TaxTMI Updates e-Newsletter
Jan 17,2022

Interim stay of recovery - GST leviable under Reverse Charge Mechanism on royalty and District Mineral Fund Contribution - parity with interim order of the Supreme Court - stay of payment pending adjudication

Interim stay of recovery - GST leviable under Reverse Charge Mechanism on royalty and District Mineral Fund Contribution - stay of payment pending adjudication - Grant of interim stay against recovery/payment of GST under the Reverse Charge Mechanism on amounts of royalty and District Mineral Fund Contribution paid in respect of minor mineral leases. - HELD THAT: - The Court examined the petitioners' challenge to notices demanding GST under the Reverse Charge Mechanism for royalty and District Mineral Fund Contribution (period pleaded as July 2017 to March 2020) and considered that identical questions were the subject of an interim order by the Supreme Court in Writ Petition (Civil) No. 1076/2021. In view of that Apex Court interim order and the fact that the petitioners raise similar legal issues, the High Court found it appropriate to grant corresponding interim relief to the petitioners. The stay is interlocutory, preserves the respondents' ability to continue assessment and enquiry, and operates until further orders of the Court. [Paras 5]

Until further orders, payment of GST for grant of mining lease/royalty by the petitioners shall remain stayed.

Parity with interim order of the Supreme Court - stay of payment pending adjudication - Application of the principle of parity with the Supreme Court's interim order to similarly situated petitioners. - HELD THAT: - The Court applied the principle of parity: because the Supreme Court granted interim protection in a case involving the same legal question, the High Court extended similar interim protection to the petitioners before it who raised substantially identical contentions regarding levy of GST on royalty and District Mineral Fund Contribution. The order is limited to interim relief and does not adjudicate the merits of the tax liability. [Paras 3, 5]

Similar interim relief was granted to the petitioners on the basis of the Apex Court's interim order in a like case.

Procedural directions for pleadings - tagging of matters for consolidated listing - Procedural directions concerning filing of counter-affidavits and consolidation of matters for listing. - HELD THAT: - The Court directed that the respondents file counter-affidavits within three weeks and allowed one week thereafter to the petitioners to file replies. The writ petitions were ordered to be tagged with W.P. (T) No. 3878/2020, where similar issues are pending, for joint listing and consideration. [Paras 6, 7]

Respondents to file counter-affidavits in three weeks; petitioners may file replies in one week; petitions to be tagged with W.P. (T) No. 3878/2020 for listing.

Final Conclusion: Interim relief granted: recovery and payment of GST under the Reverse Charge Mechanism on royalty and District Mineral Fund Contribution payable in relation to the specified minor mineral leases (July 2017 to March 2020) is stayed until further orders; procedural directions issued for filing of affidavits and matters are tagged for consolidated listing.

Revision of GST TRAN-1 declaration within the time specified by GST rules - effect of technical/portal difficulties on exercise of transitional credit - indefeasibility of input tax credit and non-lapsing of accrued transitional credit - remand for verification and fresh consideration by departmental officer

Revision of GST TRAN-1 declaration within the time specified by GST rules - effect of technical/portal difficulties on exercise of transitional credit - indefeasibility of input tax credit and non-lapsing of accrued transitional credit - Whether the petitioner, having made mistakes in filing GST TRAN-1 and having attempted rectification within the statutory window, was entitled to have the transitional input tax credit examined despite portal limitations. - HELD THAT: - The Court observed that the petitioner was entitled to revise the TRAN-1 declaration and submit a revised declaration on the common portal within the time prescribed under the GST Rules (Rules 117-120). The judgment recognises that difficulties in making proper declarations in TRAN-1 occurred at the initial phase of GST implementation and that technical limitations of the web portal impeded assessees and the Department. The Court held that input tax credits accumulated under the erstwhile regime are intended to discharge tax liability under GST and such credits cannot be allowed to lapse merely because the portal architecture did not permit amendment. Consequently, procedural or technical obstacles in the portal do not automatically defeat a legitimately available transitional credit; the availability of credit requires examination on the facts and records. [Paras 19, 20, 21, 22, 23]

The petitioner's entitlement to seek revision and protection of legitimately available transitional input tax credit is recognised and technical portal difficulties do not ipso facto extinguish such credit; the matter requires factual examination.

Remand for verification and fresh consideration by departmental officer - Whether the matter should be remitted to respondents for independent verification of the petitioner's claim to transitional credit and for a fresh decision. - HELD THAT: - The Court directed the second respondent to deputise a suitable departmental officer to verify whether the petitioner had unutilised accumulated credit as on 01.07.2017. The officer may call for records from the petitioner and examine whether the claimed credit was available and could have been transitioned but for technical issues. If the credit was available on the cut-off date, the respondents are to internally resolve portal-related problems and take appropriate action consistent with earlier relevant decisions of this Court. The verification and decision are to be completed within six weeks from receipt of the order. [Paras 24, 25]

The petition is disposed by remitting the claim for independent departmental verification and fresh decision within six weeks.

Final Conclusion: Writ petition disposed: petitioner's entitlement to seek correction of TRAN-1 and protection of transitional input tax credit recognised; respondents directed to verify the petitioner's claim to transitional credit and pass a fresh decision after calling for records within six weeks; no costs.

Extension of timelines for filing Income-tax returns and audit reports - Clarification excluding application of extension to Explanation 1 to section 234A where tax payable exceeds one lakh - Acceptance of physical filing due to technical glitches in e-filing portal - Interest and penalty consequences deferred to assessment and show-cause proceedings

Extension of timelines for filing Income-tax returns and audit reports - Clarification excluding application of extension to Explanation 1 to section 234A where tax payable exceeds one lakh - Validity and scope of CBDT Circular No.01/22 extending timelines for filing audit reports and returns for AY 2021-22 and effect of Clarification 1 relating to Explanation 1 to section 234A. - HELD THAT: - The Court took notice of and reproduced CBDT Circular No.01/22 dated 11.01.2022 which further extended the due dates for furnishing audit reports and for filing returns in respect of Assessment Year 2021-22 (including extension of the return filing date to 15th March, 2022 and audit report deadlines to 15th February, 2022). The Court observed that Clarification 1 in the circular expressly provides that the extension shall not apply to Explanation 1 to section 234A of the Act in cases where the amount of tax on the total income as reduced by specified amounts exceeds one lakh rupees; the Court therefore recorded that the extension is subject to that clarification. The Court further noted that issues of interest, late fees and penalty would arise only at the time of assessment or on issuance of a show-cause notice and cannot be finally adjudicated at this interlocutory stage. [Paras 7, 8, 11]

CBDT Circular No.01/22 extending timelines for AY 2021-22 is noted and applied; the extension is subject to Clarification 1 excluding its operation in cases falling under Explanation 1 to section 234A where tax (after specified reductions) exceeds one lakh; consequences of interest/penalty remain for assessment or penalty proceedings.

Acceptance of physical filing due to technical glitches in e-filing portal - Interest and penalty consequences deferred to assessment and show-cause proceedings - Request for direction to accept Tax Audit Reports and Income-tax Returns in physical form in view of technical glitches in the new e-filing portal. - HELD THAT: - The petitioners sought mandamus to permit physical filing of audit reports and returns while portal glitches persist. The Court acknowledged reported technical difficulties in uploading audit reports (including UDIN-related issues) and expressed the practical concern that extended timelines would be vitiated if portal problems continue. Rather than grant a direction for physical acceptance, the Court directed the Additional Solicitor General to consult the highest authority concerned in the Department and ascertain whether the department would be agreeable to accept physical filings, urging a practical approach to easing difficulties faced by assessees. The Court therefore left the matter for consideration by the executive and directed further reporting on the returnable date. [Paras 9, 10, 12, 13]

Petition for mandating physical filing was not granted; matter referred to the respondents for consideration and the Additional Solicitor General was directed to obtain instructions and revert on the returnable date.

Final Conclusion: The Court recorded and applied CBDT Circular No.01/22 extending timelines for filing audit reports and returns for Assessment Year 2021-22 (subject to Clarification 1 excluding certain cases from the extension); petitions seeking mandatory acceptance of physical filings were not granted but the respondents were directed to consider the request and report back to the Court.

Faceless assessment procedure under Section 144B - non-est/ nullity of assessment if procedure under Section 144B not followed - burden under Section 68 limited to identity, genuineness and creditworthiness of creditor vis-a -vis assessee - source of the source - principles of natural justice in assessment proceedings - remand for de novo consideration with reasoned order

Faceless assessment procedure under Section 144B - non-est/ nullity of assessment if procedure under Section 144B not followed - principles of natural justice in assessment proceedings - remand for de novo consideration with reasoned order - Whether the impugned assessment was made in accordance with the procedure under Section 144B and, if not, whether it must be quashed and remitted for fresh consideration. - HELD THAT: - The Court examined Section 144B (faceless assessment) including sub-section (9) which provides that an assessment under section 143(3) shall be non-est if not made in accordance with the procedure laid down. The impugned final order was held to be an exact reproduction of the draft assessment order without any meaningful consideration of the explanations and documents filed by the assessee; the Assessing Officer merely expressed doubts about genuineness without recording reasons. Where the statutory faceless procedure and the non-obstante mandate of Section 144B(9) are not complied with, the resulting assessment is rendered a nullity. In those circumstances the Writ Court may entertain relief and quash the order rather than insist on exhaustion of the alternative appellate remedy. The matter was therefore quashed and remitted to the Assessing Officer to re-consider de novo, hear the assessee afresh, and pass a reasoned order in accordance with law within the time prescribed by this Court. [Paras 13, 14, 19, 20, 21]

Impugned assessment order quashed as non-est for failure to follow Section 144B procedure; matter remitted to Assessing Officer for de novo consideration with directions to hear the assessee and pass a reasoned order within eight weeks.

Burden under Section 68 limited to identity, genuineness and creditworthiness of creditor vis-a -vis assessee - source of the source - principles of natural justice in assessment proceedings - Scope of the assessee's burden under Section 68 and whether the firm was required to explain the 'source of the source' for capital introduced by partners. - HELD THAT: - The Court reiterated that under Section 68 the primary burden on the assessee is to establish identity of the creditor, genuineness of the transaction and creditworthiness of the creditor in relation to transactions with the assessee. Once the firm identifies the partners and shows that amounts were introduced by them, the firm's burden stands discharged; it is not obliged to explain the sources of funds of those partners (i.e., the 'source of the source'). The Assessing Officer remains free to investigate the individual contributors and, if necessary, proceed against them, but the firm cannot be penalised as having unexplained income merely because further inquiries into third party sources remain unanswered unless there is clinching evidence to attribute the funds to the assessee itself. The Court relied on the reasoning in the cited authorities to hold that the Assessing Officer must assign cogent reasons if he still treats the credited amounts as unexplained. [Paras 15, 16, 17, 18]

The firm's explanation that partners introduced the capital discharged its burden under Section 68; the Assessing Officer cannot demand the firm to prove the 'source of the source' and must, if persisting, record cogent reasons based on evidence.

Final Conclusion: Writ partly allowed: the assessment order passed under section 143(3) read with Section 144B is quashed as not made in accordance with the faceless procedure and therefore non-est; the matter is remitted to the Assessing Officer for fresh, reasoned consideration after hearing the assessee within eight weeks, having regard to the legal limits of the assessee's burden under Section 68.

Hybrid system of accounting - accrual of income under mercantile/accounting system vis-a -vis taxability on receipt - taxability of accrued interest on investments - allowability of expenditure under Section 37(1) as wholly or exclusively for business - deductibility of amortisation premium on acquisition of government securities as revenue expenditure

Hybrid system of accounting - accrual of income under mercantile/accounting system vis-a -vis taxability on receipt - Assessee permitted to compute income under the head "Profits and gains of business or profession" applying a hybrid/mercantile system and not be taxed on notional accruals in respect of non-performing assets or notionally accrued revenue. - HELD THAT: - The coordinate-bench precedents relied upon by the Court establish that where an assessee follows the mercantile or hybrid system of accounting, the revenue cannot demand tax merely on notional accruals in respect of non-performing assets which do not yield actual receipt. The Court held that identical questions have been considered and answered in favour of the assessee in earlier decisions and thereafter applied those rulings to the facts of the case, concluding that the revenue's contention that notional accrual must be taxed is without basis. [Paras 3]

Substantial questions of law nos. 1 and 2 answered in favour of the assessee and against the revenue.

Taxability of accrued interest on investments - hybrid system of accounting - Interest accrued on investments is not chargeable to tax merely because it is notionally accrued when the assessee follows an unrecognised hybrid system of accounting. - HELD THAT: - Following the coordinate-bench authorities cited by the Court, the Tribunal's conclusion that interest accrued on investments need not be taxed when the assessee's accounting treats such amounts as not realised was upheld. The Court treated the precedent as dispositive and answered the question in favour of the assessee, rejecting the revenue's contention that accrual alone mandates taxation. [Paras 3]

Substantial questions of law nos. 1 and 2 upheld for the assessee; accrued interest on investments not taxable on mere notional accrual under the facts and law applied.

