TaxTMI Updates e-Newsletter
Jan 09,2021

Release of detained consignment on bank guarantee - adjudication leading to Form MOV-09 - opportunity of being heard - perishable goods - expedited disposal - suspicion of misuse of E Way bill

Release of detained consignment on bank guarantee - perishable goods - expedited disposal - Direction for release of the detained consignment and vehicle upon furnishing a bank guarantee - HELD THAT: - The Court directed that the petitioner may furnish a bank guarantee drawn on a nationalised bank to secure the sum specified in Ext.P7. Upon such furnishing, the respondents are ordered to release the consignment (which is perishable) and the vehicle without avoidable delay. The order was made in light of the respondents' offer to permit release on such security and the perishable nature of the goods, with an express instruction that the Government Pleader communicate the judgment so release can be effected promptly if the guarantee is tendered the same day.

Petitioner to furnish bank guarantee as security for the sum in Ext.P7; on receipt, respondents shall release the consignment and vehicle without avoidable delay and expedite communication to permit immediate release.

Adjudication leading to Form MOV-09 - opportunity of being heard - suspicion of misuse of E Way bill - Direction to complete adjudication proceedings and communicate resultant order within a fixed time after affording hearing - HELD THAT: - The Court directed the respondents to complete the adjudication arising from Exts.P7 and P8, culminating in proceedings under Form MOV-09, after affording the petitioner an opportunity of being heard either physically or by video-conference. The adjudication is to be completed expeditiously and in any event not later than two weeks from the date of receipt of a copy of the judgment. The direction follows the respondents' stated bonafide suspicion regarding possible misuse of the E Way bill but insists on adjudicatory process and hearing within the specified time-frame.

Respondents to complete adjudication under Exts.P7 and P8 (leading to Form MOV-09) after hearing the petitioner, and to communicate the resultant order within two weeks of receiving the judgment.

Final Conclusion: Writ petition disposed by directing release of the perishable consignment and vehicle on furnishing a bank guarantee securing the sum in Ext.P7, and by ordering the respondents to complete adjudication (leading to Form MOV-09) after hearing the petitioner and to communicate the order within two weeks.

Detention of goods under Section 129(1) of the Central Goods and Services Tax Act, 2017 - release of goods on furnishing bank guarantee - sampling of goods in presence and acknowledgement of consignor - statutory adjudication with opportunity of hearing - court refraining from adjudicating factual merits in writ proceedings

Detention of goods under Section 129(1) of the Central Goods and Services Tax Act, 2017 - release of goods on furnishing bank guarantee - sampling of goods in presence and acknowledgement of consignor - Interim entitlement to release of detained consignment on provision of adequate security and the procedure for taking samples. - HELD THAT: - The Court declined to enter into the merits of classification or the factual controversy concerning the nature of the bags, observing that such enquiries require a proper adjudicatory process. Instead, the petitioner was granted interim relief: release of the detained articles on furnishing a bank guarantee drawn on a nationalised bank for the amount covered by the impugned communication (Ext.P7). Release is conditioned upon the respondent taking a sample of the bags in the petitioner's presence and obtaining the petitioner's acknowledgement. The direction balances the need to protect revenue with the petitioner's right to the goods pending final adjudication and is framed to preserve the parties' respective positions until completion of statutory proceedings.

Petitioner entitled to release of the detained consignment upon furnishing the specified bank guarantee within one week; respondent to take sample in petitioner's presence and acknowledgement prior to release.

Statutory adjudication with opportunity of hearing - court refraining from adjudicating factual merits in writ proceedings - Whether the detention and classification dispute should be finally adjudicated by the competent authority or decided by the Court at interlocutory stage. - HELD THAT: - The Court held that the merits of the tax classification and any alleged contravention are matters for the statutory adjudicating authority and not for final determination in the writ petition at the interlocutory stage. Consequently, the matter was remitted to the competent authority for completion of adjudication based on the impugned orders and notices after affording the petitioner a chance of being heard, either physically or via videoconference. The Court prescribed a timetable to ensure expeditious disposal: the adjudication must be completed as expeditiously as possible and not later than three weeks from receipt of a copy of the judgment.

Final determination of classification and any liability remanded to the competent authority for statutory adjudication after hearing the petitioner; adjudication to be completed within three weeks.

Final Conclusion: Writ petition allowed in part: petitioner granted interim release of detained goods on furnishing a bank guarantee and subject to sampling in the petitioner's presence; the substantive dispute on classification and liability is remitted to the competent authority for adjudication after hearing the petitioner, to be completed within three weeks.

Detention and confiscation proceedings under Section 130 of the Central Goods and Services Tax Act, 2017 - provisional release under Section 67(6) of the Central Goods and Services Tax Act, 2017 - perishable goods consideration in provisional release - opportunity of hearing before confiscation decision

Detention and confiscation proceedings under Section 130 of the Central Goods and Services Tax Act, 2017 - opportunity of hearing before confiscation decision - Completion of confiscation inquiry and requirement of decision after considering the reply and hearing - HELD THAT: - The court observed that goods and the conveyance were seized and a notice in Form GST MOV-10 under Section 130 was issued calling for a show-cause response. The inquiry into whether the goods and conveyance are liable for confiscation remains pending and no final decision has been taken. The court directed that the inquiry be completed at the earliest, after due consideration of the reply filed by the writ applicant and after giving the writ applicant an opportunity of hearing. The court expressly refrained from expressing any opinion on the merits of the confiscation question, limiting its direction to procedural completion and consideration. [Paras 3]

The confiscation inquiry is to be completed promptly with due consideration of the reply and after affording an opportunity of hearing; no opinion on merits expressed.

Provisional release under Section 67(6) of the Central Goods and Services Tax Act, 2017 - perishable goods consideration in provisional release - Procedure for provisional release of seized goods and conveyance where goods are perishable - HELD THAT: - Noting that the seized goods are perishable (tobacco products) and were detained since 6th November 2020, the court recorded that the writ applicant may apply for provisional release under Section 67(6) of the Act. The court directed that if such an application is filed, the concerned authority (respondent No.2) shall immediately consider the application and pass an appropriate order in accordance with law, taking into account the perishable nature of the goods where relevant. [Paras 3]

If an application under Section 67(6) is filed, the authority shall immediately consider it and pass an appropriate order in accordance with law, mindful of the perishable nature of the goods.

Final Conclusion: Writ petition disposed with directions to complete the confiscation inquiry promptly after consideration of the reply and hearing, and to immediately consider any application for provisional release under Section 67(6); the court expressed no view on the merits.

Detention and seizure under the statutory code of Section 129 of the Central Goods and Services Tax Act, 2017 - extraordinary jurisdiction under Article 226 of the Constitution - availability of appellate remedy under Section 107 of the Central Goods and Services Tax Act, 2017 - compliance with principles of natural justice in detention proceedings - provisional release of detained goods and vehicle on bank guarantee pending challenge

Detention and seizure under the statutory code of Section 129 of the Central Goods and Services Tax Act, 2017 - extraordinary jurisdiction under Article 226 of the Constitution - availability of appellate remedy under Section 107 of the Central Goods and Services Tax Act, 2017 - compliance with principles of natural justice in detention proceedings - Whether the High Court should exercise its extraordinary jurisdiction under Article 226 to interfere with an order passed under Section 129(3) of the CGST Act instead of relegating the petitioner to the statutory appellate remedy. - HELD THAT: - The Court held that Section 129 constitutes a complete code governing detention and seizure, and that the statutory procedure envisages compliance with principles of natural justice. The material shows that after detention a notice (Ext.P6) was issued and an opportunity of being heard was afforded before passing Ext.P8. In view of the apparent compliance with the statutory procedure and the availability of an effective remedy by way of appeal under Section 107, exceptional interference under Article 226 was not warranted. Consequently, the writ jurisdiction should not be invoked in this case and the petitioner ought to be relegated to the appellate remedy provided by the statute. [Paras 4]

Court declined to exercise Article 226; petitioner relegated to appeal under Section 107 of the Act as statutory procedure under Section 129 was followed.

Provisional release of detained goods and vehicle on bank guarantee pending challenge - Whether the detained goods and vehicle should be released pending challenge to the detention order and on what conditions. - HELD THAT: - Although the writ was not entertained on merits, the Court recognised the hardship caused by continued detention of the goods and vehicle. As an interim measure it directed that if the petitioner furnishes a bank guarantee for the entire amount demanded in Ext.P8 within seven days, the goods and vehicle shall be released forthwith. The order specifies that the Bank Guarantee may be encashed if the petitioner fails to file an appeal within the period prescribed by law; conversely, if an appeal is filed in time, the guarantee shall not be encashed until disposal of the appeal. The directions preserve the right to appeal and provide a conditional mechanism for provisional release. [Paras 5]

Detained goods and vehicle ordered released on furnishing a bank guarantee within seven days; guarantee subject to encashment if no appeal is filed, and to be retained pending disposal if an appeal is filed in time.

Final Conclusion: Writ petition dismissed on merits; petitioner relegated to statutory appellate remedy under Section 107 of the CGST Act, 2017. As interim relief, the goods and vehicle detained under the Section 129(3) order shall be released on filing a bank guarantee for the amount demanded in Ext.P8 within seven days, subject to encashment rules linked to filing of an appeal.

Summary order. Notice directed to the Attorney General of India and the Advocate General of the State, returnable in four weeks; steps for service to be taken within one week by ordinary and registered post; respondents to file counter-affidavits within the four-week period; petitioner permitted one week to file rejoinder; petitioner's right to claim Input Tax Credit reserved for consideration at final disposal.

Summary order. [Court did not adjudicate the challenge to the CBIC circular dated 10-02-2020 or the consequential demand notices; petitioner permitted to confine consequential reliefs to Financial Year 2017-18 with liberty to challenge other notices separately; respondents granted four weeks to file counter affidavit, rejoinder to be filed within two weeks, and matter listed after six weeks.]

Corrigendum to Order - Anti-Profiteering - pass-on to eligible buyers - Consumer Welfare Fund

Corrigendum to Order - pass-on to eligible buyers - Consumer Welfare Fund - Correction of the wording in Paragraph 29 of Order No.81/2020 dated 10.12.2020 so as to alter the directed mode of relief from deposit in Consumer Welfare Funds to passing on to eligible buyers. - HELD THAT: - The Authority, after considering Paragraph 29 of its Order dated 10.12.2020, has issued a corrigendum substituting the 5th and 6th lines on page 26. The original text directing that amounts be "deposited in the CWFs of the Central and the Haryana State Government as per the details given above" is replaced with text directing that the amounts be "passed on to all the eligible buyers." The corrigendum expressly amends the operative wording of Paragraph 29 without purporting to vary any other part of the Order. [Paras 29]

Paragraph 29 of Order No.81/2020 dated 10.12.2020 is corrected so that the specified lines shall read that the amounts are to be passed on to all eligible buyers instead of being deposited in the Consumer Welfare Funds.

Final Conclusion: A corrigendum to Order No.81/2020 dated 10.12.2020 has been issued amending Paragraph 29 to direct that the amounts be passed on to all eligible buyers in place of deposit into the Consumer Welfare Funds.

