TaxTMI Updates e-Newsletter
Jan 23,2026

Violation of principles of natural justice - Dismissal of petitioners’ appeal ex-parte - enhancement of penalty without granting the petitioners a fresh opportunity to be heard - HELD THAT:- It is evident that the appellate authority has not passed the order impugned on any date proximate to the date which was fixed for hearing upon granting adjournment to the petitioner - From the supplementary affidavit and the documents annexed thereto it is evident that the tax consultant of the petitioners has been under medical supervision for prostate ailments and had also been admitted to the hospital for a few days in the beginning of the year 2023.

In such view of the matter, it may not be unreasonable to believe that such person missed to attend the appeal hearing fixed on October 05, 2023. That apart, when the appellate authority has increased the quantum of penalty, it was incumbent on the appellate authority to afford the petitioners a reasonable opportunity of showing cause against the proposed enhancement of penalty. It might well have been so that if such notice was given, the petitioners might have appeared and the case may not have been required to be proceeded with ex-parte. However such notice has not been given, in the case at hand. It is indeed a violation of the provisions of the first proviso to section 107(11) of the said Act of 2017.

The principles of natural justice do not appear to have been fairly complied with in the case at hand. Only on such score, the appellate order dated May 9, 2024 impugned herein stands set aside - matter is remanded to the file of the appellate authority for a fresh decision on merits.

Petition disposed off by way of remand.

False statement and suppression of material fact - Misleading the Court / abuse of process - Exemplary costs for misconduct - Dismissal of writ petition for misconduct - HELD THAT:- The prayers challenging the order dated 29.11.2024 passed by the Appellate Authority, which were already made in the earlier petition, were not addressed by the Coordinate Bench, and no leave was sought by the petitioner to challenge the same subsequently, in the event of any orders being passed pursuant to the application filed under Section 30 of the CGST Act.

We do not find any averment suggesting that in the earlier writ petition, the petitioner had challenged the order dated 29.11.2024 and that the said petition was withdrawn by the petitioner. The petitioner has, in fact, suppressed the material fact that for the very same prayer challenging the Appellate Order dated 29.11.2024, an earlier writ petition had already been filed and withdrawn, and has attempted to mislead this Court by making the averments in paragraph No. 17 confined only to filing an application under Section 30 of the CGST Act. Hence, this is a fit case where exemplary cost of Rs.25,000/- is required to be imposed and the petition deserves to be dismissed.

Writ petition stands disposed of.

Rejection of petitioner’s application for rectification - petitioner had failed to make payment of Integrated Goods and Services Tax (IGST) on ocean freight (under reverse charge mechanism) for goods imported by it - HELD THAT:- The notice to show cause issued to the petitioner, reveals that initially an issue as regards non-payment of IGST under the reverse charge mechanism on ocean freight on imports was raised vide audit observation no.4 for the period July 2017 to March 2018 and the petitioner’s response to the same was called for. The petitioner responded to the audit observation on January 2, 2021 thereby referring to the judgment of the Hon’ble High Court of Gujarat in the case of Mohit Minerals (P.) Ltd [2020 (1) TMI 974 - GUJARAT HIGH COURT], however, the revenue proceeded to issue the notice to show cause while observing that the judgment of the Hon’ble Gujarat High Court had been assailed before the Hon’ble Supreme Court holding that 'But the Hon’ble Supreme Court has admitted the plea of the Central Government to challenge Gujarat High Court’s decision quashing Integrated Goods and Service Tax (IGST) on ocean freights under reverse charge mechanism.'

The Proper Officer was, thus, of the view that since the amendment in the notification took effect from October 1, 2023 therefore transactions pertaining to any period prior to the amendment of the said notification would attract GST on ocean freight for imports notwithstanding the judgment of the Hon’ble Supreme Court in the case of Mohit Minerals (P.) Ltd.

Such view of the Proper Officer is fundamentally wrong. It is well-settled that a judgment of a Constitutional Court declaring a law applies retrospectively unless it is expressly made prospective, whereas a statute applies prospectively unless it is expressly made retrospective - In such view of the matter, the Proper Officer was not right in concluding that since the judgment of the Hon’ble Supreme Court in the case of Mohit Minerals (P.) Ltd. did not indicate as to whether the same would apply prospectively or retrospectively, the same should be given prospective effect.

The Hon’ble Supreme Court has clearly held in the case of Mohit Minerals (P.) Ltd. that the Notification 10/2017 is only clarificatory and that the same “did not specify a taxable person different from the recipient prescribed in Section 5(3) of the IGST Act for the purposes of reverse charge”.

Since the petitioner’s application for rectification was rejected by the order dated March 25, 2025 thereby confirming the impugned order in original, the same also cannot be sustained. The same also stands set aside - application disposed off.

Scope of adjudication order - adjudication order proceeds on a basis entirely different than the one indicated in the notice to show-cause - violation of Section 75(7) of the GST Act, 2017 - HELD THAT:- It cannot be disputed that the notice to show-cause issued to the petitioners was only confined to the point that the turnover of outward supplies that had been declared by the petitioners in the return filed in form GSTR-3B was less than the actual supplies. The petitioner accordingly placed its case before the adjudicating authority to answer the said point only. The adjudication order reveals that since after wading through the records produced by the petitioners, the Proper Officer/adjudicating authority had found that the petitioner had opted to pay tax under the Forward Charge Mechanism and had issued tax invoice under Forward Charge Mechanism on April 03, 2021. It was on such basis that the adjudicating authority came to the conclusion that in terms of the notification dated August 22, 2017, the petitioners being a goods transport agency was liable to pay tax @12% on the supplies made by the petitioners even under the Reverse Charge Mechanism treating the same to be done under Forward Charge Mechanism.

The provision clearly carries a negative mandate prohibiting confirmation of demand on any ground other than the grounds specified in the notice to show cause. In the case at hand the adjudicating authority has done exactly that which has been prohibited - Even otherwise, it is now very well settled that an order cannot travel beyond the confines of the preceding notice to show-cause and a person who has been issued a notice to show cause on a particular point cannot be blindsided by passing an order on an entirely different point. In fact Section 75(7) of the said Act of 2017 is a statutory expression of the said very well settled principle of law only.

There is substance in the submission of the petitioners that since the notice to show-cause is based on ‘data available in GST B.O. portal’ i.e. data available in the GST back office portal therefore they may not have access to the same as the same would be within the special knowledge domain of the GST authorities. In such a situation the petitioners would not have effective opportunity to deal with the notice to show cause.

The judgment in the case of Mayank Mineral [2025 (5) TMI 917 - ALLAHABAD HIGH COURT] cannot aid the inasmuch as the said case did not involve a situation where the order was passed on a ground other than the ground mentioned in the show cause notice. It was a case where the amount was not quantified in the show cause notice. Such is not the case here.

Both the appellate order as well as the adjudication order are set aside - matter is remanded to the file of the Proper Officer for reconsideration of the entire issue upon affording an opportunity of hearing to the petitioners - Petition disposed off by way of remand.

