TaxTMI Updates e-Newsletter
Jan 10,2024

Anticipatory bail - conditions under Section 438(2) Cr.P.C. - surrender and personal bond for release on bail - co-operation with investigation - investigation into alleged misuse of GST login

Anticipatory bail - surrender and personal bond for release on bail - conditions under Section 438(2) Cr.P.C. - Grant of anticipatory bail to the petitioner in connection with Crime No. 300 of 2023 subject to specified conditions. - HELD THAT: - The Court, having heard counsel and perused the record, allowed the criminal petition under Section 438 Cr.P.C. and granted anticipatory bail in the interest of investigation. The petitioner is directed to surrender before the Station House Officer concerned on or before the date fixed by the Court and, upon surrender, to be released on bail on executing a personal bond with two sureties. The release is made subject to the petitioner appearing before the Station House Officer daily at 10:00 a.m. for two weeks and thereafter as and when required, and to abiding by the other conditions contained in Section 438(2) Cr.P.C., including cooperation with the Investigating Officer. These conditions form the determinative terms on which the anticipatory bail is granted.

Criminal petition allowed and anticipatory bail granted subject to surrender, personal bond with sureties, periodic attendance for investigation and compliance with Section 438(2) Cr.P.C.

Investigation into alleged misuse of GST login - co-operation with investigation - Allegation that the petitioner received GST login credentials is not established on the face of the complaint or the Section 161 statement and is left to investigation. - HELD THAT: - The Court observed that neither the complaint nor the statement under Section 161 Cr.P.C. records that the password or other GST login details were informed to the petitioner. The factual contention regarding transmission of credentials is therefore a matter to be examined during the ongoing investigation. In view of these investigative lacunae, the Court considered it appropriate to grant anticipatory bail while directing the petitioner to cooperate with the Investigating Officer.

Question whether the petitioner was furnished with GST login credentials is not finally adjudicated and remains subject to investigation; anticipatory bail granted with direction to cooperate.

Final Conclusion: The criminal petition under Section 438 Cr.P.C. is allowed: anticipatory bail is granted on surrender and execution of personal bond with sureties, subject to periodic attendance for investigation, cooperation with the Investigating Officer and compliance with the conditions of Section 438(2) Cr.P.C.; factual disputes about transfer of GST credentials are left to investigation.

Maintainability of writ petition in presence of statutory appeal - statutory appeal as alternative remedy - pre-deposit for preferring statutory appeal - crediting of pre-deposit to appeal - directions to file appeal within time notwithstanding earlier filing of writ

Maintainability of writ petition in presence of statutory appeal - statutory appeal as alternative remedy - Whether the High Court should entertain the writ petition or decline adjudication when a statutory appeal lies against the impugned order. - HELD THAT: - The court declined to entertain the writ petition on merits because the impugned order is subject to a statutory appeal before the Appellate Deputy Commissioner (ST). In such circumstances the existence of the statutory appellate remedy led the court to refrain from adjudicating the substantive challenge in writ jurisdiction, reserving the petitioner to pursue the prescribed appeal mechanism. [Paras 4]

Writ petition not entertained on merits in view of availability of statutory appeal; petitioner permitted to pursue the appellate remedy.

Pre-deposit for preferring statutory appeal - crediting of pre-deposit to appeal - directions to file appeal within time notwithstanding earlier filing of writ - Directions regarding the pre-deposit already made by the petitioner and the procedure to regularise the appeal filing. - HELD THAT: - The court noted that the petitioner had made the prescribed 10% pre-deposit after filing the writ petition, but that the amount had not been credited to the appeal. Rather than deciding the merits, the court disposed of the writ by granting the petitioner leave to file the statutory appeal within ten days from receipt of the order, on the condition that the 10% pre-deposit already made by the petitioner shall be credited to that appeal. This order regularises the pre-deposit and provides a limited procedural direction to enable prosecution of the statutory remedy. [Paras 4]

Petitioner granted leave to file the statutory appeal within ten days and the 10% pre-deposit made shall be credited to the appeal.

Final Conclusion: Writ petition disposed of without adjudication on merits because a statutory appeal is available; petitioner allowed to file the statutory appeal within ten days from receipt of this order and the pre-deposit already made (10%) shall be credited to that appeal.

Input tax credit - denial of input tax credit under Section 16(4) - GSTR-1 and GSTR-3B filing - audi alteram partem - remand for fresh consideration

Input tax credit - denial of input tax credit under Section 16(4) - GSTR-1 and GSTR-3B filing - audi alteram partem - remand for fresh consideration - Legality of rejecting the petitioner's claim of input tax credit solely because certain suppliers had not filed GSTR-1 by the due date, without affording the petitioner an opportunity of hearing. - HELD THAT: - The Court found that the assessing authority denied the petitioner's claim of input tax credit on the sole ground that certain suppliers had not filed GSTR-1 by the due date, and passed the impugned order without affording the petitioner an opportunity to be heard. Relying on the reasoning in Diya Agencies (as applied in a recent decision of this Court), the Court held that mere non-reflection of tax in Form GSTR-2A or non-filing by suppliers is not a sufficient ground to preclude the assessee from establishing a bonafide claim. The matter was remitted to the assessing officer for fresh consideration: the petitioner is to be given a hearing and an opportunity to place all evidence supporting the ITC claim; the assessing officer must examine the evidence and, if satisfied that the claim is bonafide and genuine, allow the input tax credit and pass a fresh order in accordance with law.

Impugned assessment order (Ext. P2) set aside; matter remitted to the assessing officer for fresh consideration after affording the petitioner a hearing and opportunity to produce evidence, with directions to appear on the specified date.

Final Conclusion: Writ petition allowed; the assessment order denying input tax credit is set aside and the matter is remitted to the assessing authority for fresh adjudication after affording the petitioner an opportunity to be heard and to produce evidence in support of the ITC claim.

Transitional input tax credit - repeal and saving clause - jurisdiction to reopen/transit-period proceedings - requirement of a valid show cause notice - principles of natural justice - necessity of an adjudication order before summary recovery - refund/re-credit of illegally debited electronic credit ledger

Transitional input tax credit - repeal and saving clause - jurisdiction to reopen/transit-period proceedings - Validity of initiation of proceedings under the JGST Act challenging input tax credit transited from the JVAT regime - HELD THAT: - The Court held that the challenge to input tax credit transited from the pre GST regime could not be validly proceeded with by treating it merely as a fresh JGST demand in disregard of the statute governing repeal and savings. Relying on the saving provision in Section 174(2)(e) of the JGST Act as explained by this Court in Usha Martin Ltd., the repeal did not create a vacuum for past inchoate transactions and legal proceedings instituted, continued or enforceable in respect of pre existing liabilities must be treated as if the earlier Acts were not repealed. On that basis the GST authorities were incorrect in assuming jurisdiction to initiate proceedings under the JGST Act to contend that the ITC transited from the JVAT regime was inadmissible under the JVAT Act, and the consequent exercise was not sustainable in the manner adopted by the respondents.

Proceedings initiated under the JGST Act to disallow the ITC transited from the JVAT regime in the manner adopted by the respondents are not sustainable; the Court accepted the petitioner's challenge to the jurisdictional basis of such proceedings.

Requirement of a valid show cause notice - principles of natural justice - Legality of issuance of FORM GST DRC-01 as a 'Summary of Show Cause Notice' without requisite particulars - HELD THAT: - The Court found that the impugned FORM GST DRC-01 was a mere 'summary' and lacked essential ingredients of a proper show cause notice such as specification of date, time, venue and precise statutory provisions/grounds, and thus failed to afford the petitioner the opportunity required by law to respond. Following this Court's earlier decisions, an adjudication process initiated on the basis of such a deficient summary notice is void ab initio because it violates the principles of natural justice; a summary notice cannot be treated as a substitute for a detailed show cause notice where mandatory particulars are absent.

FORM GST DRC-01 dated 21.07.2018, being a summary without mandatory particulars, is void and the proceedings founded on it are quashed.

Necessity of an adjudication order before summary recovery - principles of natural justice - refund/re-credit of illegally debited electronic credit ledger - Validity of FORM GST DRC-07 (summary of order) issued without any adjudication order and the legality of debit from the petitioner's electronic credit ledger - HELD THAT: - The Court noted the admitted position in the respondents' affidavits that no adjudication order was ever passed; nevertheless a FORM GST DRC-07 was issued and an amount was suo moto debited from the petitioner's electronic credit ledger. Issuance of a summary order without passing an adjudication order and without affording hearing violates section 75(4) and the principles of natural justice. Consequently, the debit was illegal and the petitioner was entitled to recovery/credit. The Court therefore directed refund/re credit with statutory interest, while leaving open the respondents' right to reinitiate proceedings lawfully if so advised.

FORM GST DRC-07 dated 23.08.2018 and the summary order issued without any adjudication are quashed; the amount illegally debited must be refunded or re credited to the petitioner's electronic credit ledger with statutory interest.

Final Conclusion: Writ petition allowed. The impugned summary show cause notice (Form GST DRC-01) and summary order (Form GST DRC-07) are quashed for want of a valid show cause notice and for absence of any adjudication, and the amount illegally debited from the petitioner's electronic credit ledger is to be refunded or re credited with statutory interest; the respondents remain at liberty to reinitiate proceedings lawfully if permitted by law.

Extension of time for payment of tax demand - payment of interest for delayed payment of GST - exercise of writ jurisdiction to grant interim time for compliance - liberty to initiate recovery proceedings on default

Extension of time for payment of tax demand - exercise of writ jurisdiction to grant interim time for compliance - Whether the petitioner should be permitted further time and an instalment schedule to pay the interest demanded for delayed GST payment. - HELD THAT: - The Court noted that the respondent issued a sudden notice demanding interest for non-payment of GST for the period 2017-2018 to 2021-2022 and that the petitioner had paid only a part of the demanded amount. Considering that the two-day period originally fixed for payment was insufficient in the circumstances and having regard to the partial payment already made, the Court exercised its writ jurisdiction to grant a limited extension for compliance. The Court fixed a three-month period and directed payment by specified instalments, while making clear that failure to pay as directed would permit the respondent to commence recovery proceedings. The order balances the need for prompt tax recovery with the petitioner's practical difficulty in making a lump-sum payment on short notice. [Paras 7, 8, 9]

Petitioner granted three months' time to pay the balance interest in specified instalments; failure to pay on due dates entitles respondent to initiate recovery proceedings.

Final Conclusion: Writ petition disposed by permitting the petitioner three months' time to pay the balance interest demanded for the years 2017-2018 to 2021-2022 in specified instalments, with liberty to the respondent to initiate recovery proceedings on default; no costs.

Bail is rule and jail is exception - Arnesh Kumar directions regarding arrest and disclosure of grounds - Non-tampering of evidence where official devices and data are seized - Grant of bail subject to conditions to secure attendance and protect prosecution case - Offence under section 132 of the Central Goods and Services Tax Act and arrest under section 69

Bail is rule and jail is exception - Non-tampering of evidence where official devices and data are seized - Grant of bail subject to conditions to secure attendance and protect prosecution case - Whether the accused should be released on bail despite arrest for offences alleged under the CGST Act - HELD THAT: - The Court found that the accused had been in custody since 12/12/2023, had cooperated with the investigating agency, surrendered his official laptop, bank data and phone which were seized by panchanama, and his statement was recorded while in judicial custody. The prosecution's apprehensions regarding tampering and absconding were negatived by (a) the seizure of the accused's devices and data, (b) the recorded cooperation, and (c) the absence of any allegation of non-cooperation in the record. The Court applied the principle that bail is the general rule and detention the exception and held that the ends of justice did not require continued incarceration for the purposes of investigation or recovery of tax where seized material is in custody. The Court further observed that appropriate and stringent conditions could adequately protect the prosecution's case and secure the accused's attendance, and that breach of conditions would permit an application for cancellation of bail. [Paras 8, 9, 10]

Accused released on bail subject to stringent conditions safeguarding attendance and preventing tampering with evidence.

Arnesh Kumar directions regarding arrest and disclosure of grounds - Offence under section 132 of the Central Goods and Services Tax Act and arrest under section 69 - Whether the prosecution has sufficiently disclosed the specific charges/ingredients of the offence as required by law - HELD THAT: - The Court noted that the arrest memo and charges referred broadly to clauses of section 132 and punishment provisions but observed that the prosecution had not demonstrated the specific ingredients or the accused's particular role to meet the requirements highlighted in Arnesh Kumar. The Court recorded that investigation must unfold the modus operandi and intention of the accused in light of the charges and that actual charges ought to be communicated with clarity. This lack of specific articulation weighed against continued detention in the circumstances. [Paras 8]

Prosecution required to disclose the actual charges and the particulars of the accused's alleged role; lack of such disclosure contributed to the grant of bail.

Final Conclusion: The bail application is allowed: the accused is enlarged on bail on furnishing the prescribed security and subject to enumerated conditions (including residence proof, reporting obligations, prohibition on tampering or influencing witnesses, attendance at the complainant's office, and prior permission before leaving the jurisdiction), breach of which will invite cancellation of bail.