Allowability of expenditure under Section 37(1) as wholly or exclusively for business - Expenditure incurred by the assessee-bank for promotion of self-help groups through payments to a charitable trust was allowable as revenue expenditure under Section 37(1) because it satisfied the tests of commercial exigency and was relatable to mobilization of deposits and advances. - HELD THAT: - The Assessing Officer had disallowed the expenditure on the ground that it was not incurred for earning taxable income and was made pursuant to directions of the controlling authority. The CIT(A) and the Tribunal, however, found on facts that there was commercial exigency, that the expenditure led to mobilization of loans, advances and deposits relatable to the bank's business, and that the objective was to promote the bank's business. Applying the settled principle that 'wholly or exclusively' does not require 'necessity' and that benefit to others does not preclude deduction if the statutory tests are met, the authorities' factual findings were held not to be perverse and permitted the deduction under Section 37(1). [Paras 4, 5, 6, 7]

Substantial question of law no. 3 answered in favour of the assessee and against the revenue; the expenditure was allowable under Section 37(1).

Deductibility of amortisation premium on acquisition of government securities as revenue expenditure - Amortisation premium paid on acquisition of Government securities held as long-term investments is allowable as revenue expenditure. - HELD THAT: - The Court found that coordinate-bench decisions squarely cover the question and have been decided in favour of the assessee. Applying those precedents, the substantial question raised by the revenue was answered against it and in favour of the assessee, endorsing the view that such amortisation premium is deductible as revenue expenditure in the circumstances considered. [Paras 8]

Substantial question of law no. 4 answered in favour of the assessee and against the revenue.

Final Conclusion: All substantial questions of law raised by the revenue were answered in favour of the assessee and against the revenue; the appeal is dismissed.

Natural justice - ex parte order - application of mind - determination of cost of construction and cost of acquisition - remand for fresh consideration - opportunity of hearing

Natural justice - ex parte order - application of mind - opportunity of hearing - determination of cost of construction and cost of acquisition - Orders of the CIT (Appeals) and the Tribunal were set aside and the matter remitted for fresh consideration because the authorities proceeded on an ex parte basis and the assessment order did not disclose the material basis for determining the cost of construction and acquisition, thereby denying a fair opportunity and independent application of mind. - HELD THAT: - The Assessing Officer fixed the cost of construction and acquisition purportedly on the basis of information collected, but the assessment order did not disclose that material or demonstrate application of mind. The CIT (Appeals) issued notice which was returned unserved and thereafter passed an ex parte order without an independent decision on merits. The Tribunal confirmed the ex parte order. In these circumstances, and having regard to the principles of natural justice, the orders below called for interference. The Court observed that where determinations affecting capital gains rest on material not reflected in the order and where the first appellate order is recorded ex parte without independent reasoning, the proper course is to restore the matter for fresh consideration so that the assessee may be given a reasonable opportunity to place valuation reports and other evidence before the authority and have the authority apply its mind afresh. [Paras 7, 8, 9]

Orders of the CIT (Appeals) and the Tribunal are set aside and the matter is remitted to the CIT (Appeals) for fresh adjudication after issuing notice and affording reasonable opportunity of hearing; all rights and contentions left open.

Final Conclusion: The impugned orders of the CIT (Appeals) and the Tribunal are set aside; the matter is restored to the CIT (Appeals) for fresh consideration in accordance with law after issuing notice and providing the assessee a reasonable opportunity to place evidence and be heard.

Disposal of objections to notice under Section 148 - Validity of notice under Section 148 - Jurisdiction to issue notice under Section 148 - Assessments completed without adjudication of objections - Ex-parte assessment under Section 144 - Reopening and reassessment procedure

Disposal of objections to notice under Section 148 - Assessments completed without adjudication of objections - Whether omission to pass a separate speaking order disposing of objections to the Section 148 notice rendered the subsequent assessment void and required quashing. - HELD THAT: - The Court accepted that ordinarily disposal of objections to a notice under Section 148 is a mandatory procedural step, and precedent recognises that absence of such disposal may vitiate reassessment. However, on the facts the Tribunal found that the Assessing Officer had recorded reasons and dealt with the objections within the body of the assessment order and that the assessee had not cooperated or filed a return after issuance of the Section 148 notice, resulting in an ex parte order under Section 144. The High Court noted that the assessee did not place before the Tribunal a copy of a relied judgment and failed to challenge the Tribunal's dismissal of subsequent miscellaneous petitions which addressed the point. In these circumstances the Tribunal's direction to restore the matter to the file of the Assessing Officer to pass a speaking reasoned order on the objections and, if the reassessment is held valid, to proceed de novo after affording opportunity of hearing, was not perverse. The Court declined to annul the assessment outright, finding no prejudice to the assessee from restoration and re-adjudication and observing that the Assessing Officer had provided reasons (albeit not in a separately paginated order). [Paras 3, 8, 10, 11, 13]

Tribunal did not err in directing restoration for a speaking disposal of objections rather than annulling the assessment; the assessment was not quashed on this ground.

Validity of notice under Section 148 - Jurisdiction to issue notice under Section 148 - Reopening and reassessment procedure - Whether the notice under Section 148 was invalid for non-compliance with mandatory conditions, vague as to whether it was for assessment or reassessment, or issued by an officer without jurisdiction, so as to render the assessment void ab initio. - HELD THAT: - The Court observed the settled propositions that a notice for reassessment presupposes a prior assessment and that objections to reasons are entertainable only after filing or adopting a return; but on the facts the assessee did not file a return nor adopt the earlier return after service of the Section 148 notice. The Tribunal concluded that reasons had been recorded and objections were disposed of in the assessment order itself; accordingly the High Court found no jurisdictional defect or fatal vagueness in the notice such as to invalidate the proceedings. Reliance placed on Supreme Court and coordinate bench decisions was examined and held distinguishable on the material facts, including the assessee's non-cooperation and the Tribunal's factual finding that reasons were furnished and objections addressed. The Court therefore rejected the contention that the notice was inherently bad or that the officer lacked jurisdiction. [Paras 9, 12, 13, 14]

Contentions as to invalidity, vagueness or lack of jurisdiction in issuance of the Section 148 notice were rejected; the reassessment proceedings are not void on those grounds.

Final Conclusion: The substantial questions of law are answered in favour of the Revenue and against the assessee. The Tribunal did not err in restoring the matter to the Assessing Officer for passing a reasoned speaking order on the objections and, if reassessment is held valid, in proceeding de novo after affording opportunity to the assessee. The appeal is dismissed.

Exemption under Section 54 - exemption under Section 54F - proviso (a)(i) to Section 54F - the phrase "owns" - investment in new asset in name of spouse - distinction between Section 54 and Section 54F - Section 27 deemed ownership not applicable beyond Sections 22-26 - verification of payment of stamp duty by Assessing Officer

Exemption under Section 54 - investment in new asset in name of spouse - Whether investment in a new residential house made in the name of the assessee's wife qualifies for exemption under Section 54 - HELD THAT: - Relying on the coordinate-bench decision in DIT v. Mrs. Jennifer Bhide, the Court held that Section 54 is concerned with application of the sale consideration to acquire or construct a residential house and does not expressly require that the investment be made only in the name of the assessee. Once the sale consideration is utilized for the purposes specified in Section 54, the assessee is entitled to the exemption even if the new asset is purchased in the name of the assessee's spouse. The Tribunal's extension of relief in this respect was affirmed. [Paras 16, 22, 23]

Investment in a new residential house made in the name of the assessee's wife qualifies for exemption under Section 54, and the Tribunal's conclusion on this point is sustained.

Exemption under Section 54F - proviso (a)(i) to Section 54F - the phrase "owns" - distinction between Section 54 and Section 54F - Section 27 deemed ownership not applicable beyond Sections 22-26 - Whether the assessee is entitled to exemption under Section 54F where (a) one residential house stood in the name of the assessee's wife and (b) another residential house had been gifted away prior to the date of transfer of the original asset - HELD THAT: - The Court analysed the clear textual distinction between Sections 54 and 54F and emphasised that proviso (a)(i) to Section 54F uses the word "owns", which is significant and absent in Section 54. Section 27 (deeming provisions as to ownership for Sections 22-26) is limited to those sections and cannot be imported to treat a property standing in the name of the wife as property "owned" by the assessee for the purposes of Section 54F. The Court held that Section 54F must be construed differently from Section 54 and that, for Section 54F, the new residential investment must be in the name of the assessee; a property standing in the name of the wife cannot be treated as owned by the assessee. Applying these principles to the facts, and accepting that the Kodihalli house was gifted away prior to the transfer and that the Domlur flat stood in the wife's name, the Court held that the assessee did not own more than one residential house (other than the new asset) on the date of transfer and therefore is entitled to exemption under Section 54F, subject to other conditions. [Paras 21, 24, 25, 26, 27]

Assessee entitled to exemption under Section 54F; property standing in the name of the wife is not to be treated as property owned by the assessee for proviso (a)(i) to Section 54F, and the Tribunal's denial on this point is set aside.

Verification of payment of stamp duty by Assessing Officer - Whether payments towards stamp duty, evidenced by Demand Drafts, should be verified and, if found to have been made by the assessee, afforded benefit under Section 54 - HELD THAT: - The Tribunal remanded the matter to the Assessing Officer because the record did not adequately identify to whom the accounts used to make the demand drafts belonged. The High Court found no error in this approach: the Assessing Officer was directed to verify the payments and, if proved to have been made by the assessee from his account, to allow the benefit under Section 54. [Paras 17]

Remand to the Assessing Officer for verification of stamp duty payments is confirmed and the Assessing Officer is to allow the benefit under Section 54 if payments are established to have been made by the assessee.

Final Conclusion: Appeal allowed in part. The Tribunal's order is set aside insofar as it denied exemption under Section 54F; the assessee is entitled to exemption under Section 54F subject to other conditions. The Tribunal's extension of relief under Section 54 for investment made in the name of the wife is sustained. The Assessing Officer shall verify payments of stamp duty and recompute income accordingly.

Adventure in the nature of trade - capital gains vs business income - suppression of sale consideration - reliance on third-party statements found during search - disallowance under Section 40(a)(ia) - remand for factual verification of expenditure

Adventure in the nature of trade - capital gains vs business income - Whether the assessee's sale of the property amounted to an adventure in the nature of trade or was taxable as capital gains - HELD THAT: - The Tribunal, as the ultimate fact-finding forum, examined the evidentiary material relied upon by the Assessing Officer and found that the letters and documents seized or relied upon did not clearly establish that the assessee carried on an adventure in the nature of trade or treated the properties as trading assets. The High Court noted that the Assessing Officer's conclusions were founded on a letter allegedly written by the deceased assessee which was found in possession of a third party, and that the property had been held as a long-term capital asset. Applying the principle that the Tribunal must first find primary evidentiary facts and then apply legal principles, the Court found no perversity or arbitrariness in the Tribunal's factual conclusion that the receipts were chargeable as capital gains and not business income. [Paras 8, 11]

The Tribunal's finding that the receipts are taxable as capital gains and not as income from an adventure in the nature of trade is upheld.

Suppression of sale consideration - reliance on third-party statements found during search - Whether addition on account of suppression of sale consideration could be sustained on the basis of the statement of a third party recorded during search proceedings - HELD THAT: - The Assessing Officer made an addition by treating the sale consideration at a higher rate based on the statement of a third party recorded in search proceedings. The Tribunal found that this statement was not corroborated by other material evidence and therefore did not justify disallowance or addition. The High Court agreed, observing that the Assessing Officer's addition rested merely on the said statement without independent corroboration, and the Tribunal's rejection of that addition on the available material was not perverse. [Paras 8]

The addition for suppression of sale consideration based solely on the third-party statement cannot be sustained.

Disallowance under Section 40(a)(ia) - capital gains vs business income - Whether the disallowance under Section 40(a)(ia) is sustainable once the income is held to be capital gains - HELD THAT: - Section 40(a)(ia) disallows certain expenditures where tax has not been deducted at source in respect of payments relevant to business income. Having held that the receipts from sale of the property are chargeable as capital gains and not business income, the Court held that the foundational premise for invoking Section 40(a)(ia) did not exist. Consequently, the Assessing Officer's disallowance under that provision could not be sustained in the facts of this case. [Paras 9]

The disallowance under Section 40(a)(ia) is not sustainable in view of the income being held to be capital gains.

Remand for factual verification of expenditure - Whether the Tribunal's remand to the Assessing Officer to verify construction of the compound wall and genuineness of the expenditure was improper - HELD THAT: - The Tribunal remitted the question of whether the compound wall was actually constructed and whether payments to the contractor were genuine to the Assessing Officer for examination and verification. The High Court observed that these are factual matters requiring ground-level enquiry and that remand for factual verification by the assessing authority was appropriate. The Court found no merit in the Revenue's challenge to the remand. [Paras 10]

The remand to the Assessing Officer to verify the factual aspects of the compound wall and related expenditure is appropriate and is confirmed.

Final Conclusion: No substantial question of law arises; there is no perversity in the Tribunal's findings on facts. The Tribunal's conclusions that the receipts are chargeable as capital gains, the additions based solely on an uncorroborated third party statement are unsustainable, the disallowance under Section 40(a)(ia) cannot stand, and the remand for factual verification is appropriate are affirmed. The Revenue's appeal is dismissed.