Cancellation of registration of petitioner - time limitation - petitioner has failed to pay any amount of tax, interest or penalty to the account of the Central/State Government beyond the period of three months from the date on which such payment became due - petitioner has not submitted any explanation to the SCN, which led to the order impugned to be passed - HELD THAT:- It appears that the Show Cause Notice came to be issued to the petitioner and it was informed to the petitioner vide said Show Cause Notice that the petitioner has failed to pay the duty which he was otherwise liable under the GST Act, to be deposited with the respondents and as such, the petitioner was called upon as why his GST registration be not cancelled - It is not in dispute that the petitioner was granted registration on 5th June 2019. The Show Cause Notice does not contain a clause (a) whether the cancellation is with retrospective effect; and (b) as to the quantum of duty and the period for which such duty was not deposited by the petitioner and the consequences thereof, particularly, when the delayed payment of duty is permissible as respondents can recover the same with interest.

A vague Show Cause Notice is nothing less than a document which is not providing sufficient and complete opportunity of hearing to the parties like the petitioner. In absence of specific cause in the Show Cause Notice, the petitioner is handicapped and is unable to reply to the respondent qua the cause which is formed to be the basis for the purposes of cancellation of registration of the petitioner’s GST with retrospective effect - In such an eventuality, it has to be held that the order impugned, whereby the GST registration of the petitioner was cancelled with retrospective effect can be said to be non-sustainable in law as the same goes to the principles of natural justice.

It is deemed appropriate to quash and set aside the impugned order dated 23rd January, 2021, whereby the GST registration of the petitioner was cancelled with retrospective effect - the order dated 26th September, 2025 passed by the Appellate Authority set aside, whereby the appeal was rejected being time barred.

The writ petition stands partly allowed.

Condonation of delay beyond prescribed period- statutory limitation and special legislation - sufficient cause - Alternative efficacious remedy -power of Appellate Authority to condone delay - Demand order belatedly after 284 day -powers of High Court under Article 226 of the Constitution - Article 142 of the Constitution - HELD THAT:- Section 107 (4) of the Act grants discretion to the Appellate Authority, to allow additional one month in case he/she is satisfied that the appellant was prevented by “sufficient cause” from presenting the appeal after 90 days, but within a period of 30 days. Thus, the discretion of the Appellate authority ends on the completion of additional 30 days. Such discretion does not extend to powers under Article 226 of the Constitution on India as well. The statute, thus provides additional one month to file the appeal, and all the reasons satisfying the expression “sufficient cause” can be raised by the appellant. Similar expression is found in section 5 of the Limitation Act, 1963, and Section 29 of Limitation Act, 1963 which deals with “Savings”, which prevents the overriding the provisions of specific statutes that have their own distinct limitation periods. It permits such laws to govern their own timelines while still leveraging the mechanics of the Limitation Act.

Thus, when an additional period of 30 days is supplied by the statute over and above the basic period of 90 days, and the same stands exhausted, this Court cannot exercise powers under Article 226 of the Constitution to dilute the intention of the legislature and further extend the limitation by condoning the delay by re-examining the “sufficient cause”. The reason assigned by the appellant is also not palatable, as it is hard to believe, that in todays, era, the appellant and his accountant are not having the knowledge of operating the computers, and hence they did not verify the order DRC-07.

We clarify, that even if the appellant had a valid reason and sufficient cause explaining the delay, this Court cannot condone the delay beyond 120 days. The tax payers are supposed to remain vigilant of all the proceedings and have to timely verify the orders on the portal. The taxing statutes operate in very strict time frame, and any relaxation or easing of limitation period will have cascading effect on the functioning of the revenue.

So far as the challenge of Demand Order is concerned, having availed its alternative efficacious remedy of filing the appeal, this Court cannot call back and examine the Demand Order.

Having availed the remedy of filing an appeal as the petitioner was aware that none of the issues either with regard to violation of the principles of natural justice or the lack of jurisdiction was involved and the issue was only confined with the facts and the appropriate remedy was to file an appeal as provided under the statute, this Court cannot examine the validity or legality of the Order-in-Original.

In view of the settled legal precedents, this Court cannot exercise its jurisdiction under Article 226 of the Constitution of India condoning the delay. Thus, the writ petition fails and the same is dismissed.

Grant of adjournment - Opportunity of hearing - refund of tax collected - Statutory adjournment limit - request of adjournment, passed an ex-parte order, without giving any opportunity of hearing, as required under the provision of Section 75(5) - HELD THAT:- It is not in dispute that pursuant to the show-cause notice issued to the petitioner on 01.10.2025 proposing to reject the refund application, the petitioner applied for adjournment on 13.10.2025 within the stipulated time as per Section 75(5) of the Act and Rule 92(3) of the GST Rules, 2017, however, no response was given by the respondent authority and the impugned order was passed on 13.10.2025, on which the petitioner had sought adjournment.

Thus, the impugned order is passed de hors the provisions of Section 75(5) of the Act as the respondents have passed the order ex-parte and without acceding to the request of the petitioner for adjournment.

It is not the case of the respondent that the petitioner has availed or exhausted the 3 adjournments, as required under the statute. Hence, the impugned order is quashed and set-aside.

The matter is remanded to the respondent to decide the refund application of the petitioner afresh, after giving an opportunity of hearing to the petitioner.

Refund of IGST on ocean freight paid under reverse charge mechanism - refund of tax paid under mistake of law - limitation under the Limitation Act for refund claims arising from mistake of law - appellate authority's power to remit for verification of limitation - right to opportunity of hearing before adverse adjudicatory action

Appellate authority's power to remit for verification of limitation - refund of IGST on ocean freight paid under reverse charge mechanism - Validity of appellate authority's direction to the adjudicating authority to verify admissibility of the refund claim in respect of period of limitation. - HELD THAT: - The Court found that, in light of its earlier precedents including Mohit Minerals and Comsol Energy , the appellate authority was not required to direct verification of limitation when disposing the appeal in favour of the petitioner. Paragraph No.12 of the appellate order directing the adjudicating authority to verify admissibility of the refund claim with respect to limitation was held to be unnecessary and contrary to the settled legal position that claims of refund of IGST on ocean freight paid under reverse charge, where such liability was held untenable, should not be subjected to technical limitation objections in the manner done by the appellate authority. Consequently, the appellate order was quashed and set aside insofar as it made the said observation and direction. [Paras 11, 12, 13]

Observation in Paragraph No.12 of the appellate order directing verification on limitation is quashed; the appellate authority erred in making that direction.

Right to opportunity of hearing before adverse adjudicatory action - Whether the petitioner was afforded an opportunity of hearing before the adjudicating authority when the show-cause notice was issued. - HELD THAT: - The Court accepted the petitioner's contention that the show-cause notice (referred to in the appellate order as dated 30.01.2023) did not specify any hearing date and that the petitioner was never afforded a personal hearing (the alleged hearing date 03.02.2023 was not mentioned in the show-cause notice). The Court observed that it was impossible to have been heard within three days of issuance, and treated the absence of hearing as a further ground to quash the impugned order. [Paras 5, 13]

Impugned order is quashed on the ground that the petitioner was not afforded an opportunity of hearing.