Deduction under Section 80IA(4) - Developer versus works contractor - Explanation to sub section 13 of Section 80IA - exclusion of works contracts - Concurrent findings of fact - Scope of infrastructure facility

Deduction under Section 80IA(4) - Developer versus works contractor - Scope of infrastructure facility - Concurrent findings of fact - Whether the assessee acted as a developer of infrastructure facilities (and hence was eligible for deduction under Section 80IA(4)) or was merely a works contractor. - HELD THAT: - The Tribunal and the Commissioner (Appeals) made concurrent factual findings after analysing the tender documents and contractual terms (design responsibility, mobilisation of funds and materials, obligation to provide supervisory staff, site facilities, testing laboratory, indemnity and security deposit, liquidated damages, defect liability and other obligations) that the assessee undertook the project as a developer and assumed the relevant risks and responsibilities attendant on development. Those findings established that the assessee did not merely perform civil construction as a contractor but executed the project in the capacity of a developer and thereby satisfied the predicate for claiming deduction under Section 80IA(4). The High Court noted these concurrent findings of fact and held that no substantial question of law arises to interfere with the conclusions recorded by the lower fora. [Paras 3, 4, 11]

Concurrent factual findings that the assessee was a developer and entitled to deduction under Section 80IA(4) are upheld; no substantial question of law warrants interference.

Explanation to sub section 13 of Section 80IA - exclusion of works contracts - Developer versus works contractor - Whether the Explanation to sub section 13 of Section 80IA, which denies deduction to enterprises executing works contracts, applied to the assessee's case. - HELD THAT: - The Tribunal examined the Explanation (inserted with retrospective effect) which excludes businesses that are 'in the nature of a works contract' from deduction under Section 80IA(4). Applying the contractual terms and tender conditions, the Tribunal found that the assessee did not fall within the exclusion because it had undertaken design, financial mobilisation, risk of defects, security obligations and other developer like responsibilities. On that factual basis the Tribunal held that the Explanation did not apply. The High Court accepted the concurrent conclusion and recorded that no substantial question of law arises to re open the factual determination that the Explanation is not attracted. [Paras 3, 11]

Explanation to sub section 13 does not apply as the assessee was found to be a developer; the exclusion for works contracts is not attracted on the facts.

Final Conclusion: The appeal is dismissed. The High Court upheld the concurrent factual findings of the Tribunal and Commissioner (Appeals) that the assessee acted as a developer of infrastructure facilities and was thus entitled to the deduction under Section 80IA(4); no substantial question of law arises for interference.

Amortisation of expenditure in case of amalgamation or demerger - appointed date versus operative/effective date of amalgamation - commencement year for deduction under section 35DD - Vivad se Vishwas Scheme - treatment of MAT credit and option to carry forward MAT credit

Amortisation of expenditure in case of amalgamation or demerger - commencement year for deduction under section 35DD - appointed date versus operative/effective date of amalgamation - Allowability of merger/amalgamation expenses under section 35DD and the year from which amortisation begins - HELD THAT: - Section 35DD mandates deduction of expenditure incurred wholly and exclusively for amalgamation in five equal instalments beginning with the previous year in which the amalgamation or demerger takes place. The Tribunal held that there is no provision permitting claim of 2/5th in a single year; accordingly the claim for 2/5th of the merger expenses in A.Y. 2007-08 was not permissible and the disallowance of the excess (1/5th) was sustained. However, on the additional legal plea the Tribunal examined whether the first year of claim should be the year of the appointed date or the year in which court approvals rendered the amalgamation operative. The Scheme showed an appointed date of 01.04.2005 but became operative only upon approvals received in the financial year relevant to A.Y. 2007-08. Reading section 35DD, the Tribunal concluded that the deduction must begin in the previous year in which the amalgamation "takes place" (i.e., becomes operative), and on these facts A.Y. 2007-08 is the first year of claim. The alternate plea to treat A.Y. 2007-08 as the commencement year for amortisation was therefore allowed. [Paras 12, 13]

Claim of 2/5th in A.Y. 2007-08 is not permitted and the excess disallowance is sustained; nevertheless A.Y. 2007-08 is to be treated as the first year for claiming amortisation under section 35DD and the additional ground is allowed.

Vivad se Vishwas Scheme - treatment of MAT credit and option to carry forward MAT credit - Entitlement to carry forward and set off MAT credit in A.Y. 2007-08 under the Vivad se Vishwas Scheme - HELD THAT: - The assessee asserted having paid tax under section 115JB for A.Y. 2006-07 and having opted under the Vivad se Vishwas Scheme to include the tax amount related to MAT-credit reduction within disputed tax so as to carry forward the MAT credit (the option in the Scheme and CBDT clarification). The Tribunal found that allowance of the MAT credit depends on documentary evidence of the option exercised under VSVS and its correct computation as per the Scheme. As the lower authorities had not examined the factual record and substantiation, the Tribunal remitted the matter to the Assessing Officer for verification of the evidence submitted under VSVS, giving the assessee an opportunity of being heard, and directed that the claim be allowed in accordance with law if substantiated. [Paras 14, 18]

Issue remitted to the Assessing Officer for verification of documentary evidence and adjudication of the MAT credit claim under the Vivad se Vishwas Scheme; allow if substantiated in accordance with law.

Final Conclusion: The appeal is partly allowed: the claim for 2/5th of merger expenses in A.Y. 2007-08 is not permissible and the excess disallowance is sustained, but A.Y. 2007-08 is held to be the first year for amortisation under section 35DD; the claim for MAT credit under the Vivad se Vishwas Scheme is remitted to the Assessing Officer for verification and decision in accordance with law.

Eligibility for exemption under section 10AA - condition of not being formed by transfer to a new business of machinery or plant previously used (sub section (4)(iii) of section 10AA) - materiality threshold of existing plant and machinery for denial of 10AA (comparison with 50% benchmark) - precedential weight of the assessing appellate order in closely similar earlier assessment year

Eligibility for exemption under section 10AA - condition of not being formed by transfer to a new business of machinery or plant previously used (sub section (4)(iii) of section 10AA) - materiality threshold of existing plant and machinery for denial of 10AA (comparison with 50% benchmark) - precedential weight of the assessing appellate order in closely similar earlier assessment year - Claim of exemption under section 10AA for the Chennai and Coimbatore SEZ units was allowable despite an alleged transfer of used plant and machinery. - HELD THAT: - The Tribunal upheld the view of the Ld. CIT(A) who had adopted the reasoning from his earlier order for Assessment Year 2013-14. The Assessing Officer's conclusion that assets of value were transferred from a pre existing business was not supported by specific findings as to how and which assets were actually used in the SEZ units; the assets were shown to have been acquired as part of a running business (slump sale) and located elsewhere. The appellate authority further held that even if some existing computers were used for the SEZ units, their proportionate value vis a vis plant and machinery in the SEZ units was below the threshold (less than 50%), a finding not controverted by the Revenue. On these determinative facts and on the precedent of the closely similar earlier appellate order, the exemption under section 10AA was held to be available to the assessee for the SEZ units. [Paras 8, 12]

The disallowance of the section 10AA claim was set aside and the Revenue's appeals dismissed.

Final Conclusion: Both appeals by the Revenue for Assessment Years 2014-15 and 2016-17 challenging denial of section 10AA benefits to the Chennai and Coimbatore SEZ units are dismissed; the assessee's eligibility for the exemption is upheld on the grounds stated by the appellate authority and on the finding that any existing plant and machinery used was not of material proportion and was not shown to be used in the SEZ units in a manner sufficient to deny the benefit.

Excess stock as business income - assessment as unexplained investment under section 69B - application of section 115BBE - precedential effect of jurisdictional High Court decision

Excess stock as business income - assessment as unexplained investment under section 69B - application of section 115BBE - precedential effect of jurisdictional High Court decision - Excess stock of gold and silver found during survey is assessable as business income and not as unexplained investment under section 69B; section 115BBE is not attracted to that excess stock. - HELD THAT: - The Tribunal found that the assessee carried on a single business (jewellery and pawn broking), the excess stock was mixed with regular trading stock and was not separately identifiable, and the assessee offered the differential as income from business. Coordinate decisions of the Tribunal were examined which held that where excess stock is part and parcel of regular business stock and is backed by corresponding entries (credit to capital / books), it is assessable as business income. The jurisdictional High Court decision in M/s SVS Oil Mills was held distinguishable on facts where there was no corresponding credit in books. On this basis the Tribunal held that the excess stock arose from normal business operations and could not be treated as unexplained investment liable to taxation under the higher rates of section 115BBE. [Paras 9, 11, 15]

Set aside the orders of the Assessing Officer and the CIT(A) insofar as they applied section 115BBE by treating the excess stock as unexplained investment; appeal allowed on this point.

Final Conclusion: The Tribunal allowed the appeal of the assessee for AY 2019-20 by holding that the excess stock found during survey is taxable as business income and not as unexplained investment under section 69B, and accordingly section 115BBE does not apply to that excess stock; the orders of the AO and CIT(A) are set aside to that extent.

Exemption u/ 11-Cancellation of registration u/s 12A - Eligibility for interim relief - petitioner has made a case for grant of interim stay and for further examination of the matter by the court [2023 (10) TMI 39 - DELHI HIGH COURT] as made out a case that the registration could not have been cancelled for years earlier than the period commencing from 28.05.2021. In the ordinary course, the registration granted to the petitioner on 28.05.2021, would have extended till Assessment Year (AY) 2006-07.

HELD THAT:- In view of the fact that the order impugned is interim in nature, we are not inclined to interfere with the impugned judgment passed by the High Court. Hence, the Special Leave

Petition is dismissed.

Limitation for revisional order under section 263(2) - Requirement to pass order versus dispatch/service for limitation - Revisional jurisdiction under section 263 - order erroneous and prejudicial to revenue - Failure of Assessing Officer to make enquiry or investigation - HELD THAT:- As reported by petitioner(s)- assessee(s) that these petitions could be disposed of as the assessees have settled their matter under Vivad Se Vishwas Scheme, 2020 and therefore, the issues raised in the Special Leave Petitions no longer survive for consideration.

The Special Leave Petitions are therefore disposed of as having become infructuous in the aforesaid terms.

Power under Section 263 - erroneous and prejudicial to the interests of revenue - minimal enquiry requirement - inadequacy of enquiry is distinct from absence of enquiry - where two views are possible Commissioner cannot substitute his view

Power under Section 263 - erroneous and prejudicial to the interests of revenue - minimal enquiry requirement - inadequacy of enquiry is distinct from absence of enquiry - Validity of Principal Commissioner's exercise of revisionary jurisdiction under Section 263 in cancelling the assessment and directing fresh assessment. - HELD THAT: - The Court examined whether the PCIT, before invoking Section 263, recorded reasons and carried out at least a minimal enquiry to conclude that the Assessing Officer's order was erroneous and prejudicial to revenue. The assessment order dated 07.12.2018 showed that the Assessing Officer conducted enquiries: electronic and subsequent manual scrutiny, issued notices under Section 142(1) with a detailed questionnaire, received and considered replies, and held hearings. The PCIT issued a show cause notice and the assessee filed written submissions and appeared through representatives, but the revision order did not refer to or deal with the contents of those replies nor record any discussion of them. Consistent with Supreme Court and coordinate bench precedents cited, Section 263 requires the Commissioner to apply his mind, record reasons and, where necessary, make a minimal enquiry; mere disagreement with a view taken by the Assessing Officer or an inadequate (as opposed to absent) enquiry does not justify invoking revisionary powers. Because the PCIT failed to record reasons and did not demonstrate any minimal enquiry or engagement with the assessee's replies, the order under Section 263 was vitiated. [Paras 5, 6, 7, 8]

Order under Section 263 cancelling the assessment was unsustainable; the Tribunal rightly set aside the revision order.

Final Conclusion: The appeal is dismissed. The Tribunal's order allowing the assessee's appeal and setting aside the order passed under Section 263 is affirmed as the PCIT failed to conduct or record any minimal enquiry or reasons to show the assessment was erroneous and prejudicial to revenue.

Revisional jurisdiction under Section 263 - Erroneous and prejudicial to the interests of revenue - Difference of opinion between Assessing Officer and Commissioner - Deduction under Section 80IA(4)(ii) - eligible undertaking including broadband and internet services - Initial assessment year and continuity of claim under Section 80IA(5) per CBDT Circular No.1/2016 - Migration of licence not creating a new undertaking

Revisional jurisdiction under Section 263 - Erroneous and prejudicial to the interests of revenue - Difference of opinion between Assessing Officer and Commissioner - Whether the Principal Commissioner (PCIT) rightly invoked revisional jurisdiction under Section 263 by setting aside the assessment as 'erroneous and prejudicial' where the Assessing Officer had allowed deduction under Section 80IA. - HELD THAT: - The Court applied settled principles that two conditions must be satisfied to invoke Section 263: the order of the Assessing Officer must be erroneous and such error must be prejudicial to the interests of the revenue. A mere difference of opinion between the Commissioner and the Assessing Officer, or adoption by the Assessing Officer of a course permissible in law, does not render the order 'erroneous' for the purposes of Section 263. The PCIT must record clear logical reasons showing why the assessment is unsustainable in law; mere expression of disagreement or a change of view in a later year cannot, by itself, justify revision. In the present case the PCIT did not demonstrate that the view taken by the Assessing Officer was legally unsustainable; he effectively substituted his own view without establishing that the assessment was erroneous in law or that the error prejudiced revenue. Accordingly the exercise of revisional power was held to be improper. [Paras 4, 5, 9, 10]

PCIT wrongly invoked jurisdiction under Section 263; revision could not be sustained merely on a differing view.

