviso to subsection 11A, something positive such as fraud, collusion, wilful misstatement, suppression of facts or contravention with intent to evade duty must be shown; mere inaction or failure to account does not suffice. Relying on the reasoning in the authorities cited in the judgment and , and on similar High Court decisions invalidating revival of Call Book matters after long unexplained gaps, the Court concluded that no valid justification was shown for the long delay and retrieval, warranting quashing of the SCN and subsequent proceedings. [Paras 6, 8, 11]

Impugned SCN dated 3rd February, 2010 and all consequent proceedings including the notice dated 26th May, 2017 are quashed

Final Conclusion: Writ petition allowed; the show-cause notice and subsequent proceedings quashed for inordinate and unexplained delay in reviving a matter kept in the Call Book, without any order as to costs.

Special rate of value addition - estoppel by representation - effect of stay of an order - finality of recorded submission in court - time-bar under a statutory notification

Estoppel by representation - finality of recorded submission in court - time-bar under a statutory notification - Respondents cannot reopen or urge that the petitioning assessee's application for fixation of a special rate of value addition was time-barred after having made a submission in court that the matter would be considered on merits. - HELD THAT: - The Court noted that the Department, by its submission recorded in the order dated February 26, 2021, represented that it would settle the petitioner's account with regard to the special rate of value addition and that the petitioner's grievance stood redressed. Implicit in that submission was an acceptance that the application would be considered on merits. Having so represented and thereby inducing the petitioner to accept disposal on that basis, the Department is estopped from asserting subsequently that the application could not be entertained as being made beyond the time permitted under the notification. The Court held that the question of limitation could not be reopened where the Department had failed to press that objection in the proceedings and had made a contrary submission which attained finality. [Paras 10]

Department is estopped from raising limitation objection and is bound to consider the application for fixation of the special rate of value addition on merits irrespective of when it was made.

Special rate of value addition - effect of stay of an order - The respondents are directed to affirm or alter the earlier determination communicated by the Commissioner in the letter dated June 1, 2021, by conducting consideration in accordance with law within a specified time. - HELD THAT: - In view of the communication of June 1, 2021 indicating a determinable rate of value addition of 81.9% (with particulars), and having regard to the respondents' binding submission recorded on February 26, 2021, the Court disposed of the writ petition by directing the respondents to, within four weeks, either affirm or alter that determination in accordance with law so that consequential steps may follow. The order reflects the Court's insistence that the matter be decided on merits and that administrative finalisation occur within a short stipulated period. [Paras 11, 12]

Respondents to, within four weeks, affirm or alter the determination indicated in the June 1, 2021 communication in accordance with law; petition disposed accordingly.

Final Conclusion: The petition is disposed of: the respondents are estopped from raising the limitation objection and are directed to consider and, within four weeks, affirm or alter the determination of the special rate of value addition communicated on June 1, 2021, in accordance with law; no order as to costs.

Limitation for filing appeal to Commissioner (Appeals) - service versus despatch of order for computing limitation - burden of proof as to service of order - deemed service under section 37C - proviso to section 35(1) - extension for sufficient cause - postal tracking evidence to determine date of service

Limitation for filing appeal to Commissioner (Appeals) - service versus despatch of order for computing limitation - deemed service under section 37C - burden of proof as to service of order - Whether the Commissioner (Appeals) was justified in rejecting the appeal as barred by limitation by relying on the date of despatch of the order instead of the date of service/communication. - HELD THAT: - Section 35(1) contemplates computation of the sixty-day limitation from the date of communication of the order to the appellant. The Commissioner (Appeals) erred in treating the date of despatch recorded in the dispatch register as the operative date for limitation, without ascertaining the actual date on which the order was served on the appellant or the mode and proof of service. The statutory scheme (including the deeming provision in section 37C) fixes the date of service as the relevant event; therefore, evidence of despatch alone is not determinative of communication. The burden to establish the date of communication cannot be shifted to the appellant merely because the department produced a dispatch register; the appellate authority must verify or require appropriate proof (such as postal tracking or acknowledgement) to controvert the appellant's stated date of receipt. In the absence of any evidence from the department to rebut the appellant's assertion that the order was received on the date shown in the appeal form, the appeal filed on May 27, 2019 must be treated as within the sixty-day period counted from the date of communication the appellant had indicated. The Commissioner (Appeals)'s order rejecting the appeal on limitation grounds was therefore unsustainable and has been set aside; the matter is remitted for decision on merits by the Commissioner (Appeals) expeditiously. [Paras 10, 11, 12, 14]

The Commissioner (Appeals)'s order rejecting the appeal as time-barred is set aside because the date of despatch does not substitute for the date of service/communication for computing limitation; in absence of departmental evidence to controvert the appellant's claimed date of receipt, the appeal is within time and is allowed, with the matter remitted to the Commissioner (Appeals) for adjudication on merits.

Postal tracking evidence to determine date of service - administrative direction to ensure recording of date in orders - Observations and directions regarding administrative practices on dating of orders and maintenance of evidence of service. - HELD THAT: - The Court noted recurring omissions where adjudicating authorities do not indicate the date of order on the face of orders, which impedes determination of limitation. The Court observed that departments should rely on the date of service (ascertainable from postal tracking) rather than date of despatch when contesting limitation, and recommended maintenance of postal tracking reports. A copy of the order was directed to be sent to the Central Board of Indirect Taxes and Customs to bring these observations to the notice of concerned authorities so that future orders specify the date and departmental offices preserve postal tracking evidence. [Paras 13]

Administrative observations recorded and directions given to communicate them to the Board for compliance; adjudicating authorities should record dates of orders and preserve postal tracking to determine service.