Refund of IGST on ocean freight paid under reverse charge mechanism - limitation under the Limitation Act for refund claims arising from mistake of law - Relief to be granted and directions for final disposal of the refund claim. - HELD THAT: - Having quashed the impugned order and relying on the line of authority including Mohit Minerals , Comsol Energy , Gokul Agro Resources and Bharat Oman Refineries , the Court directed that the respondent shall process the petitioner's refund claim filed in the prescribed Form RFD-01 for the month of July, 2017 through the online portal and allow consequential interest. The Court expressly declined to remand the matter for fresh consideration, noting the matter had earlier been remanded and that settled precedent required the refund to be processed without raising the technical limitation objection. [Paras 13, 14]

Respondents directed to process the refund claim for July, 2017 through the online portal and grant consequential interest; matter is not remanded.

Final Conclusion: Writ petition allowed; appellate order dated 30.10.2023 quashed and set aside insofar as it directed verification on limitation and failed to recognise absence of hearing; respondents directed to process the refund claim for July, 2017 through the RFD-01 online portal and grant consequential interest within 12 weeks.

Condonation of delay / sufficient cause -expression “sufficient cause” - Availing and utilizing inadmissible ITC on post supply discount - Reversal of input tax credit - Discretion of Appellate Authority to allow additional one month - Appellate remedy under GST and maintainability of appeal - Requirement to apply mind to reasons for delay - HELD THAT:- The statute of Section 107 (4), thus provides additional one month to file the appeal, and all the reasons satisfying the expression “sufficient cause” can be raised by the appellant, and the appellant authority is required to apply its mind on the reasons assigned for belatedly filing the appeal i.e. beyond the period of 90 days.

In case, the appellate authority is of the opinion that the delay is appropriately explained, and the appellant has carved out “sufficient cause”, the appellate authority is authorized and empowered to condone the delay and the appeal/application cannot be rejected on the ground of lack of authority. The aforementioned reason assigned by the petitioner in his application satisfies the expression “sufficient cause”.

We are of the opinion that the appellate authorities should have applied the mind to the reasons assigned for delay, as it had the discretion to condone the delay within the period of 90 days over and above 30 days, if the appeal is filed within additional 30 days. The additional objection/reason assigned by the appellate authority of manual filing of the appeal is also unreasonable, as it is always open for the appellate authority to decide the appeal, even if the same is filed manually. Hence, the present writ petition deserves to be allowed.

Hence, the impugned orders along with Summary Corder in Form DRC-07 dated 15.04.2024 as well as the Appeal order dated 12.03.2025 in GST APL-04 are hereby quashed and set aside.

Assessment of non-filers of returns - Deemed withdrawal of assessment order on filing of return within sixty days - Proviso for extended period with additional late fee - validity of the adjudication orders - HELD THAT:- It is not in dispute that the order of adjudication for the period of March 2023, April 2023, June 2023 and July, 2023 has been passed with liberty to the petitioner to file returns within 30 days. It is to be noticed that the orders of adjudication are passed under Section 62 of the GST Act.

Taking note of the purport of Section 62 of the GST Act and the adjudication order passed are not on the basis of returns filed, it would be appropriate to afford the petitioner another chance by directing that the returns of the petitioner filed though belatedly may be taken on record reserving liberty to the authorities to take note of the returns filed and proceed to adjudicate the same in terms of Sections 73 or 74 of the GST Act as the case may be, in accordance with law. All contentions of the petitioner are kept open. In light of the lapse of the petitioner of having filed the returns belatedly, petitioners to pay cost of Rs.25,000/- to the High Court Legal Services Authority.

Accordingly, the adjudication orders at Annexures-C, C1, D, D1, E, E1, F and F1 are set aside.

Failure to provide opportunity of personal hearing - non-consideration of reply to show-cause notice - remand for fresh consideration - Karnataka High Court judicial review of quasi-judicial order - Section 74, CGST Act, 2017 - HELD THAT:- The 2nd respondent issued show-cause dated 02.03.2021 under Section 74 of CGST/KGST Act, pursuant to which, the petitioner filed its reply dated 18.02.2022 to the aforesaid show-cause notice. The 2nd respondent without considering the reply filed by the petitioner and not providing sufficient opportunity of personal hearing.

A perusal of the material on record including the impugned order will indicate that it is an undisputed fact that the petitioner filed its reply to the show-cause notice and the impugned order has been passed without granting an opportunity to the petitioner to produce necessary documents. Thus, by adopting a justice oriented approach and in order to provide one more opportunity to the petitioner, it is just and appropriate to set aside the impugned order and remit the matter back to the respondents for reconsideration afresh in accordance with law by issuing certain directions.

Petition is hereby allowed.

Limitation for issuance of notice and order u/s 129(3) - failure to comply with the time limits u/s 129(3) - uploading of orders and notices on the portal under Rule 142(5) of the GST Rules, 2017 - orders passed ex parte and their validity - HELD THAT:-It is the case of the respondent that the MOV-7 was served upon the person in charge of the conveyance, and it was served to him on 25.08.2025, but was uploaded on the portal on 27.09.2025.

It is admitted in the affidavit in reply, that no opportunity of hearing was offered to the petitioner while passing the order under section 129(3) of the GST Act dated 25.08.2025, and the same was uploaded on 27.09.2025. Rule 142(5) of the GST Rules, 2017 mandates that the order passed under section 129 of the GST Act and FORM GST 07 is required to be uploaded on the portal. Thus, no explanation is tendered for belatedly uploading the notice and order dated 25.08.2025 after a period of one month on 27.09.2025.

There is another facet in favour of the petitioner with regard to the non-granting of personal hearing to the petitioner. Thus, in light of the fact on the short issue, the impugned order as well as the notice are required to be quashed and set aside.

The show cause notice FORM MOV-7 and FORM MOV-9 are set aside on two counts, firstly, no explanation is tendered about belatedly uploading the order after a period of one month. Thus, the passing of the order and notice on 25.08.2025 appears to be doubtful, and secondly, no personal hearing has been afforded to the petitioner before passing the Order-in-Original and the same is issued ex-parte. In wake of the peculiar fact of the case, we are not inclined to remand the matter to the respondent authorities.

The impugned show cause notice and the order is quashed and set aside.