Deduction under Section 80IA(4)(ii) - eligible undertaking including broadband and internet services - Initial assessment year and continuity of claim - CBDT Circular No.1/2016 interpretation of initial assessment year - Migration of licence not creating a new undertaking - Whether the assessee was entitled to claim deduction under Section 80IA(4)(ii) for AY 2010-11 given prior years' allowance and migration from IP VPN to NLD ILD licence. - HELD THAT: - The Court found that the assessee had consistently been allowed the deduction in preceding years and that CBDT Circular No.1/2016 supports that the 'initial assessment year' is the year first opted by the assessee for claiming the deduction, with the claim required to be continuous within prescribed limits. The material on record (including DoT communication permitting migration while continuing prior services) did not demonstrate that migration from IP VPN to NLD ILD created a new and distinct 'undertaking' outside the scope of Section 80IA(4)(ii). Reliance was placed on authorities holding that mere addition or expansion of services does not take an undertaking out of the provision. The PCIT did not point to any finding that the Assessing Officer's view lacked legal sustainability. Consequently the denial of benefit in the fourth year was unjustified. [Paras 6, 7, 8, 10]

Assessee entitled to deduction under Section 80IA(4)(ii) for AY 2010-11; migration of licence did not create a new undertaking and did not disentitle the assessee from the benefit.

Final Conclusion: The Tribunal's order setting aside the PCIT's revision under Section 263 is upheld; the revisional order was unfounded and the assessee's entitlement to deduction under Section 80IA(4)(ii) for AY 2010-11 is maintained. The revenue's appeal is dismissed.

Validity of proceedings initiated under Section 148A(d) - extended period of limitation under Section 149(1)(a) - requirement that cash deposits exceed Rs.50,00,000 to invoke extended limitation - issuance of notice under Section 148 of the Act - treatment of cash deposits as unexplained money under Section 69A read with Section 115BBE - strict construction of taxing statutes

Validity of proceedings initiated under Section 148A(d) - extended period of limitation under Section 149(1)(a) - requirement that cash deposits exceed Rs.50,00,000 to invoke extended limitation - strict construction of taxing statutes - Whether proceedings under Section 148A and consequent notice under Section 148 were barred by limitation once it was established that the cash deposits were Rs.33,62,000/- (i.e. less than Rs.50,00,000/-). - HELD THAT: - The Court found on the admitted facts that the notice under Section 148A was issued on the basis that cash deposits were Rs.59,75,000/-, but the petitioner demonstrated and the record showed the deposits to be Rs.33,62,000/-. Once the material before the authority established the cash deposits to be below Rs.50,00,000/-, the criteria for invoking the extended period under Section 149(1)(a) was not satisfied. The authority had accepted the lesser figure during proceedings and therefore, having regard to the statutory threshold and the need for strict construction of taxing statutes, the issuing of notice under Section 148 after three years was barred by limitation. The Court concluded that the order under Section 148A(d) was rendered without proper application of mind and in a mechanical manner, and consequently the continuation of proceedings under Section 148 could not be sustained. [Paras 21, 22, 23, 25, 26]

Proceedings under Section 148A and the consequential notice under Section 148 are barred by limitation and are quashed.

Treatment of cash deposits as unexplained money under Section 69A read with Section 115BBE - issuance of notice under Section 148 of the Act - validity of proceedings initiated under Section 148A(d) - Whether the assessing authority could, during pendency of proceedings initiated under Section 148A/148, proceed to treat the established cash deposits (Rs.33,62,000/-) as unexplained money under Section 69A read with Section 115BBE and continue assessment. - HELD THAT: - The Court observed that the assessing authority, having accepted the figure of Rs.33,62,000/- as the cash deposits, issued a show cause under Section 69A read with Section 115BBE. However, because the initiating notice under Section 148A was itself barred by limitation once the deposits were found to be below the Rs.50,00,000/- threshold, no further action under other provisions of the Act could lawfully be taken pursuant to that defective initiation. The Court held that converting or continuing the exercise of jurisdiction into proceedings under Section 69A/Section 115BBE, after the foundational notice was invalid for being time-barred, was impermissible. [Paras 21, 22, 23, 25, 26]

The show cause and subsequent assessment action under Section 69A read with Section 115BBE, taken pursuant to the time-barred Section 148A/148 proceedings, are impermissible and are quashed.

Final Conclusion: Writ petition allowed; the show cause notice dated 17.03.2022 under Section 148A(b) and all consequential proceedings and the assessment order for assessment year 2015-16 are quashed and set aside as barred by limitation.

Scope of inquiry under Section 148A - limited to existence of information suggesting escaped income - preliminary hearing under Section 148A(b) - obligation to supply information (not foundational material) - no duty to furnish foundational material/evidence at the Section 148A stage - Explanation 1(i) to Section 148 - risk-management/Insight Portal information as valid 'information' - challenge to order under Section 148A(d) on natural justice grounds - supply of material

Preliminary hearing under Section 148A(b) - obligation to supply information (not foundational material) - no duty to furnish foundational material/evidence at the Section 148A stage - challenge to order under Section 148A(d) on natural justice grounds - supply of material - Whether the Assessing Officer was obliged to supply the foundational material/evidence on which the prima facie opinion was formed before passing order under Section 148A(d). - HELD THAT: - The Court held that Section 148A(b) mandates supply of the information which suggests that income chargeable to tax has escaped assessment but does not obligate the Assessing Officer to furnish the underlying foundational material or evidence on which the Assessing Officer formed a prima facie opinion. The plain language of Section 148A was given primacy; taxing statutes must be interpreted by their text and no further duty to supply adverse material at the 148A stage can be read into the provision. The Court reasoned that Section 148A contemplates a limited inquiry to communicate the existence of information and to give the assessee an opportunity to reply, while detailed adjudication and examination of the correctness of the information is to follow in proceedings under Section 148/147 where departmental remedies and appeals are available. [Paras 24, 25, 26, 31, 32]

The Assessing Officer was not required to supply the foundational material/evidence at the Section 148A stage; absence of such supply did not vitiate the order under Section 148A(d).

Explanation 1(i) to Section 148 - risk-management/Insight Portal information as valid 'information' - scope of inquiry under Section 148A - limited to existence of information suggesting escaped income - Whether information flagged in the Insight Portal and covered by Explanation 1(i) to Section 148 constitutes valid information to proceed under Section 148A and issue notice under Section 148. - HELD THAT: - The Court found that the information supplied with the show-cause notice, including the Insight Portal flagging under the risk-management strategy, falls within Explanation 1(i) to Section 148 and thus constitutes 'information' which permits the Assessing Officer to proceed under Section 148A and thereafter issue a notice under Section 148. The Court observed that Section 148A's object is to prevent casual reopening and to ensure the assessee is informed of the reasons and information suggesting escaped income; where the show-cause notice discloses such information (as the Insight Portal did in this case), the statutory prerequisites are satisfied and the Assessing Officer may pass an order under Section 148A(d) and issue notice under Section 148. [Paras 29, 30]

Insight Portal information covered by Explanation 1(i) to Section 148 sufficed as 'information' to sustain the Section 148A(d) order and consequential notice under Section 148.

Final Conclusion: Writ petitions dismissed. The impugned order under Section 148A(d) and the consequential notice under Section 148 are held valid; petitioners remain at liberty to raise all defences in the reassessment proceedings.

Royalty within the meaning of Article 12(3) of the Indo Singapore Double Taxation Avoidance Agreement - transfer of copyright - interpretation of copyright transfer for classification of payments as royalty - precedential application of Engineering Analysis Centre of Excellence Pvt. Ltd. v. CIT

Royalty within the meaning of Article 12(3) of the Indo Singapore Double Taxation Avoidance Agreement - transfer of copyright - precedential application of Engineering Analysis Centre of Excellence Pvt. Ltd. v. CIT - Consideration received for off the shelf sale/supply of software is not taxable as royalty under Article 12(3) of the India Singapore DTAA where copyright in the software was not transferred. - HELD THAT: - The Tribunal found as a fact that the assessee had not transferred the copyright in the subject software. Applying the legal principle enunciated by the Supreme Court in Engineering Analysis Centre of Excellence Pvt. Ltd. v. CIT, the Tribunal correctly concluded that payments for the off the shelf sale/supply, absent transfer of copyright, do not constitute 'royalty' under Article 12(3) of the India Singapore DTAA. The High Court, on review of the findings of fact and the controlling Supreme Court authority, found no error in the Tribunal's application of law to those facts and declined to interfere. [Paras 5, 6]

Tribunal's finding that the amount is not royalty is upheld and the addition is not sustained.

Final Conclusion: Appeal dismissed; no substantial question of law arises and the Tribunal's order holding the software consideration not to be royalty under Article 12(3) of the India Singapore DTAA is upheld.

Summary order. The appeals relating to the above Assessment Years are closed for the present in view of ongoing Corporate Insolvency Resolution Process affecting the respondents; liberty granted to the appellant/revenue to apply for revival as per law when clarity is obtained; the pending application for condonation of delay in re-filing (CM APPL. 60497/2023 in ITA 646/2023) stands closed.

Comparability in transfer pricing - functional dissimilarity - exclusion of comparables - appellate interference on findings of fact - substantial question of law

Comparability in transfer pricing - functional dissimilarity - exclusion of comparables - appellate interference on findings of fact - The Tribunal's and CIT(A)'s exclusion of four proposed comparables on the ground of functional dissimilarity was upheld and not interfered with by the High Court. - HELD THAT: - The Tribunal sustained the CIT(A)'s factual findings that each of the four companies proffered as comparables - Accentia, Eclerx, Mold-Tek and TSR - were functionally dissimilar to the assessee. The recorded factual findings were that Accentia underwent an amalgamation in the relevant year, Eclerx and Mold-Tek operated in KPO activities with dedicated teams and automation tools (providing higher-end services unlike the assessee's low-end services), and TSR had merged and derived significant revenue from specialised software leading to unusually high margins. Those findings were returned in the impugned order at the specified paragraphs and were treated as findings of fact. The revenue did not demonstrate that those findings were perverse or legally unsustainable; no substantial question of law was shown to arise. In such circumstances, the Court declined to reappraise or overturn the Tribunal's factual conclusions on comparability and exclusion of the said comparables. [Paras 9, 12, 15, 17]

The Tribunal's factual conclusion upholding exclusion of the four comparables on grounds of functional dissimilarity is sustained and not interfered with.

Final Conclusion: The appeal is dismissed; the Tribunal's order sustaining the CIT(A)'s exclusion of the four comparables for AY 2007-08 is maintained as no substantial question of law arises.

Limitation under Section 275(1)(c) - Penalty under Section 271D and 271E - Initiation of penalty proceedings by Assessing Officer versus Competent Authority - Prohibition on receipt of cash under Section 269SS - Addition under Sections 69C and 68

Limitation under Section 275(1)(c) - Penalty under Section 271D and 271E - Initiation of penalty proceedings by Assessing Officer versus Competent Authority - Whether the penalty order was time-barred under Section 275(1)(c) despite issuance of a subsequent notice by a superior officer, and whether initiation of penalty proceedings by the Assessing Officer could affect the limitation period. - HELD THAT: - The Court held that the limitation prescribed by Section 275(1)(c) must be calculated having regard to the financial year in which the proceedings in the course of which action for imposition of penalty was initiated are completed or the six months period from the end of the month in which such action was initiated, whichever expires later. In the present facts the financial year in which the quantum proceedings concluded ended on 31.03.2011 and the six months period from the end of the month in which action for imposition of penalty was initiated expired on 30.06.2011. The penalty order was passed on 30.12.2011, which was beyond the later date (30.06.2011) and therefore time-barred. The argument that a notice issued by a superior officer on 13.06.2011 (or issuance of notice by the ACIT) could extend the limitation so as to validate the penalty order was rejected. The Court, following its earlier decision, observed that allowing limitation to be tied to the date of such notice would permit the revenue to extend limitation beyond the statutory period at its discretion; the notice could not operate to extend the period prescribed under Section 275(1)(c). For these reasons the Tribunal's and CIT(A)'s conclusion that the penalty order was barred by limitation was upheld. [Paras 12, 13, 15, 16, 17]

Penalty order held time barred; impugned order upholding limitation sustained and appeal dismissed.

Final Conclusion: The Tribunal's order holding the penalty order time barred under Section 275(1)(c) is affirmed; no substantial question of law arises and the appeal is dismissed.

Condonation of delay - Binding effect of Supreme Court precedent - Attribution of profits to Permanent Establishment - Follow-on application of coordinate bench decision - Substantial question of law

Condonation of delay - Application for condonation of delay in re-filing the appeal - HELD THAT: - The Court exercised its discretion to condone the delay of 220 days in re-filing the appeal so that the matter could be decided on its merits. The order records the Court's inclination to decide the appeal on merits and grants condonation accordingly. [Paras 3]

Delay of 220 days in re-filing the appeal is condoned and the application is disposed of.

Attribution of profits to Permanent Establishment - Binding effect of Supreme Court precedent - Follow-on application of coordinate bench decision - Substantial question of law - Whether the Tribunal correctly directed adoption of a 15% attribution rate for the Permanent Establishment and whether any substantial question of law arises for the High Court's consideration - HELD THAT: - The Revenue conceded that the Supreme Court's decision in the group entity's case governs the merits. The Tribunal had followed its earlier decisions (for the earlier assessment years) in directing the Assessing Officer to adopt a 15% attribution of gross booking fees to the Permanent Establishment instead of the 75% attribution proposed by the DRP. A coordinate bench had sustained that approach in the related appeal and the Supreme Court dismissed the special leave petition, thereby affirming the High Court's position. In view of the binding higher court precedent and the Tribunal's consistent application of its earlier reasoning, the High Court held that no substantial question of law arises for its consideration and closed the appeal. [Paras 8, 9, 10]

Tribunal's direction to adopt 15% attribution stands; no substantial question of law arises and the appeals are closed.

