TaxTMI Updates e-Newsletter
Jan 15,2026

Challenge to N/N. 4 of 2018 dated 25 January 2018 and N/N. 56 of 2023 dated 28 December 2023 - it was held by High Court that 'it would only be appropriate if the Petitioners are relegated to instituting an Appeal against the order of 26 June 2024. In such Appeal, the Petitioners will be entitled to raise all grounds on merits.'

HELD THAT:- There are no good ground to interfere with the impugned order passed by the High Court - SLP dismissed.

Seeking cancellation of Bail granted - clandestine manufacture and sale of banned gutka with alleged GST evasion - offence under Section 132 CGST - Incriminating documents and diary, seized - CMM failed to appreciate the gravity and societal impact of the offence - illegal activity, including ownership of the brand and laundering of proceeds - tampering with evidence and influencing witnesses - HELD THAT:- In recent judgement of Ashok Dhankad vs. State of NCT of Delhi and Another [2025 (8) TMI 1709 - SUPREME COURT], Apex Court reiterated that while considering as to whether bail ought to be granted in a matter involving a serious criminal offence, the Court must consider relevant factors like the nature of the accusations made against the accused, the manner in which the crime is alleged to have been committed, the gravity of the offence, the role attributed to the accused, the criminal antecedents of the accused, the probability of tampering of the witnesses and repeating the offence, if the accused are released on Bail, the likelihood of the accused being unavailable in the event bail is granted, the possibility of obstructing the proceedings and evading the courts of justice and the overall desirability of releasing the accused on Bail.

It cannot be overlooked that the evidence is essentially documentary/electronic and there is no likelihood of the same being tampered by the Respondent after having been admitted to Bail. There is nothing to show that he is a flight Risk or there is any likelihood of his influencing the witnesses or tampering the evidence.

There is no ground which is existing to show that the discretion of grant of Bail has not been exercised judiciously by the learned CMM or that there is any misuse or abuse of liberty so granted by the Respondent. There is also nothing on record to show that the trial has been hampered on account of grant of Bail.

Thus, there is no merit in the present Petition for setting aside of the Bail Order dated 17.03.2021.

Scope of supply so as to levy GST - Validity of Show cause notice issued under Section 74(1) -Demand - non-payment of GST on transfer of leasehold rights - essential element of supply of service - HELD THAT:- The Gujarat High Court Gujarat Chamber of Commerce and Industry v. Union of India, [2025 (1) TMI 516 - GUJARAT HIGH COURT],held that assignment by sale and transfer of leasehold rights of the plot of land allotted by GIDC to the lessee in favour of third party-assignee for a consideration shall be assignment/sale/transfer of benefits arising out of “immovable property” by the lessee-assignor in favour of third party, assignee who would become lessee of GIDC in place of original allottee-lessee and in such circumstances, would not be subject to levy of GST in terms of provisions of the GST Act. We subscribe to this view for the reasons quoted is earlier part of our judgment so also because the view, in our considered opinion, is in consonance with the provisions of law on supply of services.

Further, the law laid down by Gujarat High Court is binding on the authorities i.e. the respondents in terms of the judgment of this Court in the case of Commercial of Income-Tax, Vidarbha v. Smt. Godavari Devi Saraf [1977 (9) TMI 24 - BOMBAY HIGH COURT], wherein the Court held that until a contrary decision is given by any other competent High Court, it is binding on a Tribunal in the State of Bombay, it has to proceed on the footing that the law declared by the High Court, though of another State, is the final law of land. In that sense, the decision of Gujarat High Court is binding on the authorities below. Further we subscribe to the finding of Gujarat High Court that the assignment by sale and a transfer of leasehold rights of the plot of land allotted by the Corporation like GIDC or MIDC to the lessee in favour of third party-assignee for a consideration shall be assignment/sale/transfer of benefits arising out of immovable property by the lessee-assignor in favour of third party and in such circumstances, the transaction would not be subject to levy of GST in terms of the GST Act.

The writ petition is accordingly allowed. Show cause notice issued by respondent No. 1 is quashed and set aside.

No opportunity of personal hearing - failed to file reply within the time - Validity of issuance of notice under Section 73 - mode of service - possibility of sending notices by way of other modes prescribed in Section 169 - HELD THAT:- No doubt, sending notice by uploading in portal is a sufficient service, but, the Officer who is sending the repeated reminders, inspite of the fact that no response from the petitioner to the show cause notices etc., the Officer should have applied his/her mind and explored the possibility of sending notices by way of other modes prescribed in Section 169 of the GST Act, which are also the valid mode of service under the Act, otherwise it will not be an effective service, rather, it would only fulfilling the empty formalities. Merely passing an ex parte order by fulfilling the empty formalities will not serve any useful purpose and the same will only pave way for multiplicity of litigations, not only wasting the time of the Officer concerned, but also the precious time of the Appellate Authority/Tribunal and this Court as well.

Thus, when there is no response from the tax payer to the notice sent through a particular mode, the Officer who is issuing notices should strictly explore the possibilities of sending notices through some other mode as prescribed in Section 169(1) of the Act, preferably by way of RPAD, which would ultimately achieve the object of the GST Act. Therefore, this Court finds that there is a lack of opportunities being provided to serve the notices/orders etc., effectively to the petitioner.

Issuance of notice under Section 73 - It is clear that the impugned order came to be passed by the respondent without any jurisdiction. In such view of the matter, this Court is inclined to set aside the impugned order dated 17.06.2025 passed by the respondent. Further, to avoid any further delay and inconvenience to both the parties, this Court is inclined to direct the petitioner to treat the impugned assessment order as a notice issued under Section 74A of the GST Act and file reply to the same.

Principles of natural justice - Proper service of SCN or not - notice for personal opportunity of hearing was physically served or not - Non-declaration of Credit Tax Liability - SCN contains the summary of undeclared Tax - HELD THAT:- It could be inferred from the records that neither the Show Cause Notice was physically served on the petitioner so as to enable him to submit his response to the same, nor the effective notice for personal opportunity of hearing was physically served.

That being so, learned counsel for the petitioner, is justified in claiming that the issue is squarely covered by the judgment in the matter of Shri Krishna Sales [2025 (5) TMI 380 - DELHI HIGH COURT] where it was held that 'In the opinion of this Court, considering that the rectification application is itself barred by limitation, and the show cause notice was uploaded on the additional notices tab, following the decision in NEELGIRI MACHINERY THROUGH ITS PROPRIETOR MR. ANIL KUMAR VERSUS COMMISSIONER DELHI GOODS AND SERVICE TAX AND OTHERS [2025 (3) TMI 1308 - DELHI HIGH COURT]'.

It is deemed appropriate to partly allow the present petition as the orders impugned are in violations of principles of natural justice - petition allowed.

Maintainability of petition - availability of alternative remedy - Challenge to order passed u/s 73 of the CGST Act/MGST Act - challenge to N/N. 4 of 2018 dated 25 January 2018 and N/N. 56 of 2023 dated 28 December 2023 - HELD THAT:- It would only be appropriate if the Petitioners are relegated to instituting an Appeal against the order of 26 June 2024. In such Appeal, the Petitioners will be entitled to raise all grounds on merits. If the Appeal succeeds on merits, then, possibly, there would be no occasion to challenge the Notification Nos. 4 of 2018 and 56 of 2023. However, if the Appeal fails, the Petitioners can be reserved liberty to challenge the N/Ns. 4 of 2018 and 56 of 2023.

This Petition is disposed off by relegating the Petitioners, if the Petitioners so desire, to avail of the alternate remedy of Appeal against the order dated 26 June 2024.

Penalty u/s 271D and 271E - assessee obtained as well as repaid loans in cash from four persons - Reasonable cause to get relief u/s 273B - assessee contended that the assessee as well as the lenders was having agricultural income and his income was also below taxable limit and therefore, such penalties were not leviable - transactions were under bona-fide belief and the same were genuine. The assessee was new in construction business and prior to this year, the assessee was cultivating his ancestral land only.

HELD THAT:- The facts on record, would show that the assessee’s income is below taxable limit whereas the substantial income of the assessee constitute agricultural income of Rs. 14 Lacs which has been accepted by Ld. AO.

As decided in the case of Shri Ram Singh [2022 (8) TMI 1604 - ITAT DELHI] held that when the income is below taxable income limit, it could be said that the assessee had no other income which is chargeable to tax under the Act and therefore, the penalty as levied by Ld. AO u/s 271D was deleted. It is also fact that all the lenders are agriculturists which is evident from affidavit of Shri Raj Pal and Shri Sukhpal Singh which was filed by the assessee before.AO.

The assessee had also filed copies of land revenue records (Fard) to Ld. AO which is not in dispute. Similar documents have been filed for Shri Surjit Singh. Therefore, the assessee, in my considered opinion, would be covered under second proviso.

Proceeding further, the assessee would succeed on the plea of reasonable cause also since it is the first year of start of business. The nature of business i.e., construction and building material would involve cash transactions. The lenders are agriculturists and close family friends of the assessee residing in remote villages. The genuineness or the source of loan is not in dispute.

As decided in the case of Narinder Kumar Chunilal Soni (2023 (7) TMI 271 - ITAT AHMEDABAD) held that penalty u/s 271D is not leviable when cash was accepted under bona fide circumstances and without tax evasion motive. Sec.273B relief would be applicable if reasonable cause was shown. Assessee appeal allowed.

Denial of exemption u/s 11 - delay in filing of 10B - effect of subsequent filing of Form 10B to the CPC - HELD THAT:- As in the case of Karma Falya Trust [2024 (1) TMI 1524 - ITAT AHMEDABAD] allowing the assessee’s claim of exemption denied in identical circumstances of belated filing of form 10B though subsequently filed during assessment proceedings, holding that the belated filing of Form 10B would not come in the way of claim of exemption if the form is filed during assessment proceedings.

DR was unable to controvert the contention of assessee that the CIT(A) himself had held the assessee eligible to claim of exemption finding form 10B to be filed and available during rectification proceedings. Appeal filed by the assessee is allowed.

Disallowance u/s 14A in terms of Rule 8D - AO had observed from the balance-sheet that the assessee held substantial investments which were capable of yielding tax-free income and therefore, according to him, the expenditure incurred in relation to earning such exempt income was to be disallowed - HELD THAT:- This Tribunal in assessee’s own case for AY 2013-14 [2021 (12) TMI 390 - ITAT CHENNAI], had held that, only those investments which yielded exempt income was to be considered for the purposes of computing disallowance under Rule 8D.

Thus, we hold that, the disallowance in terms of Rule 8D was required to be computed with reference to only those investments which yielded the exempt income of ₹1,07,44,451/- during the relevant year. Having regard to the amended Rule 8D, the AO is directed to recompute and restrict the disallowance to 1% of the monthly average of exempt income yielding investments.

Disallowance computed u/s 14A r.w. Rule 8D, while computing book profit u/s 115JB - Tribunal has considered an identical issue in assessee’s own case for assessment years 2014- 15 to 2016-17 [2019 (12) TMI 1562 - ITAT CHENNAI] and by following decision of Vireet Investment Pvt. Ltd [2017 (6) TMI 1124 - ITAT DELHI] held that “computation under Clause (f) of the Explanation -1 to Section 115JB(2) is to be made without resorting to the computation as contemplated u/s. 14A r.w.rule.8D of the Rules”. Therefore, we direct the AO to delete addition made towards disallowance u/s. 14A r.w.rule 8D to book profit computed u/s. 115JB.

Disallowance of proportionate interest on borrowings in relation to the interest-free advances given by the assessee - It is seen that, the assessee had own funds comprising of capital, reserve & surplus which was far in excess of the average balance of interest-free-advances - AR has rightly pointed out that, the Hon’ble Supreme Court in the case of CIT v. Reliance Industries Ltd[2019 (1) TMI 757 - SUPREME COURT] has held that, where the amount of any interest- free loans given is sufficiently covered with the non-interest-bearing fund available with the assessee, then the question of disallowance of interest on borrowed fund does not arise. We find that identical disallowance was made by the AO in the earlier year(s) as well and this Tribunal had deleted the same in the consolidated order passed for AYs 2007-08 to 2011-12 by their order [2016 (1) TMI 1028 - ITAT CHENNAI]

Having regard to the position of own interest free funds and the average value of interest free advances, as noted above, we agree with the Ld. AR that, the presumption is that the assessee had given interest free advances from its own funds.

Nature of expenditure - disallowance of depreciation attributable to the fees paid to Dr. K. Venkatesan, a purported vastu expert - AO held that such expenses cannot be termed to be for business purposes and therefore disallowed the depreciation attributable to such expenditure - HELD THAT:- Tribunal in [2016 (1) TMI 1028 - ITAT CHENNAI] held that such a huge payment cannot be made year after year. When the assessee claims that payment of Rs. 2,50,00,000/- was made for assessment year 2009-10, it is not known why such a huge payment of Rs. 75 lakhs was made to Dr. K. Venkatesan for the same services. The assessee is expected to incur certain expenditure on the belief that the art of vastu may increase the productivity or profit of the assessee. However, claiming such expenditure year after year cannot be for business purpose.

Characterization of receipt - Revenue or capital receipt - treating the subsidy received from the Government of Maharashtra for investing in backward area to by way of income instead of capital receipt not liable to tax - HELD THAT:- Considering the above amendment to section 2(24) of the Act and decision of this Tribunal in the case of M/s Hyundai Motor India Ltd [2025 (2) TMI 1317 - ITAT CHENNAI] for the AY 2018-19 we are of the view that the decision rendered in assessee’s own case for AY 2013-14 is no longer applicable, due to change in position of law. We are therefore of the view that the lower authorities had rightly taxed the impugned subsidy as income of the assessee. Accordingly, this ground of the assessee stands dismissed.

Disallowance of royalty payable to the Government on limestone excavation - According to the AO, the royalty paid to the Government on limestone excavation was subject to the rigors of Section 43B of the Act and was deductible only on actual payment basis - HELD THAT:- Though the AR appearing for the assessee vehemently contended in support of this ground, but was neither able to controvert the above findings of the Ld. CIT(A) nor was he able to show as to why the royalty payable to government under the Mines and Mineral (Development Regulation) Act cannot be subject to the provisions of Section 43B of the Act. We thus see no reason to interfere with the impugned action of the Ld. CIT(A), which we confirm, and dismiss this ground of appeal of assessee.

Addition made by the AO on account of the provision set aside for leave encashment while assessing the book profit u/s 115JB - We agree with the first contention of the Ld. AR that, Section 115JB being a code in itself, the provisions of Section 43B which is applicable for computing income under the head ‘Profits & Gains of Business’ cannot be imported into the computation mechanism set out in Explanation (1) to Section 115JB - AO is required to ascertain whether the impugned provision can be added back or not, under any of the specified clauses set out in Explanation (1) to Section 115JB of the Act. We find that the lower authorities have not examined this aspect at all and on similar facts, this Tribunal had set aside the issue back to the file of the AO in the earlier year(s) to decide the matters afresh. Respectfully following the same, we set aside the issue back to the file of the AO and direct him to decide the allowability of the impugned provision while computing book profit u/s 115JB de novo, and in light of Explanation (1) to Section 115JB of the Act alone.

Disallowance of interest paid on belated TDS while computing book profit u/s 115JB - Interest paid for belated deposit of TDS is allowed as deduction while assessing book profit u/s 115JB of the Act. This ground is accordingly allowed.

Disallowance of deduction u/s. 80IA - We, therefore, respectfully following the decision of the Tribunal in the assessee's own case for the assessment year 2018-19, set aside the order of the lower authority, uphold the benchmark analysis undertaken by the assessee and delete the downward transfer pricing adjustment and allow this ground raised by the assessee.