Full value of consideration - Mode of computation of capital gains - Guidance value deemed to be consideration - Special provision for full value of consideration where stamp valuation authority value higher (Section 50C) - Fair market value deemed full value where consideration not ascertainable (Section 50D) - Capital gains arising on Joint Development Agreement - Revenue neutrality

Full value of consideration - Guidance value deemed to be consideration - Fair market value deemed full value where consideration not ascertainable (Section 50D) - Mode of computation of capital gains - Capital gains arising on Joint Development Agreement - Determination of the full value of consideration for computing capital gains where an assessee has entered into a Joint Development Agreement and the consideration is not ascertainable. - HELD THAT: - The Court held that the determinative concept is the "full value of consideration" as used in Section 48 and, where appropriate, statutory deeming provisions operate to treat market value as consideration. Relying on the settled rule that the consideration is what the transferor receives in exchange and on the distinction drawn in George Henderson, the Court observed that special machinery provisions such as Section 50C and the subsequently enacted Section 50D illuminate the method to be adopted when actual consideration is not determinable. Although Section 50D came into force after the assessment year in question, its legislative purpose indicates that where consideration cannot be ascertained the fair market value (guidance value) of the asset on the date of transfer is the appropriate benchmark. The Assessing Officer's adoption of a rate based solely on the developer's letter was held to be an unreliable basis for full value of consideration. The Tribunal's exercise of discretion to adopt guidance value of land (or building) as the mode to determine full value of consideration in a JDA context was held not to be perverse or arbitrary, particularly because any eventual capital gains on receipt and subsequent sale of constructed area would be taxed and indexation would reckon cost proportionate to fair market value of land. Consequently, guidance value was affirmed as appropriate where consideration is not attributable or determinable. [Paras 11, 13, 15, 16]

Guidance value (fair market value) is an appropriate mode to determine the full value of consideration for capital gains in a JDA where consideration is not ascertainable; the Tribunal's adoption of guidance value is upheld.

Revenue neutrality - Mode of computation of capital gains - Whether the admitted factual and consequential tax effect renders the dispute a substantial question of law warranting interference. - HELD THAT: - The Court noted that the controversy is essentially revenue neutral and that any capital gains, if accruing on subsequent disposal of constructed area, would be taxed in the relevant year. Having regard to the facts and the discretionary factual conclusion of the Tribunal (which was not perverse), the Court concluded that no substantial question of law arises for consideration. [Paras 12, 17]

No substantial question of law arises; appellate interference is not warranted.

Final Conclusion: The Tribunal's order adopting guidance value (fair market value) as the deemed full value of consideration in the JDA context is affirmed; the Revenue's appeal is dismissed and no substantial question of law arises.

No objection certificate for withdrawal from Capital Gains Account Scheme - application of Section 54F(4) of the Income-tax Act - charging of capital gains under Section 45 where deposited amount is unutilised - sufficiency of advance tax and undertaking to permit withdrawal - power of Assessing Officer to approve closure/withdrawal under the Capital Gains Account Scheme

No objection certificate for withdrawal from Capital Gains Account Scheme - power of Assessing Officer to approve closure/withdrawal under the Capital Gains Account Scheme - Legitimacy of respondent's refusal to issue No Objection Certificate and direction to issue NOC permitting withdrawal from the specified Capital Gains Account. - HELD THAT: - The Court examined the scheme provisions (including rule 13(1) of the Capital Gains Account Scheme) which require Assessing Officer's approval for closure and payment from the deposit office. On the facts, the petitioner had deposited the capital gain in terms of the Scheme, paid advance tax of Rs. 1.25 crore (more than the assessed capital-gains liability as represented), furnished an indemnity bond and gave undertakings (including filing the return and not claiming set-off of losses). The Court found no justification for withholding the NOC in these circumstances, noted the depositor's credibility and the plugging of possible loopholes by affidavit/undertaking, and directed issuance of the No Objection Certificate for the specified account within one week of receipt of the order. [Paras 10, 13, 15]

Respondent's denial of NOC set aside; respondent directed to issue No Objection Certificate in respect of the specified account within one week.

Application of Section 54F(4) of the Income-tax Act - charging of capital gains under Section 45 where deposited amount is unutilised - sufficiency of advance tax and undertaking to permit withdrawal - Whether the proviso to Section 54F(4) and Section 45 precluded withdrawal of deposited amount where advance tax was paid and the assessee undertook to file return and not claim set-off of losses. - HELD THAT: - The Court recited Section 54F(4) and the proviso which provides that unutilised amounts may be charged as income under Section 45 when the three-year period expires, and that the assessee is entitled to withdraw unutilised amounts in accordance with the Scheme. The Court accepted the department's theoretical contention that final tax liability would be determined on filing the return for Assessment Year 2022-2023, but balanced this with the facts: advance tax payment in excess of the indicated capital-gains liability, the indemnity/undertaking to file the return and not claim set-offs, and the petitioner's consistent tax compliance. On these grounds the Court held that the advance tax and the affidavit/undertaking sufficiently addressed the possible tax shortfall and permitted withdrawal subject to the statutory charging provisions remaining applicable at assessment. [Paras 7, 13]

Proviso to Section 54F(4) and Section 45 do not bar immediate issuance of NOC where advance tax paid and adequate undertaking furnished; final assessment rights of revenue preserved.

Final Conclusion: Writ petition allowed. Direction issued to the respondent to grant the No Objection Certificate for the specified Capital Gains Account to enable withdrawal of the remaining deposit, subject to the statutory charging provisions and the petitioner's undertaking and compliance with filing requirements.

Reassessment on the basis of information in the form of a judicial decision - reopening of assessment under section 147/notice under section 148 - distinction between change of opinion and discovery of fresh information - time bar for completion of reassessment under section 153(2) - pre dating of assessment order and effect on limitation

Reassessment on the basis of information in the form of a judicial decision - distinction between change of opinion and discovery of fresh information - Validity of notice issued under section 148/ reopening under section 147 on the ground that a subsequent judicial decision constituted information justifying reassessment. - HELD THAT: - The Tribunal examined whether the decision of the High Court in Regency Creation, which came to the AO's notice after completion of the original assessment, constituted "information" within the meaning of section 147(b) so as to justify reopening. Applying precedents, the Tribunal held that a judicial decision coming to the AO's knowledge after assessment can constitute information and be a valid basis for issuing a notice under section 148. The AO's reliance on the subsequent decision was therefore a permissible source of information and not merely an impermissible change of opinion, and the notice under section 148 was held to be valid. [Paras 11, 12, 13, 14, 17]

Notice under section 148 and reopening under section 147 were valid insofar as they were founded on the subsequent judicial decision which constituted information.

Time bar for completion of reassessment under section 153(2) - pre dating of assessment order and effect on limitation - Whether the reassessment order dated 30-03-2015 was within the time permitted by section 153(2) when the order incorporated directions dated 31-03-2015 of the Addl. CIT. - HELD THAT: - Section 153(2) bars any order of reassessment under section 147 after the expiry of one year from the end of the financial year in which the notice under section 148 was served. The notice in this case was served in FY 2013-14, so the reassessment had to be completed by 31-03-2015. The AO's reassessment order was dated 30-03-2015 but incorporated directions of the Addl. CIT dated 31-03-2015, indicating that the directions post dated the order. The Tribunal was not persuaded that the dating was a mere typographical error; the material suggested the order was in fact passed after 31-03-2015 and pre dated to appear within time. As such the reassessment order was held to be barred by limitation and was set aside. [Paras 18, 19]

Reassessment order set aside as time barred under section 153(2).

Infructuousness of appellate proceedings where impugned order is quashed - Consequences for the Revenue's appeal challenging the CIT(A)'s direction to consider alternative claim under section 10A after the reassessment order was set aside. - HELD THAT: - Because the Tribunal set aside the reassessment order as time barred, the first appellate proceedings that flowed from that assessment stood rendered infructuous. Accordingly, the issues advanced in the Revenue's appeal - which challenged the CIT(A)'s directions in the appellate proceedings consequent to the reassessment - no longer required adjudication and were dismissed as infructuous. [Paras 21, 22]

Revenue's appeal dismissed as infructuous.

Final Conclusion: The Tribunal held that while a subsequent judicial decision can constitute "information" justifying reopening under section 147/148, the reassessment order in this case was pre dated and in substance passed after the statutory cut off under section 153(2); accordingly the reassessment order was set aside as time barred and the Revenue's cross appeal was dismissed as infructuous.

Deduction under section 80P(2)(a)(i) - revisional power under section 263 - debatable issue doctrine - erroneous and prejudicial to the interests of Revenue - conflicting judicial precedents - scope of revisional jurisdiction

Deduction under section 80P(2)(a)(i) - revisional power under section 263 - debatable issue doctrine - erroneous and prejudicial to the interests of Revenue - conflicting judicial precedents - Whether the Pr. CIT was justified in invoking revisional jurisdiction under section 263 to set aside the assessment for disallowing deduction claimed under section 80P on interest earned from other co-operative societies. - HELD THAT: - The Tribunal held that exercise of revisional power under section 263 is ousted where the matter is debatable and the Assessing Officer has adopted a view which is a possible view. The Pr. CIT's action to treat the assessment as erroneous and prejudicial could not be sustained because the question of allowance of deduction under section 80P(2)(a)(i) on interest from other co-operative societies involved conflicting judicial opinions and the AO had taken a view supported by judicial decisions of the Pune Bench and the Hon'ble Karnataka High Court in Tumkur Merchants Souharda Credit Cooperative Ltd. The decision in Totgar's (and the related Pr. CIT decision dealing with section 80P(2)(d)) was found not to be directly germane as it concerned a different clause and different factual background. Given that the AO's view was legally tenable and represented one of two available views, the revisional jurisdiction of the Pr. CIT could not be exercised to reopen that issue; accordingly the order passed under section 263 was set aside.

Pr. CIT's order under section 263 setting aside the assessment in respect of the interest income deduction was unjustified and is set aside; appeal allowed.

Final Conclusion: The Tribunal allowed the appeal, set aside the Pr. CIT's order under section 263, and held that the AO's allowance of deduction under section 80P(2)(a)(i) on interest from other co-operative societies was a tenable view not subject to revisional interference.

Rectification under section 154 - limited scope of amendment under section 154 - deductibility of employers' contribution to employee welfare funds - deeming of employees' contribution as employer's income under section 2(24)(x) - operation and scope of provisions governing deductions vis-a -vis section 43B - retrospective application of statutory explanations - conflict of judicial opinion

Rectification under section 154 - limited scope of amendment under section 154 - deductibility of employers' contribution to employee welfare funds - operation and scope of provisions governing deductions vis-a -vis section 43B - conflict of judicial opinion - retrospective application of statutory explanations - Whether the addition of the employees' contribution to employee welfare funds made by the assessing officer by invoking section 2(24)(x) r/w s.36(1)(va), through an amendment under section 154, is sustainable for AY 2017-18 where the contribution was deposited after the due date under s.36(1)(va) but before filing the return under s.139(1). - HELD THAT: - The Tribunal examined the limited scope of rectification under section 154 and held that where there exists a cleavage of judicial opinion on the legal characterisation and deductibility of employees' contributions, an assessing officer cannot effect an adjustment by way of an amendment under section 154 unless there is a binding decision of the Hon'ble jurisdictional High Court to the contrary. The Tribunal noted competing views in earlier decisions and that the Finance Act, 2021 inserted Explanations which purport to clarify the position between s.36(1)(va) and s.43B. However, the Explanations were proposed to take effect prospectively (from AY 2021-22) as evident from the Notes on Clauses and Memorandum to the Finance Bill, 2021, and therefore cannot be read as retrospectively applying to AY 2017-18. In the absence of any decision of the jurisdictional High Court overruling the view relied upon by the assessee, and having regard to the settled principle that rectification under section 154 is not a vehicle to decide contentious questions of law where judicial opinion is divided, the addition could not be sustained. The Tribunal observed that a subsequent binding High Court decision, if any, could require amendment of the order after giving the assessee an opportunity of hearing, but no such decision existed at the time. [Paras 4]

The additions made under section 154 in respect of the employees' contribution are not sustainable for AY 2017-18 and are deleted; the assessee's appeal is allowed.

Final Conclusion: The Tribunal allowed the appeal, directed deletion of the additions made under section 154 in respect of employees' contribution for AY 2017-18, holding that in view of divided judicial opinion and the prospective nature of the Finance Act, 2021 Explanations the assessing officer could not sustain the rectification; any subsequent binding jurisdictional High Court decision may warrant amendment after hearing the assessee.