Challenge to notice under Section 148 - re-opening assessment under Section 147 - judicial review of reassessment notice - furnishing of reasons and entitlement to file objections - retrospective application of amendment to Section 40(a)(ia) - liability to deduct tax at source under Section 194C in agency/intermediary arrangements

Challenge to notice under Section 148 - judicial review of reassessment notice - furnishing of reasons and entitlement to file objections - Whether the notice under Section 148/147 could be sustained without fresh consideration by the assessing officer in the light of the material and applicable law. - HELD THAT: - The Court recognised that challenge to a notice under Section 148 is maintainable and must be examined on judicial review principles, referencing the procedure that a noticee may file a return, seek reasons and object, and that the assessing officer must furnish reasons and pass a reasoned order. The petitioner had sought reasons and received the reasons recorded by the assessing officer alleging non-disclosure of freight receipts and failure to deduct tax at source leading to an escaped assessment. Given subsequent developments in law and the petitioner's explanation that amounts were receipts on behalf of a carrier who had borne tax liability, the Court found it appropriate that the assessing officer re-examine the continuance of proceedings. The Court directed the petitioner to file a written representation with supporting material and required the assessing officer to afford personal hearing, consider the contentions uninfluenced by earlier views, pass reasoned orders on merits and communicate the decision under written acknowledgment. Pending that exercise, the assessing officer was restrained from taking steps entailing adverse civil consequences pursuant to reopening for the assessment year 2005-2006. [Paras 2, 3, 5]

Petitioner permitted to make written representation and the assessing officer directed to afford personal hearing, reconsider the matter and pass reasoned orders; no adverse action to be taken meanwhile.

Re-opening assessment under Section 147 - retrospective application of amendment to Section 40(a)(ia) - liability to deduct tax at source under Section 194C in agency/intermediary arrangements - Whether the amendment to Section 40(a)(ia) and related judicial pronouncements affecting liability to deduct tax at source are applicable to the facts and should affect the reassessment proceedings. - HELD THAT: - The Court noted that there has been an amendment to Section 40(a)(ia) and judicial decisions (including the Supreme Court's decision cited by the petitioner and certain High Court rulings) holding that the amendment operates retrospectively from the assessment year 2005-2006 to remove hardships. The petitioner relied on those developments and on authority treating clearing/forwarding agents as intermediaries not liable to deduct tax under Section 194C. Accepting the force of these contentions, the Court did not decide the merits but directed the assessing officer to re-look at the matter in the light of the amendment and the authorities relied upon, consider the petitioner's representation and evidence, and pass a reasoned order. Thus the applicability of the amendment and the question of TDS liability in the contractual/agency context were remanded for fresh consideration rather than finally adjudicated. [Paras 4, 5]

Applicability of the amendment to Section 40(a)(ia) and the related question of TDS liability in the facts of this case remanded to the assessing officer for fresh consideration after hearing; interim restraint on adverse action.

Final Conclusion: Writ petition disposed by directing the petitioner to submit a written representation and the assessing officer to afford personal hearing and decide, uninfluenced by earlier views, the continuance of reassessment proceedings for assessment year 2005-2006 in a reasoned order in light of the statutory amendment and authorities; interim protection granted against adverse civil consequences.

Condonation of delay - substantial justice prevailing over technical delay - ex parte dismissal for non-prosecution - liberty to seek recall of an ex parte order - appeal under Section 260A of the Income-tax Act, 1961

Condonation of delay - substantial justice prevailing over technical delay - ex parte dismissal for non-prosecution - Whether the delay of 342 days in filing the tax appeal should be condoned. - HELD THAT: - The Court found that, although there was lethargy and negligence on the part of the cooperative bank in pursuing the matter, the circumstances (retirement of the branch manager and the death of the engaged advocate, with consequent oversight) justify giving the bank one opportunity to have its appeal heard on merits. The Court observed that the bank would not derive any personal advantage from condonation and that substantial justice ought to be preferred over technical considerations. While noting the Tribunal's power and its prior observation permitting recall of an ex parte order if reasonable cause were shown, the High Court exercised its discretion to condone the delay and permit the appeal to proceed to merits despite the earlier non-prosecution before the Tribunal.

Delay of 342 days in filing the tax appeal is condoned and the appeal is to be heard on merits.

Appeal under Section 260A of the Income-tax Act, 1961 - liberty to seek recall of an ex parte order - What procedural directions should follow upon condonation of delay. - HELD THAT: - Having condoned the delay, the Court directed that the Tax Appeal filed under Section 260A be proceeded with on the two questions of law raised in the memorandum of appeal. The Court required the applicant to bear costs as a consequence of the lethargy and ordered a deposit to the Gujarat High Court Advocates Welfare Fund; upon production of the receipt, the registry was directed to allocate a permanent number to the Tax Appeal and notify it for admission so that the appeal may be heard on merits.

Applicant to deposit costs; upon receipt, registry to allot a pucca number and notify the Tax Appeal for admission to be heard on merits.

Final Conclusion: Application allowed: delay of 342 days in filing the tax appeal for Assessment Year 2007-08 condoned; appeal to proceed on its merits under Section 260A of the Income-tax Act, 1961; applicant directed to deposit Rs. 50,000 with the Gujarat High Court Advocates Welfare Fund and, on producing the receipt, the registry shall allot a permanent number to the Tax Appeal and notify it for admission.

Rectification under Section 254(2) - Appeal under Section 260A - Mistake apparent from the record - Recording of satisfaction under Section 153C - Admissibility of additional grounds before the Tribunal - Writ jurisdiction under Article 226

Appeal under Section 260A - Rectification under Section 254(2) - Writ jurisdiction under Article 226 - Whether an appeal under Section 260A lies against an order of the Tribunal rejecting an application for rectification under Section 254(2), and the consequent maintainability of a writ petition under Article 226. - HELD THAT: - The Court examined the language of Section 260A and contrasted it with Section 256, following the reasoning in Chem Amit. Section 260A permits appeal only from "an order passed in appeal by the Appellate Tribunal" and does not provide for an appeal from every order under Section 254. A rejection of an application under Section 254(2) is not an 'order in appeal' and therefore is not amenable to appeal under Section 260A. Given that Section 260A does not afford a statutory appellate remedy against such rejections, the High Court's writ jurisdiction under Article 226 is available where a party would otherwise be left without an effective remedy. The Court respectfully followed the Bombay High Court view and held that the rejection of a rectification application does not attract an appeal under Section 260A, making the writ remedy maintainable. [Paras 7, 11]

An order refusing rectification under Section 254(2) is not an "order in appeal" and is not appealable under Section 260A; accordingly, writ jurisdiction under Article 226 is available.

Rectification under Section 254(2) - Mistake apparent from the record - Recording of satisfaction under Section 153C - Admissibility of additional grounds before the Tribunal - Whether the Tribunal committed an error apparent on the face of the record in refusing to admit an additional ground that challenged the absence of the mandatory satisfaction required under Section 153C. - HELD THAT: - The Court reviewed the additional ground which questioned whether the Assessing Officer had recorded the mandatory satisfaction required by Section 153C before initiating proceedings in respect of a connected person. The Tribunal had refused to admit the ground on the basis that the assessee had not produced additional evidence and that the issue was being raised for the first time. The High Court found that the question as framed was one of law - whether recording of satisfaction under Section 153C is mandatory - and that resolution required only perusal of assessment records rather than fresh evidence. Applying the principle of rectification for a "mistake apparent from the record," the Court concluded that the Tribunal erred in refusing admission. The Court directed the Tribunal to call for the assessment records from the Department, verify whether the requisite satisfaction had been recorded, and proceed to consider the additional ground accordingly. Consequently the rectification application was allowed and the appeal before the Tribunal was restored to the extent of admitting the additional ground. [Paras 12, 13, 14, 15, 16]

The Tribunal erred in refusing to admit the additional ground; the omission was a mistake apparent from the record relating to the mandatory recording of satisfaction under Section 153C and the rectification application is allowed - the Tribunal is directed to call for assessment records and consider the additional ground.

Final Conclusion: The appeal is allowed: the Single Judge's order is set aside; rejection of the rectification application is held not to be appealable under Section 260A (writ jurisdiction is available); the Tribunal's refusal to admit the additional ground challenging the absence of mandatory satisfaction under Section 153C was a mistake apparent on the face of the record, the rectification application is allowed, and the matter is remitted to the Tribunal to call for the assessment records and consider the admitted ground.

Maintainability of writ petition in presence of statutory remedy under Section 260A - appeal to High Court under Section 260A - jurisdictional limitation on exercise of Article 226 where statute provides alternative remedy - rectification of Tribunal order under section 254(2)

Maintainability of writ petition in presence of statutory remedy under Section 260A - appeal to High Court under Section 260A - Writ petition under Article 226 challenging the Tribunal's dismissal of rectification/miscellaneous applications is not maintainable where an appeal under Section 260A is available. - HELD THAT: - The Court examined the scheme of Section 260A and noted that an appeal to the High Court lies against orders passed by the Appellate Tribunal if the High Court is satisfied a substantial question of law is involved and that such an appeal must ordinarily be filed within the prescribed period. The Tribunal had rejected the petitioner's applications for rectification/additional charges on the ground that no new evidence or material was placed and the petitioner sought to impugn that order by way of writ. The High Court held that it could not, in exercise of Article 226, assume the role of an appellate court to decide merits of the Tribunal's order where the Act provides a statutory appellate remedy. In these circumstances the availability of the statutory remedy conduces to dismissal of the writ petition and the petitioner must resort to the remedy under Section 260A.

Writ petition dismissed; petitioner directed to avail remedy of appeal under Section 260A if so advised.

Rectification of Tribunal order under section 254(2) - jurisdictional limitation on exercise of Article 226 where statute provides alternative remedy - The Court declined to entertain the contention seeking rectification/error apparent under section 254(2) by writ when the Tribunal's order is amenable to appeal under the statute. - HELD THAT: - Although the petitioner invoked error apparent on the face of record and sought rectification under section 254(2), the Court observed that the Tribunal had considered the submissions and rejected the applications for lack of additional material. The High Court emphasised that it is not appropriate to reappraise such adjudicatory conclusions in writ jurisdiction where a specific appellate route is prescribed by the Income Tax Act. Consequently, the plea for rectification raised via writ was rejected for want of maintainability.

Contention for rectification via writ rejected; remedy to be pursued under statutory appeal provisions.

Final Conclusion: The writ petition is dismissed as not maintainable because the petitioner has a statutory remedy of appeal under Section 260A; the petitioner may, if so advised, pursue the remedy available under the Act.

Transfer pricing adjustment - Arm's Length Price - comparability analysis - clubbing royalty with trading segment operating cost - remand to Assessing Officer/TPO for fresh determination - deduction allowable under section 10A - opportunity of being heard / audi alteram partem

Transfer pricing adjustment - Arm's Length Price - comparability analysis - clubbing royalty with trading segment operating cost - remand to Assessing Officer/TPO for fresh determination - Whether the transfer pricing adjustment in respect of royalty payments should be sustained or the matter should be remitted to the Assessing Officer/TPO for fresh determination in accordance with earlier directions of this Tribunal. - HELD THAT: - The Tribunal found that an identical issue in the assessee's own case for earlier years had been remitted to the AO/TPO with directions to identify comparables and select an appropriate method, and that an alternative direction was given that, if no comparable is found for the royalty, the royalty may be treated as part of the operating cost of the trading segment and the ALP determined on the composite trading transaction. The Appellate Commissioner did not sufficiently consider those earlier Tribunal directions, particularly the alternative approach. The TPO in subsequent years had applied the alternative approach where no comparable was found. In view of the Tribunal's prior directions and the CIT(A)'s failure to properly apply them, the Tribunal set aside the CIT(A)'s orders on this issue for all three assessment years and restored the matter to the file of the AO/TPO with directions to reconsider the ALP of the royalty payment in light of the Tribunal's earlier rulings, including treating royalty as part of trading-segment operating cost if no comparable is available.

Order of the CIT(A) set aside; issue remitted to AO/TPO for fresh consideration in accordance with this Tribunal's earlier directions, including the alternative treatment where no comparable exists.