Addition made by the AO u/s 68 - deposit of Specified Bank Notes [‘SBNs’] during the period of November-December 2016 - The assessee has claimed that, the impugned amount represented advances which were returned by travelling employees. We however find that no details/evidence has been furnished to substantiate the same. In order to justify their claim, the assessee ought to provide the names, details of the employees, the dates on which advances were given to them, evidence that they were travelling on the date of demonetization, confirmation of accounts from them etc. No such details were either furnished before the lower authorities or before us. Hence, in fitness of the matters, we consider it fit to remit the matter back to the AO with direction to the assessee to submit necessary details/evidences to substantiate the source of these non-permitted cash receipts. The details/evidences mentioned in the foregoing are only illustrative and the assessee is free to produce any other details, as it considers fit. The AO may also make independent enquiries from the employee(s), if so desired. This ground is accordingly allowed for statistical purposes.

Taxability of retention money - Impediment in dissolving the corporate debtor - Liquidation process; Closure of liquidation - Compliance with liquidation regulations - HELD THAT:- As affairs of the Corporate Debtor were completely liquidated after realising the assets and distributing the amount to the stakeholders after complying with the provisions of Section 53 of the Code in the order of priority as mandated under the IBC, 2016. The Liquidation Account in terms of regulation 45(1) of the Liquidation Process Regulations and details thereof have been attached along with Bank statement showing “Zero” balance in the Liquidation Account.

Liquidator is further directed to serve a copy of this order upon the Registrar of Companies, West Bengal, immediately and, in any case, within fourteen days of receipt of this order. The Registrar of Companies shall take further necessary action upon receipt of a copy of this order. The Successful auction purchaser shall make the requisite filings with the RoC.

As seen that all the compliances as required under law in this regard have been made and there is no impediment in dissolving the corporate debtor. We order accordingly. The Liquidator shall stand discharged from his responsibilities, subject to all procedural compliances.

Reopening of assessment - 'reasons to believe' to initiate the reassessment proceedings, though prayed for by the assessee, were never supplied - no notice of the reassessment proceedings was issued to the assessee u/s 143(2) of the Act.

HELD THAT:- The objection raised by revenue that the assessee had not confirmed the return filed in response to the reassessment notice issued under Section 148 of the Act, we find, the CIT (Appeals) and the Tribunal have dealt with that issue and found that the assessing officer has made the computation of the income of the assessee not on the strength of any other material but primarily on the strength of the facts disclosed in the physical return filed. Inferentially, it may be observed, the reasoning of the CIT (Appeals) as confirmed by the Tribunal appears to be that though the return filed through physical mode may not have been confirmed through electronic mode at the relevant time, at the same time, substantially, procedural requirement stood fulfilled inasmuch as the assessing officer himself made the computation of income on the basis of the figures disclosed in the return filed through the physical mode.

Tribunal had noted, upon such defect being pointed out, the next date itself, the assessee e-verified the same. In Assistant Commissioner of Income Tax and Another vs Hotel Blue Moon [2010 (2) TMI 1 - SUPREME COURT] it has been held, notice under Section 143(2) is not procedural and omission to serve that notice is not curable. Requirement of its issuance cannot be dispensed with. Decided against revenue.

Immunity from penalty u/s 270AA- petitioner’s request for grant of immunity been declined - As per revenue petitioner’s application seeking immunity is neither available with the physical records of the respondents/ revenue authorities nor available on the portal

HELD THAT:- Petitioner had indeed applied for immunity from penalty under Section 270AA in Form 68 on April 9, 2025. Such application along with the print out of Form 68 forms Annexure ‘P-6’ to the writ petition. In such view of the matter, it cannot be said that no application was filed by the petitioner seeking immunity. In the said application the petitioner has, in support of its contention that it has satisfied the conditions required for grant of immunity in terms of Section 270AA

Sub-section 3 of Section 270AA reads in mandatory terms. A meaningful reading thereof makes it clear that once an assessee satisfies the conditions mentioned in the earlier limbs of the said section, the AO would be bound to grant immunity to such assessee.

The order impugned could not have been passed without disclosing the basis for the conclusion as to why was (is) the petitioner not entitled to immunity and which of the conditions mentioned in Section 270AA of the said Act of 1961 the petitioner has failed to fulfil. There is no indication in the order impugned as to how have the petitioner’s contention in its application for immunity been dealt with.

It is now well settled that reasons are live links between the narrative and the directive and that an order without reasons can also be treated as a nullity. Since the order impugned dated May 27, 2025 does not evince any application of mind to the matter by the Assessing Officer concerned and it does not cite any reason on the basis of whereof the ultimate conclusion has been arrived at, therefore, the same cannot withstand judicial scrutiny.

In fact Schneider Electric South East Asia (HQ) Pte. Ltd.[2022 (3) TMI 1295 - DELHI HIGH COURT] cited by the petitioners also emphasises on reasons being provided in the order declining immunity.

The order impugned passed under Section 270AA (pertaining to assessment year 2023-24) is set aside. AO concerned shall revisit the petitioners’ application for grant of immunity, strictly in accordance with law and pass appropriate order.

Penalty u/s 271DA - violation of Section 269ST - suit is filed with a claim of more than Rs.2,00,000/- and the amount was said to be paid in cash towards the suit transaction - HELD THAT:- It is clear whenever suit is filed with a claim of more than Rs.2,00,000/- and the amount was said to be paid in cash towards the suit transaction, the Court shall intimate the same to the jurisdictional Income Tax Department to verify the transaction and violation of Section 269ST of Income Tax Act.

In the case on hand, as per the plaint averment, the plaintiff said to have paid Rs.80,00,000/- in cash to the defendants on 21.06.2016. Though the amount said to have been paid prior to coming into force of Section 269ST of Income Tax Act, such a huge transaction by the plaintiff should have been reflected in his income tax return. If it is not duly mentioned in its income tax returns, certainly, the transaction should be viewed with suspicion.

Whether the transaction which has not been brought into the book or a black money transaction can be a subject matter of the suit and whether the Court can lend its helping hand to recover money based on such transaction are all matters to be decided at the time of final disposal of the suit. Therefore, do not want to express any opinion on the said aspect. If ultimately the plaintiff is able to prove the payment by cash to the defendants, certainly it should be brought to the notice of the Income Tax Department for setting law into motion.

The Apex Court, in The Correspondent, RBANMS Educational Institution Vs. B.Gunashekar and another [2025 (4) TMI 1313 - SUPREME COURT]with the noble object of abolishing black money transaction, issued general guidelines to Courts in India to intimate such kind of heavy cash transaction to the jurisdictional Income Tax Authorities. Though the present suit transaction had taken place prior to introduction of Section 269ST of the Income Tax Act, even in the absence of said provisions, this kind of heavy cash transaction requires consideration by the Income Tax Department. Therefore, do not want to interfere with the order passed by the trial Court directing the Ministerial Officer of the Court to intimate the suit transaction to the Income Tax Department by forwarding the copies of the plaint documents.

As far as the direction issued by the trial Court to reveal the PAN number of the petitioner is concerned, in the guideline issued by the Apex Court in the above mentioned case, no such direction is given and the petitioner cannot be compelled to reveal his PAN number to the respondents. Therefore, the direction issued by the trial Court to the petitioner to reveal his PAN number to the respondents is set aside and that portion of the impugned order is modified. The direction issued by the trial Court to forward the copy of the plaint and the plaint documents to the jurisdictional Income Tax Authority is confirmed.

Civil Revision Petition is partly allowed by setting aside the portion of the impugned order directing the petitioner to reveal his PAN number to the respondents.

Grant of Rewards to Informants, 2007 - case of the petitioner that he had supplied vital information to the respondent-department relating to the evasion of tax and, pursuant to that, the petitioner was called upon by the respondent-department to fill up the prescribed form, which he filled in the presence of the competent officer - petitioner was also granted an interim award of Rs. 1,00,000/- thereafter, the respondent-department had refused to give any further reward in accordance with the policy

HELD THAT:- Provisions of Clause No. 2.1 of the Guidelines for Grant of Rewards to Informants, 2007, which mention the formation of the Committee of three persons, being (1) the Director General of Income Tax (Inv.) of the zone concerned, (2) the cadre controlling Chief Commissioner of the region concerned, and (3) the Commissioner of Income Tax concerned or the Director of Income Tax (Inv.), which has to take a decision regarding the grant of reward.

The Clauses 13.1 and 13.2 of the Policy Guidelines, 2007 refer to the calculation of the quantum of the amount to be rewarded and the part of final reward which is to be determined after the decision in appeal, etc. The interim reward of Rs. 1,00,000/- finds place in Clause No. 15.1 of the said Policy Guidelines, which the petitioner has already received.

In the facts of the present case, we have noticed that, in fact, the respondent-department has not passed any final reward, since it is their contention that as the petitioner has already been granted a reward of Rs. 1,00,000/- as per the policy and the assessment does not reveal any further addition to the income declared by the Vasant Group of builders, there is no need to pass the final reward as the petitioner is only entitled to Rs. 1,00,000/-.

Department has to pass an order declaring to the extent that the petitioner or the informant is not entitled to any further reward/award over and above the interim reward, and that the interim reward of Rs. 1,00,000/-, which has already been paid, would suffice the requirements of the policy and the information furnished by the petitioner to the respondent-department.

We find that the respondents have not placed anything on record regarding any decision made by the Committee in this regard. Thus, in the interest of justice and in light of the order passed by the Supreme Court, we direct that the aforementioned Committee, as mentioned in Clause No. 2.1 of the Policy Guidelines, or any other Committee which is in existence today relating to the grant of rewards to informants, shall take a decision after hearing the petitioner, with regard to enhancement of the reward or, in the alternative, to pass necessary orders on the interim reward which has already been paid to the petitioner. Such decision shall be taken, in accordance with law, after hearing the petitioner, within a period of six months from today.

Accordingly, the present writ petition stands partly allowed.

Assessment u/s 143(3) read with Section 144B - petitioner requested to file the updated Income Tax Return (ITR) u/s 139(8A) which was rejected and the AO proceeded with the assessment u/s 143(3) read with Section 144B -disallowance of exemptions under Section 10 and the deduction claimed in the ITR as per the chart contained in the assessment order - HELD THAT:- A bare reading of clause (b) of the third proviso to sub-section (8A) of Section 139 of the Act indicates that no updated return shall be furnished by any person for the relevant assessment year where any proceeding for assessment or reassessment or recomputation or revision of income under the Act is pending or has been completed for the relevant assessment year in his case.

This provision squarely applies to the case of the present petitioner since the proceeding for assessment or re-assessment was pending. The petitioner had not ventured to file the updated return before issuance of notice under Section 143(2) of the Act or the assessment proceedings u/s 143(3) r/w Section 144B of the Act by the impugned order dated 15.10.2025.

Request for filing of the updated return was rightly rejected by the Assessing Officer and the assessment order was passed after disallowing exemptions and deductions on merits. On a bare reading of the Press Release dated 23.12.2025, it is apparent that it is applicable to the cases of identified taxpayers for the assessment year 2025-2026. The recital made at para 4 thereof indicates that for the previous assessment years 2021-2022 to 2024-2025, the identified taxpayers had updated their ITRs and paid more than Rs.2,500 crores of taxes. In the present case, the petitioner is not an identified taxpayer, who had been requested through SMS or e-mail under the “Non-intrusive Usage of Data to Guide and Enable (NUDGE)” campaign to correct such errors.

In view of the pendency of the assessment proceedings upon being selected for scrutiny assessment, in terms of clause (b) of third proviso to Section 139(8A) of the Act, such an opportunity to file the updated return cannot be allowed to the petitioner. The petitioner had not invoked the said provision before his case was selected for scrutiny assessment, as such we do not find any error in the impugned order refusing the request of the petitioner for filing the updated return. The petitioner, however, has the remedy of appeal. He may take all such grounds of law and facts on merits before the appellate authority as is permissible in law. WP dismissed.

Addition by way of excess agriculture income - difference between the gross agriculture receipts shown by the Appellant and estimated by the AO - estimating agricultural income - as argued sale of agriculture produce was duly supported by invoices and that buyers had duly confirmed purchases made from the Appellant - HELD THAT:- ​​​​​​AO has accepted that assessee was doing agricultural activities, and the dispute is only with regard to gross agricultural income. The gross agricultural income shown in the income tax return is more than the previous year’s return of income.

Assessee has been showing agricultural income constantly since last so many years and therefore considering these facts, to meet the end of justice, an ad-hoc estimated addition @ 10% should be made in the hands of the assessee, as the assessee is an agriculturist and produced all possible evidences before lower authorities, however, there are some self -servicing evidences produced by the assessee, which have less evidently value.

Therefore, direct the AO to make addition in the hands of the assessee @ 10% by following the normal rate of income tax. Appeal filed by the assessee, is partly allowed.

Addition being the impact on the profit due to change in method of accounting in respect of recognition of revenue - Under reporting of income -change in method for identifying the stage of completion and recognition of revenue - assessee is a company incorporated in United Kingdom (UK) - had the assessee continued with the earlier method of accounting by considering only staff cost incurred to date as a percentage of estimated staff cost for each contract to ascertain the percentage of completion for revenue recognition, the profit for the year would have been higher - HELD THAT:- As pursuant to the change of method of accounting, the assessee had indeed reversed the revenue of earlier years in the sum during the year and the same had been claimed as deduction as a prior period item, which has been allowed by the AO and not disturbed by the ld CIT(A).

Impact on the profit is only pursuant to the reversal of revenue. When that deduction on account of prior period expenses is allowed there is absolutely no reason to make a separate addition on account of addition on account of impact of profit arising out of such transaction. Either way, we find that it is merely a timing difference of recognition of revenue which has got no tax impact at all as tax rate remain same for the year and also in subsequent years. When there is no tax loss to the exchequer making an addition of an issue arising out of timing difference is not warranted. See Excel Industries ltd [2013 (10) TMI 324 - SUPREME COURT (LB)]

We direct the AO to delete the addition made for the year under consideration. Decided in favour of assessee.

Reassessment proceedings u/s 147 - validity of notice u/s 148 was issued by Additional Commissioner of Income-tax, Special Range-18, Delhi - As argued 'reasons to believe' were undated, unsigned and without any stamp or seal of office - HELD THAT:- We do not find any legal infirmity in his conclusion that Range head has a concurrent jurisdiction with the AO to initiate any proceedings under section 147 r.w.s. 148 - On the issue of undated and unsigned reasons also he has correctly observed that the same were not fatal to the proceedings as they were provided along with a covering letter having DIN.

We also find force in the argument that the assessee could not otherwise establish that the impugned proceedings were bad in law. Accordingly, no blame of any inappropriate conclusion can be placed upon the ld. CIT(A).

Arguments taken by the assessee challenging validity of the assessment order on account of invalid proceedings are unfounded and not supported by facts on record. The decision of the ld. CIT(A) on the issue of challenge to proceedings under section 147 r.w.s. 148 of the Act is therefore confirmed and all the grounds of appeal raised by the assessee in its Cross Objection are dismissed.

Addition on account of deemed dividend from Quantum Securities under provisions of section 2(22)(e) - whether the transactions reflected by way of debit/credit entries between assessee and Quantum are in respect of loans and advances or have some other connotation? - HELD THAT:- It is the case of the assessee that it is making sale purchase of shares through Quantum for nearly last two decades and that it is one of the biggest clients for Quantum. The assessee has thus indicated that the transactions referred by the ld. AO are in reality normal business transactions of sale/purchase of shares. In support of its contentions, the assessee has placed reliance upon a Catina of judgments on the subject, inter alia, including of this Tribunal pronouncing that transactions under taken in the ordinary course of business do not attract invocation of Section 2(22)(e) of the Act. Thus, we have considered the decision of Futurz Next Services Ltd. [2022 (1) TMI 339 - ITAT DELHI] confirming this hypothesis as considered CBDT Circular No.19/2017 dated 12.06.2017 postulating that transactions under taken in the ordinary course of business do not attract invocation of Section 2(22)(e) of the Act.