Deemed utilization under section 11(1)(a) - accumulation/set apart of income for charitable purposes - computation on gross receipts versus net surplus - interpretation of "income" in section 11(1)(a) - precedential effect of Supreme Court decision in Programme for Community Organization

Deemed utilization under section 11(1)(a) - computation on gross receipts versus net surplus - interpretation of "income" in section 11(1)(a) - Whether the specified percentage permitted to be accumulated/set apart under section 11(1)(a) is to be calculated on the gross receipts of the trust or on the net surplus after application/expenditure. - HELD THAT: - The Tribunal held that the term "income" in section 11(1)(a) refers to the income derived from property held under trust prior to application, and therefore the permitted accumulation (15% in the year under appeal) is to be computed on gross receipts. The conclusion rests on the plain language of section 11(1)(a) and the binding precedent of the Supreme Court in Programme for Community Organization, which held that the exemption for accumulation is available on the donations (gross receipts) and not on the balance remaining after application. The Tribunal also relied on subsequent Tribunal decisions and the Special Bench precedent which, applying the Supreme Court's reasoning, concluded that outgoings which are applications of income should not be deducted when determining the percentage eligible for accumulation. The assessing officer's reliance on decisions concerning different statutory provisions (for example, deduction under section 35(2)(iv)) was found inapposite. Applying these principles to the facts for A.Y. 2008-09, the CIT(A)'s allowance of accumulation at 15% of gross receipts was affirmed. [Paras 7, 8, 9, 10]

The accumulation allowable under section 11(1)(a) is to be computed on gross receipts; the CIT(A)'s order allowing 15% of gross receipts is affirmed and the Revenue's ground is dismissed.

Final Conclusion: Appeal dismissed. The Tribunal affirms that, for A.Y. 2008-09, the specified percentage allowable to be accumulated/set apart under section 11(1)(a) is to be calculated on the trust's gross receipts, following the Supreme Court's decision in Programme for Community Organization and consistent Tribunal precedents.

Revisionary jurisdiction under section 263 - erroneous and prejudicial to the interest of Revenue - Explanation 2 to section 263 - twin conditions for invoking section 263 - assessment officer's inquiry and formation of opinion - natural justice in revision proceedings

Revisionary jurisdiction under section 263 - erroneous and prejudicial to the interest of Revenue - Explanation 2 to section 263 - twin conditions for invoking section 263 - assessment officer's inquiry and formation of opinion - Validity of the Principal Commissioner of Income Tax's exercise of revisionary jurisdiction under section 263 in setting aside the assessment order for A.Y.2016-17 - HELD THAT: - The Tribunal examined whether the Pr.CIT was justified in invoking section 263 and Explanation 2 thereto when the Assessing Officer had conducted enquiries, collected and considered relevant material and taken one of the possible views. The record shows the assessment was a limited scrutiny concerning long term capital gains, the assessee furnished documents (including evidence of similar transactions in A.Y.2015-16 and for family members) and the same Assessing Officer had earlier scrutinised and accepted similar submissions. The Pr.CIT concluded without demonstrating how the assessment order was prejudicial to the revenue or quantifying any loss; nor did he show that the AO made no verification at all. As multiple courts require both error and prejudice to the revenue to exist for section 263 to be invoked, and Explanation 2 can only be applied where there is no inquiry by the AO, the Tribunal held that the twin conditions were not satisfied and that the Pr.CIT could not validly exercise revisionary jurisdiction in the circumstances. The Tribunal therefore set aside the order passed under section 263. [Paras 11]

Order passed by the Pr.CIT under section 263 is set aside as not sustainable; appeal allowed.

Natural justice in revision proceedings - assessment officer's inquiry and formation of opinion - Allegation of violation of principles of natural justice in the revision proceedings initiated by the Pr.CIT - HELD THAT: - The assessee contended the Pr.CIT proceeded in haste and without adequate opportunity, ignoring available evidence. The Tribunal noted the Pr.CIT issued a show-cause notice and considered the assessee's detailed submissions. While observing the Assessing Officer's assessment order was brief, the Tribunal found material on record indicating inquiries and documentary evidence had been made and considered by the AO (including cognate assessments for A.Y.2015-16 and family members). The Tribunal did not accept that the revision proceeded in complete violation of natural justice and treated the principal defect as the absence of any demonstrated prejudice to revenue required for valid exercise of section 263. [Paras 11]

No successful establishment of a substantive breach of natural justice requiring quashing; the appeal succeeds on the primary ground that section 263 was inapplicable.

Final Conclusion: The Tribunal allowed the appeal, set aside the order passed by the Principal Commissioner of Income Tax under section 263 for A.Y.2016-17 because the twin requirements for invoking section 263 (that the assessment be both erroneous and prejudicial to the revenue) were not established and the Assessing Officer had made enquiries and formed an opinion; the revision was therefore not sustainable.

Revisional jurisdiction under section 263 - erroneous and prejudicial to the interests of Revenue - acquisition for purposes of section 50 - part performance and Section 53A, Transfer of Property Act - addition to block of assets and written down value - obligation to withhold tax (TDS) and verification of receipts - genuineness of business expenditure and factual verification

Revisional jurisdiction under section 263 - erroneous and prejudicial to the interests of Revenue - Validity of the Pr. CIT's exercise of jurisdiction under section 263 in setting aside the assessment order dated 19.12.2017 - HELD THAT: - The Tribunal examined whether the Assessing Officer had made adequate inquiry and applied his mind to the matters later relied upon by the Pr. CIT. The record shows queries were raised, replies were filed, and the AO verified documents (including issuing notices under section 133(6) and considering papers on additions/deletions to the block). The Tribunal held that the AO had taken one of the possible views after verification and consideration of binding precedents available at the time, and that Explanation 2 to section 263 is applicable only where no inquiry or verification has been carried out. Merely taking a different view by the Commissioner, or directing further verification without quantifying prejudice to revenue, does not justify invocation of section 263. For these reasons the Tribunal concluded that the revisional jurisdiction was wrongly exercised by the Pr. CIT and set aside the order passed under section 263. [Paras 11, 16, 19]

Order of the Pr. CIT under section 263 set aside; appeal allowed.

Acquisition for purposes of section 50 - part performance and Section 53A, Transfer of Property Act - addition to block of assets and written down value - Whether the property acquired by agreement dated 31.03.2015 (registered 04.04.2015) could be treated as acquired during the previous year so as to preclude applicability of section 50 on sale during the year - HELD THAT: - The Tribunal analysed the factual matrix (agreement date, substantial payments before 31.03.2015, possession/fit-out activity and seller's confirmations) and applied section 53A of the Transfer of Property Act and the coordinate decision in Indogem v. ITO. It noted that where the parties' rights have crystallized by part performance, possession and part payment, the later registration is a formality and the acquisition is to be treated as having occurred in the relevant previous year for the purposes of section 50. The Tribunal observed that the Assessing Officer had in fact examined additions and deletions to the block and accepted non-applicability of section 50 while disallowing depreciation on other grounds; therefore the AO had applied his mind and taken a possible view. Consequently the Pr. CIT could not invoke section 263 merely because he preferred a different view. [Paras 12, 13, 14, 15, 16]

The AO's treatment (that the acquisition could be treated as during the previous year and section 50 not attracted) was a possible view based on verification and binding precedents; section 263 could not be invoked to revisit that conclusion.

Obligation to withhold tax (TDS) and verification of receipts - Whether failure by the AO to examine applicability of TDS on certain professional receipts justified revisional action under section 263 - HELD THAT: - The Tribunal noted that the assessee declared all professional receipts and paid tax thereon; receipts comprised amounts from a domestic payer (with TDS reflected) and receipts from a foreign party on which Indian withholding provisions did not apply. The Pr. CIT had only directed the AO to verify the foreign receipts. The Tribunal observed that such direction, without any quantified prejudice to revenue, does not satisfy the jurisdictional requirement for invoking section 263, particularly where the AO had already examined the issue and the assessee had offered the receipts to tax. [Paras 17, 19]

Direction to verify TDS applicability did not constitute sufficient ground for revision under section 263; revisional action was unjustified.

Genuineness of business expenditure and factual verification - Whether failure to examine genuineness of business promotion expenses of the assessee warranted setting aside of assessment under section 263 - HELD THAT: - Record shows the AO issued notices under section 142(1) and the assessee furnished party-wise details and explanations for business promotion expenditure. The Pr. CIT directed further verification of these expenses but did not quantify any loss to revenue. The Tribunal reiterated that mere disagreement with the AO's view or a direction to make further inquiries, absent a demonstrable lack of any inquiry by the AO or quantifiable prejudice, does not justify exercise of revisional jurisdiction. The AO had made inquiries and considered material before reaching his conclusion. [Paras 18, 19]

Revisional jurisdiction could not be exercised merely to re-open or re-do factual inquiries into the genuineness of expenses; direction for further verification did not justify setting aside the assessment.

Final Conclusion: The Tribunal held that the Pr. CIT erred in invoking section 263: the Assessing Officer had carried out enquiries, applied his mind and taken possible views (including on acquisition/addition to the block, TDS issues and business promotion expenses); consequently the order under section 263 dated 08.03.2021 was set aside and the appeal of the assessee was allowed.

Transaction value between related persons - comparability at commercial level and quantity level - deductive value and computed value - application of sub rule (3) of Rule 3 of the Valuation Rules - sequential valuation under Rules 4 to 9 - remand to re determine adjustment in transaction value

Transaction value between related persons - comparability at commercial level and quantity level - The Tribunal correctly modified the enhancement of declared transaction value and rejected enhancement for 2017 18 on the ground of non comparability with Authorized Stocking Distributors (ASD). - HELD THAT: - The Tribunal found on the facts that many goods imported by the respondent (such as RF products and made to order items) were not imported by the ASD, that the respondent imported in bulk, maintained inventory, incurred higher warehousing and distribution costs and undertook promotional activity not undertaken by ASD, and that quantity differences between respondent and ASD were substantial. The Tribunal further observed that the difference in import prices decreased over time and by 2017 18 the prices had come at par. On these factual and commercial considerations the Tribunal held there was no reasonable basis for the Revenue's 77% enhancement and instead justified a limited 20% enhancement for 2013 14 to 2016 17 while declining enhancement for 2017 18. The Supreme Court recorded that the Tribunal examined the record in detail and that its view was not impermissible, therefore there was no interference with that conclusion. [Paras 4, 6]

Tribunal's modification of enhancement to 20% for 2013 14 to 2016 17 and rejection of enhancement for 2017 18 is upheld; no interference.

Deductive value and computed value - application of sub rule (3) of Rule 3 of the Valuation Rules - sequential valuation under Rules 4 to 9 - remand to re determine adjustment in transaction value - Deductive value having been placed on record and not rebutted, valuation must be reconsidered under sub rule (3) of Rule 3 and the matter remanded for re determination by the Deputy Commissioner on the basis of deductive and computed value; application of Rule 4 was not justified at that stage. - HELD THAT: - The Tribunal observed that sub rule (3) of Rule 3 requires acceptance of the transaction value where the importer demonstrates close approximation to values such as deductive value of identical or similar goods, taking account of differences in commercial level and quantity and adjustments under Rule 10. The record showed deductive value material was available and not rejected by a speaking order; accordingly the Tribunal held that deductive value must be followed for any adjustment and that invoking Rule 4 prematurely was improper. The Supreme Court accepted that conclusion and directed remand to the Deputy Commissioner, SVB to re determine any adjustment in transaction value on the basis of deductive value and computed value, leaving quantification and verification to the assessing authority. [Paras 5]

Matter remitted to the Deputy Commissioner, SVB to re determine adjustment, if any, in transaction value on the basis of deductive value and computed value in accordance with Rule 3(3) and related provisions.

Final Conclusion: The appeal is dismissed: the Tribunal's factual and legal conclusions on non comparability and on resort to deductive/computed value under sub rule (3) of Rule 3 are affirmed; quantification is remitted to the Deputy Commissioner for re determination in accordance with the Tribunal's directions.

Cancellation of bail - Supervening circumstances - Interference with the due course of administration of justice - Flight risk - Tampering with evidence - Release of seized property and compliance with conditions of bail - Continuing utility of custody to investigation

Cancellation of bail - Supervening circumstances - Interference with the due course of administration of justice - Flight risk - Tampering with evidence - Release of seized property and compliance with conditions of bail - Continuing utility of custody to investigation - Whether the bail granted to the respondents ought to be cancelled on the grounds urged by the petitioner/Customs Department. - HELD THAT: - The Court applied the settled principle that cancellation of bail is distinct from initial rejection of bail and requires very cogent, overwhelming or supervening circumstances showing that continued liberty would be inimical to a fair trial. Reliance was placed on the distinction and guidelines in State (Delhi Administration) v. Sanjay Gandhi and Dolat Ram v. State of Haryana emphasizing that bail already granted should not be cancelled mechanically. The petitioner failed to demonstrate any supervening circumstances: there were no allegations or material showing attempt or likelihood of tampering with evidence, no material to show the respondents were flight risks or would evade justice, and no demonstration that respondents violated bail conditions. Further, the factual developments relied upon by the petitioner did not establish continued necessity of custodial interrogation - the seized watches had been released by customs and penalties paid - and the petitioner did not indicate what further investigative purpose would be served by cancellation of bail and remand to custody. In these circumstances the Court found that the requisites for cancelling bail were absent and that the grant of bail did not merit interference. [Paras 6, 7, 8, 9, 10]

Petition for cancellation of bail dismissed; bail granted to the respondents will not be cancelled.

Final Conclusion: The High Court dismissed the petitions under Section 482 Cr.P.C., holding that the petitioner/Customs Department failed to establish supervening circumstances-such as tampering with evidence or flight risk-necessary to justify cancellation of bail; factual developments (release of seized watches and payment of penalty) and compliance with bail conditions reinforced that cancellation was not warranted.