Deduction allowable under section 10A - opportunity of being heard / audi alteram partem - remand to Assessing Officer/TPO for fresh determination - Whether the recomputation of deduction under section 10A made by the Assessing Officer in compliance with the Tribunal's earlier order was within jurisdiction and whether the CIT(A) correctly upheld that recomputation. - HELD THAT: - The Tribunal observed that in giving effect to the earlier order the AO had altered the quantum of deduction under section 10A, but the assessee was not afforded an opportunity to be heard on that recomputation. The CIT(A) did not examine the jurisdictional aspect and proceeded to uphold the AO's action while considering profits at the entity level rather than at the undertaking level as contended by the assessee. Given the absence of a hearing before the AO on the recomputation and the failure of the CIT(A) to address the jurisdictional and undertaking-level computation issues, the Tribunal concluded that the matter required fresh consideration by the AO, after affording the assessee an opportunity to present explanations and information relevant to computation of deduction under section 10A.

Order of the CIT(A) set aside; recomputation of deduction under section 10A remitted to the AO for fresh consideration after giving the assessee a proper opportunity of being heard.

Final Conclusion: All three appeals are allowed in part: the CIT(A)'s orders are set aside and both issues (transfer pricing adjustment in respect of royalty and recomputation of deduction under section 10A) are remitted to the Assessing Officer/TPO for fresh consideration in accordance with this Tribunal's directions and after affording the assessee an opportunity of being heard.

Agricultural income - estimation of income by Assessing Officer - acceptance of documentary evidence - deletion of addition - proof of cultivation and sale (Form J, girdawari) - oral/certified statement of village head (Sarpanch)

Agricultural income - estimation of income by Assessing Officer - acceptance of documentary evidence - proof of cultivation and sale (Form J, girdawari) - deletion of addition - Whether the addition made by the Assessing Officer, confirmed by the CIT(A), by treating a large part of the claimed agricultural receipts as undisclosed income was sustainable in absence of satisfactory documentary evidence. - HELD THAT: - The Tribunal examined the documentary material placed before the authorities including Form J, girdawari entries, certificates and the statement of the Sarpanch and the evidence of substantial land ownership produced by the assessee. While the CIT(A) reduced the gross agricultural receipts from the figure claimed by the assessee, the Tribunal found that both the Assessing Officer and the CIT(A) ultimately relied upon estimates to make and confirm the impugned addition. In view of the documentary evidence and the Sarpanch's certificate, the Tribunal concluded that the addition rested on conjecture and estimation rather than on an absence of supporting material, and therefore was not sustainable in law. The Tribunal accordingly accepted the assessee's evidence and deleted the addition in the interest of justice. [Paras 5, 6]

Impugned addition deleted; assessee's appeal allowed.

Final Conclusion: The Tribunal accepted the assessee's documentary and certified evidence regarding agricultural receipts and land ownership, held that the addition was based on estimation and not sustainable, deleted the addition and allowed the appeal for assessment year 2014-15.

Burning loss - estimate-based addition - genuineness of transaction - onus on the revenue to prove non-genuineness - documentary evidence and books of account - disallowance of business expenditure on comparison with prior year

Burning loss - estimate-based addition - documentary evidence and books of account - Deletion of addition made on account of alleged excess burning loss during manufacture. - HELD THAT: - The Tribunal found that the assessee had recorded purchases and provided details of sponge iron used and other documentary evidence showing a burning loss of 5.81% for the year, and that burning loss varies furnace-to-furnace and with the type of scrap used. The Assessing Officer's addition was made on an estimated basis without properly appreciating the books and supporting documents. Since the addition was founded on estimation and the assessee had furnished contemporaneous records and explanations, the addition was held not sustainable and deleted. [Paras 3]

Addition of Rs. 5,41,426/- on account of burning loss deleted.

Genuineness of transaction - onus on the revenue to prove non-genuineness - documentary evidence and books of account - Deletion of addition treating unsecured loan from Smt. Bimla Devi as an accommodation entry. - HELD THAT: - The Tribunal accepted that the loan was received by NEFT through banking channels, that Smt. Bimla Devi is a relative of the directors and a regular tax assessee, and that her cash/bank statements, ITR, computation and balance sheet had been placed before the authorities. Applying the settled principle that once the assessee proves the transaction and documentary records, the onus shifts to the revenue to prove that the transaction is not genuine, the Tribunal held that the revenue failed to discharge that burden and therefore the addition was not maintainable. [Paras 4]

Addition of Rs. 3,50,000/- treated as loan from Smt. Bimla Devi deleted.

Disallowance of business expenditure on comparison with prior year - documentary evidence and books of account - Deletion of addition disallowing carriage outward expenses alleged to be inflated. - HELD THAT: - The Tribunal noted that the assessee produced bilties and proofs of payment for carriage outward and that related vehicle running and maintenance expenses had materially decreased during the year. The Assessing Officer disallowed the carriage outward merely by comparison with the prior year without properly considering the supporting evidence or the related decrease in vehicle upkeep expenses. In view of the documentary support and absence of a valid basis for the estimate-based disallowance, the addition was held unsustainable and deleted. [Paras 5]

Addition of Rs. 10,00,000/- on account of carriage outward deleted.

Final Conclusion: The assessee's appeal is allowed and the additions made by the Assessing Officer in the assessment order for Assessment Year 2014-15 are deleted.

Penalty under Section 271(1)(c) of the Income Tax Act - Requirement of tax evasion as a precondition for levy of penalty under Section 271(1)(c) - Accepting returned income in reassessment proceedings - Reclassification of income from PGBP to addition under Section 68 without change in total assessed income - Inapplicability of precedents where assessed income equals returned income

Penalty under Section 271(1)(c) of the Income Tax Act - Requirement of tax evasion as a precondition for levy of penalty under Section 271(1)(c) - Accepting returned income in reassessment proceedings - Validity of levy of penalty under Section 271(1)(c) where reassessment accepts the returned income and total assessed income remains the same as the returned income. - HELD THAT: - The Tribunal found that the returned income of the assessee was accepted both when originally filed and in the reassessment order. Although the Assessing Officer reclassified an amount from PGBP to an addition under Section 68, the assessed income remained identical to the returned income. For imposition of penalty under Section 271(1)(c) it is necessary to show that furnishing of inaccurate particulars resulted in evasion of tax. Neither the Assessing Officer nor the Commissioner (Appeals) demonstrated how any tax was sought to be evaded when the assessed income equals the returned income. The allegation of bogus credit was ineffective because the same amount was already included in the returned income. On these facts, the requisite causal link between alleged inaccuracy and tax evasion was not established, requiring cancellation of the penalty.

Penalty under Section 271(1)(c) cancelled as the authorities failed to establish tax evasion where assessed income equalled returned income.

Inapplicability of precedents where assessed income equals returned income - Reclassification of income from PGBP to addition under Section 68 without change in total assessed income - Whether reliance on earlier judicial pronouncements (cited by revenue) justified the levy of penalty in the present facts where those decisions involved facts different from the present case. - HELD THAT: - The Tribunal observed that the judicial decisions relied upon by the Assessing Officer and the Department were not factually comparable because in those cases assessed income differed from returned income. Since in the present case the overall assessed income remained the same as the returned income despite reclassification between heads, the precedents cited did not support the conclusion that the assessee had sought to evade tax. Consequently, the reliance on those authorities did not provide a valid basis for sustaining the penalty.

Precedents relied upon by revenue held inapplicable to the facts; they do not justify sustaining the penalty.

Final Conclusion: The appeal is allowed and the penalty of Rs. 1,98,600 imposed under Section 271(1)(c) is cancelled because the authorities failed to demonstrate tax evasion where the assessed income remained the same as the returned income.

Absence of mandatory notice u/s. 143(2) - mechanical approval under section 151 - validity of reopening of assessment - quashing of reassessment - penalty consequential on quashed reassessment

Absence of mandatory notice u/s. 143(2) - mechanical approval under section 151 - validity of reopening of assessment - quashing of reassessment - Validity of reassessment completed u/s. 143(3)/147 where no notice u/s. 143(2) was issued and approval under section 151 was granted mechanically - HELD THAT: - The Tribunal admitted the additional legal grounds and examined whether the reassessment was valid. Relying on binding authority that absence of notice u/s. 143(2) renders an assessment vulnerable, and on decisions holding that sanction under section 151 requires application of mind and cannot be given in a mechanical manner, the Tribunal found that the Assessing Officer completed assessment without issuing the mandatory notice u/s. 143(2). It further found that the Pr. CIT's approval under section 151 was recorded mechanically (a single "Yes") and there was no proper application of mind before reopening. On these combined defects the reopening was held bad in law and the reassessment order was quashed, with the addition deleted. [Paras 8]

Reopening of assessment quashed and the addition of Rs. 7,45,118/- deleted.

Penalty consequential on quashed reassessment - Whether penalty levied is sustainable after reassessment is quashed - HELD THAT: - Given that the reassessment and the consequential addition were quashed, the Tribunal held that the penalty based on the impugned addition could not stand. The penalty proceedings therefore became infructuous in view of the quashing of the assessment on substantive jurisdictional grounds. [Paras 9]

Penalty under section 271(1)(c) deleted.

Final Conclusion: The Tribunal allowed both appeals: the reassessment for AY 2010-11 was quashed for want of mandatory notice u/s. 143(2) and for mechanical sanction under section 151, the addition was deleted, and the consequential penalty was also deleted.

Deduction under Section 80P(2) of the Income-tax Act - business income versus income from other sources - interest on deposits held with banks out of surplus funds - distinguishing precedent of M/s Totgar's Co operative Sale Society Ltd - business requirement / compulsion to maintain bank account - reliance on High Court precedent recognising bank deposit interest as business income

Deduction under Section 80P(2) of the Income-tax Act - business income versus income from other sources - interest on deposits held with banks out of surplus funds - distinguishing precedent of M/s Totgar's Co operative Sale Society Ltd - business requirement / compulsion to maintain bank account - reliance on High Court precedent recognising bank deposit interest as business income - Interest earned by the assessee on savings bank deposits held with Kotak Mahindra Bank is eligible for deduction under Section 80P(2) as business income. - HELD THAT: - The Tribunal found that the interest arose on funds held in the assessee's savings bank account which the society was required to maintain for transacting its cooperative credit activities; the deposits were made as a business requirement rather than being surplus funds unrelated to business exigency. The decision in M/s Totgar's Co operative Sale Society Ltd was held distinguishable because, in that case, interest arose on short term deposits and securities made out of members' surplus funds not immediately necessary for business, whereas here the bank account balances were integral to the society's financial operations. The Tribunal also followed the Andhra Pradesh High Court decision holding that interest on bank deposits can be in the nature of business income and therefore eligible for deduction under Section 80P(2). On these grounds the Tribunal concluded that the AO and the CIT(A) were not justified in treating the interest as income from other sources and denying the Section 80P(2) deduction. [Paras 4, 5, 6]

Assessee entitled to deduction under Section 80P(2) in respect of interest earned on the savings bank account; appeal allowed.

Final Conclusion: Assessee's appeal allowed: interest on the savings bank account treated as business income and deduction under Section 80P(2) granted for A.Y. 2016-17.