We are of the considered view that there is no infirmity in the order of the ld. CIT(A) qua his decision to direct the ld. AO deletion of addition made on account of invocation of section 2(22)(e).

Addition u/s 14A - AO postulated that the earning of dividend income without any corresponding expenses is unimaginable and hence concluded that there must be some expenses claimed by the assessee in its proprietary concern - CIT(A) deleted addition - HELD THAT:- AO has concluded that some expenses must have been included in the overall expenditure claimed of the said concerns and that therefore commensurate disallowance under section 14A of the Act was required. We have noted from the details extracted by the ld. CIT(A) in his appellate order as well as those placed by assessee in its paper book before us that perusal of balance sheet of M/s Variety Book Depot as on 31.03.2015 do not reflects any investments in shares. Now, when there was no investment in shares there cannot be any case for any disallowance under section 14A of the Act. The presumption drawn by the ld. AO was therefore materially defective. We therefore sustain the order of the ld. CIT(A) on the issue of deletion of the addition made under section 14A of the Act by the ld. AO and dismiss the ground of appeal no.3 raised by the appellant revenue.

Disallowance of Short Term Capital Loss in respect of sale of a property - AO proceeded to make the addition holding that the assessee has not produced any documents evidencing sale consideration of the property except copy of a letter written to DLF for transfer of rights of the property - CIT(A) deleted the addition - HELD THAT:- Mere exhibition of certain amounts in Form 26AS and corresponding TDS thereupon would not give credence to a theory of sale of any property. There is nothing on record to evidence that the legal title of the property moved from the assessee to Ms. Hemlata as postulated under the definition of ‘transfer’ under the Income Tax Act read with the Transfer of Property Act. Thus, it is evidenced that the assessee has failed to demonstrate with clinching evidences regarding the sale of a property to Ms. Hemlata. There is also strength in the hypothesis as to the justification for the alleged loss. The contributory factors responsible for the loss could not be demonstrated. We have also noted that the relief accorded by ld. CIT(A) is also based upon some cryptic, incoherent and incomprehensible findings regarding the failure of the Assessing Officer while making the impugned addition. Accordingly, we set-aside the order of the ld. CIT(A) and confirm the addition made by the ld. AO. The ground of appeal raised by the Revenue is therefore allowed.

Addition on account of unexplained of Sundry Creditors u/s 41(1) - neither list/ schedule of current liabilities was filed alongwith the return nor the complete list alongwith genuineness of liabilities supplied during the course of assessment proceeding - CIT(A) deleted addition - HELD THAT:- The entire addition has been made by the ld. AO by casting a doubt on the purchases of yester years qua which liabilities were shown in the present year. The same cannot be done. Purchase transaction of a particular year can be examined only in the year of purchase and not subsequently. Further, the statutory prescription contained in section 41(1) do not allow any estimated or ad-hoc additions. There cannot be any estimation of cessation of liabilities. Either the liabilities exist or they cease to exist. We are accordingly of the view that the action of the ld. CIT(A) in deleting the addition is based upon correct understanding of the facts of the case and the contemporaneous law of section 41(1) correctly.

Addition u/s 68 on account of unexplained cash deposit - CIT(A) deleted addition - HELD THAT:- CIT(A) has rightly observed that the ld. AO has exceeded his jurisdiction while making the impugned addition under section 68. He has rightly observed that without pointing any specific entry ‘credited’ in the ‘books of accounts’ of the assessee, the ld. AO was not entitled to make any additions under section 68. His conclusion that the troika of identity, creditworthiness and genuineness of transactions mandated under section 68 is sine quo non before making any addition under section 68 has been found to be correct. We have also noted that the observation of ld. CIT(A) regarding failure of the ld. AO to bring on record any evidence to support cash expenditure on repair and maintenance of building by the assessee, is also correct. Thus, we have noted that the order of the ld. CIT(A) is based upon correct understanding and interpretation of the facts.

Disallowance of commission, reduction in share of co-sharers and disallowance of Short- Term Capital Loss - CIT(A) deleted addition - HELD THAT:- There is no dispute on the figure of claims as well. It is trite law that an Assessing Officer is empowered to hold enquiries in respect of claims of expenses made by an assessee with the persons deemed necessary. This is the discretion available with an Assessing Officer and which cannot be challenged. It is an undisputed fact on records that in spite of being given opportunities Shri K.P. R. Nair did not appear before the ld. AO. The argument of the ld. CIT(A) while deleting the addition of the AO that this non-compliance was inconsequential, cannot therefore be accepted. It is immaterial as to whether the payments were covered by some agreements or routed through some banking channels. The onus is upon the assessee and its parties to satisfy and comply with statutory notices of the ld. AO qua justification of expenses claimed. The relief accorded by the ld. CIT(A) therefore cannot be sustained.

Reduction in share of co-sharers whereby the ld. AO made the addition by computing the entire gain on the property as taxable in the hands of the appellant only and by not allowing 50% gains as attributable to the co-sharers - As admitted before the ld. AO in their sworn statements that they were only promised 2-3 Crores of rupees as profit. As regards Jorbagh property, they clearly submitted that they have no ownership status qua the said property. The ld. AO has also observed that the absence of alleged co-sharers as parties, in the sale purchase agreements of the immovable properties strongly alluded that they were not the real recipients of any profits. The observation of ld. AO that the death of Smt. Rajamma S. Madden changed the entire texture of agreement between the assessee and her, since after her death assessee acquired ownership rights qua the will of Smt. Rajamma S. Madden. We have noted that on page-16 of his order, the ld. AO has clearly brought out the infirmities and inherent contradictions in the MOU entered between the assessee and two co-sharers. We are accordingly of the view that the relief allowed by ld CIT(A) is once again based upon inappropriate understanding of the facts of the case.

Short Term Capital Loss in respect of the Jorbagh property - Sale of Jorbagh property for Rs. 31,50,00,000/- so as to give rise to the impugned loss of Rs. 43,50,00,000/- has been rightly noted by the ld. AO as a created and imaginary loss. The impugned property was sold by the assessee to a company namely M/s Bookwise India Pvt. Ltd., in which he alongwith his wife is a shareholder. In fact the sale of one of the floors of the constructed/redeveloped floors of Jorbagh property by M/s Bookwise India Pvt. Ltd. to Shri Anuj Kalra S/o Shri Ramesh Chandra Kalra, one of the co-sharers adds credence to the theory that the entire transactions were engineered to suit specific interest.

On this matter we place full reliance upon the decision of MacDowell and Company Limited. [1985 (4) TMI 64 - SUPREME COURT] held that tax planning may be legitimate provided it is within the frame work of law, colourable devices cannot be part of tax planning and it is wrong to encourage or entertain the belief that it is honourable to avoid the payment of tax by resorting to dubious methods. It is the obligation of every citizen to pay the taxes honestly without resorting to subterfuges.

Disallowance under section 36(1)(iii) for diversion of interest-bearing funds - nexus between borrowed funds and interest-free advances - unexplained cash credits under section 68 - business expediency - charging of interest from partners - negative capital account not ipso facto proof of diversion

Disallowance under section 36(1)(iii) for diversion of interest-bearing funds - nexus between borrowed funds and interest-free advances - business expediency - negative capital account not ipso facto proof of diversion - charging of interest from partners - Whether the learned CIT(A) was justified in sustaining a residual disallowance of Rs. 7,70,069/- under section 36(1)(iii) despite findings accepting availability of adequate interest-free funds and absence of nexus between borrowed funds and interest-free advances. - HELD THAT: - The Tribunal examined the Assessing Officer's and CIT(A)'s findings and concluded that the CIT(A) had already accepted that (a) the assessee had substantial interest-free funds exceeding the advances, (b) gross interest effect had not been the correct basis and no direct nexus between borrowed funds and interest-free advances was established, and (c) the increase in interest-free advances during the year was limited. Despite these findings, the CIT(A) sustained a residual disallowance solely by inferring diversion from a negative capital balance and by holding that business expediency for incremental advances was not shown. The Tribunal held that such an inference is legally unsustainable where the foundational facts required to invoke section 36(1)(iii) are absent. In particular, the Tribunal emphasised that a negative capital account, without any fund-flow analysis or identification of specific diversion, does not automatically demonstrate diversion of borrowed funds. Further, where a substantial portion of the assessee's interest income consisted of interest charged to partners (an undisputed fact), the charging of interest from partners neutralises any alleged diversion insofar as partner-debit balances are concerned; thus the debit in the capital account is irrelevant for invoking section 36(1)(iii) when interest has been recovered. On these bases the Tribunal held the residual disallowance to be assumption-based and inconsistent with the CIT(A)'s own findings accepting availability of interest-free or interest-compensated funds and absence of nexus. [Paras 12, 13, 14, 15, 16]

The disallowance of Rs. 7,70,069/- sustained by the learned CIT(A) under section 36(1)(iii) is not justified and is deleted.

Final Conclusion: The assessee's appeal is allowed; the partial disallowance under section 36(1)(iii) sustained by the CIT(A) is set aside and deleted.

Unexplained money u/s. 69A as taxed u/s.115BBE - Characterization as Shroff business - assessee explained that it has been engaged in the Shroff business and earning commission income by issuing cheques to various parties, wherein the parties returned the money within short period along with his commission - CIT(A) who restricted the addition at 1% of the total credit and also chargeable at normal provisions of the Act being the commission income earned by the assessee -

HELD THAT:- CIT(A) failed to verify whether the assessee obtained statutory license to run the Shroff business?; Why the assessee not filed the regular Return of Income? and what is the Return of Income for the previous year or subsequent year, whether that includes this Shroff business income. Thus without making any such verification Ld. CIT(A) considered the transaction as Shroff business of the assessee and restricted the addition to 1% of the total credits in the bank account, which in our considered view is not correct proposition of law more particularly assessee has never filed the Return of Income.

Thus the conclusion arrived by the Ld. CIT(A) is against the provisions of law. Therefore we hereby set-aside the order passed by Ld. CIT(A) with a direction to the Jurisdictional Assessing Officer to give one more opportunity of hearing to the assessee to establish its case whether genuine Shroff business was conducted by the assessee for the present assessment year and pass orders in accordance with the provisions of law.

Appeal filed by the Revenue is treated as allowed for statistical purpose.

Order passed u/s 143(1) - adjustment under the head “Long Term Capital Gains” on account of adopting stamp duty value instead of sales consideration of immoveable property sold - JCIT(A) directing the AO to refer valuation to DVO and adopt the same to compute income u/s 56(2)(vii)(b) of the Act - HELD THAT:- As decided in Sunil Kumar Agarwal [2014 (6) TMI 13 - CALCUTTA HIGH COURT] AO should give an option to the assessee to have the valuation made by the DVO. The valuation made by the DVO is required to avoid miscarriage of justice. The legislature did not intend that the capital gain should be fixed merely on the basis of the valuation to be made by the District Sub Registrar for the purpose of stamp duty. The legislature has taken care to provide adequate machinery to give a fair treatment to the citizen/taxpayer.

There is no reason why the machinery provided by the legislature should not be used and the benefit thereof should be refused. Even in a case where no such prayer, the AO discharging a quasi judicial function, has the bounden duty to act fairly and to give a fair treatment by giving him an option to follow the course provided by law.

A Co-ordinate Bench in order titled as “Amit Sabharwal [2025 (3) TMI 712 - ITAT DELHI] has held that no adjustment/addition u/s 50C of the Act can be made while processing ITR u/s 143(1) of the Act.

Thus, following the principles of judicial precedents, it is held that the adjustment made by AO u/s 50C while processing Income Tax Return u/s 143(1) of the Act is illegal. Appeal of filed by the assessee is allowed.

Fraudulent availing Duty Free Credit Entitlement Certificates from DGFT - valid import of goods against the DFCE Licences or not - mis-using the DFCE scheme by way of wrongly obtaining the licences, resorting to Circular trading of CPDs - it was held by CESTAT that 'As valid DFCE licences have been used for import of the goods by the respondents, hence, there are no reason for demand of duty or confiscation of the goods, or imposition of penalties.'

HELD THAT:- Issue notice on the civil appeal as well as on the application for condonation of delay.

Seeking release of seized goods - request to forthwith release the imported consignment of the Multi-Functional Devices (86 units) under Bill of Entry No.6633864 - HELD THAT:- Similar writ petitions of identical nature have already been considered by this Bench wherein by way of a conditional interim order this Bench had permitted the release of seized goods subject to the petitioner/importer fulfilling certain conditions.

However, as regards the proceedings before the adjudicating authority is concerned, the Hon’ble Supreme Court [2025 (1) TMI 800 - SC ORDER] permitted the adjudicating authority to proceed and decide the same strictly in accordance with law. The petitioner is also held entitled for participation in the adjudicating proceedings.

Pursuant to the disposal of the SLP, this Court has disposed of all such writ petitions whereby the goods were released and the proceedings were pending before the adjudicating authority.

Similar nature of facts are also there in the instant case also where the stage at this juncture is only the seizure memo and prayer is also only for an interim release of the seized goods.

Instant writ petition also therefore can be disposed of at the admission stage itself. Reserving the right of the adjudicating authority to take appropriate decision in the proceedings after permitting the petitioner to represent before the adjudicating authority.

Thus, it is ordered that let the respondent authorities pass an order on the application filed by the petitioners for provisional release of the goods.

Waiver of demand under Modified Rehabilitation Scheme sanctioned by the BIFR - Grant of Advance Licences (Duty Entitlement Export Certificate - DEEC) for the import of antibiotic chemicals - requirement of fulfilment of export obligations - HELD THAT:- The Customs has been fully cognizant of the matter from the start and have had adequate opportunity to put forth their objections in relation to the Modified Rehabilitation Scheme. The BIFR has consciously used the phrase ‘to consider’ only in regard to Income tax and Central Excise dues, leaving no avenue open for any other interpretation - the High Court is unable to accept the argument of the learned counsel for the respondents to the effect that no positive direction has been issued in respect of the demand of Rs. 81.60 lakhs raised under Order-in- Original dated 28.03.2000. This argument is rejected.

No reference to the customs case anywhere - HELD THAT:- The High Court is unable to accept this argument as well as we believe it is hyper-technical and would go against both the letter and spirit of the rehabilitation ordered by the BIFR. It is true that the demand arises out of an order in original passed by the Customs Commissioner. However, the scheme of the Customs Act provides for investigation to be conducted, and issuance of show cause notice, by the DRI in respect of violations that relate to the DGFT.

In the present case, the violation relates to non-fulfilment of export obligations which comes under the ambit of the DGFT, specifically referred to under paragraph 8.7 of Modified Rehabilitation Scheme. Then again, once show cause notice for the violations are issued by DRI, the adjudication is to be completed by the Customs Commissioner who would then pass the Order-in- Original, as in this case - the High Court is unable to accept the position that merely because the Commissioner (Customs), as an authority, has not been mentioned in paragraphs 8.6 and 8.7 of the BIFR order, that demand is any different from the demand raised under the order in original dated 23.08.2000. In fact, both in paragraphs 8.6 and 8.7 there is reference to the demand of Rs. 81.60 lakhs which matches identically with, and is the same as the demand under Order-in- Original dated 28.03.2000.

Directions for consolidation of licences of the Modified Rehabilitation Scheme - HELD THAT:- This would constitute a question of fact with which do not require concern, as the consolidation of licences would only be necessary to fulfil the direction relating to the waiver of demand.

The appeal filed by the petitioner before the CESTAT becomes superfluous, and as a sequitur, the impugned order would have to go - Petition allowed.