Valid service of notice or not - uploading the notices and orders in the portal under the category/tab “Additional Notices/Orders” - Rejection of rectification application without affording an opportunity of hearing - non-application of mind and non-consideration of germane material available on record - service of notice/order on the petitioner is beyond scope of provisions contained in Section 169 of the GST Act or not - violation of principles of natural justice - HELD THAT:- It is culled out that respective High Courts have intervened to protect the interest of the tax payer on the facts that the GST Organisation has uploaded the Show Cause Notice on the portal under the category “Additional Notices/Orders” which is inaccessible for the taxpayer and accordingly set aside the impugned orders. Though Section 169 provides uploading of notices/orders in the portal is one of the modes of service on the taxpayer for taking consequential action, it is in the present context felt expedient to observe that the petitioner-taxpayer remained unaware about such notices so that it could take appropriate step at right point of time. The notices being uploaded in the said tab, such circumstance prevented it from filing a reply or getting proper opportunity to explain the alleged transactions. The order passed in such scenario, without providing a realistic opportunity to respond is vitiated, being violative of the principles of natural justice.

It is manifest from the documents available on record and it is emerged from the submissions of the counsel for the parties that the petitioner could not respond to the Show Cause Notice which result in his non-appearance before the Proper Officer to explain and file response. Consequent upon non-appearance, ex parte Order under Section 73 of the GST Act has been passed. It is apposite to take note of the fact that the rejection of application under Section 161 for rectification of such order passed under Section 73 of the GST Act was made in violation of the principles of natural justice seriously causing prejudice, having repercussion of evil consequence. Therefore, the Order dated 20.06.2025 cannot be countenanced.

The principle of natural justice has twin ingredients; firstly, the person who is likely to be adversely affected by the action of the authorities should be given notice to show cause thereof and granted an opportunity of hearing and secondly, the orders so passed by the authorities should give reason for arriving at any conclusion showing proper application of mind. An order without reasons causes prejudice to the person against whom it is pronounced, as that litigant is unable to know the ground which weighed with the Court in rejecting his claim and also causes impediments in his taking adequate and appropriate grounds before the higher Court in the event of challenge to that judgment. The rule requiring reasons to be given in support of an order is, like the principle of audi alteram partem, a basic principle of natural justice which must inform every quasi-judicial process and this rule must be observed in its proper spirit and mere pretence of compliance with it would not satisfy the requirement of law. Recording of proper reasons would be essential, so that the Appellate Court would have advantage of considering the considered opinion of the High Court on the reasons which had weighed with the trial Court.

This Court cannot uphold the action of the State Tax Officer, as failure to provide an opportunity for a hearing does invite interference in the order impugned. This Court appreciating the argument advanced by the learned Senior Advocate that the Assessing Officer having access to the records as uploaded by the petitioner in the web-portal of the Department necessary rectification as pointed out in the application for the rectification dated 25.04.2025 could have been taken care of even in absence of the petitioner. Section 161 of the GST Act empowers any authority, who has passed or issued any decision or order or notice or certificate or any other document, to rectify any error which is apparent on the face of record - It is admitted by counsel appearing for respective parties that the notices of proceeding under Section 73 of the GST Act were uploaded in the tab— “additional notices/orders” which could not accessed by the petitioner as a result there was non-participation. This Court perceives from the arguments and documents that the Order dated 20.06.2025 has been passed to the detriment of the petitioner without affording adequate opportunity to present its matter and the same is without reason. Ergo, this Court has no option than to quash the Order dated 20.06.2025 (Annexure-3) passed by the State Tax Officer, Commercial Tax & Goods and Service Tax Circle, Angul rejecting the application for rectification dated 15.04.2025.

The case is remanded to the aforesaid State Tax Officer with the direction that the application for rectification dated 15.04.2025 be disposed of having regard to the ground taken therein along with supporting documents/ records available on the portal as stated to have been uploaded and/or to be produced, as it had not been afforded adequate opportunity to present its case during the course of the proceeding under Section 73 of the GST Act - The State Tax Officer, Commercial Tax and Goods and Services Tax Circle, Angul shall consider the explanation of the petitioner along with records/documents sought to be produced to support the fact and figures as discussed above and pass an appropriate reasoned order rectifying the Order dated 06.01.2025, if need be, in terms of provisions of Section 161 of the GST Act and communicate the same to the petitioner forthwith.

The writ petition stands disposed of.

Reconciliation statement - quashing and remand - opportunity of hearing - Extended period of limitation u/s 74 - adjudicating authority - HELD THAT:- The issue of extended period of limitation and has also referred to the provisions of section 74 Central Goods and Services Tax Act, 2017 however, the same is also not dealt with by the authority.

From a bare perusal of the observation made by the adjudicating authority, we find that the contention raised by the petitioner relating to the limitation is also not dealt with and observation is made perfunctorily. Hence, such contention shall also be dealt with by the adjudicating authority, before passing the fresh order.

Since it is recorded by us that despite there being assertion made by the petitioner that they had supplied reconciliation statement, incorrect observation has been was recorded by the adjudicating authority, we find that in the interest of justice, the adjudicating authority shall afford the opportunity of hearing to the petitioner, before passing the fresh order.

Necessary order shall be passed within a period of 12 weeks from the date of receipt of this order.

Remand for fresh adjudication on merits - pre-deposit condition for adjudication - treatment of an adjudication order as an addendum to a show cause notice - vacation of provisional attachment upon compliance - limitation for filing appeal

Limitation for filing appeal - The limitation period for filing an appeal under Section 107 had expired. - HELD THAT: - The Court recorded that the impugned order dated 06.06.2025 for the tax period 2022 123 was challenged by the petitioner only by filing the present Writ Petition on 05.12.2025 and that the statutory period for preferring an appeal under the relevant provision had already lapsed. In these circumstances the remedy of appeal was not available, which informed the Court's decision to exercise its writ jurisdiction and to grant relief by remittal rather than by entertaining a direct statutory appeal. [Paras 3, 7]

Limitation for filing statutory appeal had expired; Court proceeded to deal with the matter by remand.

Remand for fresh adjudication on merits - pre-deposit condition for adjudication - treatment of an adjudication order as an addendum to a show cause notice - The impugned order was quashed and the matter was remitted to the Respondent to pass a fresh order on merits subject to specified pre-deposit and procedural conditions. - HELD THAT: - Applying the approach adopted in similar cases, the Court quashed the impugned order and remitted the case to the Respondent for a fresh decision on merits. The remand was made conditional upon the petitioner depositing 25% of the disputed tax from its Electronic Cash Register within thirty days and filing a reply to the Show Cause Notice dated 31.03.2025 together with supporting documents; the impugned order of 06.06.2025 was to be treated as an addendum to that show cause notice. On compliance, the Respondent was directed to pass a final order on merits expeditiously, preferably within three months of receipt of the reply/pre-deposit. The Court framed these conditions as a means to balance the competing interests of the assessee and the Revenue while enabling fresh adjudication. [Paras 8, 9, 10, 11]

Impugned order quashed and matter remitted to the Respondent to decide afresh on merits subject to deposit of 25% and filing of reply; Respondent to pass final order preferably within three months.