Final Conclusion: Delay in re-filing the appeal is condoned and, applying the controlling Supreme Court and coordinate bench decisions, the Tribunal's adoption of a 15% attribution to the Permanent Establishment for AY 2015-16 is upheld; no substantial question of law is made out and the appeals are closed.

Prospective application of penal statute - retrospective application of penal statute - in rem forfeiture under Section 5 of the Benami Property Transactions Act, 1988 (2016 Amendment) - binding effect of Supreme Court precedent - pendency of review petition not a ground to depart from settled precedent

Prospective application of penal statute - in rem forfeiture under Section 5 of the Benami Property Transactions Act, 1988 (2016 Amendment) - binding effect of Supreme Court precedent - pendency of review petition not a ground to depart from settled precedent - Whether the provisions of Section 5 of the Benami Property Transactions Act as amended in 2016 can be applied retrospectively to transactions prior to the Amendment and whether the Tribunal's order setting aside adjudication based on the Supreme Court's decision in Union of India v. Ganapati Dealcom Pvt. Ltd. should be interfered with. - HELD THAT: - The High Court held that the Supreme Court's decision in Union of India v. Ganapati Dealcom Pvt. Ltd. - declaring the in rem forfeiture provision under Section 5 of the 2016 Amendment to be punitive and applicable only prospectively - continues to govern the field. Reliance on subsequent High Court and Supreme Court orders in related matters confirmed that those decisions are binding and that pendency of the Department's review petition against Ganapati Dealcom (Diary No. 34619 of 2022) does not justify departing from the settled position. The Court observed that no stay was granted in the review proceedings and that High Courts should decide matters in accordance with existing Supreme Court precedent; mere pendency of a review petition is not a ground to assail interlocutory or final orders based on that precedent. The Tribunal's reliance on Ganapati Dealcom to allow the appeals and set aside the Adjudicating Authority's orders (insofar as they relate to transactions before the 2016 Amendment) was therefore upheld. The Court, however, left the appellants free to act according to any future outcome of the review petition before the Supreme Court.

The Tribunal's order setting aside the adjudication insofar as it relied on Section 5 of the 2016 Amendment in respect of transactions prior to the Amendment is not interfered with; the appeals are disposed of while leaving liberty to the appellants to act on the outcome of the pending review petition before the Supreme Court.

Final Conclusion: The Civil Miscellaneous Appeals are dismissed by following the Supreme Court's decision in Union of India v. Ganapati Dealcom Pvt. Ltd.; Section 5 of the 2016 Amendment is to be applied prospectively and the appellants retain liberty to proceed further depending on the outcome of their pending review petition before the Supreme Court.

Appeal against assessment order of bill of entry - computation of limitation period and exclusion due to COVID 19 suspension of limitation - classification of goods under tariff headings - specific heading preferred to residuary heading - role of product composition and evidence in tariff classification - relevance (or non determinative character) of regulatory description/NOC to tariff classification - remand for fresh consideration on classification and compliance with import policy conditions

Appeal against assessment order of bill of entry - computation of limitation period and exclusion due to COVID 19 suspension of limitation - Validity of rejection of the appeal by Commissioner (Appeals) as time barred - HELD THAT: - The Tribunal found that the Commissioner (Appeals) rejected the appeal on the ground of more than 90 days delay from the date of the Bills of Entry (February 2020). The appellant filed the appeal on 21.09.2020. Applying the Hon'ble Supreme Court's order in Suo Motu Writ Petition (C) No.3/2020 which excluded the period from 15.03.2020 to 28.02.2022 for calculation of limitation, the Tribunal held that the appeal fell within the extended limitation and that the Commissioner (Appeals) erred in rejecting the appeal as time barred. The rejection on limitation grounds was therefore unsustainable and answered in favour of the appellant. [Paras 26]

Rejection of the appeal as time barred set aside; appeal held within time.

Classification of goods under tariff headings - specific heading preferred to residuary heading - role of product composition and evidence in tariff classification - relevance (or non determinative character) of regulatory description/NOC to tariff classification - remand for fresh consideration on classification and compliance with import policy conditions - Whether the imported goods are classifiable under CTH 1504 20 20 (Fish lipid oil) or under CTH 2106 90 99 (food preparations not elsewhere specified) and related consideration of EXIM Policy compliance and refund eligibility - HELD THAT: - The Tribunal observed that classification cannot be determined solely because the FSSAI NOC or Bill of Entry describes the goods as 'Food Supplement'. The determinative question is whether the imported capsules consist of fish lipid oil alone, whether other ingredients are present, and whether the goods are chemically modified - matters requiring evidentiary examination. Although the appellant contended that subsequent identical imports were accepted by the Department under CTH 1504 20 20 and produced a lab report, the appellant had not placed sufficient evidence before the Commissioner (Appeals) at the time. The Tribunal noted that Chapter 15 specifically lists 'Fish Lipid Oil' while Chapter 21 contains a residuary entry; but factual proof of composition and compliance with EXIM Policy condition No.5 (lab certificates) is necessary before classification and consequent duty/refund determination. For these reasons the Tribunal did not decide classification on merits but remanded the matter to the Commissioner (Appeals) to afford the appellant opportunity to produce documents/evidence, to examine the lab report and EXIM Policy compliance, and then determine classification and eligibility for refund. [Paras 28, 29, 30]

Matter remanded to Commissioner (Appeals) for fresh adjudication on classification and on compliance with EXIM Policy/lab report; impugned order set aside and appeals allowed to this extent.

Final Conclusion: The Commissioner (Appeals)'s order is set aside: the appeal was held within time; the question of tariff classification and attendant refund/EXIM Policy compliance is remanded to the Commissioner (Appeals) for fresh consideration after affording the appellant opportunity to produce evidence (including laboratory reports) and for a reasoned determination.

Obligations of Customs Broker under Regulation 10(d) and 10(m) of CBLR, 2018 - Natural justice - right to cross-examination in disciplinary inquiry proceedings - Revocation of Customs Broker licence and forfeiture of security deposit - Duty to advise client and to act with speed and efficiency - Standard for proving contravention in licensing inquiry

Obligations of Customs Broker under Regulation 10(d) and 10(m) of CBLR, 2018 - Duty to advise client and to act with speed and efficiency - Standard for proving contravention in licensing inquiry - Findings of contravention of Regulations 10(d) and 10(m) against the appellant Customs Broker and validity of revocation of licence, forfeiture of security deposit and penalty thereon. - HELD THAT: - The Tribunal examined whether the appellant CB had failed to advise the importer or to discharge duties with speed and efficiency as alleged. The record shows the bill of entry was filed on the basis of invoice and packing list supplied by the importer and that details such as brand, model and battery ratings were declared where available. There is no evidence that the CB deliberately mis declared particulars or had been supplied the omitted particulars and wilfully withheld them. The CIU investigation and hold on the container occurred before the importer furnished the additional documents, and some required certificates were later submitted by the CB and found proper. On the material before the licensing authority there was no proof that the CB caused delay or inefficiency in handling the transaction. In the absence of such evidence, the charges of breach of Regulation 10(d) (failure to advise and notify authorities) and Regulation 10(m) (failure to discharge duties with speed and efficiency) were not established and the consequent punitive measures could not be sustained. [Paras 6, 7, 10]

Charges under Regulations 10(d) and 10(m) not proved; revocation of CB licence, forfeiture of security deposit and penalty set aside.

Natural justice - right to cross-examination in disciplinary inquiry proceedings - Standard for proving contravention in licensing inquiry - Whether denial of opportunity to cross examine persons whose statements were recorded amounted to violation of natural justice vitiating the inquiry and the impugned order. - HELD THAT: - The Tribunal found that the appellant had specifically requested cross examination of the importer and persons whose statements were recorded, but no reasons were given for refusing that request. The inquiry report declined cross examination and the Principal Commissioner upheld that denial without adequate justification. Reliance was placed on the High Court and Supreme Court precedents recognizing that where statements form the basis of adverse findings, denial of cross examination is a breach of natural justice and renders the order unsustainable. Given that the CB's defence relied upon the importer providing additional documents and explanations, the refusal to permit cross examination prevented the CB from effectively controverting the evidence relied upon and therefore the inquiry procedure did not comply with the requirements of Regulation 17(4) (as applied) and principles of natural justice. [Paras 8, 9]

Denial of cross examination was a breach of natural justice that vitiated the inquiry and the consequent order.

Final Conclusion: The Tribunal set aside the impugned order revoking the appellant's Customs Broker licence, forfeiting the security deposit and imposing penalty, holding that (i) the alleged contraventions of Regulations 10(d) and 10(m) were not proved on the record and (ii) denial of opportunity for cross examination rendered the inquiry procedurally unfair.

Penalty under Customs Broker Licensing Regulations - suspension of customs broker licence - vicarious liability for employees' acts - independent adjudication by different commissionerates - mitigation of penalty on account of prompt internal action

Independent adjudication by different commissionerates - vicarious liability for employees' acts - Whether the adjudication and penalty imposed by the Mumbai Commissionerate on account of misconduct of one employee precludes imposition of penalty by the Cochin Commissionerate for misconduct of a different employee on different grounds. - HELD THAT: - The Tribunal held that the two show cause notices arose from distinct facts, different employees and different offences committed in different jurisdictions; hence the Final Order of the Mumbai Commissionerate did not operate to completely exonerate the customs broker in respect of the separate proceedings initiated by the Cochin Commissionerate. The Mumbai adjudication acknowledged lack of wilful fraud by the broker but attributed liability to inadequate supervision; that conclusion and penalty in Mumbai therefore did not preclude Cochin from adjudicating an independent allegation concerning another employee. Consequently the Mumbai order has no controlling effect to negate the Cochin penalty proceedings.

The Mumbai order does not bar or wholly preclude imposition of penalty by the Cochin Commissionerate in respect of a different show cause notice.

Suspension of customs broker licence - penalty under Customs Broker Licensing Regulations - Whether the suspension of the customs broker's licence in the jurisdiction of the Cochin Commissionerate, which was imposed till completion of adjudication proceedings at Mumbai, should continue after the Mumbai proceedings were concluded. - HELD THAT: - The Tribunal noted that the impugned suspension in Cochin had been ordered only until completion of adjudication at the parent Mumbai Commissionerate. As the Mumbai adjudication was concluded and the licence before the parent Commissionerate was renewed up to 31.12.2027, the temporary suspension insofar as it operated within the Cochin jurisdiction could not be allowed to continue. On this basis, and having regard to the finalization of the parent adjudication and the licence renewal, the Tribunal set aside the suspension operative in the Cochin Commissionerate.

The suspension of the broker's licence in the Cochin jurisdiction (which was linked to the Mumbai adjudication) is set aside.

Penalty under Customs Broker Licensing Regulations - mitigation of penalty on account of prompt internal action - Appropriate quantum of penalty to be imposed by the Tribunal in respect of the breach found by the Cochin Commissionerate. - HELD THAT: - Although the Tribunal rejected the submission that the Mumbai order entirely absolved the broker, it took into account the appellant's representations that remedial action had been taken against the erring employee and the fact that the parent adjudication had been concluded. In view of these considerations and the circumstances of the separate misconduct, the Tribunal exercised its discretion to moderate the monetary penalty imposed by the Commissioner under the Regulations, reducing the penalty amount originally imposed by the Cochin Commissionerate.

Penalty reduced and fixed by the Tribunal at Rs.25,000/-, appeal allowed partially.

Final Conclusion: The appeal is partially allowed: the Tribunal set aside the Cochin suspension that was contingent on the Mumbai adjudication (the parent adjudication having been concluded and the licence renewed) and, while holding that the Mumbai order does not fully exonerate the broker in respect of a separate Cochin proceeding, reduced the penalty to Rs.25,000/-.

Date for determination of rate of duty of export goods - Let export order under Section 51 as the operative date for rate determination - Interpretation of Section 16(1)(a) read with Sections 50 and 51 of the Customs Act, 1962 - Irrelevance of actual date of physical loading or sailing for rate determination

Date for determination of rate of duty of export goods - Let export order under Section 51 as the operative date for rate determination - Interpretation of Section 16(1)(a) read with Sections 50 and 51 of the Customs Act, 1962 - Irrelevance of actual date of physical loading or sailing for rate determination - The date relevant for determining the rate of duty for goods entered for export under Section 50 is the date on which the proper officer makes an order permitting clearance and loading under Section 51 (the "let export order"), not the later date of actual physical loading or sailing. - HELD THAT: - The Tribunal held that Section 16(1)(a), read with Sections 50 and 51, makes the date of the order permitting clearance and loading (the "let export order") the statutory date for determining the rate of duty on export goods entered under Section 50. Reliance by the Commissioner (Appeals) on Sections 18 and 19 was immaterial to rate determination. The Tribunal followed earlier High Court and Tribunal decisions which construed the "let export order" as an order under Section 51 and treated the subsequent physical loading/sailing date as irrelevant for fixing the applicable rate. Applying that legal principle to the facts, where the let export order was issued prior to the notification reducing duty, the earlier date governed and entitled the exporter to the benefit determined by that date. The Tribunal therefore found the Commissioner (Appeals) erred in applying the date of actual loading/sailing instead of the date of the let export order.