Conversion of imprt of Conveyance from foreign to coastal run - Prospective application of exemption notification No.12/2012 - non-payment of countervailing duty (CVD) on conversion from foreign to coastal run - Validity of demand communication vs show-cause notice - HELD THAT:- Jug Rahul’ has been imported in 2005. No Bill of Entry has been filed as the law did not mandate the filing of Bill of Entry at that relevant point in time. As far as ‘Jug Rishi’ is concerned, Bill of Entry has been filed on 28.03.2011. Both imports are prior to date of Notification dated 12/2012.

The admitted position in the present case is that, post date of Notification there has been conversion from foreign run to coastal run. However, one of the question that has been taken note of by the Orissa High Court referring to Commissioner of Customs, Mumbai v Aban Loyd Chiles Offshore Ltd. [2017 (2) TMI 294 - SUPREME COURT] is that customs duty would be leviable only on the import of conveyances at the first instance (i.e., at the time of first entry). This event was in 2005 and 2011 in the case of the two vessels we are concerned with. Post the aforesaid event, they ceased to be goods and were only conveyances.

Hence the critical event in order to attract liability under Notification No.12/2012 would be the date of import alone and not their subsequent run as a conveyance. In the present case, these critical dates are in 2005 and 2011, even prior to date of Notification.

We are hence of the considered view that the impugned demands under communications dated 11.07.2012 are liable to be quashed.

The very fact that there is a computation / working sheet annexed with the impugned communication quantifying the demand and calling for the remittance of the same within 14 days from date of receipt of the letter, would make the impugned communication nothing short of a demand and, they are quashed. In light of the above discussion, W.P. are allowed.

As a sequitur, W.P., seeking a writ of prohibition in demanding customs duty on the import of ‘Jag Rahul’ and ‘Jug Rishi’ is also allowed.

Service by notice and display under Section 153 of the Customs Act, 1962 - Maintainability of appeals filed beyond the condonable period - Doctrine of bona fides and conduct of the appellant affecting relief

Service by notice and display under Section 153 of the Customs Act, 1962 - Whether the Orders-in-Original were validly served in compliance with Section 153 and whether defective service vitiated the time-bar decision - HELD THAT: - The Tribunal examined the material on record including the departmental communication of 28.12.2015 which stated that the Orders-in-Original and detention notices were returned undelivered by postal authorities and consequently displayed on the Notice Board at Customs House, Chennai. The record also showed that the adjudicating proceedings were attended on 24.01.2011 and written submissions filed on that date, with no contemporaneous claim of non-receipt or change of address put forth before the First Appellate Authority. The Appellant's later assertion (in January 2016) that he had vacated premises in January 2011 and that postal covers were returned was found to be inconsistent with the contemporaneous hearing attendance and filings. On these facts the Tribunal concluded that the Department complied with the service mechanism prescribed by Section 153 and that the Appellant failed to challenge or controvert the mode of service at the earlier stage when it ought to have been done. [Paras 6, 7, 8]

Service in terms of Section 153 was duly effected by return and display; defective service was not established and does not vitiate the impugned orders.

Maintainability of appeals filed beyond the condonable period - Doctrine of bona fides and conduct of the appellant affecting relief - Whether the Appeals, dismissed by the First Appellate Authority as time barred, merit admission or relief in view of the appellant's conduct and asserted non-receipt - HELD THAT: - The Tribunal considered the chronology and conduct of the Appellant: release of goods on provisional deposit following the High Court order, attendance of counsel at the adjudication hearing on 24.01.2011, absence of any intimation of change of address to Customs despite vacating premises, and the instruction to the premises owner to return postal covers. These facts led the Tribunal to conclude that the Appellant did not act with bona fides and that his later contentions about non-receipt of orders were inconsistent with the contemporaneous record. The Tribunal observed that the challenge to service should have been taken earlier before the First Appellate Authority. In the absence of credible explanation and in view of the established service and appellant's conduct, no equitable basis existed to condone the delay. [Paras 9, 10]

No merit in the Appeals; absence of bona fides and established service justify dismissal of the appeals which are upheld as time barred.

Final Conclusion: Appeals dismissed; the impugned Orders-in-Original and the First Appellate Authority's dismissal of the appeals as time barred are upheld.

Imposition of penalties under Section 114AA, 117 & 158(2) of the Act and Regulation 12(8) of the Regulations - transportation and handling of containers - shipping line for export off-loading of loaded containers - dummy Export Application and Shipping Bill which were generated by the employees for calculation of dues and additional charges - HELD THAT:- The reason given in the impugned order that dummy export application and shipping bill were not required to be generated when there was no permission of customs, also overlooks the fact that the Appellants were acting under the bona fide impression that the containers are to be shifted to All Cargo Logistics after permission of customs. In this view of the matter, the reason given by the Appellants for generation of dummy export application and dummy shipping bill merits acceptance.

Having not followed this procedure and not invoked Section 138B, the Adjudicating Authority has clearly relied on inadmissible evidence. The penalty under Section 114AA can be imposed only where a person knowingly or intentionally makes, signed or uses, false and incorrect material, in the transaction of any business under the Act.

No evidence on record that the dummy export application or dummy shipping bill were used for any purposes in the transaction of any business under the Act. At any rate, Section 114AA can be invoked only against the fraudulent exports as per the 27th report of the Standing Committee on Finance and the Appellants, not a fraudulent exporter, no penalty under Section 114AA can be imposed on the Appellants.

Imposition of penalty under Section 158(2) is also not warranted as Section 158(2) is merely an enabling provision and not a penal provision as held in Sunil Kumar Jain vs. Commissioner of Customs, [2016 (12) TMI 430 - CESTAT NEW DELHI]

As regards penalty under Section 117, the same is a residual provision which can be invoked for imposition of penalty for any contravention, in respect of which no express penalty is elsewhere provided under the Act. Since the impugned order imposes simultaneous penalty under Section(s) 114AA, 158(2) and also under Regulation 12(8), invocation of residuary penal provision under Section 117 is clearly not permissible.

The present case is also not a case where penalty under Regulation 12(8) is warranted for violation of any regulation. On the contrary, the facts of the present case when seen in entirety clearly show that the entire case is that of an inadvertent mistake not involving any mala fide on the part of the Appellants. Once the entire case against the Appellant No.1 is not sustainable in law, than the imposition of penalties against the Appellant No.2 & 3 also cannot be sustained.

Thus, the impugned order, to the extent the same relates to the present Appellants, is set-aside and all the three appeals are allowed with consequential reliefs to the Appellants, as per law.

Customs Broker (CB) holding a regular CB license Revocation of licence - forfeiture of amount of security deposit - requirements under Regulation 11(m) - inefficiency or unavoidable delay in clearances of the imported goods -imposition of penalty - Mis-utilization of Advance Authorization Scheme by importers - Violation of Regulations 10(a), 10(d), 10(e), 10(m) and 10(n) of CBLR, 2018 [earlier Regulations 11(a), 11(d), 11(e), 11(m) and 11(n) of CBLR, 2013] - Whether the appellant Customs Broker has fulfilled all his obligations as required under CBLR, 2013 or not. - HELD THAT:- In the instant case, the mis-use of Advance Authorization by the importer was found by the department only on the basis of specific investigation conducted by DRI, subsequent to the clearance of imported goods from the customs control. Furthermore, it is the condition of the license that the duty-free imported goods were diverted in the local market without payment of customs duty which is purely under the domain of the importer to comply with. Hence, the appellants CB cannot be found fault for the reason that they did not advise their client importer to comply with the provisions of the Customs Act, 1962 or allied legislations, as at the time of clearance there was no allegation of any mis-use.

Thus, when the customs authorities themselves had cleared the imported goods and were not aware of any future non-compliance or violation by importer, there is no possibility for the appellants CB to be aware of the same, and to bring it to the notice of the Deputy Commissioner of Customs (DC) or Assistant Commissioner of Customs (AC). Thus, we are of the considered view that the violation of Regulation 11(d) ibid, as concluded in the impugned order, is not sustainable.

Thus, it clearly transpires that the DRI investigation against the importer is that the imported goods under Advance Authorization scheme availing duty free concession were illegally diverted by them in the local market. As the aforesaid post importation violation by the importer did not have any thing contrary at the time of import, it cannot also bind the appellants CB for any violation of the customs clearance of such imported goods. Therefore, we are of the view that the conclusion arrived at by the Principal Commissioner of Customs (General) with respect to Regulation 11(e) ibid, is without any basis of documents or facts, and hence the same is not sustainable.

We find that CBIC had issued instructions in implementing the KYC norms for verification of identity, existence of the importer/exporter by Customs Broker in Circular No. 9/2010-Customs dated 08.04.2010, and verification of any two documents among specified documents is sufficient for fulfilling the obligation prescribed under Regulation 11(n) of CBLR, 2018. Thus, we do not find any legal basis for upholding the alleged violation of Regulation 11(n) ibid by the appellants in the impugned order.

We find that in the above referred case of K.M. Ganatra & Co. [2016 (2) TMI 478 - SUPREME COURT], the Hon’ble Supreme Court had affirmed the decision of the Coordinate Bench of this Tribunal. Therefore, in order to appreciate the importance of the role of Customs Broker/Custom House Agent and the timely action which could prevent the customs duty evasion/frauds, we rely on the above judgement of the Hon’ble Supreme Court.

On the basis of the judgement of the Hon’ble Supreme Court in the case of K.M. Ganatra, we find that the appellants could have been proactive in fulfilling their obligation as Customs Broker in obtaining proper authorization in representing them in clearance of the imported goods before the Customs authorities. Thus, to this extent we find that imposition of penalty for failure in not being proactive for fulfilling of regulation 12(a) of CBLR, 2018 is appropriate and justifiable.

In view of the foregoing discussions, we do not find any merits in the impugned order passed by the learned Principal Commissioner of Customs (General), Mumbai in revoking the license of the appellants and for forfeiture of security deposit, inasmuch as there is no violation of regulations 11(d), 11(e), 11(m) and 11(n) of CBLR, 2013 and the findings in the impugned order is contrary to the facts on record. However, in view of the failure of the appellants to have acted in a proactive manner in fulfillment of the obligation under regulation 11(a), we find that it is justifiable to impose a penalty, against the appellants, which would be reasonable and would be in line with the judgement of the Hon’ble Supreme Court in the case of K. M. Ganatra supra, in bringing out the importance of crucial role played by a Customs Broker.

Therefore, by modifying the impugned order to the extent as indicated above at para 10, we allow the appeal in favour of the appellants.

Differential duty - diversion of imported goods - seeking extension of time for installation and use of the imported goods - provisional release of the seized / restrained goods after payment of entire differential duty - Foreign Trade Policy (FTP) - availing the benefit of Notification No. 92/2004-Cus - confiscation u/s 111(o) of the Customs Act, 1962 along with the imposition of penalty u/s 112(a)(ii) and 114AA - imported the goods for purpose of decrypting and encrypting signals for the pay channel 'Kaveri' which did not fructify and department had initiated proceedings for non-fulfilment of condition no. (iii) of Notification No. 92/2004-Cus - HELD THAT:- Appellant had relied on various case laws cited supra with regard to the impossibility to fulfil condition no.(iii) of the notification, the DGFT Circular No. 26/2009-14 dated 17.03.2010 to the effect that installation certificate need not be insisted in case of movable capital assets/goods, if they are imported under SFIS scheme. Further the appellant had contended that the imported goods are not diverted for any other purpose and that for the reasons mentioned in their submissions the imported goods could not be installed in time and Notification No. 92/2004-Cus dated 10.09.2004 permits the Assistant Commissioner/ Deputy Commissioner to extend the time period for installation.

The appellant has filed an affidavit before the Appellate Authority on 12.09.2013 that they had installed the DSTBs and WSCs for the purpose of another Telugu pay channel 'Sitara', however they could only install 1512 Digital Set Top Boxes along with White Smart Cards leaving remaining 488 Digital Set Top Boxes and White Smart Cards uninstalled which as per the appellant could not be installed because of outdated technology. The appellant had relied on various case laws cited supra with regard to the impossibility to fulfil condition no.(iii) of the notification, the DGFT Circular No. 26/2009-14 dated 17.03.2010 to the effect that installation certificate need not be insisted in case of movable capital assets/goods, if they are imported under SFIS scheme.

Further the appellant had contended that the imported goods are not diverted for any other purpose and that for the reasons mentioned in their submissions the imported goods could not be installed in time and Notification No. 92/2004-Cus dated 10.09.2004 permits the Assistant Commissioner/ Deputy Commissioner to extend the time period for installation.

Appellant had submitted the installation certificate to the effect that they have installed the impugned imported goods and on inquiry / investigation it was found that the goods were still lying in their Thiruvananthapuram studio. Therefore, I find that the installation certificate submitted by the appellant is not proper and the appellant was liable for action under the Customs Act, 1962 for this misdemeanour. However, I find that in this case the appellant had paid the appropriate duty on all the 2000 Nos. of DSTBs and WSCs along with the interest before issue of show cause notice. The learned counsel stated to treat the payment of duty at merit rate by the Appellant as opting out of the framework of the exemption notification.

As regards confirmation of redemption fine on the goods under section 111(o), imposition of penalties on the appellant under section 112(a)(ii) and under Section 114AA and on the Chartered Engineer under section 114AA of the Customs Act, 1994 are tenable. However, I find that the quantum of redemption fine and the penalties imposed can be considered for reduction. Accordingly, the redemption fine of Rs. 10,00,000/- imposed under section 125 of the Customs Act, 1962 is reduced to Rs. 1,00,000/-, penalty on the appellant under section 112(a)(ii) is reduced to Rs. 1,50,000/-, penalty under section 114AA is reduced to Rs. 1,00,000/-. Further the penalty imposed on Mr. Mathews Cheriyan under section 114AA.

Removal of appellant as an auditor of Respondent No.1 company by NCLT - Auditors were not acting independently and were involved in the mismanagement of the company with the RG Group - HELD THAT:- Admittedly on record there are Balance Sheets of 2016-2017 and 2017- 18, at Pages No. 786 and 899 of the Appeal Paper Book, duly audited and signed by the appellant and it depicts the appellant had charged management fees during those years. Further the order shows even in later years such fee was charged, thus in violation of sub-section (h) Section 144 of the Companies Act, 2013.

There are no error in the impugned order and thus NCLAT is not inclined to issue notice - appeal dismissed.

Oppression and mismanagement - initiation of proceedings under Sections 241 & 242 of the Companies Act - non-application of mind by the Learned NCLT - failure to consider that Respondent Nos. 2 & 3, who filed the Company Petition, did so in their capacity as beneficiaries of a trust - HELD THAT:- On the facts of the case, Applicant Nos. 2 & 3 to the Application are sons of Respondent No. 2 and beneficiaries of Applicant No. 1 Trust. Their mother is the trustee of Applicant No.1 Trust, and intra-family disputes over trust management by Respondent No.2 (Father) and over management of the company were pleaded. The Tribunal found that the basic spirit for granting a waiver under Section 244 was satisfied - For the limited purpose of testing propriety of the impugned order, the Tribunal had to ascertain whether exceptional circumstances existed to grant the waiver. The Tribunal found that although the applicants’ shareholdings fell short of statutory thresholds, the admitted configuration of shares and the potential for prejudice justified prima facie consideration of waiver; and held that deep scrutiny of maintainability was unnecessary at this stage.

The logic which has been assigned by the Tribunal while passing of the Impugned Order does not seem to be contrary of the records, so far as it relates to the holding of shares by the Applicants to the Application under Section 244 of the Companies Act, 2013. The arguments extended that the order impugned is without rational and without application of mind is contrary to the records, which was otherwise established. Even otherwise, the pendency of the civil suits or its ultimate decision which will be taken thereof, do not create any restriction as such for granting of a waiver under Section 244 of the Companies Act, for the purposes of initiation of the proceedings under Sections 241 & 242 of the Companies Act, 2013.