Recomputation of profit linked deduction under section 10AA on enhanced profits - Application of CBDT Circular No. 37/2016 to profit linked deductions outside Chapter VI A - Inclusion of disallowances/additions arising from alleged bogus/accommodation entries for computing eligible export deduction

Recomputation of profit linked deduction under section 10AA on enhanced profits - Application of CBDT Circular No. 37/2016 to profit linked deductions outside Chapter VI A - Inclusion of disallowances/additions arising from alleged bogus/accommodation entries for computing eligible export deduction - Deduction under section 10AA is to be recomputed after taking into account additions/disallowances made by the Assessing Officer in respect of alleged non genuine purchases. - HELD THAT: - The Tribunal followed the Coordinate Bench decision in the assessee's own case which applied CBDT Circular No. 37/2016 to profit linked deductions even where such deductions are not located in Chapter VI A, holding that disallowances related to the business activity giving rise to the deduction must be considered for computing the enhanced profits on which the deduction is claimed. The Bench observed that the assessee had a single business undertaking and that the disallowance in question related to that same business. In view of the settled position accepted by the Board and relied upon by the Coordinate Bench, the Assessing Officer was directed to recompute the deduction under section 10AA after taking into account the addition made by him. [Paras 5]

Assessing Officer directed to recompute deduction under section 10AA taking into consideration the addition made by him.

Final Conclusion: The appeal is disposed by directing recomputation of deduction under section 10AA in light of the additions; all other grounds were rendered academic and dismissed as infructuous.

Disallowance under Section 14A read with Rule 8D - applicability of Rule 8D where no exempt income is earned - disallowance under Section 37(1) - estoppel by concession in tax assessment - principles of natural justice in assessment proceedings

Disallowance under Section 14A read with Rule 8D - applicability of Rule 8D where no exempt income is earned - Deletion of the disallowance made by the Assessing Officer under Section 14A read with Rule 8D on the ground that no exempt income was earned in the relevant previous year. - HELD THAT: - The Commissioner (Appeals) found from the profit and loss account that the assessee did not earn any exempt income during the relevant previous year and accordingly held that the provisions of Section 14A read with Rule 8D were not applicable. Reliance was placed on the jurisdictional High Court decision. The Tribunal noted that the CIT(A) deleted the addition made by the Assessing Officer for expenditure allegedly relatable to exempt income because no exempt income was shown to have been earned; on that basis the disallowance under Section 14A read with Rule 8D was held not sustainable and directed deletion. [Paras 4, 8]

The deletion of the disallowance under Section 14A read with Rule 8D is upheld; the disallowance is not sustainable in absence of exempt income.

Disallowance under Section 37(1) - estoppel by concession in tax assessment - principles of natural justice in assessment proceedings - Validity of the enhancement by the CIT(A) adding a sum to income under Section 37(1) on the basis that the assessee had 'suo moto' made a concession and was estopped from disputing that disallowance. - HELD THAT: - The CIT(A) sustained an enhancement by treating the assessee's earlier statement (a without-prejudice working) as an admission and added the said amount to income under Section 37(1), noting non attendance of the assessee at specified hearings. The Tribunal held that an addition or disallowance impermissible in law cannot be fastened on the assessee by reason of an asserted concession; there is no estoppel as a matter of law to convert an otherwise unsustainable disallowance into a valid addition. Reliance by the CIT(A) on the jurisdictional High Court for deleting the AO's Section 14A disallowance but simultaneously enhancing under a different pretext was held to be unsustainable. The Tribunal therefore set aside the enhancement and deleted the addition, observing that affixing liability contrary to law on the basis of alleged concession would be improper. [Paras 5, 9, 10, 11]

The enhancement and addition under Section 37(1) on the ground of estoppel/concession is set aside and the addition is deleted.

Final Conclusion: The appeal is allowed: the disallowance under Section 14A read with Rule 8D was correctly deleted for lack of exempt income, and the subsequent enhancement under Section 37(1) based on alleged estoppel/concession is unsustainable and is set aside; the addition is deleted.

Deeming of stamp duty valuation as full value of consideration under section 50C - reference to Valuation Officer for fair market value under section 50C(2) - transfer as defined by section 2(47) including transfer by Development Agreement - appellate remit/remand for de novo consideration of valuation objections

Reference to Valuation Officer for fair market value under section 50C(2) - deeming of stamp duty valuation as full value of consideration under section 50C - Whether the valuation objections raised by the assessee in respect of the 3rd plot were considered on merits and whether the matter requires fresh adjudication by the appellate authority with opportunity to the Valuation Officer to address those objections. - HELD THAT: - The Tribunal found that although the Assessing Officer had invoked section 50C and later acted on the DVO report by rectification, the learned Commissioner (Appeals) did not deal with the merits of the assessee's substantive objections to the valuation-specifically alleged inherent defects and development disabilities in the land-which were the basis for contesting the DVO's valuation. It is not discernible from the record whether those objections were addressed by the DVO. In the interest of justice and in view of the duty of an appellate authority to correct errors or remit for reconsideration where necessary, the Tribunal directed that the learned CIT(A) should examine the merits of the valuation objections in a speaking order, afford the assessee an opportunity of hearing, and give the Valuation Officer an opportunity to consider those objections if he so chooses. The Tribunal therefore remitted the matter for de novo consideration by the CIT(A) with the stated directions. [Paras 11, 13]

Remitted to the file of the learned CIT(A) for de novo consideration of the assessee's valuation objections; assessee to be given an opportunity of being heard and the DVO may be permitted to consider those objections.

Transfer as defined by section 2(47) including transfer by Development Agreement - deeming of stamp duty valuation as full value of consideration under section 50C - Whether the transaction was a transfer of development rights only (and thus outside section 50C) or amounted to a transfer within the meaning of section 2(47) attracting section 50C, and whether this question requires fresh consideration by the appellate authority. - HELD THAT: - The Tribunal noted that the learned CIT(A) had relied on a body of authority holding that transfers conferring beneficial ownership or development rights may constitute 'transfer' within section 2(47) and thus fall within the scope of section 50C. The assessee challenged those precedents and relied on Tribunal decisions to the contrary, but the Tribunal observed that the assessee did not make cogent submissions to negate the applicability of the cited decisions, including the Supreme Court authority. Noting also that the question of characterization as development-rights transfer was not considered by the Assessing Officer and that the assessee had not filed a revised return, the Tribunal directed the learned CIT(A) to consider this aspect afresh-taking into account the parties' authorities and allowing the assessee to file objections to the case law relied upon- and, if necessary, to seek remand to the Assessing Officer for factual/verificatory action. [Paras 12, 13]

Remitted to the learned CIT(A) for fresh consideration of whether the transaction constituted only transfer of development rights or a transfer attracting section 50C; CIT(A) to consider authorities advanced by both sides and may remit to the Assessing Officer if required.

Final Conclusion: The Tribunal has remitted the matter to the learned Commissioner of Income Tax (Appeals) for de novo consideration of (i) the assessee's substantive objections to the valuation (with opportunity to the DVO to address those objections) and (ii) the question whether the transaction was transfer of development rights or a transfer attracting the deeming provisions of section 50C; the appeal is disposed of as allowed for statistical purposes.

Limitation for disposal of application for registration under the income-tax rules - registration under section 12AA and its effect on subsequent grant of approval under section 80G - public charitable trust versus private religious trust - test of benefit to public at large - reopening or reassessment of character of trust where registration under section 12AA remains in force - requirement of examining activities, property and expenditure to determine compliance with conditions for section 80G approval

Limitation for disposal of application for registration under the income-tax rules - The contention that the impugned order rejecting registration under section 80G was time barred. - HELD THAT: - The application for registration was filed on 01.08.2019 and the limitation period is to be computed from the end of that month. The limitation expired on 28.02.2020. The impugned order was passed on 19.02.2020 and therefore falls within the prescribed six month period. The claim of the assessee that the order was beyond the limitation period is not tenable. [Paras 5]

Order passed within limitation; contention of delay rejected.

Registration under section 12AA and its effect on subsequent grant of approval under section 80G - reopening or reassessment of character of trust where registration under section 12AA remains in force - public charitable trust versus private religious trust - test of benefit to public at large - Whether the grant of registration under section 12AA, which the Revenue has already accepted, may be reopened in the proceedings for approval under section 80G without revocation of that registration. - HELD THAT: - Registration under section 12AA had been granted and continued in force at the time of the 80G proceedings. The relevant inquiry is whether the trust's activities benefit the public at large or are limited to select individuals or a community. Mere fact that trustees belong to a single family is not, by itself, determinative of private character. Where Revenue has already registered the entity under section 12AA on the same record, it cannot take a contrary view in 80G proceedings unless it invokes the statutory recourse under sub sections (3) and (4) of section 12AA to cancel or alter that registration. Consequently, the main character of the trust as a public trust, as reflected by extant 12AA registration, cannot be displaced in the impugned 80G proceedings without appropriate action under section 12AA. [Paras 7]

Continuing 12AA registration precludes recharacterisation of the trust as private in the 80G proceedings unless 12AA is validly withdrawn; trustees' familial relationship alone insufficient to convert public trust into private trust.

Requirement of examining activities, property and expenditure to determine compliance with conditions for section 80G approval - public charitable trust versus private religious trust - test of benefit to public at large - Whether the assessee's activities relating to Bhairav Temple and the associated property and expenditure satisfy the conditions for approval under section 80G. - HELD THAT: - The record did not disclose documentary particulars of temple related activities or the corresponding expenditure despite the temple being shown as the address and as property in an amended trust deed. The Tribunal found that these matters are material to determine whether activities are for the benefit of a particular religious community or the public at large and whether statutory limits (including those under subsection (5B) of section 80G) are contravened. In the interest of justice the Tribunal directed that the matter be remitted to the CIT(E) for fresh examination of the trust's activities, property and expenditure, and for a decision in accordance with law, preferably within three months of receipt of the Tribunal's order. [Paras 8]

Matter remitted to the CIT(E) for fresh and limited adjudication of activities, property and expenditure relating to the temple and compliance with conditions for section 80G approval.

Final Conclusion: The appeal is allowed for statistical purposes: the CIT(E)'s rejection on limitation grounds is dismissed; the Tribunal held that extant registration under section 12AA prevents recharacterisation in 80G proceedings without appropriate action under section 12AA; and the question of the trust's temple related activities, property and expenditure and compliance with conditions for section 80G is remitted to the CIT(E) for fresh consideration within the specified timeframe.

Depreciation under section 32(1)(ii) of the Act - intangible asset - business or commercial right - concession/BOT right to collect user fees as capital expenditure

Depreciation under section 32(1)(ii) of the Act - intangible asset - business or commercial right - concession/BOT right to collect user fees as capital expenditure - Assessee entitled to claim depreciation on expenditure incurred for construction of Amritsar Bus Terminal on BOT basis as the right to collect user fees is an intangible asset falling under section 32(1)(ii) of the Act and is depreciable at the specified rate. - HELD THAT: - The Tribunal examined whether expenditure incurred by the assessee in constructing a bus terminal under a BOT concession gives rise to a depreciable intangible asset. Relying on earlier Tribunal decisions including Ashoka Infrastructure Ltd. and the Special Bench decision in Progressive Constructions Ltd., the Tribunal held that the right to operate the facility and collect user/adda fees is a business or commercial right within the meaning of section 32(1)(ii) r.w. Explanation 3(b) and thus constitutes an intangible asset eligible for depreciation. The Tribunal noted that the jurisdictional High Court had merely admitted a substantial question of law in a related appeal and had not stayed or set aside the Tribunal decisions relied upon; no order was placed before the Tribunal altering the operation of those decisions. Having accepted the assessee's entitlement to depreciation at the specified rate (25%), the Tribunal directed that the amortization deduction allowed by the AO as allocated project cost must be withdrawn and the AO should recompute the assessment by allowing depreciation and adding back the amortization previously allowed. [Paras 10, 13]

Appeals dismissed; assessee entitled to depreciation at 25% on the BOT project intangible asset and AO to withdraw amortization deduction and recompute assessment accordingly.