Modification of sentence - Commutation of remaining imprisonment to enhanced fine - Mitigating circumstances: advanced age, period already undergone, and inordinate delay in proceedings - Concurrent findings of guilt by trial and appellate courts - Punishment for preparation to export under Section 135A of the Customs Act, 1962

Modification of sentence - Commutation of remaining imprisonment to enhanced fine - Mitigating circumstances: advanced age, period already undergone, and inordinate delay in proceedings - Concurrent findings of guilt by trial and appellate courts - Whether the sentence imposed on the applicant should be modified in view of mitigating circumstances while leaving the conviction untouched. - HELD THAT: - The Court recorded that the applicant did not challenge the concurrent findings of guilt recorded by the trial and appellate courts and confined the challenge to sentence. Having regard to the applicant's advanced age (about 70 years), the period of sentence already undergone (17 months and 18 days), the fact that adjudicatory proceedings in respect of the goods ended in the applicant's favour, and the inordinate pendency of proceedings extending decades, the Court exercised its sentencing discretion to avoid ordering further imprisonment. The Court considered that the offence falls under the penal provision for preparation to export and the statutory maximum sentence may extend to three years or fine or both; nevertheless, in light of the mitigating factors and the applicant's readiness to pay an enhanced fine, the Court found it appropriate to modify the sentence. The Court therefore commuted the balance of the sentence to payment of an enhanced fine, providing a conditional recall mechanism: if the fine is not paid within the stipulated period, the order will be recalled and the applicant shall surrender to undergo the remaining sentence. [Paras 3, 5, 6]

Conviction confirmed; sentence modified to the period already undergone and balance commuted to payment of an enhanced fine to be deposited within the time directed, failing which the order will be recalled and the applicant shall undergo the remaining sentence.

Final Conclusion: Revision allowed to the extent of modifying the sentence: conviction affirmed; the sentence reduced to the period already undergone and the remaining sentence commuted to payment of an enhanced fine payable within 12 weeks, with recall of the order and surrender for remaining imprisonment if payment is not made.

Classification of imported goods - assessment of bill of entry - Bureau of Indian Standards certification - requirement of expert report for classification - restriction/prohibition of imports - evasion of customs duty - mandamus to assess within stipulated time

Assessment of bill of entry - mandamus to assess within stipulated time - Direction to the Assessing Officer to complete assessment of Bill of Entry No.5903739 dated 19.10.2021 within 15 days - HELD THAT: - The Court noted that the impugned Bill of Entry has remained pending since 19.10.2021 and that the nature and classification of the imported goods are matters for determination by the Assessing Officer. Having observed that adequate material (including a sample report) is available, the Court directed the respondents to assess the goods within 15 days from receipt of a copy of the order. The direction is procedural and aimed at expeditious disposal; the Court did not adjudicate the merits of classification or any liability but mandated a time-bound decision by the competent authority. [Paras 10, 11, 12]

Respondents directed to complete assessment of the Bill of Entry within 15 days.

Requirement of expert report for classification - classification of imported goods - Bureau of Indian Standards certification - Whether a Chartered Engineer's certificate was necessary and whether the Assessing Officer has adequate material to decide classification and restriction issues - HELD THAT: - The Court observed that the nature of the product as described in the Bill of Entry does not, by itself, require a Chartered Engineer's certificate. Nonetheless, the second respondent had obtained a Chartered Engineer's report dated 02.12.2021 after referring a sample. The Court held that such material is available before the Assessing Officer to determine the correct classification and to decide whether the imported goods are restricted or require BIS certification; it therefore left the substantive determination to the Assessing Officer on the basis of the available materials. [Paras 10, 11]

The Chartered Engineer's certificate is not a prerequisite by description; available expert report and materials are adequate for the Assessing Officer to decide classification and BIS/ restriction issues.

Evasion of customs duty - restriction/prohibition of imports - Allegation of tax evasion in respect of earlier imports left open for decision by competent authority - HELD THAT: - While the respondents alleged mis-declaration and evasion of customs duty in earlier imports, the Court refrained from adjudicating the question of tax evasion. The Court expressly left the issue of whether there was evasion of Customs Duty on previous imports made by the petitioner to be decided in accordance with law by the appropriate authority, without expressing any view on the merits. [Paras 12]

Allegations of evasion of customs duty in prior imports are left open for determination in accordance with law.

Final Conclusion: Writ petition disposed directing the respondents to assess Bill of Entry No.5903739 dated 19.10.2021 within 15 days; substantive issues of classification, BIS certification and restriction to be decided by the Assessing Officer on the available material, and allegations of prior evasion are left open for determination in accordance with law.

Characterisation of payment as security deposit or customs duty - refund governed by Section 27 of the Customs Act, 1962 - applicability of limitation for refund claims - doctrine of unjust enrichment in refund claims - reliance on documentary proof (bond and challan) for classification

Characterisation of payment as security deposit or customs duty - reliance on documentary proof (bond and challan) for classification - The amount of Rs. 16,39,458/- paid at the time of provisional assessment was a customs duty and not a refundable security deposit. - HELD THAT: - The Tribunal examined the bond executed at the time of provisional assessment and the TR6/GAR 7 challan evidencing payment. The challan records the payment under the customs duty head of account (No.0037) and the description expressly indicates the amount as equal to 20% of the provisional duty. On that documentary basis the payment was held to be differential customs duty rather than a separate security deposit. Consequently the payment's legal character is that of duty and must be treated accordingly. [Paras 4]

Payment held to be customs duty and not a deposit.

Refund governed by Section 27 of the Customs Act, 1962 - applicability of limitation for refund claims - doctrine of unjust enrichment in refund claims - Because the payment was customs duty, refund is governed by Section 27 of the Customs Act, 1962 and the time-limit and unjust enrichment provisions apply. - HELD THAT: - Having classified the amount as customs duty on documentary evidence, the Tribunal applied the statutory regime for refunds under Section 27. The consequence is that the claimant must meet the statutory requirements and time limits for refund claims and the revenue may examine unjust enrichment. The Tribunal therefore found the claim barred by the limitations and subject to unjust enrichment principles as provided under the statute. [Paras 4, 5]

Refund governed by Section 27; limitation and unjust enrichment provisions are applicable.

Final Conclusion: On the documentary record the payment was held to be customs duty and not a security deposit; accordingly the refund claim is governed by Section 27 of the Customs Act, 1962 and is subject to limitation and unjust enrichment; the impugned order is set aside and the appeal is dismissed.

Transfer of winding up proceedings to National Company Law Tribunal - applicability of the Insolvency and Bankruptcy Code to pending winding up petitions - in custodia legis and reversibility of winding up actions - effect of admission and appointment of provisional liquidator on transferability

Transfer of winding up proceedings to National Company Law Tribunal - effect of admission and appointment of provisional liquidator on transferability - in custodia legis and reversibility of winding up actions - Whether Company Petition No.102 of 2006 should be transferred to the National Company Law Tribunal, Ahmedabad Bench. - HELD THAT: - The petition had been admitted and advertised but no provisional liquidator was appointed, no assets had been taken into custody by a liquidator and no irreversible steps in winding up had been taken. Applying the observations of the Apex Court in Action Ispat and Power Pvt Ltd. v. Shyam Metalics and Energy Ltd., where pending winding up proceedings that have not reached an irreversible stage are to be transferred to the NCLT for resolution under the Code, the High Court concluded that the present petition is fit for transfer. The Court directed the registry to forward the papers to the NCLT within eight weeks and recorded that the Tribunal is to proceed from the stage at which the matter is received, in accordance with law.

Company Petition No.102 of 2006 transferred to the National Company Law Tribunal, Ahmedabad Bench; registry to forward papers within eight weeks and the Tribunal to proceed from the transferred stage.

Final Conclusion: The High Court transferred the admitted and advertised winding up petition to the NCLT because no irreversible winding up steps or appointment of a liquidator had occurred; the Registry is directed to forward the record within eight weeks and the Tribunal to continue the proceedings from that stage.

Revival of company petition - enforcement of settlement agreement made part of tribunal order - contempt for wilful breach of tribunal order - interim injunction restraining alienation of property

Revival of company petition - enforcement of settlement agreement made part of tribunal order - Revival of TCP/141/2017 and restoration of the winding up petition on the Tribunal file. - HELD THAT: - The Tribunal found that the corporate debtor repeatedly failed to comply with the Settlement Agreement dated 25.07.2017 which had been recorded as part of the Tribunal's order dated 10.08.2017 and attracted liberty to revive the petition on default. The corporate debtor's defaults, intermittent paltry payments, repeated adjournments and failure to comply with the timeline given in the order dated 17.09.2020 to pay the stipulated sum demonstrated breach of the settlement terms and the order. In view of persistent non-compliance, the Tribunal exercised the power to restore the main company petition and list it for further hearing, and accordingly closed MA/258/2018 which sought revival. [Paras 7, 8]

TCP/141/2017 is revived and restored on the Tribunal file and listed for hearing on 08.02.2022; MA/258/2018 stands closed.

Contempt for wilful breach of tribunal order - Contempt application MA/259/2018 not finally adjudicated but directed to be heard along with the revived petition. - HELD THAT: - The Tribunal did not decide the merits of the contempt claim alleging wilful breach of the order dated 10.08.2017. Instead, having restored the main petition, the Tribunal directed that the contempt application be listed for consideration together with TCP/141/2017 so that the question of contempt may be adjudicated in the course of the main proceedings. [Paras 9]

MA/259/2018 is listed for hearing along with TCP/141/2017 on 08.02.2022 for adjudication of the contempt claim.

Interim injunction restraining alienation of property - Continuation of the interim order restraining sale of the specified vacant land until final disposal of TCP/141/2017. - HELD THAT: - The Tribunal clarified that the interim order dated 02.05.2019, which restrains the corporate debtor from selling the vacant land without the Tribunal's permission, remains in force. This interim injunction is to continue operative protection of the property pending final disposal of the revived company petition. [Paras 9]

The interim restraint on alienation of the specified vacant land remains in force until the final disposal of TCP/141/2017.

Final Conclusion: The Tribunal restored TCP/141/2017 for further hearing on 08.02.2022 on the ground of breach of the settlement recorded in the Tribunal's order, closed the revival application MA/258/2018, listed the contempt application MA/259/2018 to be heard with the revived petition, and directed that the interim injunction restraining sale of the specified land continue until final disposal.

Interim injunction - avoidance of preferential transaction under Section 43 - locus to prefer avoidance application - maintainability of avoidance application after approval of resolution plan - no interim order pending adjudication - requirement of detailed final hearing and opportunity to all parties

Interim injunction - no interim order pending adjudication - Application for interim relief restraining alienation or encumbrance of shares and other assets - HELD THAT: - The Tribunal considered competing contentions for an interim injunction sought by the appellants to restrain alienation or encumbrance of shares and assets pending the appeals. Having examined the impugned order and rival submissions, including the existence of interlocutory orders from the High Court and disputes over maintainability and locus, the Tribunal concluded that the disputed factual and legal questions require a full hearing. In view of the need for detailed adjudication after pleadings are complete and unserved respondents are given opportunity to be heard, the Tribunal declined to grant any interim relief at this stage. [Paras 50]

No interim order; application for interim injunction declined.

Requirement of detailed final hearing and opportunity to all parties - locus to prefer avoidance application - avoidance of preferential transaction under Section 43 - Procedural course for final disposal of the appeals including notice, pleadings and listing - HELD THAT: - The Tribunal found that the appeals raise contentious factual and legal issues - including questions as to locus to prosecute avoidance proceedings and the applicability of Section 43 - which cannot be resolved on interim applications. Accordingly, the Tribunal directed issuance of notice to specified respondents (including unserved parties), prescribed timelines for filing replies and rejoinders in hard copy (in addition to e-filing), and ordered service of appeal papers on respondents. The Tribunal fixed interim dates for compliance and future listing to enable a full hearing after completion of pleadings. [Paras 50, 51, 52, 53, 54]

Notice to respondents to be issued; timelines prescribed for filing replies and rejoinders; matter listed for final hearing after completion of pleadings.

Final Conclusion: The Tribunal refused to grant interim relief, observed that the appeals involve substantial contentious factual and legal questions requiring a full hearing, directed issuance of notice to the unserved/respondent parties, prescribed timelines for filing pleadings in hard copy and e-file, and listed the matters for further hearing after completion of pleadings.

Admission under Section 9 of the Insolvency and Bankruptcy Code - initiation of corporate insolvency resolution process - default in payment of operational debt - compliance with Section 8(2) demand notice - moratorium under Section 14 of the Insolvency and Bankruptcy Code - appointment of Interim Resolution Professional - public announcement and claims submission under Section 15

Admission under Section 9 of the Insolvency and Bankruptcy Code - default in payment of operational debt - compliance with Section 8(2) demand notice - Whether the petition filed by the Operational Creditor under Section 9 is admissible on the ground of existence of debt and occurrence of default and compliance with the demand notice requirement - HELD THAT: - The Tribunal found that the Operational Creditor placed on record tax invoices, GST B2B invoices, ledger account entries, bank statement and a Form-3 demand notice with postal track report. The demand notice called upon the Corporate Debtor to raise any dispute or to prove payment within ten days as contemplated by Section 8(2). The Corporate Debtor did not furnish proof of payment or any pre-existing suit/arbitration record within the ten-day period and subsequently raised only vague and unsubstantiated contentions in its reply. On the basis of the documentary material and the absence of a timely, specific response pointing to a pre existing dispute or payment, the Tribunal concluded that default in payment was established and the petition was fit for admission under Section 9. [Paras 14, 17]

The petition under Section 9 is admitted; the Tribunal held that the Operational Creditor proved existence of debt and occurrence of default and that the Corporate Debtor failed to comply with Section 8(2) to avert the proceeding.