Since, there was a prima facie case made out by the Applicants/Respondents herein, owing to the shareholding, which they already possessed, the grant of a waiver would fall to be within an exceptional circumstance for the purposes of initiation of Section 241 & 242 of the Companies Act, 2013, so that the lis relating to the alleged act of oppression and mismanagement may be decided on its merit and thus, the exception granted cannot be said to be suffering from any derogation of law, which would be creating a restriction in considering the application for the grant of a waiver. Hence, the logic which has been assigned by the Learned Adjudicating Authority in the observations that has been recorded in para 12,13 & 14 of the Impugned Order and allowing of the application under Section 244(1)(a) of the Companies Act, 2013, is not bad in the eyes of law, which could call for any interference by this Appellate Tribunal.

The Company Appeal lacks merit, and the same is accordingly dismissed.

Maintainability of the application - Barred by law - availability of equally efficacious alternative remedy available - liability in respect of the infraction of CSE Bye-Laws - Arbitration clause and Section 8 bar; Ineligibility of arbitrator (s.12) and schedule disqualification - Prejudice test - Claim of refund - Withholding of excess security amount deposited by the petitioner no. 1 with CSE and for ancillary reliefs - unlawful constitution of the Board of Directors - CSE not furnishing copies of the documents relied - violation of the principles of natural justice - HELD THAT:- The issues raised can be divided into two categories-Threshold Issues and Merits. This Court proposes to adjudicate on the threshold issues first.

The basic framework of the financial and trading activities of an economy, which is an integral part of the functions of the State, are discharged by stock exchanges and, as such, infractions on the part of such entities are amenable to the writ jurisdiction under Article 226 of the Constitution of India.

In addition thereto, it cannot be denied that by the impugned action the right of the writ petitioners to do business, protected under Article 19 of the Constitution of India, has been allegedly violated without due process of law. Thus, the writ court definitely has the jurisdiction to examine such issue within the ambit of Article 226 of the Constitution of India.

Thus, the writ petition is maintainable.

Since the writ court is also a “judicial authority” under the contemplation of Section 8, in the absence of any application akin to one under the said provision, it cannot be said that the jurisdiction of the writ court is barred.

The Executive Director, being an employee of the CSE, one of the parties to arbitration, is ineligible to act as or to appoint an Arbitrator. Thus, the above objection of the CSE is not tenable in the eye of law and the present writ petition is maintainable despite the existence of the arbitration clause.

This court is fully aware of its limitations as a writ court and cannot enter into a re-appreciation of detailed evidence on intricate and complex questions of fact. However, the objection taken by the CSE on such count is premature at this stage, since the premise of the challenge, as mentioned earlier, hits at root of the jurisdiction of the CSE, being allegedly violative of fundamental principles of natural justice and infraction of the CSE Bye-laws. Thus, such objection cannot but be turned down.

Simultaneously, it was categorically observed that since the 45 days’ period fixed by the learned Single Judge to take final decision had expired on the date of passing of the Division Bench judgment, such final decision, if any taken meanwhile, can also be placed/challenged before the learned Single Judge and would be subject to the final outcome of the writ petition. Thus, it was the clear intention of the Appellate Bench to clarify that if any final decision was taken in the meantime, it can be challenged before the learned Single Judge taking up the writ petition itself, instead of filing a fresh writ petition. Going one step further, the Division Bench further clarified that such decision would be subject to the final outcome of the writ petition. Hence, the order dated March 15, 2022, which was passed by way of the final decision referred to by the Division Bench, is amenable to challenge in the present writ petition itself and would also abide by the final outcome of the same.

Hence, it is not a case where relief beyond pleadings are sought in an interlocutory application, but the challenge to the final decision dated March 15, 2022 by way of GA is squarely in terms of the leave granted by the Appellate Bench itself and comes within the broader ambit of the writ petition. Thus, the proposition laid down in the judgments cited by the CSE are not applicable in the present case at all. Accordingly, this objection as to maintainability of GA is also turned down.

Merits -

No Show Cause Notice (SCN) - The argument that no SCN was issued is not tenable. Even otherwise, the law does not mandate any specific SCN to be issued in case of such infractions. Yet, this Court finds from the records that sufficient opportunity over a long period of time was continuously given to the writ petitioners to disclose all particulars, whereas the writ petitioners consistently warded off such attempts and evaded the investigative process. Even in their last letter dated March 15, 2022, a stand was taken by the writ petitioners through their learned Advocate that no further documents would be furnished by them apart from those which had already been sent.

Hence, this issue is decided against the writ petitioners.

Violation of Natural Justice - Since the SCN was admittedly served on the petitioners and replied to by them, non-furnishing of such prior inspection report was entirely immaterial.

After a decision is taken by the Disciplinary Action Committee/Sub-Committee or Defaulter Committee, there is no further scope of hearing being given to the defaulter under the CSE Bye-Laws and it only remains for the Board to take a final call on the penal action to be taken.

Rightly argued by the CSE that the writ petitioners have failed to satisfy the “prejudice test”. No substantive purpose would be subserved if copies of documents which were allegedly not given were given to the petitioners; rather, the writ petitioners were given ample opportunity to comply with the queries of the CSE but failed to do so.

The CSE Bye-Laws, particularly the Section thereof pertaining to the SGF, in Clause XVIII thereof, amply provide for action to be taken against a defaulter in case of negotiated, fraudulent and non-bona fide deals, as alleged against the writ petitioners.

In view of substantial compliance of all regulations on the part of the CSE and in view of ample opportunity of hearing and explanation having been recurringly given to the writ petitioners, the argument of violation of natural justice raised by the writ petitioners is hereby held to be merely a bogey and such objection is turned down.

Ante-dating of the order dated March 15, 2022 - Since there was no statutory mandate to pass the order within 45 days. Moreover, since the Division Bench has already granted leave to challenge any final decision taken subsequently and making it clear that the same would be subject to the outcome of the writ petition, there was no compulsion on the part of the CSE or any incentive to ante-date the order. As such, the said objection is turned down and held to be irrelevant as well.

No pending investigation - It has been vociferously argued on behalf of the writ petitioners that there was no pending investigation at all which could culminate in the impugned order dated March 15, 2022 or could prompt the CSE to withhold the refund of the excess security deposit.

The term “settlement” is not restricted to withdrawal or mutual settlement out of court but can be equated with the expression “resolution” of the dispute. Hence, the CSE never insisted that it would refund excess security deposit allegedly lying with it to the writ petitioners only upon the writ petitioners withdrawing their pending legal proceedings. The insistence of the settlement of the legal dispute in the legal proceedings as a pre-condition of refund was fully justified, since under its Bye-Laws, the CSE is entitled to take penal action in monetary terms against a defaulting member if fraudulent or non-bona fide or other categories of transactions, as alleged against the writ petitioners, had been undertaken by such member.

Thus, the delay in culmination of the investigation itself does not vitiate the process of investigation, more so, since such delay was a result more of the attempts of the writ petitioners to thwart the investigation than inaction on the part of the CSE.

The issuance of a communication stating thereby that there were no trading dues cannot, by any stretch of imagination, operate as estoppel against the steps taken upon an investigation for violation of CSE Bye-Laws and Regulations, which have the force of law. It is well-settled that there cannot be any estoppel against law. Moreover, the “no dues” mentioned in the letter dated October 11, 2007 could not, by any stretch of imagination, cover the penalty which might be imposed for violations of CSE Bye-Laws otherwise.

The proposition laid down in Surendralal Giridhailal Mehta (Surendralal Giridhailal Mehta vs. Union of India & Ors. [2018 (5) TMI 1841 - CALCUTTA HIGH COURT] is not applicable here, since the investigation in the instant case was ongoing in all relevant points of time and was not re-commenced after a hiatus. Thus, this issue is decided against the writ petitioner.

Whether constitution of the Board of Directors was illegal - A Managing Director, only for the purpose of provisions such as sub-clauses (10) and (11), would come under the category of Shareholder Directors to determine the voting ratio between Public Interest Directors and Shareholder Directors, since there is no separate provision in the Regulation in that regard vis-à-vis a Managing Director.

As per the above discussion, sub-clause (4) of Regulation 23 per se does not equate a Managing Director with a Shareholder Director but merely brings the former within the category of the latter for specific purposes of compliance of Regulation 23. Thus, the SEBI exemption regarding appointment of Managing Director, due to the funds crunch of CSE and on its own prayer, cannot automatically imply that the appointment of Shareholder Directors in the Governing Board was also exempted.

Moreover, the scheme of sub-clauses (10) and (11) and the other sub-clauses of Regulation 23 clearly make the presence of both Shareholder Directors and Public Interest Directors in the Board essential, apparently to strike the balance between the interest of the investors and the shareholders of the CSE. Thus, coupled with the term “shall” in Regulation 23(1) of the 2018 Regulations, there cannot be any manner of doubt that the Board of Directors which took the impugned decision dated March 15, 2022 being comprised only of three Public Interest Directors, was unlawfully constituted, in the absence of any Shareholder Director.

Accordingly, although not on merits, the order impugned in GA, has to be set aside on the technical ground of unlawful constitution of the Board of Directors which took such decision.

Thus, in conclusion, this Court finds that the investigation by the CSE up to the impugned order dated March 15, 2022 was valid in the eye of law. However, the subsequent decision dated March 15, 2022, being taken by a Board constituted unlawfully and without proper quorum, has to be set aside.

Resolution/reverse CIRP mechanism - essential requirement, which needs to be proved by a Financial Creditor for an application under Section 7 - resolution of Real Estate Projects - malicious proceedings - Loan Agreements - sufficient material to prove - debt and default on the part of the CD in repayment of dues of the Financial Creditor - exceeds the statutory threshold -non-completion of the project by the CD - avoid payment of legitimate dues of Government Authorities and defrauding the gullible home buyers - HELD THAT:- We fully concur with the findings and conclusions drawn by the Adjudicating Authority that CD has admitted the existence of the debt and the default, and the default amount exceeds the statutory threshold of Rs. 1 crore. We, thus, are satisfied that order of Adjudicating Authority initiating CIRP against the CD cannot be faulted. However, in view of the fact that CD is carrying various projects situated in different locations of the country, what would be the manner and procedure for conducting the CIRP against the CD, shall be considered and examined by us.

The IL&FS (Financial Creditor) has brought sufficient material to prove that the CD has committed default in payment of its debt, due in respect of Loan Agreements dated 18.03.2016 and 25.11.2016 and there was sufficient ground to initiate CIRP against the CD.

It is relevant to notice that a Settlement Agreement was entered between the CD and IL&FS dated 03.03.2022, under which the CD had agreed to make total payment of Rs. 109,66,00,000/- to the IL&FS. The Settlement Agreement in Schedule-B mentions “List of Existing Securities and Security Documents”. The securities mentioned at Sl. No.1, 2, 3 and 4 relates to assets at Lucknow and security mentioned at Sl. No.5 mention 27 units in building known as Ansal Royal Plaza, Jodhpur; 54 units in Orchid Plaza and 14 units in Tulip Plaza at Jaipur; Sl. No.6 mentions 59 built up units at Ajmer, Rajasthan; Sl. No.7 mentions property at Jodhpur, Jaipur, Lucknow and Ajmer; and Sl. No.8 deals with hypothecation.

It is clear that apart from different projects at City Lucknow, State U.P., the CD had projects in the State of Haryana, Mohali (Punjab), Rajasthan – Ajmer, Jodhpur and Jaipur. There are 93 registered projects in the City of Lucknow alone. The question, which needs to be answered is as to whether securities, which have been taken by Financial Institutions, i.e. IL&FS in the present case has any relevance with respect to CIRP of a real estate Company. The securities obviously have been taken by the Financial Institutions to ensure repayment of its loan and when the CD commits default as per the Loan Agreement, the Financial Institutions are entitled to take remedy as per the Agreement and recover its dues by realization as per the insolvency process contemplated under the IBC. The IBC and CIRP Regulations, do not contain any provision so as to specify if Financial Institutions has receivable or securities of one or more projects of the CD in the CIRP, whether the CIRP should confine to one project of the CD or all projects or to the projects, in which lenders have receivables and securities.

We in the order dated 25.04.2025 passed in these Appeal(s) have noticed that with respect to the CD, the CIRP has also earlier commenced at two occasions with respect to projects namely – Fernhill Project, Gurgaon State of Haryana and Serene Residency Group Housing Project in the State of UP.

There are two instances with respect to CIRP against the CD, where the CIRP was confined to the respective projects only and the CIRP was not directed to be proceeded with respect to all projects of the CD.

We have noticed in detail the securities, which have been provided for in the Loan Agreements between the CD and IL&FS. For the purpose of consideration as to whether the CIRP, which has been initiated by the impugned order dated 25.02.2025 should be confined to the assets which are included in the securities provided by the CD or it should engulf all Projects of the CD, the same shall be considered hereinafter.

We are conscious that CIRP proceedings are not proceedings of repayment of dues or recovery of dues by the Financial Institutions and the object is to revive and rehabilitate the CD. When CIRP has commenced against a real estate project, the resolution, rehabilitation and revival of the project become necessary to safeguard interest of stakeholders, specially the allottees, who have been allotted residential/ commercial plots by the CD. In the present case, the CD, who has been developing different projects at the City of Lucknow and other cities, has allotted units to different Homebuyers and allottees of residential and commercial assets.

For resolution of a real estate project, the interest of the Homebuyers has to be taken care and the Courts have always taken steps to protect the interests of Homebuyers. We in this context refer to a recent judgment of the Hon’ble Supreme Court in Mansi Brar Fernandes vs. Shubha Sharma and Anr. [2025 (9) TMI 879 - SUPREME COURT] and other Appeals in [2025 (9) TMI 879 - SUPREME COURT] The Hon’ble Supreme Court in the above case was also considering an Appeal arising out of CIRP of a real estate project. The Hon’ble Supreme Court has reiterated certain principles, which notices that IBC is a Forum of last resort, intended to secure revival and completion of viable projects, not to serve as a debt recovery mechanism.

We are of the view that when securities, which were given by the CD for repayment of the term loan given by the IL&FS are confined to only few projects, the CIRP initiated by the impugned order, cannot engulf all the projects of the CD, which are in no manner affected by financial facilities extended by the IL&FS to the CD.

The purpose of the Loan Facility of Rs. 50 crores and Rs. 100 crores extended by the IL&FS was for utilizing the funds for any of the specified purpose [(a) to (d)] as noted in the Sanction Letter. The securities given by the CD in two loans, are securities of the projects of the CD at Mother City and Mother City Extension at Lucknow and the three assets situated at Ajmer, Jodhpur and Jaipur in the State of Rajasthan, as noted in the Sanction Letter dated 16.02.2016 and the securities, thus were confined to only few of the projects of the CD and not all the projects of the CD as noted above.

The CIRP initiated and the moratorium imposed vide order dated 25.02.2025 is to extend to only the projects of the CD, which are referred to and relied in the Loan Agreements in both the Loan Facilities, as noted above and the moratorium cannot extend to other projects of the CD situated in different cities of the State of UP (except Mother City Lucknow Projects) and other States, i.e. States of Haryana and Punjab (except assets mentioned in City of Ajmer, Jaipur and Jodhpur in the State of Rajasthan).

The Adjudicating Authority ought to have adverted to the fact that CD is running several real estate projects in different Cities of the U.P. and other States of the country. Before the Adjudicating Authority, the above facts were brought and clearly mentioned in the reply filed by the CD in Section 7 application.

CIRP needs to be confined at Lucknow project Mother City Lucknow and Mother City Extension Lucknow, including Sushant Golf City Project as well as three Projects of the CD situated in the State of Rajasthan – Ajmer, Jodhpur and Jaipur as referred to in the Sanction Letter dated 16.02.2016. The Adjudicating Authority needs to consider mode and manner of resolution of the above projects of the CD. At the first instance, the resolution of the projects situated at Lucknow need to be undertaken.