Final Conclusion: The Revenue appeals are dismissed: the Tribunal held that the BOT concessionary right to collect user fees is a depreciable intangible asset under section 32(1)(ii) and directed recomputation of assessment to allow depreciation and disallow the amortization previously permitted by the AO.

Provisional release of seized imported goods - provisional attachment of imported consignment - perishable nature of imported goods as a factor in provisional release - authority's duty to take prompt decision on release - determination of country of origin in customs seizure

Perishable nature of imported goods as a factor in provisional release - provisional release of seized imported goods - authority's duty to take prompt decision on release - Authority must take a prompt decision on whether to release the seized consignment, having regard to its perishable nature. - HELD THAT: - The Court noted that the goods (dry dates) are perishable and that they were seized first on 19.11.2019 with subsequent seizure memos, the last dated 09.06.2020. The respondents produced a communication indicating that, insofar as the special inquiry branch is concerned, there is no objection to releasing the goods under the Customs Act and that the department is in a position to take a final call. In light of those developments and the perishable character of the consignment, the Court directed the Customs authorities to take a decision promptly and fixed a short date for further reporting. The Court expressed an expectation that the authority will act without undue delay so as to protect the interest arising from the perishability of the goods. [Paras 2, 3]

Customs authorities directed to take a prompt decision on provisional release of the seized perishable consignment and to report by the listed date.

Determination of country of origin in customs seizure - provisional attachment of imported consignment - The question whether the goods are of Iran origin or Pakistan origin is to be determined by the departmental authority and further inquiry/decision was left to the department. - HELD THAT: - The Court recorded the core controversy as the origin of the consignment (Iran v. Pakistan). The learned Central Government Standing Counsel informed the Court that the department was considering the matter and would likely take a final view in due course. Rather than adjudicating the origin itself, the Court left the issue to the competent customs authority for decision and directed expedition of that process. The order therefore requires the authority to conclude or progress the inquiry and take the final call on origin and any consequent action. [Paras 2, 3]

Determination of the goods' country of origin left to the Customs department for decision; authorities to proceed and report progress by the listed date.

Final Conclusion: The High Court directed the Customs authorities to take an expeditious decision on provisional release of the seized perishable consignment and on the disputed question of its country of origin, and listed the matter for further report on the specified date.

Rectification of mistake apparent from the record - power of Appellate Tribunal under Section 35C(2) - appropriation of amounts deposited during investigation - mistake apparent from the record must be patent and not debatable

Rectification of mistake apparent from the record - typographical error in Tribunal order - Correction of a typographical/arithmetic mistake in the Final Order dated September 12, 2019 changing the penalty amount from Rs. 60,00,000/- to Rs. 60,000/-. - HELD THAT: - The Tribunal accepted that the reference to Rs. 60 lakhs in the third line of paragraph 25 of its Final Order was a typing mistake. Such an obvious clerical/arithmetic error is a mistake apparent from the record and falls within the scope of the Tribunal's power to amend orders under Section 35C(2). The Court held that the manifest error required deletion and replacement with the correct figure, and directed the amendment accordingly. [Paras 4]

The typographical reference to Rs. 60 lakhs in paragraph 25 of the Final Order dated September 12, 2019 is deleted and replaced by Rs. 60 thousand.

Appropriation of amounts deposited during investigation - power of Appellate Tribunal under Section 35C(2) - mistake apparent from the record must be patent and not debatable - Whether the Tribunal should rectify its Final Order for non-consideration and set aside that part of the Commissioner's order appropriating Rs. 1,00,00,000/- deposited by the appellant during investigation towards the dues of another firm. - HELD THAT: - The Court examined whether non-consideration of the appellant's contention regarding the legality of appropriation amounted to a mistake apparent from the record. Noting the record showed the deposit of Rs. 1,00,00,000/- during investigation and that specific grounds challenging appropriation were taken in the appeal and written submissions, the Tribunal found the omission to consider that contention to be an apparent error. Relying on the principle that a mistake rectifiable under Section 35C(2) must be patent and not a debatable point of law or fact, the Tribunal concluded that the appropriated amount-deposited by the appellant-had been applied to the tax dues of another firm which is impermissible, and that the failure to address this submission warranted rectification. Consequently, the part of the Commissioner's order directing appropriation of the deposit was set aside. [Paras 15, 18, 20, 25, 26]

That part of the order dated October 18, 2018 directing appropriation of Rs. 1,00,00,000/- deposited by the appellant during investigation is set aside.

Final Conclusion: The application for rectification is allowed: the penalty amount in the Tribunal's Final Order is corrected from Rs. 60 lakhs to Rs. 60 thousand, and the Tribunal sets aside the Commissioner's appropriation of Rs. 1,00,00,000/- deposited by the appellant during investigation.

Prospective operation of statutory amendment - Disqualification under Section 164(2) of the Companies Act, 2013 - Proviso to Section 167(1)(a) - vacancy in companies other than the defaulting company - Automatic disqualification by operation of law - no hearing / principles of natural justice - Application of Sections 92, 96, 137 and 403 regarding filing, delayed filing and additional fees - Deactivation of Director Identification Number (DIN)

Automatic disqualification by operation of law - no hearing / principles of natural justice - Deactivation of Director Identification Number (DIN) - An opportunity of hearing/representation is not required before deactivation of DIN where disqualification arises automatically under Section 164(2) read with Section 167(1)(a). - HELD THAT: - The Court held that the statutory scheme created by Section 164(2) and Section 167(1)(a), as amended, leaves no discretion to authorities; disqualification and consequent deactivation of DIN operate automatically upon the statutory defaults. Rules of natural justice apply only where an opportunity of hearing could affect the outcome; where the authority has no discretion and the consequence follows by operation of law, requiring a hearing would be futile. Accordingly, there is no scope to read into those provisions any requirement to afford a separate adjudicatory hearing or representation before deactivation of DIN. [Paras 25]

No right to prior hearing arises where disqualification and DIN deactivation follow automatically from the statutory defaults; question answered in the negative.

Prospective operation of statutory amendment - Disqualification under Section 164(2) of the Companies Act, 2013 - Proviso to Section 167(1)(a) - vacancy in companies other than the defaulting company - Application of Sections 92, 96, 137 and 403 regarding filing, delayed filing and additional fees - Deactivation of Director Identification Number (DIN) - The 2014 amendment to Section 164(2) and the 2018 proviso to Section 167(1)(a) operate prospectively; the three-year default under Section 164(2) commences from financial year 2014-15 and the proviso to Section 167(1)(a) applies only to defaults occurring after May 7, 2018. - HELD THAT: - The Court examined the statutory scheme governing annual general meetings and filing of annual returns and financial statements (Sections 92, 96, 137 and 403) and concluded that prior to the 2014 and 2018 amendments the consequences for defaults were pecuniary penalties. The 2014 and 2018 amendments introduced a far more onerous consequence - disqualification for five years and vacancy of offices in other companies - which, although denominated as "disqualifying", produce penal and severe effects on the director's livelihood and Article 19(1)(g) rights. Giving retrospective or retroactive effect to those amendments would produce anomalous and disproportionate consequences for defaults that occurred before the amendments, and would deprive directors of any reasonable opportunity to anticipate such consequences. Having regard to the nature and gravity of the new consequences, the absence of any clear legislative intent for retrospective operation, and the practical anomalies that would result, the Court held the amendments must be construed prospectively: the three-year period under Section 164(2) is to be counted from April 1, 2014 (financial year 2014-15 onwards) and the operation of the amended proviso to Section 167(1)(a) extends to defaults occurring after May 7, 2018. Consequently, deactivation of DIN can only follow in respect of defaults within those prospective time-frames, and deactivation under company rules is limited to the scope permitted by those rules. [Paras 49, 50, 51, 55, 56]

The 2014 amendment to Section 164(2) and the 2018 proviso to Section 167(1)(a) are prospective; DIN deactivation based on those amendments can be applied only to defaults occurring on or after their respective commencement dates.

Final Conclusion: Writ petition allowed: deactivation of the petitioner's DIN by the notice dated April 7, 2017 is set aside. No order as to costs.

Maintainability of writ under Article 226 vis-a -vis Article 227 - availability of alternative statutory remedy and rule of self imposed restraint - ex parte orders and remedy under Rule 49(2) of the NCLT Rules, 2016 - writ jurisdiction in disputes between private parties and requirement of public/functionary element - concurrent/multiple remedies and abuse of process (forum shopping) - suppression of material facts/unclean hands doctrine in writ jurisdiction - impleadment of tribunal in certiorari proceedings - necessary vs proper party - natural justice - furnishing of cause papers and opportunity to file counter - void/null orders cannot be ignored and must be set aside by a competent forum

Maintainability of writ under Article 226 vis-a -vis Article 227 - writ jurisdiction in disputes between private parties and requirement of public/functionary element - Writ petition under Article 226 challenging an interim order of the NCLT was not maintainable; such judicial acts of the Tribunal are to be challenged under the supervisory/revisional jurisdiction of the High Court under Article 227 or by the statutory appellate remedy. - HELD THAT: - The High Court held that orders of the NCLT are judicial/tribunal acts and the correct domain for supervisory review is Article 227 (or the statutory appellate route), not routine invocation of Article 226 in disputes that are essentially civil between private parties. Absent any material showing that the respondents were State bodies or private bodies discharging public functions (Article 12), the extraordinary remedial jurisdiction under Article 226 could not be exercised to bypass the statutory scheme and forum. The court emphasised the distinct constitutional roles of Articles 226 and 227 and cautioned against converting writ jurisdiction into an appeal from tribunal orders.

Writ under Article 226 dismissed as not maintainable for challenging the NCLT order; challenge is by Article 227/statutory appeal.

Availability of alternative statutory remedy and rule of self imposed restraint - ex parte orders and remedy under Rule 49(2) of the NCLT Rules, 2016 - The existence of efficacious alternative remedies - appeal under Section 421 to the NCLAT and the mechanism in Rule 49(2) to set aside ex parte hearings before the NCLT - rendered the writ petition inappropriate; the writ court should have required exhaustion of those remedies. - HELD THAT: - The court analysed the statutory scheme (Section 421 Companies Act and Rule 49(2) NCLT Rules) and concluded that the petitioners had available remedies to challenge the interim/ex parte orders before the Tribunal or by appeal to the Appellate Tribunal. The writ court erred in permitting relief by Article 226 when alternate, efficacious statutory remedies existed and were not exhausted; the availability of those remedies is a relevant factor in the High Court's exercise of discretion under Article 226.

Writ petition held unmaintainable in view of available alternative statutory remedies; petitioners should have availed Rule 49(2)/Section 421.

Concurrent/multiple remedies and abuse of process (forum shopping) - suppression of material facts/unclean hands doctrine in writ jurisdiction - The respondents (writ petitioners) pursued parallel remedies (writ and appeal) and made inconsistent declarations; their conduct and suppression of material facts amounted to forum shopping/unclean hands and weighed against entertaining the writ. - HELD THAT: - The court found that the petitioners had prepared and transmitted appeals to the NCLAT while filing the writ and had declared in the appeal papers that no writ or suit was pending - a prima facie suppression and contradictory stance. The High Court reaffirmed that writ relief is discretionary and equitable; suppression of material facts, parallel proceedings and attempts to pursue remedies in two forums constitute abuse of process and justify refusal to exercise writ jurisdiction.

Writ petition rendered unsuitable for grant because petitioners pursued multiple remedies and suppressed material facts; their conduct disentitled them to extraordinary writ relief.