Appointment of Interim Resolution Professional - public announcement and claims submission under Section 15 - moratorium under Section 14 of the Insolvency and Bankruptcy Code - Appointment of an Interim Resolution Professional, declaration of moratorium and consequential procedural directions upon admission of the Section 9 petition - HELD THAT: - As the petition was admitted, the Tribunal, invoking the statutory scheme, appointed an Interim Resolution Professional in the absence of any name proposed by the Operational Creditor, directed him to file requisite forms and to make the public announcement and call for claims under Section 15. The Tribunal declared the moratorium under Section 14 and specified its effects in line with the Code, directed constitution of the Committee of Creditors and prescribed the timeline for the IRP to convene the CoC and identify prospective resolution applicants. The Tribunal also directed the Operational Creditor to deposit an initial sum to meet IRP expenses. [Paras 15, 17]

Mr. Nitin Daga is appointed as Interim Resolution Professional; moratorium is declared and the IRP is directed to make public announcement, call for claims, convene the Committee of Creditors and proceed in accordance with the Code, with the Operational Creditor directed to deposit the specified initial amount.

Final Conclusion: The Tribunal admitted the Section 9 petition finding existence of operational debt and default and non compliance by the Corporate Debtor with the demand notice requirements; it appointed an IRP, declared the statutory moratorium, directed public announcement and claims submission, and issued ancillary procedural directions including constitution of the CoC and deposit of initial funds.

Liquidation under section 33(1) of the Insolvency and Bankruptcy Code - Appointment of Liquidator under section 34(1) of the Insolvency and Bankruptcy Code - Vesting of management powers in the Liquidator under section 34(2) of the Insolvency and Bankruptcy Code - Liquidation process under Chapter III of the Insolvency and Bankruptcy Code and the Insolvency & Bankruptcy Board of India (Liquidation Process) Regulations, 2016 - Public notice and notice of discharge on liquidation under section 33(7) of the Insolvency and Bankruptcy Code - Restriction on institution of suits and legal proceedings subject to section 52 and proviso to section 33 of the Insolvency and Bankruptcy Code

Liquidation under section 33(1) of the Insolvency and Bankruptcy Code - Corporate Debtor ordered to be liquidated on expiry of the CIRP period in the absence of a resolution plan. - HELD THAT: - The Tribunal noted that where the Adjudicating Authority does not receive a resolution plan before the expiry of the insolvency resolution process period or the maximum permitted period, section 33(1) mandates passing an order for liquidation. The record showed constitution of the Committee of Creditors, publication for invitation of expressions of interest with no EOIs received, and the CoC's approval by 100% vote to liquidate at its 9th meeting. Applying section 33(1) to these facts, the Tribunal allowed the application and ordered liquidation of the Corporate Debtor. [Paras 11, 12]

Application under section 33(1) is allowed and the Corporate Debtor is ordered to be liquidated.

Appointment of Liquidator under section 34(1) of the Insolvency and Bankruptcy Code - Vesting of management powers in the Liquidator under section 34(2) of the Insolvency and Bankruptcy Code - Liquidation process under Chapter III and the Liquidation Process Regulations, 2016 - Public notice and notice of discharge under section 33(7) of the Insolvency and Bankruptcy Code - Restriction on suits subject to section 52 and proviso to section 33 - Appointment of the nominated Resolution Professional as Liquidator and directions for conduct of the liquidation process and ancillary consequences. - HELD THAT: - The Tribunal recorded the Resolution Professional's consent, his registration details and AFA, and held that he be appointed as Liquidator under section 34(1). The Tribunal directed initiation of the liquidation process in accordance with Chapter III of the Code and the IBBI (Liquidation Process) Regulations, 2016, ordered publication of public notice in the same newspapers earlier used, and held that powers of the board and key managerial personnel cease and vest in the Liquidator under section 34(2). The order further directed cooperation of corporate personnel, reiterated the bar on suits being instituted against the Corporate Debtor subject to section 52 and the proviso to section 33, treated the order as a notice of discharge under section 33(7) for officers, employees and workmen (except to the extent business continues), and required filing a copy of the order with the Registrar of Companies. [Paras 9, 12]

Mr. Bimal Kanti Choudhury is appointed as Liquidator and directed to commence liquidation with specified notifications, vesting of management in the Liquidator, cooperation by personnel, restriction on suits, notice of discharge application, and filing with the Registrar of Companies.

Final Conclusion: The Tribunal allowed the Resolution Professional's application and ordered liquidation of B.D. Motors Limited under section 33(1) of the Code, appointed the nominated Resolution Professional as Liquidator under section 34(1), and issued directions for commencement of the liquidation process, public notice, vesting of management powers in the Liquidator, restrictions on suits, notice of discharge to employees, and filing of the order with the Registrar of Companies.

Liquidation under Section 33(2) of the Insolvency and Bankruptcy Code, 2016 - Role of the Committee of Creditors in resolving for liquidation - Appointment of Liquidator and entitlement to fees - Cessation of moratorium and its effect - Vesting of management powers in the Liquidator - Duties and powers of the Liquidator under Sections 35 to 50 and 52 to 54 of the Code - Public announcement and notice of discharge to employees - Obligation to communicate the order to regulatory authorities

Liquidation under Section 33(2) of the Insolvency and Bankruptcy Code, 2016 - Role of the Committee of Creditors in resolving for liquidation - Initiation of liquidation of the Corporate Debtor under Section 33(2) of the Code following the Committee of Creditors' resolution in favour of liquidation. - HELD THAT: - The Tribunal recorded that the Committee of Creditors, after completing the CIRP steps and considering available information (including valuation showing nil liquidation value), resolved in favour of liquidation. The Tribunal applied the principle in K. Sashidhar (as cited) that the adjudicating authority is not to reappraise the commercial decision of the CoC but is obliged to initiate liquidation when the CoC so resolves. There was no material before the Tribunal to take a contrary view; accordingly the Tribunal ordered liquidation in the manner prescribed by the Code. [Paras 7, 8]

Order initiating liquidation of M/s. Tejaswini Engineering Private Limited under Section 33(2) of the Code.

Appointment of Liquidator and entitlement to fees - Cessation of moratorium and its effect - Vesting of management powers in the Liquidator - Duties and powers of the Liquidator under Sections 35 to 50 and 52 to 54 of the Code - Public announcement and notice of discharge to employees - Obligation to communicate the order to regulatory authorities - Consequential directions on appointment of liquidator, cessation of moratorium, vesting of powers, duties of the liquidator, public announcement, discharge notice to employees, and communication of the order to authorities. - HELD THAT: - Having ordered liquidation, the Tribunal appointed the Resolution Professional who had consented to act as Liquidator. The Tribunal directed the Liquidator to make the public announcement of liquidation and to exercise the statutory powers and duties under the Code and Liquidation Regulations, including entitlement to fees as specified by the Board. It declared that the moratorium under Section 14 shall cease to operate, that suits against the Corporate Debtor are barred subject to Section 52 and notified exceptions, and that management powers of directors and KMP shall vest in the Liquidator. The Tribunal further directed that personnel must cooperate with the Liquidator and that the order be furnished to IBBI, Regional Director, MCA, ROC, Official Liquidator and the Corporate Debtor's registered office. [Paras 9]

Appointed Ms. Mummaneni Vazra Laxmi as Liquidator and issued consequential directions as recorded.

Final Conclusion: Application under Section 33(2) of the Code allowed; the Corporate Debtor ordered into liquidation and Ms. Mummaneni Vazra Laxmi appointed as Liquidator with directions as set out (public announcement, cessation of moratorium, vesting of powers, duties of Liquidator, discharge notice to employees, and compliance communications to regulatory authorities).

Payment of entire debt before admission - claim for interest after pre-admission repayment - requirement of documentary proof for interest claim - application under Section 9 of the Insolvency and Bankruptcy Code, 2016 - malicious prosecution / pursuit of interest contrary to the object of the I&B Code

Payment of entire debt before admission - claim for interest after pre-admission repayment - requirement of documentary proof for interest claim - Whether the operational creditor is entitled to interest where the corporate debtor paid the entire claimed debt before admission and the interest claim lacks documentary substantiation. - HELD THAT: - The Tribunal found that the corporate debtor had paid the outstanding principal amount claimed in the petition and that the operational creditor confirmed receipt of that payment. The invoices and challans did not contain any clause levying interest, while the purchase order referred to levy of charges/interest but did not specify any rate. The operational creditor did not produce documentary proof substantiating the claim for interest. Relying on precedent that pursuing only interest after pre-admission repayment may be inimical to the object of the Code and may amount to malicious pursuit, and given absence of contractual or documentary basis for interest, the claim for interest could not be sustained. In view of the pre-admission repayment and lack of proof for interest, the petition seeking initiation of CIRP could not be maintained and was dismissed. [Paras 10, 13, 15, 16]

The application under Section 9 is dismissed as the claimed principal was paid before admission and the claim for interest is not substantiated by documentary evidence.

Final Conclusion: The petition under Section 9 is dismissed because the corporate debtor paid the entire claimed debt prior to admission and the operational creditor failed to substantiate any entitlement to interest; consequently the claim for interest was not permitted.

Operational debt - default - pre-existing dispute - acknowledgement of debt - admission under Section 9 of the Insolvency and Bankruptcy Code, 2016 - moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 - appointment of Interim Resolution Professional

Operational debt - default - acknowledgement of debt - Existence of an operational debt due from the corporate debtor and default by the corporate debtor in discharging that admitted debt. - HELD THAT: - The Tribunal found on perusal of records and after hearing both parties that the operational creditor supplied goods pursuant to purchase orders and raised invoices which were accepted by the corporate debtor as evidenced by freight-bill acknowledgements and by emails in which the corporate debtor confirmed the outstanding balance. The corporate debtor acknowledged the outstanding amount on two occasions and, despite such acknowledgment, failed to discharge the liability. On these findings the Tribunal concluded that an operational debt exists and that the corporate debtor defaulted in payment. [Paras 5]

There exists an operational debt which has been acknowledged by the corporate debtor and remains unpaid; default is established.

Pre-existing dispute - Whether a pre-existing dispute between the parties existed prior to the demand notice sufficient to bar admission of the Section 9 petition. - HELD THAT: - The corporate debtor pleaded pre-existing disputes about defective material and relied on prior communications and a tripartite meeting. The Tribunal examined the record, including minutes of meetings, and observed that the corporate debtor did not raise any dispute in the meetings and for the first time raised the dispute in its reply to the demand notice. The plea of a pre-existing dispute was found to be unsubstantiated on the materials before the Tribunal; contrary case-law relied upon by the corporate debtor (regarding rejection where a genuine pre-existing dispute exists) was distinguished on the facts. [Paras 5]

No pre-existing dispute was established prior to the demand notice; the plea of pre-existing dispute is rejected.

Admission under Section 9 of the Insolvency and Bankruptcy Code, 2016 - moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 - appointment of Interim Resolution Professional - Whether the Section 9 petition should be admitted and consequential directions issued (moratorium, public announcement, and appointment of an Interim Resolution Professional). - HELD THAT: - Having concluded that an operational debt existed, was acknowledged and remained unpaid, and that no pre-existing dispute barred the petition, the Tribunal exercised its power under the Code to admit the Section 9 petition. Consequential directions were issued: declaration of moratorium for the purposes of Section 14, directions regarding continuation of essential supplies and preservation of licences subject to payment of current dues, requirement for public announcement under Section 13, and appointment of the proposed Interim Resolution Professional after satisfying the relevant regulatory provision for registration and consent.

The petition under Section 9 of IBC, 2016 is admitted; moratorium is declared; public announcement to be made and the proposed Interim Resolution Professional is appointed.

Final Conclusion: The Tribunal admitted the Section 9 petition: it held that an operational debt was established and acknowledged by the corporate debtor, rejected the plea of a pre-existing dispute, declared the moratorium under Section 14, directed public announcement of CIRP and appointed the named Interim Resolution Professional.

Interim Moratorium - Appointment of Resolution Professional - Powers and duties of Resolution Professional under Section 99 - Service of order and documents on Resolution Professional and personal guarantor - Obligation of personal guarantor to cooperate and furnish information

Interim Moratorium - Interim moratorium commences from the date of filing of the application and applies to all debts of the personal guarantor subject to notified exceptions. - HELD THAT: - The Bench recorded that upon filing of the application on 23.09.2021, the interim moratorium under the Code comes into effect in relation to all debts of the personal guarantor. During this period pending legal proceedings in respect of any debt are deemed stayed and creditors are restrained from initiating legal action, subject to transactions notified by the Central Government in consultation with financial sector regulators. This conclusion follows the statutory effect attributed to the filing of the application under the Code and the Rules applicable to insolvency resolution of personal guarantors. [Paras 7]

Interim moratorium operates from 23.09.2021 in respect of the personal guarantor's debts, with statutory exceptions.