The view that the let export order date under Section 51 is the date for determination of the rate of duty is accepted; the date of actual loading/sailing is irrelevant for this purpose.

Final Conclusion: The impugned order is set aside and the Revenue's appeal is allowed, the Tribunal applying Section 16(1)(a) read with Sections 50 and 51 and holding the date of the let export order to be the relevant date for determination of the rate of duty.

Rejection of declared transaction value - comparative import data / contemporaneous imports - Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - transaction value of similar goods under Rule 5 of the Customs Valuation Rules - application of proviso to Rule 3 - adjustments for commercial and quantity levels - requirement of evidence/reasoned comparison for enhancement of value - condonation of delay for filing appeal beyond 30 days - preclusion of condonation by binding precedent (Singh Enterprises)

Rejection of declared transaction value - comparative import data / contemporaneous imports - Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - transaction value of similar goods under Rule 5 of the Customs Valuation Rules - application of proviso to Rule 3 - adjustments for commercial and quantity levels - requirement of evidence/reasoned comparison for enhancement of value - Whether the adjudicating authority could reject the declared transaction value and enhance value in absence of contemporaneous comparable import data and without reasoned evidence under the Customs Valuation Rules. - HELD THAT: - The adjudicating authority rejected the importer's declared values and invoked valuation rules, but did not produce contemporaneous comparable import data of other importers. The Commissioner (Appeals) found that the assessing officer failed to explain how comparisons were made or to adduce evidence to substantiate enhancement under Rule 5 read with Rule 3 adjustments; mere reference to higher assessed unit prices in other Bills of Entry, without documentary comparatives or reasoned application of commercial-level and quantity-level adjustments, does not justify rejecting declared transaction value. In absence of any evidence of contemporaneous imports in the record or in the grounds of appeal, invocation of Rule 4/Rule 5 or Rule 12 to reject declared values cannot be sustained. The appellate tribunal therefore dismissed Revenue's appeal and upheld the Commissioner (Appeals) order setting aside the value rejection. [Paras 3]

Rejection of declared value and enhancement in absence of contemporaneous comparable import data and reasoned evidence is unsustainable; Revenue appeal dismissed.

Condonation of delay for filing appeal beyond 30 days - preclusion of condonation by binding precedent (Singh Enterprises) - Whether the Commissioner (Appeals) could condone delay of more than 30 days in filing appeal by the importer. - HELD THAT: - The importer's appeal against rejection for delay was considered. Various explanations for delay were advanced, but the tribunal applied the binding ratio of the Apex Court in Singh Enterprises that delay beyond 30 days of the statutory period for filing appeal before the Commissioner (Appeals) cannot be condoned. On that authoritative basis, the tribunal declined to condone the delay and dismissed the appeal filed by the importer against rejection on limitation grounds. [Paras 4]

Appeal against rejection on the ground of delay dismissed; condonation beyond 30 days not permissible in view of binding precedent.

Final Conclusion: The Tribunal set aside the assessing authority's enhancement of declared import values for lack of contemporaneous comparable data and reasoned evidence, dismissing Revenue's appeal; separately, the importer's appeal against rejection on account of delay was dismissed as condonation beyond 30 days is barred by binding precedent.

Summary order. Special Leave Petitions dismissed; delay condoned; pending applications disposed of.

Maintainability of Special Leave Petition under Article 136 in presence of statutory appeal - Availability of statutory appeal under Section 62 of the Insolvency and Bankruptcy Code, 2016 - Bar of limitation and inadmissibility of Article 136 to circumvent statutory remedy - Dismissal for delay and on merits

Dismissal for delay and on merits - Delay in filing and re-filing the Special Leave Petitions were noted and formed a ground for dismissal. - HELD THAT: - The Court recorded a delay of twenty days in filing and one hundred and ninety-one days in re-filing the Special Leave Petitions. Having noted the delay, the Court dismissed the petitions on the ground of delay and also on merits. The order accordingly disposes of the petitions by reference to both delay and the substantive position.

Special Leave Petitions dismissed on the ground of delay as well as on merits.

Maintainability of Special Leave Petition under Article 136 in presence of statutory appeal - Availability of statutory appeal under Section 62 of the Insolvency and Bankruptcy Code, 2016 - Bar of limitation and inadmissibility of Article 136 to circumvent statutory remedy - Whether the SLP under Article 136 could be entertained when an appeal lay under Section 62 of the Insolvency and Bankruptcy Code, 2016, and whether limitation can be obviated by invoking Article 136. - HELD THAT: - The Court held that the impugned order of the National Company Law Appellate Tribunal dated 28 September 2022 was amenable to appeal under Section 62 of the Insolvency and Bankruptcy Code, 2016. In that situation, resort to Article 136 of the Constitution to seek to obviate the bar of limitation is not permissible. The Court declined to entertain the petition under Article 136 on that ground, observing that the bar of limitation cannot be obviated or circumvented by taking recourse to Article 136 when a statutory appeal is available. The petitioner was left free to pursue appropriate remedies in accordance with law.

SLP under Article 136 declined as maintainability is barred when a statutory appeal under Section 62 is available; limitation cannot be circumvented by Article 136.

Final Conclusion: The Special Leave Petitions were dismissed: (i) on the ground of delay in filing and re-filing, and (ii) on the ground that Article 136 could not be invoked to circumvent the availability of a statutory appeal under Section 62 of the Insolvency and Bankruptcy Code, 2016; petitioners may pursue remedies available in law.

Financial debt - disbursement against the consideration for time value of money - existence of disbursal as sine qua non for financial debt - verification / re-verification of admitted claims by the Resolution Professional - power of Resolution Professional to call for substantiation of claims - scope of Regulation 8/10/13 and Regulation 14(2) of the CIRP Regulations in relation to admission and revision of claims - jurisdiction of the Adjudicating Authority under Section 60(5) of the Code to decide claims

Financial debt - disbursement against the consideration for time value of money - existence of disbursal as sine qua non for financial debt - Whether the claim of the appellant constituted a financial debt owed by the corporate debtor - HELD THAT: - The Tribunal held that the appellant failed to prove the essential ingredient of disbursement against consideration for the time value of money, which the Supreme Court in Anuj Jain requires as an essential element of 'financial debt'. The Form C asserted an "Inter Company Loan given from time to time" and relied on a balance confirmation dated 02.05.2022 and a statement of outstanding balance, but there was no evidence of actual disbursement from the appellant to the corporate debtor's account. The balance sheet entries relied upon (Note 13 'Inter Corporate Deposit' and Note 14 'Other Financial Liabilities') did not demonstrate borrowings or the specific disbursal required to convert the asserted liability into a financial debt; other financial liabilities alone did not establish a financial debt within Section 5(8). On the appellant's own case and correspondence it was not shown that any inter-company loan was ever disbursed, and therefore the essential feature for treating the claim as a financial debt was missing. In view of the foregoing, the Adjudicating Authority's conclusion rejecting the claim on merits was held sustainable. [Paras 11, 15, 16, 17, 19]

The claim was not a proved financial debt; the Adjudicating Authority rightly rejected the appellant's claim on merits.

Verification / re-verification of admitted claims by the Resolution Professional - power of Resolution Professional to call for substantiation of claims - scope of Regulation 8/10/13 and Regulation 14(2) of the CIRP Regulations in relation to admission and revision of claims - jurisdiction of the Adjudicating Authority under Section 60(5) of the Code to decide claims - Whether the Resolution Professional could seek further documents and whether the Adjudicating Authority properly adjudicated the dispute over admission of the claim - HELD THAT: - The Tribunal noted that the Resolution Professional, in discharge of duties to preserve assets and maintain an updated list of claims, may request supporting documents and clarifications to substantiate claims during the CIRP; Regulation 10 permits calling for such evidence. Although the Bench did not enter into a final determination on the formal propriety of the RP's specific email as an exercise of power, it observed that the Adjudicating Authority has plenary jurisdiction under Section 60(5) of the Code to entertain and decide any claim made against a corporate debtor. The Adjudicating Authority exercised that jurisdiction, considered the materials and authorities (including Anuj Jain), and adjudicated the claim on merits. Given that the Adjudicating Authority decided the claim after hearing the parties and on the basis of the record, the Tribunal found no legal error in its exercise of jurisdiction or in upholding the RP's rejection of the claim. [Paras 12, 18, 19, 20]

The Resolution Professional was entitled to seek substantiating documents and the Adjudicating Authority properly adjudicated the claim under its jurisdiction; there was no error in upholding the rejection of the claim.

Final Conclusion: The appeal is dismissed. The Adjudicating Authority correctly found that the appellant failed to prove a financial debt (absence of disbursement against consideration for time value of money) and, exercising jurisdiction under Section 60(5), rightly upheld the Resolution Professional's rejection of the claim.

Pre-existing dispute - Section 9 proceedings under Insolvency and Bankruptcy Code, 2016 - notice of dispute requirement under Mobilox - default and debt for triggering insolvency process - commencement of corporate insolvency resolution process (CIRP) - jurisdiction to entertain petition

Pre-existing dispute - notice of dispute requirement under Mobilox - arbitration notice as afterthought - Existence of a pre-existing dispute which would bar initiation of Section 9 proceedings - HELD THAT: - The Tribunal examined whether there was a plausible, pre-existing dispute such as would require rejection of the Section 9 petition under the test in Mobilox. The Adjudicating Authority and this Tribunal found no contemporaneous or authentic communication from the Corporate Debtor disputing the invoices or asserting non-completion prior to the demand notice; the demand notice of 04.11.2019 went unreplied and the arbitration notice was issued only on 24.01.2020 after initiation of IBC proceedings. Circumstantial evidence - repeated invoices, verification by technical personnel, emails from the Operational Creditor, lack of prior replies from the Corporate Debtor - led the Tribunal to conclude that the alleged dispute was not a genuine pre-existing dispute but an afterthought intended to frustrate CIRP. Reliance on the appellant's later contentions regarding quality of work and rate of interest did not prima facie establish a dispute capable of defeating the Section 9 application under the Mobilox standard. [Paras 26, 27, 28, 29, 30]

No pre-existing dispute was established; the Section 9 petition could not be rejected on that ground.

Default and debt for triggering insolvency process - Section 9 proceedings under Insolvency and Bankruptcy Code, 2016 - jurisdiction to entertain petition - Satisfaction of conditions for initiation of CIRP under Section 9 (existence of debt/default, threshold amount, and jurisdiction) - HELD THAT: - The Tribunal upheld the Adjudicating Authority's findings that invoices and documentary evidence established an unpaid operational debt in excess of the statutory threshold applicable at the relevant time, and that default had occurred. The Adjudicating Authority's factual findings - including service of the demand notice, the absence of payment, and verification of running bills - were accepted. The registered office of the Corporate Debtor being in Jaipur supported the Adjudicating Authority's jurisdiction, and the petition was held to be within the prescribed limitation period. [Paras 21, 25]

Conditions for initiating CIRP under Section 9 were satisfied; the Adjudicating Authority had jurisdiction and the petition was within limitation.

Final Conclusion: The appeal is dismissed and the order of the Adjudicating Authority admitting the Section 9 petition and directing commencement of CIRP is affirmed.

Admission under Section 9 of the Insolvency and Bankruptcy Code - requirement to establish existence of debt and default - pre-existing dispute defence - time-bar/limitation in Section 9 proceedings - confirmation of accounts as admission of debt - corroborative commercial documents and electronic records (e-way bills and GST ITC) as proof of supply

Admission under Section 9 of the Insolvency and Bankruptcy Code - requirement to establish existence of debt and default - Validity of the Adjudicating Authority's admission of the Section 9 petition and initiation of CIRP against the Corporate Debtor. - HELD THAT: - The Tribunal upheld the Adjudicating Authority's conclusion that the Operational Creditor had established a debt and default sufficient for admission under Section 9. The AA relied on documentary evidence including invoices, confirmation of accounts signed on behalf of the Corporate Debtor, partial payments, e-way bills and GST records showing the Corporate Debtor availed ITC. Having examined these materials and the pleas raised by the Corporate Debtor, the AA found no error in its factual and legal assessment and correctly held the petition admissible, leading to initiation of CIRP. [Paras 15, 16]

The AA's admission of the Section 9 petition and initiation of CIRP is affirmed.

Time-bar/limitation in Section 9 proceedings - confirmation of accounts as admission of debt - Whether the Section 9 petition was barred by limitation. - HELD THAT: - The Tribunal accepted the AA's finding that the petition was not time-barred. The demand notice dated 18.02.2022 and the petition filed on 10.03.2022 were within permissible period because the Corporate Debtor had earlier signed a confirmation of accounts (dated 15.10.2019) acknowledging the closing balance payable. The AA's assessment that the claim fell within limitation was examined and sustained. [Paras 8]

The petition was not time-barred; limitation defence is rejected.

Pre-existing dispute defence - confirmation of accounts as admission of debt - Existence of a pre-existing dispute raised by the Corporate Debtor affecting admissibility of the Section 9 petition. - HELD THAT: - The Tribunal upheld the AA's finding that the Corporate Debtor failed to establish a bona fide pre-existing dispute. Although the Corporate Debtor alleged damaged goods and other complaints, it produced no contemporaneous documentary evidence of dispute; instead the statement of account was authenticated by the Corporate Debtor's representative. Consequently, the AA rightly held that the pre-existing dispute plea did not preclude admission. [Paras 12, 14, 15]

Pre-existing dispute plea is rejected for want of documentary proof; it does not bar admission.