Vacation of provisional attachment upon compliance - Conditional vacation of bank attachment and consequences of non-compliance were laid down. - HELD THAT: - The Court ordered that, subject to the petitioner complying with the deposit and filing stipulations, the attachment of the petitioner's bank account shall stand automatically vacated. It clarified that vacation of the bank attachment is contingent on the specified deposit and that the petitioner must not be in arrears of any other amount except the demand under the impugned order. The Court further directed that failure to comply with the stipulations would entitle the Respondent to proceed to recover the tax in accordance with law as if the writ petition had been dismissed in limine, and that the Respondent must give due notice before taking any such step. [Paras 11, 12, 13, 14]

Bank attachment to be vacated on compliance with deposit condition; non-compliance permits the Respondent to proceed to recover tax as if the writ petition were dismissed.

Final Conclusion: Writ petition disposed of at admission by quashing the impugned order and remitting the matter for fresh adjudication on merits for tax period 2022 123, subject to the petitioner's deposit of 25% of the disputed tax within thirty days and filing of a reply; conditional vacation of bank attachment ordered on compliance; failure to comply will permit recovery as if the petition were dismissed.

Validity of reassessment proceedings -notice was issued beyond the period of limitation as prescribed in first proviso to Section 149(1) - Delay filling SLP beyond time by 320 days.

As decided by HC [2024 (11) TMI 1204 - DELHI HIGH COURT] notice could be issued u/s 148 of the new regime for assessment year 2021-2022 and before only if the time limit for issuance of such notice continued to exist u/s 149(1)(b) of the old regime.

The first proviso to Section 149(1)(b) requires the determination of whether the time limit prescribed under Section 149(1)(b) of the old regime continues to exist for the assessment year 2021-2022 and before. Resultantly, a notice under Section 148 of the new regime cannot be issued if the period of six years from the end of the relevant assessment year has expired at the time of issuance of the notice.

HELD THAT:- We do not find sufficient explanation to condone the delay. The special leave petition is, accordingly, dismissed on ground of delay.

Pending application(s), if any, shall stand disposed of.

Dependent agent PE (DAPE) in India - nature of transaction between the assessee and ESPN India - Royalty receipt - delay of 558 days days in filing the present petition - HELD THAT:- The application for condonation of delay hardly justifies condonation of such a huge delay in filing the petition.

Accordingly, the application for condonation of delay is dismissed. Consequently, the Special Leave Petition is also dismissed with cost of ₹50,000/- for filing the present petition after such a huge delay.

HC [2024 (2) TMI 1495 - DELHI HIGH COURT] order confirmed.

Reopening of assessment - reasons to believe - vague information allegedly connected from the seized document from third party - sale of land at high prices within span of three months - HELD THAT:- The questions and answers forming part of the statements recorded under the provisions of 131 of the IT Act, in the case of one Shri Nagjibhai Bhavadiya, the searched person, does not in any manner mention the name of the petitioners. Thus, we do not find any direct or indirect link with the seized document and the same does not even remotely connect the rate mentioned of the concerned question of land with the petitioner.

Thus, the revenue has attempted to reopen the assessment year 2021-22 only on the basis of some vague information allegedly connected from the seized document and the same does not in any manner relates to the present petitioner. Thus, the invocation of the proceedings u/s 148 of the IT Act, itself is ill conceived and unsustainable in light of the information contained in the seized document. Assessee appeal allowed.

Assessment/reassessment under Section 148/143(3) of the Income Tax Act, 1961 - merger and cancellation of PAN - objection to proceedings on ground of PAN

Assessment/reassessment under Section 148/143(3) of the Income Tax Act, 1961 - Assessing Officer permitted to proceed with assessment/reassessment proceedings against the petitioner irrespective of which PAN is reflected in transactions. - HELD THAT: - The Court, on the petition seeking relief against a notice issued under Section 142(1) and related proceedings, allowed the Assessing Officer to continue assessment/reassessment proceedings under Section 148/143(3) against the petitioner without being restricted by the PAN number appearing in any transaction. The order recognises that any addition found in respect of the alternate PAN may be made in the hands of the petitioner and expressly authorises continuation of proceedings irrespective of the PAN used in records or transactions. [Paras 4]

Assessing Officer may proceed with the assessment/reassessment under Section 148/143(3) irrespective of the PAN number in any transaction.

Merger and cancellation of PAN - objection to proceedings on ground of PAN - Petitioner barred from raising objections to proceedings on the basis of PAN disparity and alternate PAN directed to be cancelled forthwith. - HELD THAT: - The Court directed that the petitioner shall not be permitted henceforth to raise any objection to the departmental proceedings on grounds related to which PAN number is used. In furtherance of removing multiplicity of PANs and to prevent procedural objections, the Court required the Assessing Officer or the authority issuing PANs to cancel the PAN AOAPS6867H forthwith. The Court also disposed of the writ petition in light of these directions and left open the departmental respondents' right to seek clarification or recall if grievance persists. [Paras 6, 8]

Petitioner precluded from objecting to proceedings on PAN-related grounds and PAN AOAPS6867H ordered to be cancelled forthwith; writ disposed.

Final Conclusion: The application is disposed by permitting the Assessing Officer to proceed with assessment/reassessment under Section 148/143(3) irrespective of the PAN number; the petitioner is barred from raising PAN-based objections and the alternate PAN AOAPS6867H is directed to be cancelled forthwith; the writ petition is disposed, with leave to the Department to seek clarification or recall if necessary.

Validity of reopening of assessment - reasons to believe - vague reasons -Revenue, the reason given is that information is received by the Revenue by virtue of a Tax Evasion Petition in which the Assessee is supposedly the beneficiary - HELD THAT:- As per Tax Evasion Petition, the Assessing Officer could not have had reason to believe that Rs.100 Crores has escaped assessment for A.Y. 2017-2018, and there is no other material relied upon by the Assessing Officer for reopening the assessment, we find that the notice issued under Section 148 is wholly unsustainable. It is, therefore, quashed and set aside. Decided in favour of assessee.

Reopening of assessment u/s 147 on the basis of same material as subject-matter of assessment u/s 153C - Unexplained cash deposits - additions were made by the AO u/s 153C relying on digital data seized by the search team (WhatsApp image)

HELD THAT:- Reopening of assessment and the issuance of notice on the very same material which is the subject matter of consideration of the CIT (Appeals), it was not open for the Assessing Officer to reopen the assessment on the same material by alleging that the alleged cash deposit has been found from the search conducted under Section 132.

Both the amounts and the alleged amount which has been referred in the notice for reopening u/s 148(1) of the Act emanate from the WhatsApp image of the person named Mr. Ashokbhai V. Patel. Thus, the petitioner cannot be allowed to suffer the rigors of reopening on the same material. WP allowed.

Reopening of assessment u/s 147 - Denial of deduction u/s 80P - mandatory requirement u/s 80AC of the Act to file the return of income within the due date prescribed under Section 139(1) not met - scope of Section 80AC, as amended with effect from 01.04.2018

HELD THAT:- Amendment introduced by the Finance Act, 2018 with effect from 01.04.2018, no deduction under any provision of Chapter VI-A under the heading “C” shall be admissible unless the assessee furnishes a return of income for the relevant assessment year on or before the due date specified under sub-section (1) of Section 139 of the Act.