Appointment of Resolution Professional - The Resolution Professional nominated in the application is appointed to conduct the insolvency resolution process for the personal guarantor. - HELD THAT: - The Bench noted that the application was filed through Smt. Reshma Mittal, bearing the specified registration number, and confirmed her appointment as Resolution Professional. The appointment is necessary both for the Applicant and to safeguard the assets of the personal guarantor in accordance with the Code. The confirmation is an exercise of the Tribunal's power to appoint an IRP where the application is filed through a proposed professional. [Paras 8]

Smt. Reshma Mittal is confirmed as the Resolution Professional in the matter.

Service of order and documents on Resolution Professional and personal guarantor - The Applicant is directed to serve the order, application and documents on the appointed Resolution Professional, the Insolvency and Bankruptcy Board of India, and the personal guarantor, and to file proof of such service. - HELD THAT: - The Tribunal directed immediate service of the order and accompanying application/documents on the Resolution Professional and the IBBI and required the Applicant to file proof of dispatch and delivery. A copy of the order and application must also be served on the personal guarantor for the limited purpose of informing him of the moratorium and securing his presence in the next hearing. These directions ensure notice and enable the Resolution Professional and regulatory authority to discharge their statutory roles and secure participation of the guarantor. [Paras 9]

Applicant must serve the order and documents on the RP, IBBI and personal guarantor and file proof of service.

Obligation of personal guarantor to cooperate and furnish information - The personal guarantor is directed to cooperate with the Resolution Professional and furnish specified information, including last three income-tax returns and latest statement of affairs. - HELD THAT: - The Tribunal required the personal guarantor to cooperate with the appointed Resolution Professional and to provide all relevant information, explicitly including the last three income-tax returns and a latest statement of affairs setting out assets and liabilities with supporting documents. This obligation is imposed to enable the Resolution Professional to assess the guarantor's financial position and carry out the insolvency resolution process effectively. [Paras 9]

Personal guarantor must cooperate with the RP and furnish the requested financial information and documents.

Powers and duties of Resolution Professional under Section 99 - The Resolution Professional is directed to exercise powers under Section 99 of the Code and to make written recommendations accepting or rejecting the application within the statutory time, and to provide a copy of the report to the creditor when filed. - HELD THAT: - The Bench directed the appointed Resolution Professional to exercise all powers enumerated under Section 99 and the relevant Rules, to assess the application and make recommendations with reasons in writing for acceptance or rejection within the time envisaged by Section 99. The RP must furnish a copy of the report under sub Section (7) of Section 99 to the creditor once the report is filed before the Authority. These directions implement the procedural duties of the RP in conducting the preliminary evaluation of the insolvency application in respect of a personal guarantor. [Paras 10]

RP shall exercise Section 99 powers, submit written recommendations within the stipulated time, and provide the creditor a copy of the report when filed.

Final Conclusion: Application admitted for initiation of insolvency resolution process against the personal guarantor; interim moratorium operates from the date of filing, the nominated Resolution Professional is appointed and directed to exercise statutory powers and file recommendations, the Applicant must serve relevant documents and file proof, and the personal guarantor is directed to cooperate and furnish the requested financial information. Matter listed for further proceedings on 31.01.2022.

Supply of tangible goods for use (STGU) service - Declared service: transfer of goods by way of hiring without transfer of right to use - Transfer of right to use goods - Possession and effective control - Deemed sale / VAT as indicia of transfer of right to use - Contract terms as determinative fact for transfer of right to use - Service versus deemed sale distinction

Supply of tangible goods for use (STGU) service - Possession and effective control - Contract terms as determinative fact for transfer of right to use - Deemed sale / VAT as indicia of transfer of right to use - Whether hiring out of diesel generator sets to customers amounted to taxable STGU/declared service or constituted transfer of right to use (deemed sale) for the periods in dispute. - HELD THAT: - The Tribunal analysed the statutory tests for taxability: (i) there must be a transfer or supply of goods; (ii) the transfer must be by way of hire/lease/license; and (iii) the right of possession and effective control must not have passed to the transferee. The contracts between the parties were examined as a whole. The terms showed specific equipment identified for a specified hire period, fixed monthly charges with overtime, customer obligation to comply with statutory regulations, provision of operators (who acted under customer directions), customer responsibility for issuing directions to operators, customer supply of fuel and lubricants, and restrictions on movement of equipment without customer pass. On these facts the Tribunal held that possession and effective control over the diesel generator sets passed to the customers and the transaction therefore qualified as transfer of the right to use goods. The Tribunal applied the established principle that whether a transaction effects transfer of right to use is a question of fact determined from the contractual terms and surrounding circumstances and noted relevant precedents which set out attributes of transfer of right to use. It rejected Revenue's reliance on transportation, installation, provision of operators, or maintenance as determinative of continuing effective control by the owner, observing that such activities are often incidental to supply and do not preclude transfer of possession and control where the contract otherwise vests dominion with the hirer. The Tribunal also held that payment/assessment of VAT on the transaction is a relevant indicium that the transaction is treated as a deemed sale and militates against a service tax levy, in line with departmental circulars and judicial authorities. Applying these tests to the contracts on record, the Tribunal concluded that the transactions constituted transfer of right to use goods and were therefore not taxable as STGU/declared service for the periods 01.04.2011-30.06.2012 and 01.07.2012-31.03.2015. [Paras 18, 19, 25, 26, 41]

The supply of diesel generator sets to customers was a transfer of right to use (deemed sale) and not taxable as STGU/declared service for the stated periods; the impugned demand and penalties were set aside.

Final Conclusion: The appeals were allowed: the orders confirming service tax demand, interest and penalties were set aside as the transactions constituted transfer of right to use goods (deemed sale) rather than STGU/declared service for the periods 01.04.2011-30.06.2012 and 01.07.2012-31.03.2015.

Condonation of delay in filing appeal - statutory time limit for filing appeal before Commissioner (Appeals) - inability of adjudicatory forum to exceed statutory limitation - interpretation of proviso to sub-section (3) of Section 85 of the Finance Act, 1994 - maintainability of appeal

Condonation of delay in filing appeal - interest of justice - Whether the Tribunal should condone the delay of eight days in filing the appeal before it. - HELD THAT: - The Tribunal examined the appellant's miscellaneous application explaining an eight-day delay in presenting the appeal to the Tribunal and found the explanation reasonable. With the consent of both parties and noting the narrow compass of the issue, the Tribunal exercised its discretionary power to condone the eight-day delay in the interest of justice and proceeded to hear the appeal forthwith. [Paras 2]

The eight-day delay in filing the appeal before the Tribunal was condoned and the appeal was admitted for hearing.

Statutory time limit for filing appeal before Commissioner (Appeals) - interpretation of proviso to sub-section (3) of Section 85 of the Finance Act, 1994 - inability of adjudicatory forum to exceed statutory limitation - maintainability of appeal - Whether the Commissioner (Appeals) was justified in rejecting the appellant's appeal as barred by limitation where the appeal to the Commissioner (Appeals) was filed after 210 days. - HELD THAT: - The Tribunal reviewed sub-section (3) of Section 85 of the Finance Act, 1994 and the first proviso thereto, which permit presentation of an appeal within three months and allow the Commissioner (Appeals) to condone delay for sufficient cause up to a further period of three months. A conjoint reading of the provision and its proviso shows that condonation by the Commissioner (Appeals) is statutorily limited to a total of six months from receipt of the order. The appeal to the Commissioner (Appeals) in this case was filed after 210 days, which exceeds the six-month ceiling. The Tribunal observed that authorities created under the statute cannot relax the time-limit prescribed by the statute itself and relied on the statement of law as articulated in Singh Enterprises Vs. CCE, Jamshedpur to the effect that statutory time-limits must be strictly adhered to and cannot be interpreted so as to enlarge the power of the adjudicatory forum. [Paras 3, 4]

The Commissioner (Appeals) correctly rejected the appeal as barred by limitation; the Tribunal dismissed the appeal on that ground.

Final Conclusion: The Tribunal condoned an eight-day delay in filing the appeal before it but upheld the rejection of the appeal by the Commissioner (Appeals) as barred by limitation where the appeal to the Commissioner (Appeals) was filed after 210 days, holding that statutory time-limits under Section 85(3) of the Finance Act, 1994 cannot be exceeded by adjudicatory authorities.

Confiscation - redemption fine - penalty for non-accounting of finished goods - mala fide intention - presence during panchnama - Rule 10 of Central Excise Rules, 2002 - lenient view in imposition of penalty

Confiscation - presence during panchnama - Rule 10 of Central Excise Rules, 2002 - penalty for non-accounting of finished goods - Confiscation of excess stock of M.S. Ingot upheld and goods held liable for confiscation. - HELD THAT: - The physical stock taking disclosed excess stock and a panchnama was drawn in the presence of the authorised signatory who raised no objection at that time and admitted that the excess stock had accumulated over a period. In light of the appellant's duty to record finished goods under Rule 10 of the Central Excise Rules, 2002 and the admitted non-accounting of the excess stock, the goods are liable to be confiscated. Although no mala fide or clandestine attempt to clear the goods was found, that does not negate liability for confiscation when stock is not accounted for. [Paras 4]

Confiscation of the excess stock upheld.

Redemption fine - lenient view in imposition of penalty - mala fide intention - Redemption fine reduced from the amount imposed by the adjudicating authority. - HELD THAT: - While confiscation is sustained, the Tribunal observed absence of mala fide intent or clandestine clearance of the goods. Given the offence is essentially failure to account for finished goods and not an act of deliberate evasion, a lenient approach on the quantum of redemption fine is appropriate. Applying that principle the previously imposed redemption fine was moderated. [Paras 4]

Redemption fine reduced to a lesser amount.

Penalty for non-accounting of finished goods - penalty on factory - lenient view in imposition of penalty - Penalty imposed on the appellant factory is reasonable and upheld. - HELD THAT: - The Tribunal considered that although the excess stock was not accounted for, there was no evidence of mala fide or clandestine disposal. Taking a lenient stance on monetary punishments for the non-accounting offence, the Tribunal nevertheless found the reduced penalty fixed by the Commissioner (Appeals) on the factory to be reasonable and maintained that penalty. [Paras 4]

Penalty on the appellant factory upheld.

Penalty on authorized signatory - mala fide intention - presence during panchnama - Penalty imposed on the authorised signatory Shri D K Shrivastava set aside. - HELD THAT: - The authorised signatory was present during the panchnama and did not object to the manner of stock taking; moreover, the record did not disclose any mala fide intention or attempt by him to clear the goods clandestinely. In the absence of culpable conduct by the individual, the Tribunal concluded that imposing a penalty on the authorised signatory was not justified. [Paras 4]

Penalty on the authorised signatory set aside.

Final Conclusion: The appeal of Amit Industries is partly allowed: confiscation is upheld, the redemption fine is reduced and the penalty on the factory is maintained; the appeal of Shri D K Shrivastava is allowed by setting aside the penalty imposed on him.

Works contract - transfer of property in goods - sale of goods - marketability test - deemed sale under Article 366(29 A) - service tax as exclusionary charge - goods intrinsic to service (non severable supply)

Works contract - marketability test - transfer of property in goods - service tax as exclusionary charge - goods intrinsic to service (non severable supply) - Assessee liable to Service Tax for denting and painting of vehicles; State cannot levy Assam VAT on paints consumed in such repair work by treating the transaction as sale of paints under works contract. - HELD THAT: - The Court examined whether denting and painting of vehicles constitute a sale of paint (taxable under the Assam VAT Act) or a service. Applying the marketability test endorsed in S.S. Photographic Lab (and related Supreme Court authorities), the Court found that paint insofar as it is consumed in vehicle repair at an authorised service station is not a marketable item transferred independently to the customer and therefore does not qualify as "goods" for the purpose of treating the transaction as a works contract sale. The Court further considered the character of the transaction under the doctrine of deemed sale in Article 366(29 A) but held that the paint used in the petitioner's repair and reconditioning work does not become an independently taxable component: it is intrinsic to and not distinctly separable from the taxable service of repair/reconditioning. The petitioner was already discharging Service Tax for the repair/reconditioning service and Circular No.699/15/2003 CX was noted as clarifying that items like paints which form an intrinsic part of the service are to be included in the value of taxable service. Having regard to these factors, the Court concluded that it would be impermissible for the State authority to impose VAT separately on the paint consumed in the authorised service station's repair work as that would amount to taxing the same component already subjected to Central Service Tax. [Paras 2, 18, 19, 20, 21]

Impugned assessment and revisional orders treating paint consumption as sale taxable under Assam VAT are unsustainable and are set aside.

Final Conclusion: Writ petition allowed; assessment order dated 10.08.2010 and revisional order dated 18.02.2015 quashed; no order as to costs.