Corroborative commercial documents and electronic records (e-way bills and GST ITC) as proof of supply - reliability of third-party documents and electronic records - Reliability and sufficiency of the Operational Creditor's documentary evidence (invoices, e-way bills, GST screenshots, delivery challans, lorry receipts) relied upon by the AA. - HELD THAT: - The Tribunal found no error in the AA's appraisal of documentary evidence. The AA considered the Corporate Debtor's reliance on a third party warehouse letter and correctly noted those dates related to invoice dates rather than delivery; moreover, e way bills and GST printouts corroborated dispatch and the Corporate Debtor's availing of ITC, amounting to admission of receipt. Allegations of possible tampering or fictitious vehicle numbers were treated as conjecture unsupported by cogent evidence and therefore insufficient to displace the OC's documents. [Paras 10, 11, 13]

Documentary and electronic records relied upon by the Operational Creditor were found reliable and sufficient; challenges to their authenticity are rejected.

Final Conclusion: The Appellate Tribunal affirms the Adjudicating Authority's admission of the Section 9 petition and initiation of CIRP; pleas of limitation, pre-existing dispute and documentary unreliability are rejected and the appeal is dismissed.

Existence of debt and default under Section 7 IBC - acknowledgement under Section 18 of the Limitation Act - effect of OTS/restructuring proposals as admission of debt - date of default and reckoning of limitation - bar under Section 10A of the IBC - limited scope of enquiry by the Adjudicating Authority in a Section 7 petition - appropriation of Debt Service Reserve Account/Fixed Deposit Receipt and regularisation of account

Existence of debt and default under Section 7 IBC - limited scope of enquiry by the Adjudicating Authority in a Section 7 petition - effect of OTS/restructuring proposals as admission of debt - Whether the Adjudicating Authority erred in admitting the Section 7 petition by failing to demonstrate existence of debt and default or by ignoring asserted regularisation of EMIs from FDRs and other communications. - HELD THAT: - The Tribunal applied the settled limited test under Section 7, requiring only satisfaction that a financial debt exists and that a default has occurred. The Adjudicating Authority recorded that the Corporate Debtor's obligation was unequivocal and that default existed. Multiple OTS communications by the Corporate Debtor were placed on record and treated as acknowledgements of liability; the Tribunal accepted that such communications, including offers to settle and admissions that the account had become irregular/NPA, supported existence of debt and default. The contention that EMIs were regularised by appropriation from FDRs was considered but held not to negate default because the Financial Creditor lawfully encashed/appropriated pledged FDR/DSRA amounts at its discretion and also required replenishment, which was not done, so the appropriation did not amount to automatic regularisation of the loan account. On the material before it the Adjudicating Authority was entitled to be satisfied that debt and default were established and admit the petition. [Paras 15, 21, 27]

The Adjudicating Authority did not err in holding that debt and default were established and admitting the Section 7 petition.

Acknowledgement under Section 18 of the Limitation Act - effect of OTS/restructuring proposals as admission of debt - date of default and reckoning of limitation - Whether the Section 7 petition was barred by limitation or was rendered timely by acknowledgements in OTS/restructuring communications invoking Section 18 of the Limitation Act. - HELD THAT: - The Tribunal applied Laxmi Pat Surana and held that written acknowledgements by the Corporate Debtor within three years of the date of default attract Section 18, thereby renewing the limitation period. The OTS proposals dated within the three year window from the asserted date of default were found to constitute such acknowledgements in writing, thereby extending the limitation period and rendering the Section 7 petition filed on 24.01.2023 within time. The Appellant's argument that the date of default must be reckoned only from the date stated in the Section 7 application was rejected in light of the admitted communications which operated as fresh acknowledgements. [Paras 22, 24]

The OTS/restructuring communications constituted acknowledgements under Section 18, and the Section 7 petition was within limitation.

Bar under Section 10A of the IBC - date of default and reckoning of limitation - Whether initiation of CIRP was barred by Section 10A because default, if any, arose during the Section 10A period. - HELD THAT: - The Tribunal noted that Section 10A bars initiation of CIRP only where the default itself first occurs during the Section 10A period. The admitted facts showed that the default arose prior to the Section 10A period (the loan was classified NPA in December 2019 and the facility was recalled in December 2019). Because the default pre dated the Section 10A period and merely continued thereafter, Section 10A did not operate as a bar to initiation of CIRP in this case. [Paras 25, 26]

Section 10A does not bar the Section 7 petition because the default pre dated the Section 10A period.

Procedural fairness and opportunity to be heard - limited scope of enquiry by the Adjudicating Authority in a Section 7 petition - Whether the Adjudicating Authority committed a jurisdictional error by denying the Corporate Debtor an opportunity to be heard or by failing to consider its written submissions. - HELD THAT: - The Tribunal examined the interim orders and the hearing chronology, noting that the Corporate Debtor was granted time to file reply, its counsel appeared on multiple dates, an IA was treated as reply on an earlier date, and written submissions were ultimately filed on 04.08.2023. Given these facts and the liberty afforded to both parties to file synopses even after reservation, the Tribunal found no foundation for the contention that the Corporate Debtor was denied opportunity to be heard. Thus there was no procedural infirmity warranting interference. [Paras 13, 14]

The contention of denial of opportunity to be heard is without merit; no procedural error is established.

Final Conclusion: The Adjudicating Authority correctly applied the limited Section 7 enquiry, accepted that debt and default existed, properly held that OTS/restructuring communications extended limitation under Section 18, and rightly concluded that Section 10A did not bar the petition; the appeal is dismissed and the impugned order admitting the corporate debtor into CIRP is upheld.

Resolution plan - commercial wisdom of the Committee of Creditors - assignment and transfer of security interests - Regulation 37 of the CIRP Regulations - compliance with Section 30(2) of the IBC - judicial review of CoC decisions - due process and disclosure in CoC proceedings

Due process and disclosure in CoC proceedings - commercial wisdom of the Committee of Creditors - judicial review of CoC decisions - Whether the Resolution Professional and the CoC acted improperly by proceeding to discuss, vote and approve the resolution plan without granting the Appellant additional time and without furnishing the information sought, thereby rendering the e voting and approval invalid. - HELD THAT: - The Tribunal examined the 6th CoC meeting minutes and the record of communications. It found that the only modifications communicated before the meeting related to a minor reduction in BSP and exclusion of wooden flooring, matters primarily affecting home buyers; the resolution applicant stated the plan was final and refused further changes; and the RP afforded additional voting time (72 hours) for financial creditors other than home buyers. The CoC's predominant stakeholders (home buyers with 71.75% vote) opposed further delay, and the RP relied on IBBI guidance regarding mandate of representatives. The Adjudicating Authority had considered these factors at length and concluded there was no irregularity in conducting the e voting. The Tribunal agreed, holding that the Appellant (a minority creditor) failed to establish sufficient procedural breach or manifest error warranting recall of the e voting or interference with the CoC's commercial decision. The Tribunal emphasized the time bound object of CIRP and that judicial interference with CoC commercial wisdom is limited and permissible only where Section 30(2) compliance or demonstrable procedural illegality is absent. [Paras 8, 9, 11, 12, 13]

The conduct of the RP and CoC in proceeding with discussion, e voting and approval of the resolution plan did not amount to procedural irregularity or arbitrariness; no interference with the e voting result was warranted.

Assignment and transfer of security interests - Regulation 37 of the CIRP Regulations - compliance with Section 30(2) of the IBC - judicial review of CoC decisions - Whether Clause 6.5(ii) and (vii) of the resolution plan, providing for unconditional release and transfer/assignment of secured creditors' securities to the corporate debtor and extinguishment of guarantees, is impermissible, arbitrary or non compliant with Section 30(2) of the IBC and other law. - HELD THAT: - The Tribunal analysed the statutory framework including Regulation 37 which expressly contemplates that resolution plans may provide for sale or dealing with assets whether subject to security and for satisfaction or modification of security interests. Precedents and the Tribunal's prior decisions were applied to hold that a resolution plan may lawfully deal with security interests as part of the commercial decision of the CoC, subject to statutory minimum entitlements of dissenting creditors under Section 30(2). The Tribunal found Clause 6.5 did not offend Section 30(2)(e) or the scheme of IBC; mere contentions that assignment would impede separate recoveries from guarantors or third party collateral lacked substance in the facts of this case and were distinguishable from earlier authorities relied upon by the Appellant. Given the CoC approval and compliance with Regulations 38/39 and Section 30 formalities, the Adjudicating Authority rightly declined to re open the commercial decision. [Paras 17, 18, 19, 20, 21]

Clause 6.5(ii) and (vii) relating to release/transfer of securities and extinguishment of certain guarantees is not impermissible or non compliant with Section 30(2) IBC; the resolution plan is legally tenable and the Adjudicating Authority's approval stands.

Final Conclusion: The appeal is dismissed. The Appellate Tribunal found no procedural irregularity or illegality in the conduct of the CIRP by the RP and CoC, and upheld the Adjudicating Authority's approval of the resolution plan, including the provisions for assignment/transfer of securities; no interference with the CoC's commercial decision was warranted.

Application and release of seized assets under Section 132B of the Income tax Act, 1961 - exercise of search and seizure powers under Section 37 of the FEMA, 1999 read with Section 132 of the Income tax Act, 1961 - obligation to release seized assets within 120 days where determination is not completed

Application and release of seized assets under Section 132B of the Income tax Act, 1961 - obligation to release seized assets within 120 days where determination is not completed - Whether the respondents were obliged to release the currency seized on 14/3/2019 in view of the provisos to Section 132B of the Income tax Act, 1961 as applied through Section 37(3) of FEMA, 1999 - HELD THAT: - The Court found that Section 132B provides for release of seized assets where the person applies and explains the nature and source of acquisition to the satisfaction of the Assessing Officer, and that the second proviso mandates release of such asset or portion thereof within 120 days from the date of execution of the last authorisation for search if determination has not been completed. The search and seizure carried out by the Enforcement Directorate on 14/3/2019 and subsequent repeated representations for release were not responded to and no determination was made despite the lapse of the statutory period. The books of account having been seized with the currency meant that the source of acquisition was in fact available to the respondents. The respondents' inaction in not releasing the seized currency amounted to violation of the statutory mandate in Section 132B as applicable by virtue of Section 37(3) of FEMA, 1999. The Court therefore directed the respondents to pass appropriate orders for release of the seized assets within four weeks, while leaving open the respondents' power to continue adjudication of the show cause notice and the ultimate proceedings against the petitioners. [Paras 15, 16, 19, 20, 21]

Seized currency relating to the search on 14/3/2019 must be released by respondents within four weeks; their continued adjudication is not precluded but inaction in withholding release is unlawful.

Challenge to show cause notice and maintainability of writ for release of seized assets - Whether the petition seeking release of seized currency could be entertained notwithstanding that a show cause notice had been issued and adjudication was pending - HELD THAT: - The Court acknowledged that adjudication on the show cause notice lies within the respondents' powers, but held that such power did not entitle them to remain inactive indefinitely and to ignore statutory obligations for release under Section 132B. The petition insofar as it sought release of seized assets was maintainable; the Court restrained the respondents from sitting over representations and directed release subject to the final outcome of the adjudicatory proceedings. [Paras 7, 17, 18, 20, 21]

Writ petition for release of seized assets is maintainable; respondents must act on representations and comply with statutory release obligations even while adjudication on the show cause notice proceeds.

Final Conclusion: The writ petition is partly allowed: respondents are directed to pass orders releasing the currency seized on 14/3/2019 within four weeks, the release being without prejudice to the final outcome of the pending adjudication initiated by the respondents.

Maintainability of intra-court appeal under Clause 15 of the Letters Patent - quashing of criminal proceedings under Article 226 of the Constitution - scope of criminal jurisdiction in Letters Patent appeals - effect of quashing of predicate offence on prosecution under the Prevention of Money Laundering Act, 2002 - precedential application of Ram Kishan Fauji

Maintainability of intra-court appeal under Clause 15 of the Letters Patent - quashing of criminal proceedings under Article 226 of the Constitution - scope of criminal jurisdiction in Letters Patent appeals - precedential application of Ram Kishan Fauji - Whether the writ appeals filed under Clause 15 of the Letters Patent against an order quashing criminal proceedings under Article 226 are maintainable. - HELD THAT: - The Court applied the ratio of the Apex Court in Ram Kishan Fauji, holding that the Letters Patent bar in Clause 15 must be construed with reference to the subject-matter and nature of the jurisdiction exercised. The High Court cannot allow an intra court appeal merely because the order under challenge was passed in exercise of extraordinary jurisdiction under Article 226; the conception of 'criminal jurisdiction' for the purpose of the Letters Patent is broad and includes orders quashing criminal proceedings. Consequently, the distinction sought to be drawn between orders under Article 226 and orders under Section 482 Cr.P.C. is rejected and the appeal court's jurisdiction to entertain an intra court appeal is barred where Clause 15 applies. Although the writ Court had relied on authorities concerning the consequence of quashing predicate offences under the PMLA, the present appeal was dismissed on the threshold maintainability ground without expressing any opinion on that legal question. [Paras 9, 10, 11]

Writ appeals dismissed as not maintainable under Clause 15 of the Letters Patent; no costs.

Final Conclusion: The intra court writ appeals under Clause 15 of the Letters Patent are barred and are dismissed following Ram Kishan Fauji; the Court did not determine the substantive question arising from precedents on the PMLA.