Undisputedly, in the present case, the assessee did not file the return of income on or before the due date specified under sub-section (1) of Section 139 of the Act. After the expiry of the said due date, the income escaped assessment and the Assessing Officer reopened the assessment by issuing notice under Section 148 of the Act.

Assessee filed a return of income claiming deduction under Section 80P of the Act in compliance with the notice issued under Section 148 of the Act. By no stretch of imagination can a return of income filed pursuant to a notice under Section 148 of the Act be construed as a return filed within the due date specified under sub-section (1) of Section 139 of the Act. The due date prescribed under sub-section (1) of Section 139 had expired much prior to the issuance of notice under Section 148 of the Act and the same would not revive on issue of notice under Section 148 of the Act.

The CIT(A) and the Tribunal, having duly considered the aforesaid legal position, have rightly held that the assessee is not entitled to claim deduction under Section 80P of the Act, having failed to file the return of income within the due date specified under sub-section (1) of Section 139 of the Act.

This Court, upon consideration of the provisions of Sections 80AC and 139 of the Act, is of the considered opinion that the findings and conclusions recorded by the CIT(A) and the Tribunal are fully justified. The order passed by the Tribunal does not warrant interference by this Court. Decided against assessee.

Liability of directors of a private company under Section 179 of the Income Tax Act - contingent liability upon non-recoverability of tax from the company - requirement of an affirmative finding on non-recoverability before invoking Section 179 - joint and several liability of directors subject to proof of gross neglect, misfeasance or breach of duty

Requirement of an affirmative finding on non-recoverability before invoking Section 179 - contingent liability upon non-recoverability of tax from the company - Whether invocation of Section 179 against a director is permissible in the absence of a recorded finding that the tax dues cannot be recovered from the company. - HELD THAT: - The Court examined Section 179 and the statutory scheme and accepted the petitioner's contention that liability under Section 179 is contingent upon the tax dues being not recoverable from the private company. The Court observed that no finding was recorded by the assessing authority that recovery from the company was not possible. In the absence of such a finding, proceedings against the director under Section 179 could not be sustained. The Court therefore set aside the impugned order for want of the requisite pre-condition, while noting that if during recovery proceedings it is established that dues cannot be recovered from the company, Section 179 may be invoked thereafter strictly in accordance with law. [Paras 9, 10]

Impugned order setting aside invocation of Section 179 for want of a recorded finding of non-recoverability; authority may invoke Section 179 later if the statutory pre-condition is satisfied.

Final Conclusion: The petition is allowed insofar as the order passed under Section 179 is set aside for failure to record an affirmative finding that tax dues cannot be recovered from the company; other contentions are left open and Section 179 may be invoked in future if recovery from the company is shown to be impossible.

Reopening of assessment u/s 147 - Income from other sources u/s 56(2)(vii)(b) - acquisition of immovable property jointly - assessee having entered into purchase of an immovable property where there was difference between agreement value as well as the stamp duty value - Appellant has failed to prove that the entire consideration was paid by the Appellants spouse - AO, was of the opinion that just because the consideration is paid according to the direction of the Consumer Court the transaction would not become tax-free for adopting the stamp duty value for the entire year - whether assessee cannot be held liable in respect of the agreement entered into by her husband with the builder merely because assessee is a joint name holder?

HELD THAT:- As in view taken by Hon’ble Bombay High Court [2024 (3) TMI 733 - BOMBAY HIGH COURT] under identical circumstances in the case of another assessee reproduced hereinabove, we do not find any reason to uphold the order passed by Ld.CIT(A).The source of the advance paid by assessee’s husband categorically stands explained hereinabove from the reconciliation statement filed by Ld.AR before this Tribunal. In any event, the Ld.AO of assessee’s husband verified necessary facts before dropping the 148 proceedings.

This Tribunal directs the AO to delete the addition in hands of assessee.

Addition u/s. 68 - Bogus Short term capital loss on shares - as per AO assessee had benefitted from accommodation entries of various nature like bogus loans, advances or share capital - estimation of commission income at 2% of the total value of the impugned purchase and sale transactions - as alleged transaction was pre-arranged.

HELD THAT:- Having regard to the nature of the transaction and the role of the assessee therein, we find that the assessee functioned merely as a conduit in a pre-arranged and layered accommodation entry transaction. In such cases, it is a settled position emerging from a catena of decisions of the Co-ordinate Benches of this Tribunal that the assessee cannot be taxed on the entire value of the purchase and sale of shares, but only on the embedded commission or profit element earned for facilitating such transactions.

This is for the reason that the principal amounts involved in the transactions do not partake the character of income in the hands of the conduit entity, but merely pass through it, with only the marginal commission retained representing real income.

While we concur with the finding of the CIT(A) that the transactions in shares were non-genuine and pre-arranged, we do not approve the action of taxing the entire value of the purchase and sale transactions. The record establishes that the admitted position that assessee functioned merely as a conduit in a layered accommodation entry arrangement, and that the principal amounts involved do not constitute real income in its hands.

Adoption of a rate of 2%is considered reasonable in the facts of the present case, having regard to the structured and pre-arranged nature of the transactions, the active facilitation and layering involved, and the absence of complete and reliable evidence regarding the exact commission earned, which warrants a conservative yet realistic estimation to safeguard the interests of the Revenue.

AO is directed to compute the addition by applying a rate of 2% on the aggregate value of the non-genuine share transactions in question. Grounds raised by the assessee stands partly allowed.

Validity for assessment order came to be passed u/s 143(3) r.w. Section 144C(13) - statutory limitation prescribed u/s 153 r.w. Section 144C - limitation arising from the interplay between Section 144C and 153 of the Act is pending consideration before the Hon'ble Supreme Court

HELD THAT:- Provision of Section 158AB of the Income Tax Act provides for the procedure to be adopted by the Department in case where an identical question of law is pending before the Hon'ble High Court or Hon'ble Supreme Court it is for the Revenue to adopt the procedure contemplated u/s 158AB of the Act where an identical question of law is pending before the Hon'ble High Court or the Supreme Court.

In view of the ratio laid down in the case of Roca Bathroom Products Pvt. Ltd [2022 (6) TMI 848 - MADRAS HIGH COURT] and also relying on the plethora of orders passed by the Co-ordinate Bench of the Tribunal of Hyderabad Bench (supra), in order to follow the principals of consistency, by respectfully following those binding precedents, we hold that the impugned Final Assessment Order passed u/s 143(3) r.w.s. 144C(13) of the Act dated 26/07/2024 pertaining to Assessment Year 2020-21 is barred by limitation as per Section 153 r.w. Section 144C of the Act. Accordingly, the impugned Final Assessment Order is hereby quashed.