Impleadment of tribunal in certiorari proceedings - necessary vs proper party - It is not an absolute rule that the Tribunal must always be impleaded in a writ under Article 226; whether the tribunal/court is a necessary party depends on whether it is required to defend the impugned order - but non impleadment of a tribunal that must defend its order can render the petition incompetent. - HELD THAT: - The court surveyed precedents (including Udit Narain and later clarifications) and held that the question is fact sensitive: where the authority/tribunal is expected to defend its order, it is a necessary party; but some tribunals need not be impleaded if they are not required to contest the matter. The judgment therefore recognises the settled distinction between necessary and proper parties and applies it to the statutory context before the Court.

Tribunal need not invariably be impleaded; but omission to implead a tribunal that must defend its order may render the writ petition not maintainable.

Natural justice - furnishing of cause papers and opportunity to file counter - The appellants were not furnished with the entire cause papers before the writ court and were not given adequate time to file a counter affidavit; that amounted to violation of principles of natural justice. - HELD THAT: - While the court concluded that the writ petition itself was not maintainable on other grounds, it also found procedural unfairness: the appellants had not received full cause papers as required by the High Court rules, yet were pressed to respond; the High Court should have allowed time for filing a counter to avoid breach of natural justice. That procedural lapse contributed to the appellate court setting aside the impugned order.

Procedural prejudice found: appellants were not given full cause papers or adequate time to file counter - breach of natural justice.

Void/null orders cannot be ignored and must be set aside by a competent forum - An order that is void for lack of jurisdiction cannot be ignored by private parties; it must be set aside by the appropriate forum - but implementation of an order does not render a collateral challenge infructuous. - HELD THAT: - The court reiterated the principle that even if an order may be void, parties cannot unilaterally treat it as a nullity; a competent court must declare it void. Implementation of an order does not automatically make an appellate or collateral challenge moot or infructuous; where a tribunal lacked jurisdiction, the remedy is to have the order set aside by the proper forum rather than to defy it.

Void tribunal orders require judicial declaration of nullity; execution of an order does not make challenge automatically infructuous.

Final Conclusion: The Division Bench allowed the writ appeal, set aside the single Judge's order dated 22 7 2020, and held that the writ under Article 226 was not maintainable to challenge the NCLT's interim order: the parties had alternative statutory remedies (Section 421/NCLAT; Rule 49(2) NCLT Rules), the dispute was a private corporate matter (no public function element), the petitioners had pursued parallel remedies and suppressed material facts, and procedural unfairness (non supply of full cause papers) was also found; the impugned order was set aside and the parties directed to pursue appropriate remedies before the competent forum.

Disqualification under section 164(2) of the Companies Act, 2013 - activation of DIN and DSC - strike off from the register of companies - judicial remand for consideration within a fixed timeframe

Disqualification under section 164(2) of the Companies Act, 2013 - activation of DIN and DSC - strike off from the register of companies - judicial remand for consideration within a fixed timeframe - Direction to the 2nd respondent to consider any application by the petitioners for activation of DIN and DSC to enable filing of Form STK-2 for striking off the company, and to pass appropriate orders within two weeks. - HELD THAT: - The petitioners sought quashing of the orders disqualifying them and activation of their DIN/DSC so they could file statutory returns and Form STK-2 to effect strike off. The petitioners had not produced any prior request made to the respondents for this relief. Rather than adjudicating the merits of the disqualification or quashing the impugned orders, the Court directed that if the petitioners approach the 2nd respondent with an application for activation of DIN and DSC for the limited purpose of uploading Form STK-2, the 2nd respondent shall consider that application and pass appropriate orders in accordance with law within two weeks of receipt. The petitioners were directed to produce a copy of this judgment before the 2nd respondent to facilitate compliance. The Court therefore remitted the matter for fresh consideration limited to the activation request and filing for strike off, without deciding the substantive validity of the disqualification orders. [Paras 4]

Application for activation of DIN/DSC to enable filing of Form STK-2 shall be considered and decided by the 2nd respondent in accordance with law within two weeks; copy of judgment to be produced by petitioners.

Final Conclusion: The writ petition was not allowed on the merits; the Court directed the 2nd respondent to consider any application by the petitioners for activation of DIN and DSC for the purpose of filing Form STK-2 and to pass appropriate orders within two weeks, the petitioners to produce a copy of this judgment before the 2nd respondent.

Re-activation of Director Identification Number (DIN) to enable statutory filings - Deactivation/cancellation of DIN - limited grounds under the DIN Rules and Companies (Appointment and Qualifications of Directors) Rules - Power of the Tribunal to enforce its orders under Section 424(3) of the Companies Act, 2013 - Registrar of Companies' authority to collect fees/additional fee/fine on reactivation - Scope of order - without prejudice to Registrar of Companies' power to take other actions under law

Re-activation of Director Identification Number (DIN) to enable statutory filings - Deactivation/cancellation of DIN - limited grounds under the DIN Rules and Companies (Appointment and Qualifications of Directors) Rules - Application for direction to Registrar of Companies to reactivate the DINs of the company's directors so that the company may file defaulted annual returns and financial statements. - HELD THAT: - The Tribunal examined the statutory scheme governing cancellation, deactivation and re-activation of DINs and noted that the Rules prescribe specific grounds for cancellation/deactivation (duplicate DIN, wrongful or fraudulent obtainment, death, lunacy/unsoundness of mind, insolvency and failure to file DIR-3 KYC) and do not provide for automatic cancellation/deactivation merely by reason of disqualification under Section 164(2). In the absence of a reply from the RoC and having considered relevant decisions cited by the applicant, the Tribunal concluded that re-activation of the DINs to enable filing of defaulted statutory documents is appropriate. The RoC was directed to reactivate the specified DINs and permitted to collect any fine/penalty as applicable for the lapse, with the company required to file all statutory documents along with prescribed fees/additional fee/fine within 30 days of re-activation. [Paras 9, 11]

The RoC is directed to reactivate the DINs of the named directors, collect any applicable fine/penalty, and the company shall file all outstanding statutory documents within 30 days of reactivation.

Power of the Tribunal to enforce its orders under Section 424(3) of the Companies Act, 2013 - Scope of order - without prejudice to Registrar of Companies' power to take other actions under law - Whether the order for reactivation is confined to enabling compliance and whether it precludes the RoC from initiating or continuing other actions under the Act. - HELD THAT: - The Tribunal invoked its enforcement power under Section 424(3) to pass directions for reactivation in order to effectuate the earlier restoration order and facilitate statutory compliance by the company. The Tribunal expressly limited its order to violations that led to the deactivation and clarified that the direction to reactivate shall not circumscribe the RoC's power to take appropriate actions in accordance with law for any other violations or offences committed prior to or during the period of DIN deactivation. [Paras 9, 11]

The order to reactivate DINs is confined to enabling the company to comply with outstanding filing obligations and does not bar the RoC from taking any other lawful action for other violations.

Final Conclusion: MA/172/KOB/2020 disposed of by directing the Registrar of Companies to reactivate the specified DINs (subject to collection of any applicable fine/penalty) to enable filing of defaulted statutory documents within a stipulated period, while reserving the RoC's statutory powers to proceed against the company or its directors for other violations.

Interim directions - status quo - reconciliation of securities ownership - opportunity of hearing - preservation of assets pending adjudication - digital signing and service of orders

Interim directions - status quo - reconciliation of securities ownership - opportunity of hearing - preservation of assets pending adjudication - Interim procedural directions to facilitate reconciliation of competing claims to securities and to preserve the assets pending further adjudication. - HELD THAT: - The Tribunal, without adjudicating the merits of competing ownership claims or examining the legality of the impugned directions, directed the parties to appear before NSE on the specified date and permitted appearance either physically or by video conference. It required NSE to facilitate and arrange a meeting and to reconcile/determine rights in respect of the securities based on available databases within one week thereafter. While reserving final determination, the Tribunal ordered maintenance of status quo until the next hearing, prohibiting any transfers as directed in the impugned orders and prohibiting the appellant from alienating the securities in question. These directions were framed as interim reliefs to preserve assets and to provide an opportunity for reconciliation and hearing rather than to decide ownership or the legality of prior orders. [Paras 7]

Parties to appear before NSE on June 24, 2020; NSE to facilitate and reconcile rights within one week; status quo maintained; matter listed for further hearing on July 03, 2020.

Digital signing and service of orders - opportunity of hearing - Validity and use of digitally signed copy of the order for compliance and service in light of inability to issue a certified signed copy during the pandemic. - HELD THAT: - Given constraints arising from the Covid-19 pandemic, the Tribunal recorded that it was not possible to physically sign or issue a certified copy of the order. The Tribunal directed that the order be digitally signed by the Presiding Officer on behalf of the bench and that parties are entitled to act on production of such digitally signed copy sent by fax and/or email. This procedural direction was given to ensure immediate operability and communication of the interim directions. [Paras 8]

Order to be digitally signed and parties may act on the digitally signed copy transmitted by fax and/or email.

Final Conclusion: The appeal was proceeded with on an interim basis: parties directed to meet before NSE for reconciliation and hearing arrangements, rights in securities to be reconciled within one week, status quo maintained pending further hearing on July 03, 2020; the order is to be digitally signed and treated as enforceable for compliance and service.

Maintainability of writ against summons under Section 50 of the Prevention of Money Laundering Act, 2002 - prematurity of challenge to statutory summons / show-cause process - entitlement to presence of legal practitioner during statutory questioning - judicial interference with investigation procedure including venue, timing and manner of questioning

Maintainability of writ against summons under Section 50 of the Prevention of Money Laundering Act, 2002 - prematurity of challenge to statutory summons / show-cause process - Writ under Article 226 challenging summons issued under Section 50(2) PMLA is not maintainable at the summons stage as no cause of action arises. - HELD THAT: - The Court followed the established principle that a mere summons or show-cause process ordinarily does not give rise to a cause of action warranting writ relief because it is premature to interfere before any final adverse order is passed. Reliance was placed on precedents treating challenges to analogous pre-adjudicatory processes as premature and on the proposition that a person summoned is bound to appear and answer truthfully, and that the possibility of future prosecution does not entitle one to evade statutory summons. The Court therefore rejected the petitioners' foundational contention that issuance of summons itself warranted writ intervention. [Paras 5, 9]

The writ petition challenging the summons under Section 50 was dismissed as not maintainable.

Entitlement to presence of legal practitioner during statutory questioning - judicial precedents on accompaniment during interrogation - There is no legal entitlement to have a legal practitioner present during questioning under Section 50; courts have refused to permit such accompaniment at the summons/interrogation stage. - HELD THAT: - The Court applied binding and persuasive authorities which have held that allowing companions or lawyers during statutory interrogation would frustrate the object of enquiries under revenue and enforcement statutes. The Poolpandi decision was cited for the principle that the purpose of such enquiries may require dissociation of the person from persons who could encourage non-cooperation, and that constitutional rights should not be expanded to frustrate investigative processes. On this basis the Court rejected the petitioners' prayer for presence of a legal practitioner during questioning. [Paras 5, 7]

Prayer for presence of legal practitioner during questioning under Section 50 was refused.

Judicial interference with investigation procedure including venue, timing and manner of questioning - limits of court supervision over investigation - The Court will not monitor or regulate the investigation process - including venue, timings, questions or manner of questioning - unless the investigation transgresses statutory law. - HELD THAT: - The Court reiterated that it is not the function of courts to supervise routine investigative choices made by enforcement agencies so long as they do not transgress legal limits. Authorities were cited where High Court interference at the summons stage or by fixing interrogation modalities was deprecated. Applying that principle, the Court declined to grant directions limiting questioning hours, prescribing venue, or supervising the manner of interrogation sought by the petitioners. [Paras 8, 9]

Requests to prescribe procedure (timing, venue, manner) for questioning were declined and the court refrained from intervening in the investigative process.