Composite contract - vivisection - mining services - cargo handling services - site formation services - service tax liability

Composite contract - vivisection - mining services - service tax liability - Whether the department could bifurcate a lump-sum composite mining contract into separate taxable services and sustain a demand for periods prior to 01.06.2007 - HELD THAT: - The contract dated 06.06.2005 provided a lump-sum consideration for a range of activities connected with limestone mining without any specific allocation to site formation, excavation, over-burden clearing or cargo handling. The Tribunal held that in such circumstances the Department was not justified in vivisecting the composite contract to treat portions as distinct taxable services for the earlier period. The Department itself accepted that the activity falls under mining services w.e.f. 01.06.2007 and quantified demand thereafter under that single heading; having so accepted, the earlier bifurcation and demand under separate heads amounted to an attempt to fasten excess service tax liability on the appellant. Reliance was also placed on Tribunal precedents holding that a comprehensive mining contract cannot be broken up into separate service-heads for taxation. For these reasons the confirmed demand for the earlier period was set aside and the appeal allowed on merits. [Paras 5, 6, 8, 9]

The Department's bifurcation of the composite mining contract for periods prior to 01.06.2007 is not sustainable; the demand for that earlier period is set aside and the appeal is allowed.

Final Conclusion: The impugned order is set aside; the appeal is allowed on merits and the appellant is entitled to consequential benefits as per law.

Composite works contract - works contract service under section 65(105)(zzzza) - negative list regime / post negative list taxation - abatement towards value of goods in works contracts - exemption under Notification No.25/2012 (entries 12, 12A and 29(h)) - Special Economic Zone Act overriding effect - remand for verification of payment certificates - penalties set aside under section 80 of the Finance Act

Composite works contract - no service tax prior to 1.6.2007 on composite works contracts - Whether demands on composite works contracts for the period prior to 1.6.2007 are sustainable - HELD THAT: - The Tribunal applied the principle that composite works contracts involving transfer or deemed transfer of property in goods together with rendering of services were outside the charge to service tax prior to 1.6.2007. Relying on that principle, demands arising before 1.6.2007 that seek to charge service tax on composite works contracts cannot be sustained and must be set aside. [Paras 7, 11]

Demands for periods prior to 1.6.2007 set aside.

Works contract service under section 65(105)(zzzza) - charging clause and notice requirement - Whether composite works contracts for the period 1.6.2007 to 1.7.2012 could be validly charged except under the works contract clause and whether demands not framed under that clause are sustainable - HELD THAT: - For the period 1.6.2007 to 1.7.2012 works contracts could be taxed only if they fell within the limited scope of the works contract clause. If the department did not put the assessee to notice under that specific clause in the SCN, demands framed or confirmed under other service heads cannot be sustained. [Paras 8]

Demands for 1.6.2007-1.7.2012 not supported where SCN did not invoke the works contract clause; such demands set aside.

Services simplicitor versus composite works contract - Validity of the confirmed demand in Service Tax Appeal No. 50097 insofar as it was based on services simplicitor heads - HELD THAT: - The impugned order confirmed demand under heads such as 'Commercial or Industrial Construction Service', 'Construction of complex' and 'Management, maintenance and repair' which apply to services simplicitor. Given that the contracts were composite works contracts, and in view of the principles governing composite contracts, the Tribunal found that the entire demand in the impugned order (and interest and penalties consequent thereto) could not be sustained. [Paras 11]

Impugned order in Appeal No. 50097/2022 set aside.

Works contract service under section 65(105)(zzzza) - exemption under Notification No.25/2012 (entries 12 and 12C) - Taxability of construction of an auditorium at Maharshi Dayanand University (MDU) for periods before and after 2012 - HELD THAT: - For the pre 2012 period the works contract clause applies only to structures meant for commercial purposes; the Tribunal held that the auditorium's essential nature is not commercial and thus did not fall within the limited scope of the works contract clause. For the post negative list period (after 2012) construction services to an educational institution created by state legislation fall within the exemption in Notification No.25/2012 (entries for structures meant predominantly for educational use and services to government authorities). Accordingly the demand in respect of the MDU auditorium is not sustainable. [Paras 19, 21]

Demand on MDU auditorium set aside for both pre and post 2012 periods.

Abatement towards value of goods in works contracts - works contract service - Entitlement to abatement in respect of NTPC/APCPL Jharli contract and treatment of VAT/non production of VAT evidence - HELD THAT: - The NTPC contract was an indivisible works contract involving transfer/deemed transfer of goods. The Tribunal held that service tax cannot be levied on the value of goods transferred and that abatement towards materials used must be allowed. Denial of abatement on the ground that VAT was not evidenced is not warranted; whether VAT was payable or paid is a matter for state authorities and does not permit imposition of service tax on the value of goods. The matter was directed to the Commissioner for re calculation of demand after abatement. [Paras 26, 51]

Appellant entitled to abatement; matter remanded to Commissioner for recalculation after allowing abatement.

Exemption under Notification No.25/2012 (entries 12A and 29(h)) - Taxability of external development/sub contract works performed for NBCC on behalf of Central Government (Kidwai Nagar) and entitlement of sub contractor to exemption - HELD THAT: - Works executed for accommodation for Central Government employees and outsourced by the Ministry to NBCC qualify for exemption under Notification No.25/2012 (S.No.12A(a)) when not meant for commerce or industry. A sub contractor of NBCC is entitled to exemption under S.No.29(h). Therefore the demand on such NBCC sub contract works cannot be sustained. [Paras 32]

Demands on NBCC Kidwai Nagar subcontract works set aside.

Remand for verification of payment certificates - Whether the confirmed demand in respect of HSIIDC flatted factories should be sustained where the appellant produced certificates claiming HSIIDC paid the service tax - HELD THAT: - The sole dispute was the evidentiary sufficiency of certificates asserting HSIIDC discharged the tax. The Tribunal held that the certificates produced by the appellant must be examined and therefore remanded the matter to the Commissioner for verification of those certificates; the rest of the demand was set aside. [Paras 36, 37]

Matter remanded to the Commissioner to examine certificates; other demands set aside.

Special Economic Zone Act overriding effect - Taxability of services rendered in Noida SEZ - HELD THAT: - By reference to Section 7 and Section 51 of the SEZ Act, services provided to or for a Unit/Developer in an SEZ are exempt as prescribed and the SEZ Act has overriding effect over other laws. Consequently service tax demands on services rendered in the Noida SEZ cannot be sustained. [Paras 43, 44]

Demands for services rendered in NOIDA SEZ set aside.

Notification no. 30/2012 (split liability 50:50) - remand for examination of coverage under specific notification - Whether services rendered for HSCC (Kalpana Chawla Medical College, Karnal) were covered by Notification No.30/2012 so that only 50% liability remained with the service provider - HELD THAT: - The Tribunal noted that the Commissioner recorded no findings on the appellant's claim that the contract fell within Notification No.30/2012 (resulting in 50% liability) and that the appellant had paid the stated 50%. Given the absence of an adjudication on that claim, the Tribunal remanded the issue to the Commissioner for examination and decision. [Paras 45, 51]

Matter remanded to the Commissioner to decide claim under Notification No.30/2012.

Requirement of proof of consideration for levy - Validity of demands based on amounts allegedly received (arbitral award from CPWD and entries in Form 26AS) - HELD THAT: - The Tribunal held that the department must prove that amounts received by the assessee constituted consideration for a taxable service. Absent evidence that such receipts were consideration for services rendered, service tax cannot be levied. Consequently the impugned demands on such amounts were set aside. [Paras 49]

Demands based on alleged receipts set aside for lack of proof of consideration for taxable service.

Penalties set aside under section 80 of the Finance Act - Whether penalties imposed in the impugned orders should be sustained - HELD THAT: - Invoking section 80 of the Finance Act, the Tribunal found all penalties in the impugned orders could not be sustained in view of the findings on tax liability and remands, and accordingly directed that penalties be set aside. [Paras 51]

All penalties set aside.

Final Conclusion: The Tribunal allowed Appeal No. 50097/2022 and set aside the impugned order; partially allowed Appeal No. 52211/2016 by setting aside several demands, remanding specified matters to the Commissioner for re calculation or verification (abatement in NTPC Jharli; verification of HSIIDC certificates); remanded issues in Appeals No. 52133 and 52135 concerning the HSCC contract to the Commissioner for examination of coverage under Notification No.30/2012; allowed Appeal No. 52134/2022 and set aside the impugned order; set aside other demands where exemptions or statutory bars applied (including SEZ and NBCC sub contracts); and directed that all penalties be set aside under section 80 of the Finance Act, with consequential relief to the appellant.

Denial of CENVAT credit during refund proceedings without initiation of Rule 14 proceedings - scope and application of Rule 5 of the CENVAT Credit Rules, 2004 (refund formula and "net CENVAT credit") - temporal scope of credit to be included in "net CENVAT credit" (credit availed during relevant quarter irrespective of invoice/service date) - time bar for filing refund claims under Section 11B of the Central Excise Act, 1944 - treatment of amounts not allowed as refund - restoration to CENVAT account and entitlement to cash refund under transitional provision - total turnover for centralized registration - aggregation of registrant's turnover for refund computation

Denial of CENVAT credit during refund proceedings without initiation of Rule 14 proceedings - Whether CENVAT credit can be disallowed in proceedings under Rule 5 without initiating proceedings under Rule 14 of the CENVAT Credit Rules, 2004. - HELD THAT: - The Tribunal held that disallowance of CENVAT credit cannot be effected in refund proceedings under Rule 5 without initiation of appropriate proceedings under Rule 14 (read with Section 73 of the Finance Act, 1994). Rule 14 is the statutory route to question the correctness of credit availed and to recover inadmissible credit after giving notice; refund proceedings under Rule 5 are limited to computing and granting refund as per the formula and procedural safeguards. Absent invocation of Rule 14 and the attendant show cause/adjudicatory process, denial of credit in the refund exercise is without authority of law. The impugned disallowances that rested on contested admissibility were set aside for the purpose of determining "net CENVAT credit" and consequential relief ordered. [Paras 4]

Disallowance of credit in Rule 5 proceedings without initiating Rule 14 is impermissible; such disallowances set aside for computation of refund and consequential relief directed.

Temporal scope of credit to be included in "net CENVAT credit" (credit availed during relevant quarter irrespective of invoice/service date) - Whether 'net CENVAT credit' for the purpose of Rule 5 includes all credit availed during the relevant period even if the underlying invoices or services relate to earlier periods. - HELD THAT: - The Tribunal interpreted Rule 5 and Notification No.27/2012 CE(NT) to mean that the 'net CENVAT credit' comprises all CENVAT credit availed during the relevant period (the quarter for which refund is claimed), reduced by reversals under Rule 3(5C), without regard to the date of receipt of service or invoice issuance. Reliance was placed on earlier tribunal decisions recognising that there is no prescribed time limit for availing credit so long as tax was paid prior to taking credit. Accordingly, credits availed during April June 2012 were to be included in computing the net credit even if invoices pertained to earlier periods. [Paras 4]

'Net CENVAT credit' includes all credit availed during the relevant quarter irrespective of the invoice/service date; such credit must be taken into account in computing refund under Rule 5.

Time bar for filing refund claims under Section 11B of the Central Excise Act, 1944 - Whether parts of the refund claim were barred by limitation under Section 11B and whether such limitation justified denial of credit in the refund proceedings. - HELD THAT: - Section 11B prescribes a one year period for filing claims for refund. The Tribunal recognised the statutory limitation for filing refund applications. However, where the department sought to disallow credits in the refund computation on the ground that the invoices pertained to periods beyond one year, the Tribunal held that the proper course is to examine admissibility in accordance with Rule 5 (which considers credit availed during the relevant period) and, if necessary, proceed under Rule 14 for denial of credit. Applying the Rule 5 scheme and Rule 14 principle, the Tribunal did not sustain the adjudicating authority's disallowance of credits for being time barred for the purpose of computing 'net CENVAT credit', and included such credits in the net credit calculation. [Paras 4, 5]

While Section 11B prescribes one year limitation for filing refund claims, the departmental denial of credit on the ground of invoice date in refund proceedings was not upheld; credits availed during the relevant quarter are to be considered and procedural route under Rule 14 is the correct forum to deny credit.

Invoices not addressed to registered premises / renting of premises - admissibility of input service credit - Whether credit availed on invoices not addressed to the registrant's registered premises or on rent invoices lacking specific premises address could be disallowed in refund proceedings. - HELD THAT: - The adjudicating authority had disallowed credits inter alia on grounds that invoices were not addressed to the registered premises or did not specify the premises for which rent was paid. The Commissioner (Appeals) had upheld some of these findings. The Tribunal, however, applied the Rule 14 principle and concluded that such admissibility disputes could not be resolved by denying credit in Rule 5 refund proceedings without initiating Rule 14. Consequently, the Tribunal did not sustain the impugned disallowance for the purpose of computing 'net CENVAT credit' and directed inclusion of such credits in the refund computation (subject to any Rule 14 process). [Paras 4, 5]

Disallowance of credit on invoice address/ premises address grounds cannot be effected in Rule 5 refund proceedings; such disputes require Rule 14 process and the credits were to be included in net credit for refund computation.