Input Tax Credit - Validity of reassessment notices - Duty to afford personal hearing - Effect of delay in complying with court directions - Circular-based reassessment guidelines

Validity of reassessment notices - Effect of delay in complying with court directions - Impugned Notices dated 04.07.2020 in respect of the assessment years 2012-2013 to 2016-2017 are not quashed as being without jurisdiction merely on the ground of delay in proceeding after this Court's remand order. - HELD THAT: - The Court observed that although a timeline had been fixed in the earlier remand order, the implementation of GST and consequent re-organisation and transfers in the tax administration occurred thereafter. The lapse of time in issuing reassessment notices, standing alone, did not create an embargo preventing the respondent from proceeding with reassessment. Consequently, the pleas to quash the notices solely on the ground of delay were rejected and the Writ Petitions were held to be without merits on that score. [Paras 11, 12]

Delay in acting on the remand did not render the reassessment notices void; the petitions challenging the notices on that ground lack merit.

Input Tax Credit - Duty to afford personal hearing - Circular-based reassessment guidelines - The matter was remitted for fresh consideration on merits in the light of Circular No.5/2021, and the respondent was directed to pass a speaking order after affording personal hearing to the petitioner within four weeks. - HELD THAT: - The Court emphasised that the remand's purpose was to ascertain whether the petitioner was entitled to Input Tax Credit and whether demand was justified. If the petitioner validly availed input tax credit based on supplier invoices and complied with applicable rules, recovery would not arise merely because the supplier omitted turnover in returns. The Principal Secretary/Commissioner has issued Circular No.5/2021 to deal with such situations; therefore the respondent must examine the case on merits following that Circular and after hearing the petitioner. A speaking order addressing these aspects was directed to be passed within four weeks from receipt of the judgment. [Paras 13, 14]

Matter remitted for reconsideration on merits under Circular No.5/2021; respondent to hear petitioner and pass a speaking order within four weeks.

Final Conclusion: Writ Petitions dismissed on merits insofar as they sought quashing of the reassessment notices for delay; matter remitted for fresh adjudication in accordance with Circular No.5/2021, with the respondent directed to afford personal hearing and to pass a speaking order within four weeks.

Production of C-Forms - mandatory compliance with Rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957 - concessional rate under the Central Sales Tax Act - strict construction of statutory rules for claiming concessional rate - classification of goods for determination of rate of tax - remand for fresh consideration on merits

Production of C-Forms - mandatory compliance with Rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957 - concessional rate under the Central Sales Tax Act - strict construction of statutory rules for claiming concessional rate - Whether the petitioner was entitled to the concessional rate by relying on xerox/photocopies or by shifting burden to the Assessing Officer to verify supplier records instead of producing C-Forms in the manner prescribed by Rule 12. - HELD THAT: - The Court held that the statutory scheme and Rule 12 require the dealer to obtain and produce C-Forms or follow the prescribed procedure (including obtaining duplicates or furnishing indemnity bonds) to claim concessional rate. Reliance on copies and asking the Assessing Officer to verify supplier records on the web portal is impermissible; the obligation to procure certificates in the prescribed manner rests on the petitioner. The Court applied the principle of strict construction of mandatory rules as expounded by the Supreme Court in India Agencies (REGD) Bangalore v. Additional Commissioner of Commercial Taxes and related authorities, concluding that non-compliance disentitles the petitioner from the concessional rate. [Paras 8, 9]

Petition dismissed insofar as it sought concession without production of C-Forms; petitioner must obtain and produce C-Forms or follow Rule 12 procedure to claim concessional rate.

Classification of goods for determination of rate of tax - remand for fresh consideration - Whether the goods supplied by the petitioner were taxable at 12.5% or at the concessional rate of 4% under the TNVAT Act. - HELD THAT: - The Court found that the impugned order contains no discussion or decision on classification and rate. Determination of the correct tariff/classification and applicable rate is a substantive question of law and fact which cannot be resolved in these summary writ proceedings. Accordingly, the Court set aside the impugned order to the limited extent of requiring the assessing authority to reconsider the classification and rate on merits and in accordance with law, giving the petitioner an opportunity to produce duplicate C-Forms if procured and to be heard. [Paras 10, 11]

Impugned order set aside and remitted to the respondent for fresh adjudication on classification and rate; respondent directed to decide on merits and in accordance with law within 60 days, after hearing the petitioner.

Final Conclusion: Writ petition partly allowed: challenge based on non-production of C-Forms dismissed for lack of merit; matter remitted for fresh consideration on the classification and rate of tax, with directions to decide within 60 days and liberty to the petitioner to produce duplicate C-Forms in terms of Rule 12.

Scope of appeal under Section 37 of the Arbitration and Conciliation Act, 1996 - prohibition on re-appreciation of merits in Section 37 appeal - setting aside arbitral award only where contrary to public policy of India - challenge to arbitrator's jurisdiction not permissible where earlier objections were overruled and not appealed

Scope of appeal under Section 37 of the Arbitration and Conciliation Act, 1996 - prohibition on re-appreciation of merits in Section 37 appeal - setting aside arbitral award only where contrary to public policy of India - High Court exceeded its jurisdiction under Section 37 by entering into and re-appreciating the merits of the arbitral award and setting it aside. - HELD THAT: - The Court held that an appeal under Section 37 confers a limited jurisdiction on the High Court and does not permit the court to decide the dispute afresh as if it were an appeal from a trial court. An award is liable to be set aside under Sections 34/37 only if it is contrary to the public policy of India - namely, if it is against the fundamental policy of Indian law, the interests of India, justice or morality, or is patently illegal. Applying these principles, the Court found that none of these exceptional grounds applied on the facts, and that the High Court impermissibly entered into the merits to reverse the award, thereby exercising jurisdiction not vested in it under Section 37. [Paras 7, 8, 9]

High Court's quashing of the award on merits was beyond its jurisdiction under Section 37 and is unsustainable; the award is not shown to be against public policy and is to be restored.

Challenge to arbitrator's jurisdiction not permissible where earlier objections were overruled and not appealed - jurisdictional objections under Section 16 - Respondent could not, in the present appeal by the original claimant, reopen the question of the arbitrator's jurisdiction which had been overruled by the High Court and not separately appealed by the respondent. - HELD THAT: - The Court noted that the High Court had considered and overruled the jurisdictional objection to the arbitrator, and the respondent did not prefer any appeal against that finding. Having been finally dealt with earlier, the respondent could not resurrect that contention in the current proceedings brought by the original claimant. Consequently the challenge to the arbitrator's jurisdiction was not open in this appeal. [Paras 6]

Jurisdictional objection to the arbitrator, having been overruled earlier and not appealed, cannot be raised in the present appeal and is not a ground to sustain the High Court's order.

Final Conclusion: Appeal allowed; impugned judgment and order of the High Court quashed and set aside; the arbitral award and the order of the Additional District Judge under Section 34 restoring the award are hereby restored.

Offence under Section 138 of the Negotiable Instruments Act - Presumption under Sections 118 and 139 of the Negotiable Instruments Act - Probable defence standard - preponderance of probabilities - Service of statutory legal notice and opportunity to make payment - High Court revisional jurisdiction under Section 397 CrPC

Offence under Section 138 of the Negotiable Instruments Act - Service of statutory legal notice and opportunity to make payment - Conviction of the accused for commission of offence under Section 138 of the Negotiable Instruments Act was legally sustainable. - HELD THAT: - Trial and appellate courts recorded concurrent findings that the accused had received money from the complainant, issued cheque Ext. CW-1/A in discharge of liability, the cheque was presented and dishonoured, and a statutory legal notice was served on the accused to make good the payment but he failed to do so. The High Court, on reappreciation in revisional jurisdiction, found no error in the concurrent appreciation of evidence and accepted the complainant's direct and bank evidence as establishing the essential ingredients of the offence. The court noted the accused's non-appearance and failure to pursue compromise, but principally relied on the recorded testimony, bank memo and legal notice to uphold conviction. [Paras 7, 8, 9, 10, 17]

Conviction and sentence under Section 138 of the Negotiable Instruments Act affirmed.

Presumption under Sections 118 and 139 of the Negotiable Instruments Act - Probable defence standard - preponderance of probabilities - Presumption in favour of the cheque-holder under Sections 118 and 139 applies and the onus shifts to the drawer to raise a probable defence on preponderance of probabilities. - HELD THAT: - The court observed that issuance of the cheque and signatures were not denied and therefore statutory presumption arises in favour of the holder. Citing authority, the court reiterated that once the presumption under Section 139 is drawn, the onus shifts to the accused to rebut it by adducing evidence that makes a reasonably probable defence. The accused's defence that dealings were with a third person and other suggestions were found to be unsupported by positive documentary or cogent oral evidence, and thus insufficient to rebut the presumption. [Paras 11, 12, 13]

Presumption under Sections 118 and 139 stood unrebutted; accused failed to establish a probable defence on preponderance of probabilities.

High Court revisional jurisdiction under Section 397 CrPC - Scope of High Court's revisional power under Section 397 CrPC does not extend to reappreciation of evidence where concurrent findings of fact and law have been recorded unless there is a glaring miscarriage of justice. - HELD THAT: - The High Court emphasised its supervisory jurisdiction is not equivalent to a second appellate power and ordinarily it will not reappreciate evidence after two courts have concurrently upheld findings. Relying on precedent, the court held that absent any demonstrated material irregularity, illegality or failure of justice in the judicial process below, the revisional jurisdiction should not be exercised to disturb concurrent findings. [Paras 14, 15, 16]

No interference with concurrent findings; revisional petition dismissed for want of merit.

Order of surrender and cancellation of bail - Directions regarding surrender and cancellation of bail consequent to dismissal of the revision petition. - HELD THAT: - Upon dismissing the revision petition, the court directed the petitioner to surrender before the trial court to serve the sentence, disposed of pending applications, and cancelled any bail bonds furnished by the accused. The direction followed from upholding the conviction and sentence previously imposed. [Paras 18]

Petitioner directed to surrender; pending applications disposed of and bail bonds cancelled.

Final Conclusion: The High Court dismissed the criminal revision, upheld the concurrent conviction and sentence under Section 138 of the Negotiable Instruments Act, found the statutory presumptions under Sections 118 and 139 unrebutted, declined to reappreciate concurrent findings in revisional jurisdiction, and directed the petitioner to surrender while cancelling bail.

Offence under Section 138 of the Negotiable Instruments Act - Presumption under Section 118 and Section 139 of the Negotiable Instruments Act - Rebuttal of statutory presumption by raising a probable defence - Validity and timeliness of statutory legal notice under Section 138 NI Act - Scope of revisional jurisdiction of High Court under Section 397 Cr.P.C.

Validity and timeliness of statutory legal notice under Section 138 NI Act - Legal notice issued by the complainant was within the statutory period and is valid for proceeding under Section 138 of the NI Act. - HELD THAT: - The court examined the dates of dishonour (information received on 01.08.2015) and the dispatch/issue of the legal notice (documentary record shows notice issued on 31.08.2015). The High Court found that the notice was issued within one month from receipt of information regarding dishonour and thus was not beyond the statutory period. The contention that the notice was issued one day late was rejected on the basis of the documentary evidence placed on record. [Paras 11]

Legal notice held to be within statutory period and therefore valid.

Presumption under Section 118 and Section 139 of the Negotiable Instruments Act - Rebuttal of statutory presumption by raising a probable defence - Presumptions under Sections 118 and 139 operate in favour of the complainant and the accused failed to rebut them by raising a probable defence; conviction under Section 138 is sustainable. - HELD THAT: - The accused admitted issuance of the cheque and the signature thereon in his Section 313 statement, claiming instead that the cheque was given as security and that the actual loan was lesser. The court applied the statutory presumption that a cheque issued and admitted to be signed is presumed to have been issued for discharge of a liability. The court observed that to rebut this presumption the accused must bring forward materials showing a preponderance of probabilities in his favour. No positive evidence or sufficient material was produced by the accused to create a probable defence. Reliance was placed on authoritative precedents holding that once the presumption under Section 139 is drawn, the burden shifts to the drawer to raise a probable defence on preponderance of probabilities, and mere suggestions or denials without evidentiary support do not suffice to rebut the presumption. [Paras 7, 12, 15]

Presumptions applied; accused failed to rebut; conviction under Section 138 upheld.

Scope of revisional jurisdiction of High Court under Section 397 Cr.P.C. - High Court will not re-appreciate concurrent findings of fact recorded by trial and appellate courts in the absence of a glaring miscarriage of justice; no interference warranted in the present revisional petition. - HELD THAT: - The High Court noted its supervisory jurisdiction under Section 397 Cr.P.C. is not equivalent to an appellate or second appellate jurisdiction and ordinarily does not permit re-appreciation of evidence where both trial and appellate courts have concurrently recorded findings of fact. The court found no material irregularity, illegality or miscarriage of justice pointed out by the petitioner that would justify interference. Consequently, the High Court declined to disturb the concurrent findings and sentences recorded below. [Paras 17, 18, 19, 20]

Revisional jurisdiction not exercised to disturb concurrent convictions; petition dismissed.

Final Conclusion: The High Court found the legal notice to be timely, the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act remained unrebutted by the accused and concurrent findings of conviction under Section 138 were sustainable; revisional interference was declined and the petition was dismissed with directions to surrender to serve the sentence.