Since above issue of Limitation is pending adjudication before the Hon'ble Supreme Court in case of Shelf Drilling Ron Tappmeyer Ltd. [2025 (8) TMI 698 - SUPREME COURT] and to be reached finality by the Larger Bench of the Hon'ble Supreme Court, we grant liberty to the parties to get the present Appeal revived for adjudication of the other issues on merits if the decision of the Hon'ble Supreme Court on this issue necessitates modification of this order.

Applicability of section 50 - permissibility of re-computation of depreciation and written down value for earlier assessment years by invoking Explanation 6 to section 43(6) - assets forming part of a block of depreciable assets - as submitted that the assessee has not claimed depreciation on the motor cars in the past, despite the vehicles being reflected as fixed assets in the books of account - depreciation of Car @ 30%

HELD THAT:- The assessee has not claimed depreciation in the earlier years and has also not offered any lease or hire income from the alleged use of the motor cars. Section 50 of the Act cannot be invoked in the absence of depreciation having been actually allowed.

Explanation 6 to section 43(6) does not empower the AO to retrospectively force depreciation into concluded assessment years merely to invoke section 50.

The issue is squarely covered in favour of the assessee by the binding judgment of the Hon’ble Karnataka High Court in Swetha Realmart LLP.2025 (3) TMI 1582 - KARNATAKA HIGH COURT]

Accordingly, the addition made by AO by invoking the provisions of section 50 of the Income-tax Act, 1961 is deleted. Action of the AO in recomputing depreciation and the written down value for the earlier assessment years by invoking Explanation 6 to section 43(6) of the Act is held to be unsustainable in law. Consequently, the findings of the learned CIT(A) to that extent are set aside.

Appeal filed by the assessee is allowed.

Computing deemed income u/s 44B - Inclusion of Goods and Services Tax (“GST”) receipts for computation of deemed income u/s 44B - scope of presumptive scheme of taxation u/s 44B - HELD THAT:- We find that the Coordinate Mumbai Bench of Tribunal in assessee’s own case in Orient Overseas Container Line Limited [2024 (11) TMI 954 - ITAT MUMBAI] held that GST cannot be included while computing the deemed income u/s 44B of the Act. Accordingly, the Coordinate Bench of the Tribunal decided a similar issue in favour of the assessee.

We find that similar findings were rendered in assessee’s own case in Orient Overseas Container Line Limited for the assessment year 2022-23[2025 (8) TMI 434 - ITAT MUMBAI]. As is evident from the record, this issue is recurring in nature and has been decided in favour of the assessee by the Coordinate Bench of the Tribunal in preceding years. Decided in favour of assessee.

Applicability of the provisions contained in section 115JB - assessee has offered its income from operation of ships to tax under the deeming provisions contained in section 44B r/w section 90(2) of the Act and Article 8 of the India Hong Kong Tax Treaty - We find that an identical issue came upon for consideration in the assessee’s own case for the assessment year 2020-21 [2024 (11) TMI 954 - ITAT MUMBAI] as deciding the issue in favour of the assessee, the Coordinate Bench of the Tribunal held that in view of the Explanation 4A to section 115JB(1) of the Act, the provisions of section 115JB of the Act are not applicable to the assessee.

Short grant of credit of TDS and advance tax and also the non-grant of interest u/s 244A - Since these issues raised by the assessee are already pending consideration before the AO, we direct the AO to grant credit of TDS and advance tax, as well as compute the interest under section 244A of the Act, as per law, after necessary verification of the facts involved.

Addition u/s 69C - bogus purchases - Likelihood of profit suppression - addition based on statement of the Director of the assessee company, recorded u/s 131 by another authority - contention of the AR that the statement of the Director has been misread and misunderstood merits serious consideration

HELD THAT:- In the absence of any independent enquiry, corroborative evidence, or material establishing bogus purchases or unexplained expenditure, the addition of the entire purchase amount under section 69C is not sustainable merely on the basis of a statement, particularly when the documentary evidences remain uncontroverted.

The ratio laid down in Kanak Impex [2025 (3) TMI 230 - BOMBAY HIGH COURT] to be followed namely that where the assessee fails to prove the genuineness of purchases and the source of expenditure, the provisions of section 69C mandate disallowance of the entire amount, is binding.

It is equally well settled that the application of a binding precedent is contingent upon the existence of the foundational facts on which such precedent rests. A judgment cannot be mechanically applied divorced from its factual matrix. The Hon’ble Supreme Court has repeatedly held that a decision is an authority for what it actually decides and not for what may logically follow therefrom.

In the present case, sole basis for the impugned addition is the statement of the Director, wherein it is stated that goods were sold in transit and physical delivery was not taken. When read in its entirety, the statement does not contain any admission of bogus purchases, accommodation entries, or receipt of cash. Sale of goods in transit, as explained by the assessee, is a recognised commercial practice in the textile trade, and in the absence of corroborative material, such statement by itself cannot be elevated to conclusive proof of unexplained expenditure within the meaning of section 69C.

At the same time, we are unable to lose sight of the fact that the nature of transactions, coupled with sale-in-transit mechanism, does introduce an element of opacity, which cannot be entirely ignored. While the evidentiary threshold required to sustain 100% disallowance under section 69C, as upheld in Kanak Impex, is not met in the present case, the factual matrix does justify a reasonable inference of possible suppression of profit. The present case, therefore, stands on a distinct factual footing, falling between two extremes:

i. it is not a case where the purchases are proved to be entirely fictitious so as to warrant full disallowance under section 69C, nor

ii. is it a case where the transactions are so transparent as to warrant deletion of the addition in toto.

Thus, we are of the considered view that restricting the addition to the profit element embedded in such transactions would best subserve the ends of justice. Such an approach does not dilute the ratio of Kanak Impex, but represents a fact-based calibration of its application, consistent with the statutory scheme and principles of judicial discipline.

Considering the likelihood of profit suppression, an estimated addition at 6% of the impugned purchases, comprising gross profit and suppression element, is justified and is accordingly sustained. Appeal of the assessee is partly allowed.

Bogus LTCG - capital gains in penny stock - entire premise of reopening is based on the investigation that was carried out regarding organized racket of generating bogus entries of long term capital gains in penny stock

HELD THAT:- On similar facts, this Tribunal in assessee’s own case in preceding assessment year [2022 (10) TMI 565 - ITAT MUMBAI] as held very transaction of the assessee in the scrips of First Financial Services Ltd, which resulted in long term capital gains to the assessee, has been found to be not violative of provisions of relevant Act and Rules by the SEBI upon necessary investigation and even the initial restraint order was revoked vide interim order dated 06/09/2017, therefore, we find no basis in sustaining the impugned addition made by the AO by treating the said transaction to be a penny stock transaction resulting in bogus long term capital gains.

The subsequent order referred by DR also does not support the observation of Ld.AO as assessee has not been alleged to be one among the fraudulent players as per the investigation carried out by SEBI. As no new facts have been brought on record by DR, we do not find any reason to deviate from the view taken by CIT(A). Decided in favour of assessee.