The CD has 93 projects at Lucknow, which are registered with UP RERA. The project wise resolution of the CD needs to be proceeded with as required by law. The Adjudicating Authority may also issue necessary direction regarding mode and manner of resolution of above Projects.

The projects at Lucknow City being projects under Hi-Tech Township, the Adjudicating Authority has also to advert to all relevant facts to take a decision as to whether under the Agreement between the CD and the Lucknow Development Authority, the projects need to be completed by the Lucknow Development Authority.

We dispose of both the Appeal(s).

CIRP proceedings - initiation of proceedings under Section 7 - long-term advances - concept of an “oral agreement” - essential requirement to establish default and existence of debt - HELD THAT:- Owing to the fact that, in accordance with Section 7 of the I&B Code, the factum of debt stands established by the supporting documents, the argument that the loan is non-existent on the grounds of an oral agreement, is not acceptable owing to the own admissions made by the Appellant, and the recordings in the Impugned Order, by virtue of which the proceedings under Section 7 of the I&B Code, was commenced by admission of the application filed under Section 7 of the I&B Code. The entries made in the balance sheet, as well as, the reflection of the interest which had accrued on the basis of the agreement as referred to in Para 2 of the Impugned Order and as shown in the TDS Form-16 A, show the existence of loan transaction and liability payable.

Hence, admission of debt made under Section 7 of I&B Code, is absolutely sustainable in view of the findings recorded in the Impugned Order and the exception attempted to be carved out since remains un-established would stand ‘denied’. The Impugned Order admitting the Appellant to CIRP proceedings, under Section 7 of the I&B Code, does not suffer from any error, and it doesn’t call for any interference. Accordingly, the same is ‘dismissed’.

Rejection of claim of interest and damages on the ground of time limittaion - Resolution Plan had been approved by the CoC and was pending before the Adjudicating Authority - EPF dues stand outside the liquidation estate or not - HELD THAT:- The question of limitation under Regulation 12 was considered by the Supreme Court in State Tax Officer v. Rainbow Papers Ltd. [2022 (9) TMI 317 - SUPREME COURT], where the claim of the State had been rejected as belated. The Supreme Court held that Regulation 12 is directory, not mandatory, particularly for statutory dues.

Whether the Resolution Plan contravenes Section 36(4)(iii) of the Code, since provident fund and gratuity fund cannot be treated as assets of the Corporate Debtor? - HELD THAT:- This was examined by the NCLAT in Tourism Finance Corporation of India Ltd. v. Rainbow Papers Ltd. [2019 (12) TMI 1490 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI], where it was held that the EPF Act does not conflict with Section 36(4)(iii) and that PF and gratuity are not assets of the Corporate Debtor.

In the impugned order, the findings in paras 9 and 10 concern the claim being raised beyond the prescribed time. It is already answered in light of the Supreme Court judgment in Rainbow Papers, which holds the Regulation 12 period to be directory. Therefore, the claim cannot be rejected solely on the ground of delay.

Consideration of claim at belated stage - Resolution Plan had been approved by the CoC and was pending before the Adjudicating Authority - HELD THAT:- The Tribunal relied on RPS Infrastructure Ltd. v. Mukul Kumar [2023 (9) TMI 516 - SUPREME COURT], where the Supreme Court held that reopening claims at this stage would make CIRP an endless process.

The Tribunal’s reasoning, based on the restriction against reopening a plan after CoC approval, cannot stand in view of the Supreme Court ruling in Rainbow Papers, which governs the field and was not considered by the Adjudicating Authority.

The impugned order rejecting the claim on the ground of limitation is hereby quashed, and the matter is remitted to the Adjudicating Authority to reconsider the IA on its own merits, except on the question of limitation - Appeal allowed.

Claim filed in the CIRP - workers impleaded as appellants - Gratuity entitlement - pay the gratuity and PF of the claims admitted in full - condonation of delay in refiling - HELD THAT:- This is an application praying for condonation of 60 days in refiling the application. We have already passed order in the application by which 73 workers have been impleaded as appellants, we find sufficient cause in the application, praying for condonation of delay in refiling of the application.

Delay condone.

It is clear that the amount which is admitted towards the gratuity has to be treated as the amount full admitted of the gratuity and we are of the view that this clarification is necessary to protect the amount of gratuity which SRA has already undertaken to pay in full.

When the submitted claim and gratuity amount is already there, we are failed to see whey in the finally admitted claim word used are “claim missing” when the figures are already there the said total claim was entitled to be admitted and we treat the claim of item nos.70 to 73 as claim as reflected above to be treated to be admitted and needs to be dealt accordingly. Gratuity with reference to item nos. 70 to 73 also is to be paid in full as submitted by counsel for SRA.

In view of the aforesaid, we see no reason to keep appeal pending with the clarification and modification as above the appeal is disposed of.

Money Laundering - seeking grant of regular bail - predicate/scheduled offence - misappropriation of funds availed through loan from the consortium of banks, and thereafter, diversion of the same into different entities - twin conditions mandated under Section 45 of the PMLA for grant of bail have been satisfied by the applicant or not - the High Court has released the respondent on bail u/s 3 and 4 of the Prevention of Money Laundering Act, 2002 - HELD THAT:- The Apex Court is not inclined to interfere with the judgement passed by the High Court.

The Special Leave Petition is, accordingly, dismissed.

Money Laundering - rejection of petition filed by the petitioner seeking discharge - the orders by which the application for discharge filed by the petitioner has been dismissed and charges have been framed respectively, can be said to suffer from an error or not - prima facie case against the petitioner is made out or not, on the basis of the evidence which has been collected in course of investigation.

HELD THAT:- The reason for giving explanation under Section 2(1)(u) is by way of clarification to the effect that whether as per the substantive provision of Section 2(1)(u), the property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property or where such property is taken or held outside the country but by way of explanation the proceeds of crime has been given broader implication by including property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence - It is evident that the “scheduled offence” means the offences specified under Part A of the Schedule; or the offences specified under Part B of the Schedule if the total value involved in such offences is [one crore rupees] or more; or the offences specified under Part C of the Schedule.

In the judgment rendered by the Hon’ble Apex Court in Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. [2022 (7) TMI 1316 - SUPREME COURT (LB)] it has been held that the Authority under the 2002 Act, is to prosecute a person for offence of money-laundering only if it has reason to believe, which is required to be recorded in writing that the person is in possession of “proceeds of crime”. Only if that belief is further supported by tangible and credible evidence indicative of involvement of the person concerned in any process or activity connected with the proceeds of crime, action under the Act can be taken forward for attachment and confiscation of proceeds of crime and until vesting thereof in the Central Government, such process initiated would be a standalone process.

The law regarding the approach to be adopted by the Court while considering an application for discharge of the accused person the Court has to form a definite opinion, upon consideration of the record of the case and the documents submitted therewith, that there is not sufficient ground for proceeding against the accused.

If, upon consideration of the record of the case and the documents submitted therewith, and after hearing the submissions of the accused and the prosecution in this behalf, the Judge considers that there is no sufficient ground for proceeding against the accused, he shall discharge the accused and record his reasons for doing so and if, after such consideration and hearing as aforesaid, the Judge is of the opinion that there is ground for presuming that the accused has committed an offence, the trial Court shall frame the charge. However, the defence of the accused cannot be looked into at the stage of discharge. The accused has no right to produce any document at that stage. The application for discharge has to be considered on the premise that the materials brought on record by the prosecution are true - at the time of considering an application for discharge, the Court is required to consider the limited extent to find out whether there is prima facie evidence against the accused to believe that he has committed any offence as alleged by the prosecution; if prima facie evidence is available against the accused, then there cannot be an order of discharge.

It is settled position of law that the accused is entitled in law to know with precision what is the law on which they are put to trial. Charges are framed against the accused only when the Court finds that the accused is not entitled to discharge under the relevant provision of CrPC/BNSS - In Sessions case the Court shall frame a charge in writing against the accused when the Court is of the opinion that there is ground for presuming that the accused has committed an offence as can be seen from Section 252 of the BNSS. In warrant cases, a charge shall be framed when a prima facie case has been made out against the accused as is evident from sections 263 and 269 of BNSS.

Further, it is settled position of law that at the stage of framing the charge, the trial Court is not required to meticulously examine and marshal the material available on record as to whether there is sufficient material against the accused which would ultimately result in conviction. The Court is prima facie required to consider whether there is sufficient material against the accused to presume the commission of the offence. Even strong suspicion about commission of offence is sufficient for framing the charge, the guilt or innocence of the accused has to be determined at the time of conclusion of the trial after evidence is adduced and not at the stage of framing the charge and, therefore, at the stage of framing the charge, the Court is not required to undertake an elaborate inquiry for the purpose of sifting and weighing the material.

The present petitioner had directly indulged and knowingly is a party and is actually involved in all the activities connected with the offence of money laundering. Consequently, based on the evidence gathered during the course of the investigation, prima facie, it appears that the petitioner has committed offence under Section 3 of the Prevention of Money Laundering Act, 2002 - prima-facie material is available against the present petitioner, as such, charges have rightly been framed under the Section 3 of the Act 2002 against the petitioner.

From perusal of the impugned orders, it is evident that the learned Special Judge has duly considered the rival submissions, examined the documents and statements placed on record, and thereafter, passed a reasoned order. The discharge application filed by the Petitioner was rejected only after satisfaction that sufficient grounds exist to proceed against him and consequently, order for framing of charge has also been passed.

This court is of the considered view that there is no illegality in the impugned orders - the instant criminal revision petitions are hereby, dismissed.

Provisional Attachment Orders (PAO) - power and jurisdiction of authority of the Enforcement Directorate/Authorities forattachment- “reason to believe” that the subject properties were proceeds of crime involved in the money laundering -withdrawal of the concessions given by the Advocate - Meaning of term “proceeds of crime” - proceeds of crime involved in the money laundering - Whether the contention of a party, that its submissions/stand has been wrongly recorded by the Court, be taken up in the Appeal which seeks to challenge the very judgment and order? - HELD THAT:- The Supreme Court in the case of Bhavnagar University V/s Palitana Sugar Mill Pvt Ltd & Others [2002 (12) TMI 563 - SUPREME COURT], after referring to the judgments in the matter of Daman Singh and others [1985 (4) TMI 322 - SUPREME COURT] and State of Maharashtra v. Ramdas Shrinivas Nayak [1982 (7) TMI 265 - SUPREME COURT], has observed that a statement of fact as to what transpired at the hearing, recorded in the order are conclusive of the facts so stated and no one can contradict such statements or recording of facts.

The pronouncements of the Supreme Court are having binding effect on all Courts. It is only prudent and matter of judicial discipline that the clarifications, corrections or mis-recordings be clarified before the same Authority/Court. This may be done by filing appropriate proceedings before the said Court. If there are incorrect concessions or statements or the same are misquoted or fact or admission misreported or a different stand was taken by the Advocate for Appellants before learned Appellate Tribunal, the only option or remedy available to the Appellant was to approach the Appellate Tribunal and seek a clarification by filing appropriate proceedings.

A perusal of the Impugned Order, passed by the learned Appellate Tribunal, PMLA clearly indicates that certain admissions or statements made by the Advocate of the Appellants, are recorded in the Impugned Order. The same till date are a part of the record.

The statements and admissions thus form a part of the record, as no steps have been taken to have them corrected or withdrawn. The parties are bound by the record. Raising the said ground, in the present Appeal will be of no consequences.

Term “proceeds of crime” - The term “proceeds of crime”, in any prosecution under the PMLA Act is the basis and foundation for the said action. It being the foundation of the offence of money laundering, it is required to be interpreted and construed in a strict sense. If any of the aforestated ingredients i.e property, derived out of a criminal activity, relating or relatable to a schedule offence is missing, then in that event the property cannot be termed as a “proceeds of crime”.

We also note that, one of the vital ingredient and condition to attract or invoke an offence of money laundering, is that the concerned person has knowledge or is knowingly involved in any process or activity which is related to the proceeds of crime.

We have noted that, the offence under Prevention of Corruption Act came to be notified as Schedule offence of the PMLA, by the PMLA Amendment Act which came into force on 1st June, 2009. Before 1st June,2009, the offence under Section 13 of the Prevention of Corruption Act was not predicate/scheduled offence under PMLA. Therefore, before 1st June 2009, offence under Section 13 of the Prevention of Corruption Act, was not a scheduled offence.

It is settled law that, no person can be prosecuted for an allegation/act which occurred earlier by applying law which has come into force at a later date after the act/allegation is made. There can be no retrospective application of criminal liability for an act/offence which has taken place or committed prior to introduction of the liability in the statute books. Even otherwise, the Enforcement Directorate, does not have any material to show that the money is covered under the definition of “Proceeds of Crime” under section 2 (u) of the PMLA.

Without a criminal activity and/or a scheduled offence there cannot be a “proceeds of crime”. Pertinent to note, that it is not even the case or allegation of the Enforcement Directorate that the monies advanced by SPCL are generated from or of a criminal activity, let alone the same being relating or relatable to a schedule offence.

Attaching properties under the PMLA, without any legal evidence or basis or when the basic requirements/ingredients under the PMLA are not fulfilled is misplaced and misconceived. Considering the facts and documents on record, and the same viewed from any angle or in any manner, the conclusion can only be one that, the Appellant has incorrectly attached the properties especially in the absence of any criminal activity.

No merits in the Appeal. We are inclined to dismiss the Appeals and uphold the impugned Order dated 17th January, 2019 with modification to the extent of refund of the accrued interest to Shapoorji Pallonji and Co. Pvt. Ltd. The Appellate Authority by the impugned Judgment, as far as the interest accrued is concerned, has directed that it be paid to the Shapoorji Pallonji and Co. Pvt. Ltd.

As would be evident from the track record of the company, the said companies had all times whilst pursuing its own objectives has strived to develop economic activities in the interest of the nation and charitable works for benefit of the society.

We are therefore inclined to modify the said directions of refund of interest accrued on the said principal amount.

We therefore, deem it fit to transfer 50% of the interest accrued on the said FD’s to the Armed Forces Battle Casualties Welfare Fund (AFBCWF). We do this in a manner and with an object of balancing the equities.

Recovery of non-paid service tax with interest and penalty - demand on the basis of third Party data collected from the Income Tax Department for the year 2016-17 - appellant was liable to pay Service Tax as they are not “Goods Transport Agency” (GTA) within the meaning of Clause 26 of Section 65(B) of the Finance Act, 1994 or not - extended period of limitation - HELD THAT:- Merely raising a demand on the basis of 3rd Party information without appropriate investigation and verification of the factual position, cannot justify the levy and cannot be a sustainable ground alleging suppression of facts without any other corroborative evidence to support the said premise.

The appellant had in the course of arguments submitted that the entire information as culled out by the authorities on the basis of the 3rd Party data, was already published information in their statutory records. GTO unlike the GTA has however been kept away from the ambit of taxnet. Section 67E(f) of the Finance Act clearly states the rendition of service only under the circumstance when “ transfer of goods by way of hiring, leasing, licencing or any such manner without transfer of right to use such goods”. No such aspect of leasing/hiring etc. emanates from facts on record. This new proposition as made out by the Learned Commissioner (Appeals) is required to be duly supported by tangible evidence which is lacking in the present matter. The appellant indeed is not a GTA and therefore as held by the Adjudicating Authority is also not liable to issue consignment notes.

The present case is one clearly relating to the scope of levy of tax and the scope of exemption which was considered by the learned Adjudicating Authority by way of an alternate argument. The ld. Adjudicating authority has recorded elaborate findings thereto in the matter. A perusal of the same clearly brings out the fact of the appellant not being a GTA and hence not falling within the clutches of taxability. Further when the department itself is not clear under which category the service is rendered by the appellant, as evidenced by two diverse claims of classification by the two lower authorities, extended period of limitation would clearly be inapplicable.