Final Conclusion: The appellate bench set aside the Commissioner (Appeals)'s order rejecting the appeal as barred by limitation because the authority relied on date of despatch rather than date of communication; absent departmental proof to the contrary, the appeal filed on May 27, 2019 is within time and the Commissioner (Appeals) is directed to decide the appeal on merits expeditiously, with administrative observations sent to the Board.

Reassessment under sub-section (5) of Section 6 of the Kerala Tax on Luxuries Act, 1976 - Retrospective application of statutory amendment - Limitation period for reassessment - Availability of alternative remedy by appeal - Treatment of belated appeal as within period of limitation by judicial direction

Reassessment under sub-section (5) of Section 6 of the Kerala Tax on Luxuries Act, 1976 - Retrospective application of statutory amendment - Limitation period for reassessment - Validity of reassessments made under the amendment (sub section (5) to Section 6) for the years 2000-01 to 2004-05. - HELD THAT: - The High Court examined the scheme of the Act and held that the amendment introducing sub section (5) did not operate retrospectively so as to invalidate reassessments made within the period of limitation applicable to the assessment years. Applying that view, the reassessments for 2001-02 to 2004-05 were within the permissible period and upheld, whereas the reassessment for 2000-01 was held to be beyond the five year period and therefore unsustainable. This Court, after hearing the parties, declined to interfere with the High Court's conclusion on these points.

Reassessment for 2000-01 set aside as time barred; reassessments for 2001-02 to 2004-05 upheld as within limitation and not retrospective in invalidating manner.

Availability of alternative remedy by appeal - Treatment of belated appeal as within period of limitation by judicial direction - Whether the petitioner may challenge reassessments for 2001-02 to 2004-05 by preferring appeals and the temporal treatment of such appeals. - HELD THAT: - The Court observed that the petitioner had an alternate remedy by way of appeal against the reassessment orders and had not challenged those reassessments on merits before the High Court. In the exercise of supervisory jurisdiction the Court made a direction that if the petitioner prefers appeals within 60 days from the date of the order before the Appellate Authority against the reassessments for 2001-02 to 2004-05, those appeals shall be treated as filed within the period of limitation. The Appellate Authority is to examine the appeals on merits in accordance with law and all legal contentions remain open for adjudication.

Petitioner permitted to file appeals within 60 days which shall be treated as within limitation; Appellate Authority to decide merits in accordance with law.

Final Conclusion: Special leave petitions dismissed; reassessment for 2000-01 quashed as beyond the permissible five year period, reassessments for 2001-02 to 2004-05 sustained, and petitioner granted 60 days to prefer appeals which will be deemed within limitation for adjudication on merits by the Appellate Authority.

Entertainment of Special Leave Petition in relation to small monetary penalty - preservation of question of law - setting aside of costs imposed by High Court

Entertainment of Special Leave Petition in relation to small monetary penalty - Special Leave Petition not entertained because the penalty involved was small. - HELD THAT: - The Court declined to entertain the Special Leave Petition on the basis that the amount of penalty involved was Rs.2,15,770/-. In view of the limited monetary stake, the petition was not admitted for consideration and was dismissed. No substantive determination on the merits of the underlying tax or commercial tax controversy was undertaken.

SLP dismissed on the ground that the penalty involved is small and the petition is not entertained.

Preservation of question of law - The question of law arising from the case is kept open for consideration. - HELD THAT: - Although the SLP was not entertained due to the limited monetary amount, the Court expressly refrained from foreclosing any legal question that may arise from the matter. The preservation indicates that no adjudication on legal points of law was made and that such questions remain available for future litigation or appropriate proceedings.

Question of law is left open.

Setting aside of costs imposed by High Court - The costs imposed by the High Court are set aside by this Court. - HELD THAT: - Independent of the non-entertainment of the SLP, the Supreme Court directed that the cost previously imposed by the High Court be quashed. This relief was granted notwithstanding dismissal of the petition on the limited monetary ground.

Cost imposed by the High Court ordered to be set aside.

Final Conclusion: The Special Leave Petition is dismissed on the ground that the penalty involved is small; the Court has preserved any question of law for future consideration and has directed that the costs imposed by the High Court be set aside; pending applications are disposed of.

Summary order. Petition for special leave to appeal under Article 136 of the Constitution of India is dismissed; all pending applications disposed of.

Condonation of delay - discretionary refusal to condone delay - entertainment of special leave petitions

Condonation of delay - discretionary refusal to condone delay - Validity of the High Court's refusal to condone a delay of 469 days in three appeals and consequent non-entertainment of those appeals. - HELD THAT: - The Supreme Court examined whether the High Court erred in refusing to condone a delay of 469 days in the three appeals filed against the State VAT Tribunal's order. Having considered the matter, the Court held that the High Court did not err in its approach to the question of condoning the delay. On that basis, the Supreme Court declined to interfere with the High Court's exercise of discretion and refused to entertain the special leave petitions challenging the refusal to condone delay.

Special leave petitions dismissed; refusal to condone delay upheld and petitions not entertained.

Final Conclusion: The Supreme Court declined to interfere with the High Court's discretionary refusal to condone a 469-day delay in three appeals and dismissed the special leave petitions; pending applications disposed of.