Total turnover for centralized registration - aggregation of registrant's turnover for refund computation - Whether 'total turnover' for the refund formula under Rule 5 should be computed on the basis of turnover of the specific premises or the aggregate turnover of the centralized registrant. - HELD THAT: - The Tribunal held that for a centralized registration the term 'total turnover' in Rule 5 refers to the total turnover of the registrant. It rejected the appellant's contention that only turnover of a specific premises should be taken into account, noting that appellant itself argued for inclusion of credits received at any premises in computing net CENVAT credit. The adjudicating authority's use of the registrant's aggregated domestic turnover (as per ST 3) was upheld for the purposes of applying the refund formula. [Paras 4]

'Total turnover' for refund computation under Rule 5 for a centralized registration is the registrant's aggregate turnover; the adjudicating authority's computation in that regard was correct.

Treatment of amounts not allowed as refund - restoration to CENVAT account and entitlement to cash refund under transitional provision - What is the remedy where part of a refund claim is not allowed - whether the denied amount must be restored to the CENVAT account and whether cash refund is available in view of the transitional provision. - HELD THAT: - The Tribunal observed that Notification No.27/2012 CE(NT) requires the claimant to debit the claimed amount from the CENVAT credit account at the time of making the claim and provides that if refund sanctioned is less than amount debited, the difference may be taken back as credit. The adjudicating authority had failed to restore disallowed amounts to the CENVAT account. The Tribunal directed that the difference between the amount debited and the refund allowed be credited back to the appellant's CENVAT account so it may be utilised for domestic clearances. Further, having regard to Section 142(8)(b) of the CGST Act (transitional provision), the Tribunal directed that in the present posture the entire amount debited at the time of filing the refund claim should be allowed as cash refund to the appellant. [Paras 4]

Amounts not allowed as refund under Rule 5 must be restored to the claimant's CENVAT account; in the present case, by virtue of transitional provision, the amount debited at filing should be allowed as cash refund.

Final Conclusion: The appeal was allowed. The Tribunal held that disputed disallowances of credit could not be sustained in Rule 5 refund proceedings without initiating Rule 14; 'net CENVAT credit' includes all credit availed during the relevant quarter irrespective of invoice dates; total turnover for a centralized registrant is the registrant's aggregate turnover; the impugned disallowances were set aside for refund computation, the refund entitlement recomputed accordingly, denied amounts were to be restored to the CENVAT account and, having regard to the transitional provision, the amount debited at filing should be allowed as cash refund.

Cenvat credit - valuation under Rule 8 of the Valuation Rules, 2000 - actual cost of production versus estimated/projected cost - revenue-neutral situation - extended period of limitation - penalty for incorrect valuation

Cenvat credit - valuation under Rule 8 of the Valuation Rules, 2000 - actual cost of production versus estimated/projected cost - revenue-neutral situation - Whether cenvat credit availed by Unit-I on duty paid by Unit-II on stock transfers can be denied where duty was paid on declared/estimated cost that later varies from actual cost as per CAS-4. - HELD THAT: - The Tribunal accepted the appellant's contention that accurate actual cost of production per CAS-4 can only be determined after finalisation of accounts and therefore projected or declared cost at the time of clearance may differ from later ascertained CAS-4 figures. Applying the reasoning in the appellant's own earlier decision, the Tribunal held that where duty has been paid by Unit-II as per invoices and the overall position between the two units is revenue-neutral, the recipient unit (Unit-I) cannot be denied credit. The practical difficulty of ascertaining actual cost at clearance and the fact of duty payment by the transferor preclude denial of credit to the receiving unit; consequently the denial of cenvat credit was set aside. [Paras 7]

Denial of cenvat credit to Unit-I was set aside and credit held eligible.

Extended period of limitation - revenue-neutral situation - penalty for incorrect valuation - Whether demands and penalties for short payment (and corresponding excess payment) of duty on stock transfers can be sustained. - HELD THAT: - Following the Tribunal's prior finding in the appellant's own case, the court treated the transactions as giving rise to a revenue-neutral situation. On that basis the invocation of the extended period of limitation could not be sustained and the demand for the extended period was set aside, with only the normal period demand being maintainable in that earlier decision. In the present appeals the Tribunal concluded that demands and penalties emanating from the valuation discrepancy could not be sustained and therefore required to be set aside. [Paras 8, 9]

The demands, interest and penalties reflected in the impugned orders were set aside.

Final Conclusion: The impugned orders are set aside; the appeals are allowed and the reliefs consequential to allowance granted to the appellant are to follow.

Input service - Cenvat Credit - services outside factory premises - activities relating to business - extended period - time bar - suppression

Input service - Cenvat Credit - services outside factory premises - activities relating to business - Manpower services used for depot management, sales and related activities qualify as input services and are eligible for Cenvat credit. - HELD THAT: - The Tribunal examined the definition of input service as it stood for the period in dispute and observed that the inclusive portion expressly covers services used in relation to advertisement or sales promotion, market research, storage up to the place of removal and various "activities relating to business" which may be performed outside the manufacturing factory premises. The Adjudicating Authority's narrow approach-that manpower services must relate only to the core manufacturing activity within factory premises-was held to be erroneous. Applying the definition harmoniously, the Tribunal concluded that services rendered by the manpower provider for depot management, sales and similar activities fall within services used "in or in relation to the manufacture of final products" or are otherwise included services and therefore qualify for Cenvat Credit. [Paras 6, 7]

Set aside the order-in-original on merits and allow Cenvat credit for the manpower services.

Extended period - time bar - suppression - ER-1 Returns - Show Cause Notice issued after more than four years was time-barred in the absence of suppression by the appellant. - HELD THAT: - The Tribunal accepted the appellant's submission that ER-1 returns, showing the Cenvat credit claimed, had been regularly filed and that the department had raised an audit objection in 2006 to which the appellant replied. No further action was taken by the Department for over four years before issuance of the SCN dated 24/12/2010. In these circumstances, and since no case of concealment or suppression was made out against the appellant, the Tribunal held that the invocation of the extended period was not justified and the demand was hopelessly time barred. [Paras 8]

Hold the Show Cause Notice to be time-barred and allow the appeal on this ground.

Final Conclusion: The appeal is allowed both on merits and on the ground of time bar; the order-in-original is set aside and the appellant is entitled to consequential relief in accordance with law.

Refund of tax deposited during search - duty to furnish reasoned order when rejecting refund claim - de novo consideration on remand - right to personal hearing with advance notice - obligation to furnish list of relied judicial authorities before hearing

Duty to furnish reasoned order when rejecting refund claim - refund of tax deposited during search - de novo consideration on remand - right to personal hearing with advance notice - obligation to furnish list of relied judicial authorities before hearing - Whether the Deputy Commissioner properly adjudicated the petitioner's refund claim and, if not, what relief should follow. - HELD THAT: - The Court found that the impugned assessment orders reject the petitioner's refund claim by stating, in brief, that the working of tax liability resulted in dues and hence refund is not payable, without engaging with the substantive grounds raised in the petitioner's refund application dated 20 June, 2017. Such meagre reasons are inadequate and do not amount to appropriate adjudication as required by law. In view of the prior directions of this Court and the specific submissions placed before the authority, the appropriate course is to set aside the impugned orders and require the Assessing Officer/Deputy Commissioner of State Tax to reconsider the matter de novo. The de novo consideration must address all submissions of the petitioner, furnish adequate reasons for the conclusion reached on the refund claim, afford the petitioner a personal hearing with at least seven days' notice, and, where the authority intends to rely on any judicial pronouncement, provide a list of such authorities with the hearing notice so the petitioner may deal with them. The Court directed that, after the personal hearing, the petitioner may file written submissions within three working days if desired, and that the reassessment and reasoned order be completed within three months from presentation of this order to the officer. The Court expressly kept all contentions of the parties open and did not adjudicate the merits. [Paras 8, 9, 10]

Impugned assessment orders quashed and set aside; matter remanded for de novo consideration with directions to afford personal hearing, provide list of relied authorities with notice, consider all submissions and pass a reasoned order within three months; all contentions left open.

Final Conclusion: The High Court set aside the impugned assessment orders for inadequate reasoning on the petitioner's refund claim, remanded the matter for de novo consideration by the Deputy Commissioner of State Tax with directions to afford personal hearing (with advance notice and list of relied authorities), to consider all submissions and to pass a reasoned order within three months; all parties' contentions remain open.

Principles of natural justice - opportunity of personal hearing - Section 75(4) of the Goods and Services Tax Act, 2017 - setting aside an order passed without hearing - remittal for fresh consideration after hearing - lifting of attachment

Principles of natural justice - opportunity of personal hearing - Section 75(4) of the Goods and Services Tax Act, 2017 - setting aside an order passed without hearing - Impugned order passed without affording personal hearing in terms of Section 75(4) and principles of natural justice - HELD THAT: - The Court found that the 1st respondent passed the impugned order without providing the petitioner an opportunity of personal hearing. The absence of personal hearing violated the principles of natural justice and the mandate of Section 75(4) of the Goods and Services Tax Act, 2017 which requires an opportunity of hearing before passing such an order. The petitioner's case that it deals in bone meal and did not import the goods alleged by the respondent was noted; even if notices had been served, the statutory requirement of hearing remained. In view of this procedural infirmity and the respondent's apparent misconception about the nature of the petitioner's business, the impugned order could not be sustained.

Impugned order dated 13.10.2021 set aside for non-compliance with the requirement of personal hearing; attachment issued pursuant to that order is lifted.

Remittal for fresh consideration after hearing - opportunity of personal hearing - lifting of attachment - Whether the matter should be remitted for fresh consideration and directions for further proceedings - HELD THAT: - Having set aside the impugned order for procedural lapse, the Court remitted the matter to the 1st respondent for fresh consideration. The petitioner is to be granted time to file a reply and afforded an opportunity of personal hearing; thereafter the 1st respondent must pass appropriate orders. The Court directed that these steps be completed within three months from receipt of the copy of the order. The interim consequence of setting aside the order included lifting the attachment notice that had been issued based on the impugned order.

Matter remitted to the 1st respondent for fresh adjudication after granting the petitioner a hearing and filing opportunity; directions to decide within three months and attachment lifted in the meantime.

Final Conclusion: The writ petition is allowed by setting aside the order dated 13.10.2021 for failure to afford personal hearing in terms of Section 75(4) and the matter is remitted to the 1st respondent for fresh consideration after permitting the petitioner to file a reply and be heard within three months; the attachment based on the impugned order is lifted.

Cancellation of bail for non-compliance of undertaking - suspension of sentence - binding effect of an undertaking forming part of a court order - refusal to adjudicate inter se apportionment between co-obligors in collateral proceedings - execution of sentence and coercive measures for non-surrender - award of costs for non-compliance with judicial orders

Cancellation of bail for non-compliance of undertaking - binding effect of an undertaking forming part of a court order - suspension of sentence - award of costs for non-compliance with judicial orders - Validity of the High Court's order cancelling suspension of sentence and bail for failure to comply with the undertaking recorded in the settlement order - HELD THAT: - The Court upheld the High Court's cancellation of interim protection because the total amount agreed in the undertaking recorded in the order was not paid within the timelines fixed by the High Court, and the extension order had expressly provided that in case of default the bail and suspension would stand withdrawn without further reference to the Court. The undertaking and the order recorded that the signatories would pay the settled amount and that default would attract liability and prosecution; the Supreme Court refused to reopen or reallocate the obligation between the signatories in these proceedings, observing that the complainant was only bound to accept the reduced settlement and was not party to any inter se arrangement. Having found no infirmity in the High Court's reliance on the recorded undertaking and its conditional extension, the Court dismissed the appeal and imposed costs for non-compliance, directing surrender to undergo the sentence and permitting the High Court to take coercive measures if surrender is not effected. [Paras 10, 15, 17, 19, 20]

The cancellation of bail and suspension of sentence was upheld for non-compliance with the undertaking; appeal dismissed with costs, and surrender ordered.

Refusal to adjudicate inter se apportionment between co-obligors in collateral proceedings - binding effect of an undertaking forming part of a court order - Whether the Court would determine the internal apportionment of the settlement between the two directors - HELD THAT: - The Court declined to decide which co-signatory should bear what share of the agreed payment, noting that the settlement as recorded obligated the signatories jointly and that disputes over inter se liabilities between them do not affect the High Court's power to cancel interim protection for non-payment to the complainant. The Supreme Court left the question of internal apportionment to be addressed separately and refused to re-write the undertaking or substitute its own allocation in the present criminal proceeding. [Paras 16, 17]

The Court will not adjudicate inter se apportionment in these proceedings; the fact of non-payment to the complainant sufficed to uphold cancellation.

Execution of sentence and coercive measures for non-surrender - remand for decision of pending revisions and applications - Direction to the High Court to proceed with pending revisions and ensure compliance with the undertaking - HELD THAT: - The Supreme Court directed that the Revisional Court proceed to decide the pending revisions and any applications, and to ensure that the undertaking is fully complied with and that the complainant is compensated and protected from further harassment. The Court ordered surrender within a fixed period and authorised appropriate coercive measures by the High Court for execution of sentence in case of non-surrender. This constitutes a mandate for the High Court to take fresh steps to secure compliance and to adjudicate outstanding matters. [Paras 20]

Revisions and pending applications remitted to the High Court for decision; High Court directed to ensure compliance and may take coercive measures for execution of sentence.

Final Conclusion: The Supreme Court dismissed the appeal, upholding the High Court's cancellation of bail and suspension of sentence for non-compliance with the recorded undertaking, declined to determine internal apportionment between the co-obligors in these proceedings, awarded costs to the complainant, directed surrender to undergo sentence and remitted the pending revisions/applications to the High Court to ensure full compliance and execution.

Summary order. The appeal is allowed in terms of the signed reportable judgment; pending applications, if any, stand disposed of.