This Tribunal in the case of Maa Kalika Transport Pvt. Ltd. Vs. Commissioner of CGST & Central Excise, Rourkela [2023 (7) TMI 435 - CESTAT KOLKATA], has held that demand raised merely on the basis of data collected from Income Tax department without any corroborative evidence was certainly unsustainable.

The Hyderabad Bench of the Tribunal in the case of Shriram Chits Pvt. Ltd. Vs. Commissioner of Central Excise, Customs & Service Tax, Hyderabad [2020 (1) TMI 187 - CESTAT HYDERABAD] has held that when no positive act of misstatement with intent to evade payment of duty was brought on record by the Revenue, there was no scope to allege suppression and thereby invoke the extended period of limitation.

The Order of the Learned Appellate Authority is set aside being shorn of merits and unsustainable in the eyes of law - The order of the adjudicating authority is upheld and maintained - Appeal allowed.

Entitlement to claim interest on the amount of deposit - Effective date - time barred - Pre-deposit in view of Section 35E - Demand of Service Tax - received amount from their clients for providing services but not declared it in their ST-3 returns filed during the material time - HELD THAT:- Relying upon the law laid down by Hon'ble Apex Court in the case of Sandvik Asia Limited. [2006 (1) TMI 55 - SUPREME COURT], the Tribunal has observed that as the Hon'ble Apex Court answered the issue holding that the assessee is entitled to claim interest from the date of payment of initial amount till the date of its refund, therefore, the appellants, in the instant case, are entitled to claim interest on delayed payment of amount from the date of its deposition till its realization.

The interest on the said delayed refund is also payable at the rate of 12% as held by Hon'ble Kerala High Court in the case of Sony Pictures Networks India Pvt. Limited. [2017 (5) TMI 864 - KERALA HIGH COURT]

This Tribunal is bound by the law laid down by Hon'ble Supreme Court in Sandvik Asia Limited vs. Commissioner of Income Tax & Ors. (supra). Therefore, the appellant is entitled to claim interest on the amount of deposit from the date of deposit till its refund at the rate of 12% per annum as held by Hon'ble Kerala High Court in the case of Sony Pictures Networks India Pvt. Limited (supra).

Appeal is allowed in the above terms.

Classification of services - Manpower Recruitment or Supply Agency Services, or not - Appellants are providing certain ‘quality works’ in the manufacturing unit of M/s Bagga Distilleries Hyderabad Pvt Ltd., who are engaged in the manufacture alcoholic beverages (IML) - HELD THAT:- The activity agreed under the contract is for providing ‘quality work’, i.e., washing activities, stacking in godowns, cleaning of washing area, bottling area, blending area, godowns and surroundings using the manpower of the contractor, employed by the appellant himself and not for supply of manpower as such to M/s Bagga Distilleries Hyderabad Pvt Ltd. As per the contract, the appellants will be paid based on the work carried out by the contractor and not on the basis of number of persons employed for the work, which is a clear indication that the activity under the contract is not for ‘supply of manpower’ at all. It is also important that the manpower works under the control and supervision of the appellants and not under the control of supervision of M/s Bagga Distilleries Hyderabad Pvt Ltd. Therefore, the contract clearly shows that there is no supply of manpower, and it is for providing certain specified works as mentioned in the contract.

Hence, demand based on classification of the services provided by the appellants as supply of manpower service would not sustainable as per law.

The Co-ordinate Bench, Bangalore in the case of S.S. Associates Vs Commissioner of Central Excise [2009 (12) TMI 152 - CESTAT, BANGALORE], wherein, it is also held that 'the entire tenor of the agreement and the purchase orders issued by the appellants’ service recipient clearly indicates the execution of a lump-sum work. In our opinion this lump-sum work would not fall under the category of providing of service of supply of manpower temporarily or otherwise either directly or indirectly.'

In the case of Sivashakti Enterprises Vs Commissioner of Central Excise, Pune, [2015 (12) TMI 682 - CESTAT MUMBAI], decided by Tribunal Mumbai, it is also important to mention wherein, appellant had deploying his employees in the factory premises of Tata Motors for doing of specific job work in accordance with the purchase order placed and the manufacture paying consideration to appellant based upon the number of pieces that would be manufactured. Hon’ble Tribunal held that the lump sum work not covered under ‘Manpower Recruitment or Supply Agency Service’ and held not taxable.

The demand under ‘Manpower Recruitment or Supply Agency Service’ is not sustainable. Further, since the demand is not sustainable on merit itself, the imposition of penalty will also not sustain. Thus, in view of the same, the impugned orders are liable to be set aside.

Appeal allowed.

CENVAT credit - availment and utilisation of CENVAT credit on common input services attributable to trading activity - contravention of Rule 6 of the CENVAT Credit Rules, 2004 - recovery with interest and penalty - invocation of the extended period of limitation under the proviso to Section 73(1) of the Finance Act, 1994.

Whether procurement and supply of goods and gift vouchers by the appellant constitute “trading activity” under the CENVAT Credit Rules, 2004? - HELD THAT:- The appellant is engaged in buying and selling of goods/vouchers, which squarely falls within the ordinary and commercial understanding of trading - the procurement and supply of goods and gift vouchers by the appellant constitutes trading activity - the issue is decided against the appellant. The procurement and supply of goods and gift vouchers constitute trading activity.

Whether gift vouchers are actionable claims or goods-in-lieu, and whether their supply can escape Rule 6 of the CENVAT Credit Rules? - HELD THAT:- The gift vouchers represent goods-in-lieu, and not actionable claims - Gift vouchers are not actionable claims - They represent goods-in-lieu, and their trading attracts Rule 6 of CCR 2004 consequences.

Whether CENVAT credit attributable to trading activity is admissible prior to 01.04.2011 under the CENVAT Credit Rules, 2004? - HELD THAT:- The phrase “for removal of doubts” used in the Explanation is a clear legislative indicator that the amendment was intended to clarify the existing position and not to create a new levy or restriction - the credit attributable to trading activity was not admissible even prior to 01.04.2011, and the Department was justified in denying such credit - thus, CENVAT credit attributable to trading activity is not admissible even for the period prior to 01.04.2011.

Whether, for the period from 01.04.2011 to 31.03.2016, the appellant is entitled to avail CENVAT credit on common input services attributable to trading activity, and whether compliance with Rule 6 of the CENVAT Credit Rules, 2004 is mandatory? - HELD THAT:- From 01.04.2011 onwards, trading is statutorily deemed to be an exempted service, irrespective of the fact that it is not a taxable service under the Finance Act, 1994 - Once an activity is treated as an exempted service, Rule 6(1) comes into operation, which mandates that no CENVAT credit shall be allowed on inputs or input services used for provision of exempted services - The argument of the appellant that Rule 6 is optional is misplaced. The option exists only between the methods prescribed under Rule 6(3), and not between compliance and non-compliance. This position has been consistently upheld by courts.

Since the appellant admittedly failed to maintain separate accounts and failed to follow the prescribed reversal/payment mechanism, the denial of credit is legally sustainable. For the period from 01.04.2011 to 31.03.2016, CENVAT credit attributable to trading activity is inadmissible unless Rule 6 is strictly complied with - the issue is decided against the appellant.

Whether, after the amendments to the CENVAT Credit Rules post-2016, the appellant is entitled to avail CENVAT credit / whether the demands for the post-2016 period are sustainable? - HELD THAT:- Mere assertion of reversal, without demonstrating strict procedural compliance, cannot entitle the appellant to retain credit. The Tribunal in Dorma India Ltd. [2023 (8) TMI 1691 - CESTAT CHENNAI (LB)] has categorically held that post-amendment provisions do not grant any automatic entitlement to credit, and that Rule 6 compliance remains mandatory - there are no merit in the contention that the Department cannot raise demands for successive periods. Where non-compliance continues, each period gives rise to a fresh cause of action - the appellant is not entitled to avail CENVAT credit attributable to trading activity even for the post-2016 period, in the absence of strict compliance with Rule 6 - the issue is decided against the appellant.

Whether invocation of the extended period of limitation, demand of interest and imposition of penalties are sustainable? - HELD THAT:- The proviso to Section 73(1) permits invocation of the extended period where non-payment or short payment of tax arises by reason of fraud, collusion, wilful misstatement, suppression of facts or contravention of statutory provisions with an intent to evade payment of tax.

The plea that details were available in books of accounts cannot be accepted. It is settled law that statutory returns are the primary mode of disclosure, and mere availability of information in accounts does not amount to disclosure to the Department - The Hon’ble Supreme Court in Pushpam Pharmaceuticals Co. v. CCE [1995 (3) TMI 100 - SUPREME COURT] has held that suppression includes failure to disclose information which the assessee is legally required to disclose.

In the present case, trading details were admittedly not declared in returns. Therefore, the computation of limitation from the date of subsequent disclosure is legally correct - the extended period has been rightly invoked.

Levy of Interest - HELD THAT:- Interest under the relevant provisions of the Finance Act, 1994 and CENVAT Credit Rules is automatic and mandatory, once inadmissible credit is availed and utilised - The Hon’ble Supreme Court in SKF India Ltd. v. CCE [2009 (7) TMI 6 - SUPREME COURT] has held that interest is compensatory and follows as a matter of course - the demand of interest is legally sustainable.

Levy of penalties - HELD THAT:- The imposition of penalties, including penalties equivalent to the amount of inadmissible credit, is upheld, there being suppression of material facts with intent to evade payment of duty/tax. However, invoking the provisions of Section 80 of FA 1994, in respect of Six appeals relating to periods prior to 14.05.2015 are eligible for complete waiver of penalties under Sections 76, 77 and 78 by invoking Section 80, on the ground of reasonable cause and the seventh appeal, pertaining to the period after 14.05.2015, is not eligible for waiver of penalty, as the statutory power under Section 80 stood deleted.

Appeal disposed off.

Levy of service tax under the category of banking and other financial services - liability of Appellant to pay service tax considering the threshold limit - doctrine of mutuality - HELD THAT:- As regarding demand under the category of Banking and Other Financial Services, it is found that appellant was providing services to the members of the cooperative society and in the absence of any evidence regarding service provided by the appellant to any non-members, following the ratio of the judgment of the Hon’ble Supreme Court in the matter Kolkata Club Ltd [2019 (10) TMI 160 - SUPREME COURT (LB)], no service tax can be demanded.

As regarding other demand, it is found that the demand against other activities are also unsustainable since it is below threshold limit during the relevant period.

Appeal allowed.

Rectification of mistake - error apparent on the face of the record or not - non consideration of the submission of the department and judgement relied upon - Non-consideration of the decision of the Higher Court - HELD THAT:- The Department was made aware that PPJ (petitioner) had not paid the central excise duty on the manufacturing and sales made by them and had also not filed the central excise returns. In fact, both Shri R.R. Singla and Shri Pawan Gupta accepted that they would deposit the central excise duty as early as possible, also a sum of Rs 2 crores was also deposited as per the statement of Shri Pawan Gupta on 20.11.2016. Under the circumstances, it cannot be said that the Department did not have any knowledge as early as on 19/20.11.2016. For that reason, there cannot be any quarrel with the proposition laid down by the Apex Court that the demand can be raised from the date of the knowledge.

Considering the argument that as per the decision of the Tribunal in Satya Power and Ispat Limited [2024 (11) TMI 200 - CESTAT NEW DELHI], “once accepted, need not be proved”, from the statements made by Shri R.R. Singla and Shri Pawan Gupta on 19.11.2016 and 20.11.2016 respectively, there is no reason for the Revenue not to issue the show cause notice within the normal period of two years. Distinction is also made out by reason of the fact that the said decision related to clandestine removal.

For all justification, it is a settled principle of law that so far as the aspect of limitation is concerned, it is a mixed question of law and facts and is mainly based upon the facts of individual cases. From the facts of the present case, it is evident that in so far as the knowledge was concerned, the Department was aware that the appellant was clearing the articles of jewellery manufactured by them without payment of excise duty as early as in November, 2016 and it was incumbent upon them to have issued the show cause notice within the normal period of two years, more particularly when all the documents and the transaction details were made available by the appellant and duty was paid by 28.11.2017.

The Apex Court in Master Construction Co. (P) Ltd. vs. State of Orissa [1965 (12) TMI 108 - SUPREME COURT] was pleased to observe that an error which is apparent from record should be one which is not an error which depends for its discovery on elaborate arguments on questions of fact or law.

The scope of rectification of mistake application is very limited and certainly cannot call upon an appeal to be heard afresh - the rectification of an order does not result into obliteration of order originally passed and its substitution by a new order - the Rectification of Mistake applications filed by the Revenue are rejected.

Availment of CENVAT credit of service tax paid on licence for providing courier service - service connected with the manufacturing activity undertaken or not - levy of equal amount of penalty u/r 15(5) of the CENVAT Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944 - HELD THAT:- As per the evidence on record, the credit was availed on 13.10.2013 and when the audit was conducted on 11/12.11.2013, the appellant reversed the credit on 12.11.2013. However, show cause notice (SCN) was issued on 07.08.2014. It is a well settled law that reversal of unutilized CENVAT credit amounts to not taking of credit. Since the credit has been reversed before utilization, show cause notice could not have been issued.

Following the ratios of the decision relied by the appellant in Rana Sugars [2009 (9) TMI 350 - CESTAT, NEW DELHI], it is found that the demand of cenvat credit already reversed before utilization and imposition of penalty is unsustainable and impugned order to that extent is liable to be set aside.

The impugned order to the extent of confirmation of demand of Cenvat credit and imposition of penalty is set aside - Appeal allowed in part.

Method of valuation - clearances made by the appellant to its own units for captive consumption - to be valued in terms of Rule 8 of the Valuation Rules, or on the basis of the price at which sales are made to independent third-party buyers, in terms of Rule 11 r.w. Rule 4 of the Valuation Rules - revenue neutrality - invocation of extended period of limitation.

Whether the appellant is correct in following Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 [“the Valuation Rules” for short] for arriving at the value in respect of clearances of goods to their own units at Angul and Raigarh, when most of the quantity of such goods manufactured by them is cleared to their own units and part of the quantity is cleared to third party buyers, or not? - HELD THAT:- The case of the appellant is squarely covered by the decision in the case of OCL India Ltd. v. Commissioner of Central Tax, G.S.T. & C.E., Rourkela [2024 (6) TMI 1463 - CESTAT KOLKATA] where it was held that 'On stock transfer of clinker, the Appellant paid excise duty at 110% of cost of production in accordance with Rule 8 of the Central Excise Valuation Rules, 2000 ('Valuation Rules'). The Kapilas and Bengal units availed Cenvat Credit of the excise duty charged and paid by the Appellant.'

As the issue is squarely covered by the decision in the case of OCL India Ltd, in view of this, the appellant has correctly valued their goods in terms of Rule 8 of the Valuation Rules and therefore, the demand of central excise duty by adopting Rules 4 and 11 of the Valuation Rules is not sustainable.

Whether it is a case of revenue neutrality? - HELD THAT:- Admittedly, in this case, the appellant has been clearing the goods to their own units, for further manufacture. In that view, the issue that arises is whether the duty paid by the appellant is available as CENVAT Credit to their own unit which is using these goods for further manufacture and clearing on payment of duty, resulting in a revenue neutral situation, or not - the same issue has been examined by this Tribunal in the case of Britco Foods Company Ltd. v. Commissioner of C.Ex., Pune [2000 (10) TMI 76 - CEGAT, MUMBAI] wherein it was held that such a situation is revenue neutral. The said decision has been affirmed by the Hon’ble Apex Court in COMMISSIONER OF C. EX., PUNE VERSUS COCA-COLA INDIA PVT. LTD. [2007 (4) TMI 17 - SUPREME COURT] - thus, in that view, if duty is paid by the appellant, the same would be available as CENVAT Credit to the appellant in their own unit and in these circumstances, it is a revenue neutral situation.