Final Conclusion: The writ petition was dismissed: challenges to the summons under Section 50(2) PMLA were held premature and not a basis for writ relief; requests for presence of counsel and court-imposed limits or monitoring of interrogation were refused, the Court declining to interfere with routine investigative procedure absent transgression of law.

Quantified - written communication quantifying duty - eligibility under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 for cases under enquiry, investigation or audit - duty liability admitted by the person during enquiry, investigation or audit - reconsideration after opportunity of hearing

Quantified - written communication quantifying duty - duty liability admitted by the person during enquiry, investigation or audit - Admission by the proprietor on 28.06.2019 amounted to quantification of the service tax liability for the purposes of eligibility under the Scheme. - HELD THAT: - The Court accepted that the proprietor's statement recorded on 28.06.2019 contained a clear admission that the service tax liability for the period from 2014-15 to 2017-18 upto 30.06.2017 was Rs. 1,26,54,725.00 and that the admission preceded the cut off date of 30.06.2019. The Court applied the Board's clarification (para 10(g) of circular dated 27.08.2019) and earlier High Court precedents which interpret the word "quantified" in the Scheme as meaning a "written communication" of the amount of duty payable, expressly including a duty liability admitted by the person during enquiry, investigation or audit. On that basis the Court held that such an admission is sufficient for the tax dues to be regarded as quantified for determining eligibility under the enquiry/investigation/audit category of the Scheme, and need not await adjudication or a departmental crystallisation of demand. [Paras 17, 18, 19]

The proprietor's admission on 28.06.2019 constituted quantification of tax dues for the purposes of the Scheme and made the petitioner eligible to file the declaration under the enquiry/investigation/audit category.

Eligibility under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 for cases under enquiry, investigation or audit - reconsideration after opportunity of hearing - Whether the respondents were justified in rejecting the petitioner's declaration on the ground that quantification was not made final on or before 30.06.2019, and the consequent relief. - HELD THAT: - Having held that the admission recorded on 28.06.2019 amounted to quantification within the meaning of the Scheme, the Court concluded that the respondents' rejection of the declaration solely on the ground that quantification of tax dues was not made final by 30.06.2019 was not justified. The Court noted that the letter of 06.09.2019 merely reiterated the earlier admission and that the object's examination for eligibility is distinct from the investigation into alleged tax evasion. In view of these findings and consistent with the reasoning in earlier decisions, the impugned order rejecting the declaration was set aside. The matter was remitted to respondent Nos.2 and 3 to treat the petitioner's declaration as valid under the investigation/enquiry/audit category, to grant due opportunity of hearing and to grant consequential reliefs within six weeks. [Paras 21, 22]

Impugned order dated 12.02.2020 is quashed; declaration to be reconsidered as valid under the Scheme after affording opportunity of hearing and consequential reliefs to be granted within six weeks.

Final Conclusion: The petition is allowed: the proprietor's written admission on 28.06.2019 qualified as "quantified" duty for eligibility under the Scheme; the rejection dated 12.02.2020 is quashed and the matter is remanded for reconsideration of the declaration after hearing, to be completed within six weeks; no order as to costs.

Entitlement to C forms for inter-state purchase of High Speed Diesel - registration under the Central Sales Tax Act for purchasing dealers - concessional rate of tax against Declaration in 'C' forms - applicability of the CST Act post-GST regime for specified six commodities - right of dealers to purchase at concessional rate despite amendments restricting 'goods' to six commodities - judicially enforceable in rem operation of High Court decisions affecting dealer class - online issuance / downloading of 'C' forms by Assessing Authorities

Entitlement to C forms for inter-state purchase of High Speed Diesel - concessional rate of tax against Declaration in 'C' forms - judicially enforceable in rem operation of High Court decisions affecting dealer class - Petitioner is entitled to obtain 'C' Forms and claim concessional rate for inter state purchases of High Speed Diesel and the benefit of the High Court's ruling in Ramco Cements is to be applied to all similarly placed dealers. - HELD THAT: - The Court applied and followed the ratio in the Division Bench judgment in the Ramco Cements batch (which held that purchasing dealers retain rights under the CST Act to obtain registration and claim concessional rate by Declaration in 'C' forms for the specified commodities) and observed that such decisions operate in rem and are applicable to all dealers seeking benefit. The Division Bench reasoning (paras.13, 14, 15, 39, 40, 41) establishes that the amendments narrowing the definition of 'goods' did not extinguish a purchasing dealer's right to claim concessional rate under Section 8(3)(b) and that registration under Section 7 can be maintained by purchasing dealers. Until any stay or reversal of that decision, Assessing Authorities must apply its rationale to pending assessments and permit dealers to avail the benefit. The petitioner represented inability to download 'C' forms due to departmental blockage; the Court directed implementation of the Ramco Cements ruling in the petitioner's case and allowed the request for 'C' forms as consequential relief. [Paras 14, 15, 39, 40, 41]

Writ petition allowed; petitioner entitled to include High Speed Diesel in its registration certificate and to the issuance/use of 'C' Forms to claim concessional rate, with departmental compliance directed forthwith.

Registration under the Central Sales Tax Act for purchasing dealers - online issuance / downloading of 'C' forms by Assessing Authorities - Assessing Authorities in Tamil Nadu are directed to permit online downloading/issuance of 'C' Forms and to include High Speed Diesel as a commodity in the petitioner's registration certificate within the directed timeframe. - HELD THAT: - Relying on the Division Bench direction (para.41) that the State and revenue authorities must not restrict use of 'C' Forms and must permit online downloading, the Court ordered that the petitioner's registration be amended to include High Speed Diesel and that the department take the necessary action within four weeks from uploading of the order. The Court noted the State may seek further remedy by special leave, but as of now the Ramco Cements ruling is final and binding on the Assessing Authorities in the State; consequential administrative steps were therefore mandated. [Paras 5, 41]

Department directed to permit online downloading/issuance of 'C' Forms and to amend registration to include High Speed Diesel within four weeks; no costs.

Final Conclusion: The writ petition is allowed by applying and following the Division Bench decision in the Ramco Cements batch: the petitioner is entitled to inclusion of High Speed Diesel in its CST registration and to obtain 'C' Forms to purchase at concessional rate; the State authorities are directed to permit online issuance/download of 'C' Forms and to implement the remedial steps within four weeks.

Entitlement to 'C' forms - concessional rate of tax for inter state purchases - registration under the Central Sales Tax Act by purchasing dealers - applicability of in rem judicial decisions to all dealers - operability of CST Act for specified six commodities post GST

Entitlement to 'C' forms - concessional rate of tax for inter state purchases - The petitioner is entitled to issuance of 'C' Forms and the concessional rate for inter state purchase of High Speed Diesel Oil. - HELD THAT: - The Court followed the ratio of earlier decisions, including the Division Bench affirming Ramco Cements, holding that dealers purchasing High Speed Diesel from other States are entitled to the concessional rate by producing 'C' Forms. Until any such precedent is stayed or reversed, assessing authorities must extend the benefit to dealers seeking it in accordance with law. The petitioner therefore is entitled to obtain 'C' Forms and the consequential concessional treatment. [Paras 3, 4, 6]

Writ petition allowed; petitioner entitled to issuance of 'C' Forms to claim concessional tax on inter state purchase of High Speed Diesel Oil.

Registration under the Central Sales Tax Act by purchasing dealers - operability of CST Act for specified six commodities post GST - applicability of in rem judicial decisions to all dealers - Assessing authorities must permit inclusion of High Speed Diesel Oil in the petitioner's CST registration certificate and apply the in rem decisions statewide, including facilitating online downloading of 'C' Forms. - HELD THAT: - Relying on the Division Bench reasoning that registration under the CST Act is not confined to sellers alone and that rights of purchasing dealers to claim concessional rate continue (notwithstanding amendment restricting 'goods' to six commodities), the Court directed the department to carry out the inclusion of the commodity in the registration certificate and to permit issuance and online access of 'C' Forms. The Court emphasised that decisions rendered in rem apply to all dealers and cannot be limited by assessing authorities to parties to the litigation. [Paras 4, 6]

Directed inclusion of High Speed Diesel Oil in registration certificate within four weeks and directed department to permit issuance and online downloading of 'C' Forms; departmental restriction quashed as inconsistent with binding precedent.

Final Conclusion: Following and applying the Division Bench and Single Judge precedents (including Ramco Cements), the writ petition is allowed: the petitioner is entitled to have High Speed Diesel Oil included in its CST registration and to obtain 'C' Forms for concessional inter state purchases; the department is directed to implement this forthwith and enable online access.

Carry forward of unabsorbed sub-contractor payments - vesting of property on registration - change in status of business v. change in ownership - invocation of adjustment of excess input tax under Section 46(2A) - obligation to surrender registration and obtain fresh registration on change of status - maintainability of appeals arising from revision under Section 64

Carry forward of unabsorbed sub-contractor payments - substrate evidence for deduction under Section 15(5)(b) - Whether the petitioner had substantiated by documentary evidence its claim for deduction of excess unabsorbed sub-contractor payments. - HELD THAT: - The adjudicating authority and the first appellate authority found that the petitioner had placed on record agreements, purchase orders and certificates/declarations from sub-contractors and held that the petitioner complied with the requirements of Section 15(5)(b) of the Act and was entitled to benefit to the extent of amounts supported by such certificates/declarations. The tribunal ignored these findings and the material on record and held that the claim was not substantiated. The High Court held that the tribunal's contrary finding was perverse and impermissible, and further observed that the question of substantiation was not a matter properly for the tribunal in the context in which the appeal was brought. Accordingly, the tribunal's finding that the petitioner had not substantiated its claim was set aside. [Paras 10]

The petitioner had substantiated its claim for deduction of unabsorbed sub-contractor payments and the tribunal's finding to the contrary is set aside.

Vesting of property on registration - change in status of business v. change in ownership - invocation of adjustment of excess input tax under Section 46(2A) - obligation to surrender registration and obtain fresh registration on change of status - liability on transfer of business under Section 46(1) - Whether the petitioner, after conversion from a partnership firm to a joint stock company by operation of law, is entitled to carry forward unabsorbed sub-contractor payments accumulated during its status as a partnership firm. - HELD THAT: - The Court noted Section 575 of the Companies Act, 1956, which provides that property vested in a company at registration passes to the company, and observed that conversion under Part IX of the Companies Act effected vesting of assets, liabilities and the ongoing business in the company by operation of law. The Court recorded that although the petitioner obtained fresh registration under the Act as required by Section 28(2)(b), there was no change in ownership of the business-only a change in status. The tribunal erred in invoking Section 46(2-A), which concerns transfer of excess input tax on transfer of business as a whole, a provision not applicable to the present fact situation. Instead, the scheme of the Act and the effect of statutory vesting meant that the petitioner could avail carry forward of the payments made to sub-contractors accumulated prior to registration as a company. For these reasons the tribunal's conclusion that the company could not carry forward the unabsorbed sub-contractor payments was held to be legally incorrect. [Paras 11, 13]

Conversion of the partnership into the company effected vesting of assets and liabilities in the company and the petitioner is entitled to carry forward the unabsorbed sub-contractor payments; the tribunal's contrary conclusion is quashed.

Final Conclusion: The impugned order of the Karnataka Appellate Tribunal dated 18.12.2015 is quashed: the petitioner had substantiated its claim for deduction of unabsorbed sub-contractor payments and, on conversion from partnership to company by operation of law (with statutory vesting of assets and liabilities), is entitled to carry forward those unabsorbed payments for the tax period June 2008 to March 2009; the petitioner is not liable to pay tax under Section 39(1) on that account.