Whether the extended period of limitation can be invoked in the facts and circumstances of the present case, or not? - HELD THAT:- Admittedly, in the facts of this case also, audits took place, on 16.05.2012 and 14.08.2013, but the valuation arrived at by the appellant by adopting Rule 8 of the Valuation Rules and payment of duty as per CAS-4 has never been disputed. In these circumstances, the Show Cause Notice, issued to the appellant for the period from January, 2010 to November, 2013, is barred by limitation. Therefore, the whole of the demand against the appellant is barred by limitation.

The impugned order is set aside and the appeal is allowed.

Exemption on hire charges received by the respondent for the bulldozers working on an hourly basis considering these transactions as service charges rather than transfer of right to use goods - transfer of right to use goods in the form of bulldozers hired to farmers on hourly basis - HELD THAT:- It would be trite at this juncture to refer to a recent judgment of the Hon’ble Supreme Court in the case of K.P. Mozika vs. Oil and Natural Gas Corporation Ltd. and Another [2024 (1) TMI 443 - SUPREME COURT], wherein the Hon’ble Supreme Court held that 'Essentially, the transfer of the right to use will involve not only possession, which may be granted at some stage (after execution of the contract), but also the control of the goods by the user. When the substantial control remains with the contractor and is not handed over to the user, there is no transfer of the right to use the vehicles, cranes, tankers, etc. Whenever there is no such control on the goods vested in the person to whom the supply is made, the transaction will be of rendering service within the meaning of Section 65(105) (zzzzj) of the Finance Act after the said provision came into force.'

The Hon’ble Supreme Court in the case of BSNL [2006 (3) TMI 1 - SUPREME COURT] laid down five essential attributes that must be cumulatively present for a transaction to qualify as transfer of right to use goods. In the instant case, none of these essential attributes are satisfied. The bulldozers remained under the complete control and possession of the respondent corporation at all times with the corporation's own personnel operating the machinery. The applicant (farmers’) neither acquire physical possession of the equipment nor obtain any legal right to independently use, control or operate the bulldozers. What is contracted for is not the use of machinery, but rather the execution of specific land development work by the respondent using its machinery and manpower. Therefore, this transaction is essentially a works contract for land development rather than a lease or transfer of equipment.

The fact that security responsibility is placed on the applicant (farmers’) or that amounts remain payable even if work is halted for reasons attributable to the applicant does not alter the basic character of the transaction as a works contract. These contractual stipulations merely protect the respondent's commercial interests and ensure payment for the work undertaken, but do not evidence any transfer of right to use the bulldozers. The previous assessment orders for earlier years treating similar transactions as service charges rather than transfer of right to use goods further support the respondent's contention and establish a consistent administrative interpretation of such transactions.

The Bench is of the considered opinion that there is no merit in the Tax Revision Case filed by the State. The STAT has correctly appreciated the facts and law in concluding that the bulldozer hire charges collected by the respondent corporation do not constitute taxable turnover under Section 5(E) of the APGST Act. The transaction in question is a composite works contract for land development services and does not involve any transfer of right to use goods as contemplated under the statutory provisions.

The instant Tax Revision Case being devoid of merit deserves to be and is accordingly dismissed.

Reversal of order of the First Appellate Authority, who discussed the issue meticulously with the available documentary evidences - sustenance of Assessment Order which is apparently passed by the Assessing Officer, based on the direction of his superiors and who was not allowed to apply his independent discretion - whether the rate of tax on turnover from sales of car stereo systems would be 12% as applicable to domestic products, or 20%, as imported goods? - HELD THAT:- Under the license agreement, Kenwood has agreed to provide the use of its intellectual property, technical expertise and some signature parts of the audio systems, to the petitioner. However, the parts are of little use if they are not integrated and assembled with other parts to form a car audio system - It is undisputed that the petitioner has a unit in Noida where it carries on the process of manufacture of audio systems that it clears on payment of central excise duty. The imported components are integrated with the domestically sourced materials to arrive at the final product, which is a complete car audio system. It is this which is ultimately sold.

There has been no allegation that the business arrangement that the petitioner is engaged in is opaque or is designed specifically to avoid or reduce tax liability. What has been imported by the petitioner constitute only components or parts of sound systems, that are distinct, commercially saleable goods in their own right. The parts do not, by themselves, constitute a complete car audio system as contemplated under Schedule Eleven. What has been sold however is a complete car audio system, as contemplated under First Schedule/Part D/Entry 14 (vi).

The order of the first appellate authority confirmed and order of the Tribunal reversed - the substantial questions of law are answered in favour of the assessee and adverse to the Revenue - Tax Case (Revision) is allowed.

Compounding of offence involved u/s 85(1)(n) of the Assam Value Added Tax Act, 2003 - power of Superintendent of Taxes to compound an offence under the provision of Section 89 of the Act - seeking refund of the money deposited as security by the petitioner - non-compliance of the provisions of Rule 41(9) of the Assam VAT Rules, 2005 -HELD THAT:- A perusal of the provision of Rule 3 of the Rules of 2005 would reflect that it is permissible that the Commissioner, by way of issuance of a notification in the Official Gazette to delegate the power to be exercised by the different officers under Section 3 of the Act. It is stated at the Bar that such notifications have been issued from time to time in the Gazette, the initial notification was so issued under the provisions of sub-Section (9) of Section 3 of the Rules of 2003 vide a notification bearing No. CTS-2/2005/172 dated 28-04-2005 delegating the powers under various provisions of the Act including the that Section 89, conferred upon the Commissioner, to the Superintendent of Taxes, including the respondent No. 3. The said notification was superseded by similar notification bearing No. CTS-1/2009/Pt./43 dated 19-06-2009 delegating amongst others to the respondent No. 3 w.e.f. 18-05-2009 powers of the Commissioner under various provisions of the Act of 2003 including the power of compounding offences under Section 89 of the Act of 2003.

The respondent No. 3 cannot be held to have passed the order dated 29-12-2012 compounding the offence alleged against the petitioner/ Company, on acceptance of the composition amount offered by it in the matter, to be an act done without jurisdiction. The provision of sub-Section (2) of Section 89 mandates that the Commissioner shall not compound an offence under this section and or pass an order for payment of composition money unless the person concerned admitted in writing that he had committed an offence. A perusal of the communication dated 29-12-2012 issued by the Vice President of the petitioner/ Company would go to reveal that the Company had accepted the commission of an offence of producing forged documents by it in connection with vehicles in question and also of offering an amount of Rs. 8,99,196/- being equivalent to the tax amount, as composition money, with a further request to accept the same and for dropping the prosecution. The order dated 29-12-2012 being in acceptance of such offer made by the petitioner/ Company issued by the respondent No. 3, this Court finds that the provision of Section 89 of the act of 2003 was complied with by the respondent No. 3 before issuing the order dated 29-12-2012.

The compounding of the offence being so effected in exercise of the power under Section 89 of the Act of 2003 by the respondent No. 3 basing on the delegation of the power so made upon him by the Commissioner of Taxes and the composition amount being equivalent to the tax amount as demanded from the petitioner/ Company vide notice dated 19-12-2012, this Court is of the considered view that the no error was committed by the Superintendent of Taxes in compounding of offence and issuing order dated 29-12-2012. The petitioner/ Company having deposited the amount involved as composition money, the subsequent contentions raised by the petitioner/ Company after depositing of such amount on 31-12-2012 without any reservation or protest would not mandate acceptance by this Court.

The order dated 29-12-2012 issued by the respondent No. 3 compounding offence as alleged against the petitioner vide notice dated 19-12-2012, would not mandate any interference - Petition dismissed.

Extinguishment of claims upon approval of a resolution plan - binding effect of an approved resolution plan on corporate debtor and stakeholders - doctrine of 'clean slate' for successful resolution applicant - overriding effect of the Insolvency and Bankruptcy Code over inconsistent enactments - immunity from prosecution and extinguishment of liabilities under Section 32A of the IBC

Seeking a declaration that the petitioner / company has contravened the provisions of Section 33(2)(b) of The Industrial Disputes Act - contention of the petitioner primarily is that they have received the company on a clean slate and that there can be no claim made by the complainant against the SRA (Successful Resolution Applicant) - whether the proceedings could have been continued further before the Industrial Tribunal after the acceptance of resolution plan? - HELD THAT:- This issue is no more in res integra as the same is concluded by the Hon’ble Supreme Court in the case of Electrosteel Steel Limited (Now M/S Esl Steel Limited vs. Ispat Carrier Private Limited [2025 (4) TMI 1246 - SUPREME COURT], wherein the Hon’ble Supreme Court by relying upon the earlier Judgments at paragraphs no.50, 50.1,51.52 has held that it is now well settled that once resolution plan is duly approved by the adjudicating authority under Sub-section 1 of Section 31 all claims which are not part of the resolution plan shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect of the claim which is not a part of the resolution plan.

In the case of Essar Steel India Ltd. Committee of Creditors Vs. Satish Kumar Gupta, [2019 (11) TMI 731 - SUPREME COURT], the Hon’ble Supreme Court had categorically declared that a successful resolution applicant cannot be faced with undecided claims after the resolution plan is accepted. Otherwise this would amount to a hydra head popping up which would throw into uncertainty the amount payable by the resolution applicant. It has been further observed that the lifting of the moratorium does not mean that the claim of the respondent would stand revived notwithstanding approval of the resolution plan by the adjudicating authority. Moratorium is intended to ensure that no further demands are raised or adjudicated upon during the corporate insolvency resolution process so that the process can be proceeded with and concluded without further complications.

Also considering the relevant clauses of the resolution plan, there is no scope left for payment of any dues by the petitioner / company and the petitions will have to be necessarily allowed. In view of the resolution plan, as approved, the claim of the respondents would automatically stood extinguished.

By virtue of the Judgment of the Hon’ble Supreme Court in the case of Electrosteel Steel Limited (Now M/S Esl Steel Limited vs. Ispat Carrier Private Limited no further claim of the respondents / employees could have been adjudicated by the Industrial Tribunal and Labour Court. Even the claim for reinstatement without back-wages cannot be considered by the Labour Court / Industrial Tribunal. The proceeding pending before the Labour Court, Aurangabad bearing Reference (IDA) No.61 of 2014 stands terminated. The impugned order dated 02.07.2025, passed by the Presiding Officer, Labour Court-II, Aurangabad and the impugned orders dated 21.01.2025, passed by the Presiding Officer, Industrial Tribunal, Aurangabad are quashed and set aside.

Petition allowed.

Taxability under the Gujarat Motor Vehicles Tax Act, 1958 - Heavy Earth Moving Machinery or special services vehicles or any construction equipment vehicles such as Dumpers, Loaders, Excavators, Surface Miners, Dozers, Drills, Rock Breakers etc. are “motor vehicles” within the ambit of Section 2 (28) of the Motor Vehicles Act, 1988 or not - what is meant by “motor vehicle” or what are “motor vehicles”? - HELD THAT:- A simple and plain reading of Section 2 (28) of the Act would reveal that it is in two parts. The first part is inclusive and the second part is exclusive. The first part, in short, provides that a motor vehicle or a vehicle means any mechanically propelled vehicle which is adapted for use upon roads and includes the chassis to which a body has not been attached and a trailer. So, the above part of the definition of motor vehicle is inclusive in nature. The second part provides for the exclusion of certain vehicles from the definition of the motor vehicle. It provides that motor vehicle does not include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or in any other enclosed premises. It means that the legislature has consciously provided for the exclusion of the vehicles of the special kind which have been adapted for use only in a factory or any other enclosed premises from the definition of motor vehicle. In other words, though the term motor vehicle is wide enough but it expressly excludes some of the motor vehicles which are of special type and have been adapted for use only in factory or in any other enclosed premises from its ambit.

The vehicles in question used by the appellant are all in the nature of special vehicles as they are basically construction equipment vehicles which have been made suitable for use only in a factory and an enclosed premises rather than for use on roads. These vehicles may be capable of being used on road but essentially, they are meant to be used as a special vehicle inside the enclosed premises or in the factory premises alone and not outside on the road. Even for reaching the factory premises, or the so-called enclosed premises they do not ply on road and are taken on tractors and trailers from the place of their manufacturing to the place of their deployment - the vehicles used by the appellants are special type of vehicles meant to be used as construction equipment vehicle within the enclosed premises and as such ex-facie stands excluded from the definition of the motor vehicle as contained in Section 2 (28) of the Act, more particularly by virtue of the second part of the definition.

The vehicles used by the appellant are “motor vehicles” within the first part of the definition under Section 2 (28) of the Act but they stand excluded from the definition of “motor vehicles” on account of their very nature of use and the place of the use by virtue of the second part of the definition.

In the case of Natwar Parikh & Co. Ltd. vs. State of Karnataka & Ors. [2005 (9) TMI 644 - SUPREME COURT] a three-Judge Bench of this Court without over ruling Bolani Ores Ltd. [1974 (9) TMI 115 - SUPREME COURT] held that tractor-trailers used for transporting goods constitute a different category of “goods carriage” which requires permit under Section 66 of the Motor Vehicles Act. Therefore, in the absence of such a permit they are liable to tax under Section 3(2) of the Karnataka Motor Vehicles Taxation Act, 1957.

A three-Judge Bench of this Court in Western Coalfields Limited vs. State of Maharashtra & Anr. [2016 (5) TMI 517 - SUPREME COURT] simply referring to the earlier decisions of this Court in Natwar Parikh & Co. Ltd. held that excavators fall within the meaning of the definition of “motor vehicles” as contained in Section 2(28) of the Act and therefore, would be liable for registration and payment of taxes.

Thus, it is concluded that the vehicles used by the appellants are vehicles of special types, precisely construction equipment vehicles which are suitable and are meant for use for operation and use within the industrial area/factory premises/ defined enclosed premises and are not meant for use on roads or public roads. They are off-road equipments and as such stand excluded not only from the purview of the “motor vehicle” as defined under Section 2 (28) of the Act but also from tax as Entry 57 of List II of the Seventh Schedule of the Constitution only authorizes taxation of vehicles suitable for use on roads only. They are not even chargeable to road tax in view of Schedule I to Section 3(1) of the Gujarat Tax Act which do not prescribes any tax for such kind of vehicles i.e., construction equipment vehicles. However, if any such kind of vehicles are found using roads, they would not be free from the rigors of Section 2 (28) of the Act and Section 3 of the Gujarat Tax Act and may also be subject to proceedings for seizure and penalty in accordance with the law.

The impugned judgments and orders dated 15.07.2011 and 19.12.2012 passed by the High Court of Gujarat are set aside - Appeal allowed.

Permission to amend the prayer clause to challenge the appeal order dated 24.11.2025 - HELD THAT:- Relying on M/S Bambino Agro Industries Ltd. Vs. State of Uttar Pradesh & Anr. [2025 (12) TMI 1598 - ALLAHABAD HIGH COURT], it has been stressed that the appeal authority has wrongly dismissed the appeal filed by the petitioner as time barred inasmuch as ex parte order dated 11.02.2025 was first communicated to the petitioner on 01.10.2025. Computed therefrom, the appeal has been filed within time.

Prima facie, the order passed by the appeal authority may run contrary to the law laid down by this Court in M/S Bambino Agro Industries Ltd.

The impugned ex parte order dated 11.02.2025 is set aside the matter is remitted to the appeal authority to pass appropriate orders, in accordance with law keeping in mind the law laid by this Court in M/S Bambino Agro Industries Ltd. - the present writ petition stands disposed of.