Refund of sales tax on raw materials - eligibility based on date of establishment - construction of government orders granting incentives to new industrial units - binding effect of certificates issued by Department of Industries and Commerce - administrative clarification and estoppel by subsequent retraction

Refund of sales tax on raw materials - construction of government orders granting incentives to new industrial units - eligibility based on date of establishment - Respondent's entitlement to refund of sales tax on raw materials under the sequence of Government Orders dated 30.06.1969, 04.04.1975, 12.01.1977 and related notifications. - HELD THAT: - The tribunal and this Court examined the Government Orders collectively and applied the Government Order dated 12.01.1977 which limited the concession to a percentage of fixed assets but did not restrict eligibility by an absolute monetary investment ceiling. The Court found that the 04.04.1975 discontinuation did not operate to deprive units entitled under earlier orders where relevant conditions were met, and that the tribunal correctly restored the Assessing Authority's finding that the respondent qualified for refund for the relevant period. The Court held that the tribunal had considered the applicability of the Government Orders and did not err in law in reaching its conclusion. [Paras 9, 10]

Respondent entitled to refund of sales tax on raw materials in accordance with applicable Government Orders; order of Assessing Authority restored.

Binding effect of certificates issued by Department of Industries and Commerce - administrative clarification and estoppel by subsequent retraction - Validity and effect of the Department of Industries and Commerce certificate and prior administrative clarification in determining eligibility for the concession. - HELD THAT: - The Department issued a new unit certificate stating the respondent commenced production on 14.04.1977 and notified entitlement under the Government Order dated 12.01.1977; the Law/Finance Department had earlier furnished a clarification in favour of the respondent. The Court held that the tribunal rightly treated those administrative acts and the certificate as material and binding for the purpose of the claim, and that subsequent governmental retraction did not negate the entitlement as found by the Assessing Authority and affirmed by the tribunal. [Paras 3, 10]

Certificates and prior administrative clarification sustained as operative for determining respondent's entitlement; revisional order setting aside refund set aside.

Final Conclusion: Revision petition dismissed; the tribunal's decision allowing refund and restoring the Assessing Authority's order is upheld.

Willful suppression of turnover - penalty under Section 12-A(1-A) of the Karnataka Sales Tax Act, 1957 - bona fide non-disclosure based on prevailing position of law - perverse finding - applicability of tax to agreements entered into prior to commencement of construction - quashing of penalty and interest

Perverse finding - applicability of tax to agreements entered into prior to commencement of construction - The finding that the petitioner had entered into sale agreements with prospective buyers prior to commencement of construction and thereby suppressed turnover was perverse and unsupported by material on record. - HELD THAT: - The tribunal's conclusion that agreements had been executed before commencement of work was recorded without identification of particulars or supporting material. The High Court examined the record and found no evidence before the adjudicating authority or the first appellate authority to establish that the petitioner had entered into agreements prior to commencement of construction. In consequence, the factual finding recorded by the tribunal was held to be perverse and could not sustain liability predicated on such a conclusion. [Paras 6]

The finding of pre-commencement agreements and consequential suppression of turnover is quashed as perverse for want of material.

Willful suppression of turnover - bona fide non-disclosure based on prevailing position of law - penalty under Section 12-A(1-A) of the Karnataka Sales Tax Act, 1957 - quashing of penalty and interest - Whether penal provisions under Section 12-A(1-A) could be invoked where non-disclosure of turnover was bona fide in view of the unsettled position of law. - HELD THAT: - The Court noted that, for the relevant assessment years, the legal position regarding taxability of such agreements was not settled. In such circumstances the failure to disclose turnover was held to be bona fide. Relying on the principle that penal provisions cannot be invoked where there is a bona fide belief grounded in the then-prevailing law, the Court concluded that invoking penalty and interest under Section 12-A(1-A) was not justified. The tribunal had not considered this question of law; on the material before the Court the penal demands could not stand. [Paras 6]

Penalty and interest levied under Section 12-A(1-A) are quashed because the non-disclosure was bona fide in view of the unsettled law.

Final Conclusion: Revision allowed; the impugned orders of the tribunal and first appellate authority levying penalty and interest under Section 12-A(1-A) are quashed as the finding of pre-commencement agreements is perverse and the non-disclosure was bona fide in view of the prevailing uncertainty in law.

Levy of higher rate of tax for interstate sales for non-submission of C-Forms - credit for C-Forms in assessment - revision of assessment on submission of additional documents - application of PVAT Act and CST Act to interstate sales and C-Form credits

Levy of higher rate of tax for interstate sales for non-submission of C-Forms - credit for C-Forms in assessment - revision of assessment on submission of additional documents - Amendment of the assessment and revision of tax demand after submission of additional C-Forms. - HELD THAT: - The petitioner had been assessed on the ground that C-Form declarations were not filed and higher rates of tax were levied. At the hearing counsel for the petitioner placed additional C-Forms before the Assessing Officer. The Assessing Officer prepared a memorandum of calculation dated 05.10.2020 reflecting credit where C-Forms were submitted and revised the tax demand accordingly. The High Court accepted the revised computation and amended the impugned assessment order in accordance with the memorandum dated 05.10.2020, directing payment of the balance demand.

Assessment amended on the basis of the memorandum dated 05.10.2020 giving credit for submitted C-Forms; petitioner directed to pay the balance demand within four weeks of uploading of the order.

Final Conclusion: Writ petition disposed by amending the impugned assessment in accordance with the revised computation dated 05.10.2020; petitioner to pay the balance demand within four weeks; connected petitions closed without costs.

Limitation for statutory appeals - condonation and restoration of time-barred appeals - remittal as a condition for restoration of appeal - effect of unsuccessful constitutional challenge on limitation - adjudication on merits after restoration

Condonation and restoration of time-barred appeals - remittal as a condition for restoration of appeal - limitation for statutory appeals - Whether the appeals rejected as barred by limitation could be restored and on what conditions. - HELD THAT: - The Court noted that assessment orders were passed despite the petitioner having earlier challenged the vires of the statutory provision before the High Court and that the challenge ultimately failed in the Supreme Court. The petitioner did not challenge the assessment orders within the statutory 30-day period following the final judicial determination and attributed the delay to the conduct of the Advocate on Record. Having considered the explanation and the circumstances, the Court exercised its discretion to set aside the order rejecting the appeals as time-barred and directed restoration of the appeals on file of the appellate authority, subject to a specific condition. The petitioner was required to remit an additional 25% of the disputed tax in addition to the 25% already remitted; upon proof of such remittance the appeals are to be restored and adjudicated on merits in accordance with law. [Paras 5, 6]

Order dated 11.09.2020 is set aside; appeals shall be restored upon remittance of a further 25% of the disputed tax within three weeks, and thereafter adjudicated on merits.

Final Conclusion: Writ petitions disposed by setting aside the appellate order rejecting appeals as time-barred; appeals to be restored on proof of remittance of the specified additional amount and to be adjudicated on merits; no costs.

Extension of limitation periods - time for making arbitral award under Section 29A of the Arbitration and Conciliation Act, 1996 - extension of time for completion of statement of claim and defence under Section 23(4) of the Arbitration and Conciliation Act, 1996 - pre-institution mediation period under Section 12A of the Commercial Courts Act, 2015 - service of notices and pleadings by electronic means - validity period of negotiable instruments as prescribed by the Reserve Bank of India

Extension of limitation periods - All periods of limitation under the Arbitration and Conciliation Act, 1996 are extended with effect from 15-3-2020 until further orders. - HELD THAT: - The Court recorded its earlier orders in Suo Moto Writ Petition (C) No. 3/2020 dated 23-3-2020 and 6-5-2020, directing that periods of limitation prescribed under the Arbitration and Conciliation Act, 1996 be extended w.e.f. 15-3-2020 till further orders. The Court continued and gave effect to that direction in the present proceedings, addressing prayers for extension where limitation would expire during the COVID-19 lockdown period or where time to perform acts would expire during the lockdown. [Paras 3]

Periods of limitation under the Arbitration and Conciliation Act, 1996 are extended w.e.f. 15-3-2020 until further orders.

Time for making arbitral award under Section 29A of the Arbitration and Conciliation Act, 1996 - extension of time for completion of statement of claim and defence under Section 23(4) of the Arbitration and Conciliation Act, 1996 - The orders extending limitation shall apply to the time limits fixed under Section 29A and Section 23(4) of the Arbitration and Conciliation Act, 1996. - HELD THAT: - The Attorney General sought a modification to cover time-limits which are not strictly 'limitation' periods but are statutory times for performing certain acts. The Court observed that Section 29A fixes a time for making an arbitral award and Section 23(4) prescribes six months for completion of statement of claim and defence; accordingly the Court directed that the previously issued extension orders apply to these time limits as well, thereby suspending the running of those prescribed times during the notified period. [Paras 5]

Time limits under Section 29A and Section 23(4) of the Arbitration and Conciliation Act, 1996 are covered by the extension orders.

Pre-institution mediation period under Section 12A of the Commercial Courts Act, 2015 - The prescribed time for completing compulsory pre-institution mediation under Section 12A of the Commercial Courts Act, 2015 stands extended by an exclusion equal to the period of lockdown plus 45 days thereafter, subject to the qualification stated by the Court. - HELD THAT: - The Court recognised that Section 12A prescribes time for completion of compulsory pre-litigation mediation and settlement and held that the time is liable to be extended because of lockdown constraints. It directed that the period to be excluded shall be the period of lockdown plus 45 days after lifting of lockdown; if that composite period has already expired, no further exclusion would apply. [Paras 7]

Time prescribed under Section 12A is extended by excluding the period of lockdown plus 45 days thereafter, with no further exclusion if that period has already expired.

Service of notices and pleadings by electronic means - Service of notices, summons and exchange of pleadings/documents may be effected by e-mail, fax and commonly used instant messaging services, provided that service by instant messaging is accompanied by simultaneous e-mail service on the same date. - HELD THAT: - Recognising practical impossibility of physical service during lockdown, the Court directed that service requirements in legal proceedings may be satisfied by electronic means including e-mail, fax and commonly used messaging apps. To ensure reliability and record, where service is effected by instant messaging services (e.g., WhatsApp, Telegram, Signal), the Court mandated simultaneous service by e-mail on the same date. [Paras 8]

Electronic means including e-mail, fax and instant messaging may be used for service, but service by instant messaging must be accompanied by simultaneous e-mail service.

Validity period of negotiable instruments as prescribed by the Reserve Bank of India - The Court declined to extend or interfere with the period of validity of cheques as prescribed by the Reserve Bank of India, leaving any modification to the RBI's discretion. - HELD THAT: - The petitioners sought extension of the period of validity of cheques. The Court noted that the validity period is not statutorily prescribed but set by the Reserve Bank of India under the Banking Regulation Act, 1949. Given the centrality of the RBI-prescribed period to banking operations, the Court refrained from altering it and observed that the Reserve Bank of India may, in its discretion, alter such period if it deems fit. [Paras 9, 10]

No judicial extension of the RBI-prescribed validity period of negotiable instruments; any change remains within RBI's discretion.

Final Conclusion: The Court extended limitation periods under the Arbitration and Conciliation Act w.e.f. 15-3-2020 until further orders, directed that statutory time-limits under Sections 29A and 23(4) of that Act and the pre-institution mediation period under Section 12A of the Commercial Courts Act be treated as extended (with the Section 12A exclusion limited to lockdown plus 45 days), authorised service of process by specified electronic means subject to simultaneous e-mail where instant messaging is used, and declined to alter the RBI-prescribed validity period of cheques, leaving any change to the Reserve Bank of India.