Condonation of delay - limitation - liberal but not unfettered approach to condonation - review jurisdiction - error apparent on the face of the record - discovery of new and important matter or evidence - for any other sufficient reason - Tribunal passed the order without proper appreciation of facts and reasons stated by the appellant for the delay. The ground has been raised without realizing the pleadings to the application of CoD and blame has been put to this Tribunal for non-application of mind.

HELD THAT:- The distinction between the inordinate delay and delay of short duration of few days has also been made which in the present case is of more than a year because exclusion of the period out of Covid-19 was for those litigants whose limitation was to expire during the period of Covid-19 and not for the benefit of those defaulters who failed to file appeal within a period of limitation expired prior to Covid-19.

The grounds urged in the Review Application were not taken in the application of the CoD and perusal of the paras quoted above does not explain any reason of delay after getting certified copy of the order which was admittedly and as per the fairly statement of the Ld. Counsel for the Review Applicant obtained in the month of November, 2019 itself.

Looking to the facts of this case and the manner the application was filed, it was sufficient to record absolute negligence on the part of the appellant in taking up the remedy, rather, there was lack of bona fide even for filing of the application for CoD.

Looking to the aforesaid and limited jurisdiction of this Tribunal while deciding the Review Application, we do not find a case is made out within the framework of the law laid down by the Apex Court in the case of Govt. of NCT of Delhi versus K.L. Rathi Steels Limited [2023 (3) TMI 1503 - SUPREME COURT] and in the case of Parsion Devi & Ors. [1997 (10) TMI 369 - SUPREME COURT] so as to allow the Review Application.

Review Application is accordingly dismissed.

Effective Date of the Notification - Publication in the Official Gazette - import and trading of mild steel items such as Hot Rolled Coils, Cold Rolled Coils, Hot Rolled Steel Plates and Pre Painted Steel Coils etc -promulgation of delegated legislation - expression 'date of this Notification' in Notification No. 38/2015-20 - transitional protection under para 1.05(b) of the Foreign Trade Policy, 2015-2020 - Notice requirement for delegated legislation - Non-est of law prior to publication - Whether the expression ‘date of Notification’ mentioned in para 2 of the Notification issued under the Act, can be interpreted to mean any date, other than the date of its publication in the Official Gazette. - HELD THAT:- Admittedly, prior to February, 2016, the said items were freely importable and fell under Chapter-72 of the Indian Trade Clarification (Harmonized System), 2012 (‘ITC-HS’), Schedule-I of the Foreign Trade Policy, 2015-2020 (FTP).

Law, to bind, must first exist. And to exist, it must be made known in the manner ordained by the legislature. Delegated legislation, unlike plenary legislation enacted by the Parliament, is framed in the executive chambers without open legislative debate. The requirement of publication in the Gazette, therefore, serves a dual constitutional purpose i.e. (a) it ensures accessibility and notice to those governed by the law, and (b) it ensures accountability and solemnity in the exercise of delegated legislative power. The requirement of publication in the Gazette, is therefore not an empty formality. It is an act by which an executive decision is transformed into law. It is precisely for this reason that courts have consistently insisted that strict compliance with the publication requirements is a condition precedent for the enforceability of delegated legislation.

The benefit of transitional provision contained in para 1.05(b) of the FTP cannot be denied to the appellants, as the same would defeat the plain language of the FTP and would undermine the object of the parent Act, and would introduce uncertainty to a field where certainty is indispensable. The imposition of fiscal or trade burdens on the basis of an unpublished Notification would erode commercial confidence and offend the Rule of Law, the result which the court must steadfastly guard against.

Once it is held that Notification became operative only on 11.02.2016, the expression ‘date of this Notification’ occurring in para 2 thereof, must necessarily be construed to mean the date of its publication in the Official Gazette. Accordingly, the issue is answered. The appellants having opened irrevocable Letters of Credit prior to 11.02.2016 and having complied with procedural requirements under para 1.05(b) of the FTP are clearly entitled to the benefit of transitional provision contained therein. The MIP introduced by the Notification with effect from 11.02.2016 cannot be applied to imports effected by the appellants pursuant to irrevocable Letters of Credit prior to 11.02.2016.

We accordingly hold that the Notification issued under Section 3 of the Act acquires the force of law only upon its publication in the Official Gazette. The expression ‘date of this Notification’ must necessarily mean the date of such publication.

Appeals are allowed.

Classification of goods - General Rules for Interpretation (GIR) - Harmonized System / HSN explanatory notes - heading 9610 0000 (slates and boards with writing or drawing surfaces) - heading 9503 0090 (toys, games and sports requisites) - trade parlance - reassessment under Section 28(1) of the Customs Act, 1962

Classification of goods - heading 9610 0000 (slates and boards with writing or drawing surfaces) - heading 9503 0090 (toys, games and sports requisites) - General Rules for Interpretation (GIR) - Harmonized System / HSN explanatory notes - Appropriate classification of the imported "Drawing Colour Doodle" goods - HELD THAT: - The Tribunal applied the General Rules for Interpretation sequentially, giving primacy to the tariff headings and related notes (GIR-1). The product photographs and catalogue show a board with a magnetic writing/drawing surface intended to be written on and erased. Chapter 95 deals with "toys" (including illustrative items and "educational toys") which require characteristics of play, amusement or elements of chance/skill; the impugned goods lack such toy-specific features and do not fall within the illustrative examples in the HSN notes. Chapter 96 heading 9610 expressly covers slates and boards "clearly designed to be used for writing or drawing" of varied base materials and coatings, and the HSN explanatory notes describe boards designed for writing or drawing (including those bearing permanent markings or incorporating counting frames) as within the heading. Because the classification can be resolved under GIR-1 by reference to the specific terms and HSN notes, there is no occasion to resort to GIR-4. Applying the statutory scheme and HSN explanatory notes, the imported goods are more properly classifiable as slates/boards under CTI 9610 0000 rather than as toys under CTI 9503 0090. [Paras 8, 9]

Imported "Drawing Colour Doodle" goods are classifiable under CTI 9610 0000.

Reassessment under Section 28(1) of the Customs Act, 1962 - confirmation of demand, extended period and penalties - classification of goods - Sustainability of the impugned order's demand, extended limitation invocation and penalties based on the revised classification - HELD THAT: - The original order reassessed the entries and confirmed differential duty, invoked extended limitation and imposed redemption fines and statutory penalties after treating the goods as classifiable under CTI 9503 0090. Having concluded that the correct classification is CTI 9610 0000, the foundational basis for reassessment, demand and attendant penalties/remedies in the impugned order fails. The Tribunal therefore held that the impugned order cannot be sustained on merits because its principal classification finding is incorrect. [Paras 6, 10, 11]

Impugned order confirming demand, invoking extended period and imposing redemption fine/penalties cannot be sustained and is set aside.

Final Conclusion: The appeal is allowed: the imported Drawing Colour Doodle goods are held classifiable under CTI 9610 0000 (slates and boards with writing or drawing surfaces), the impugned Order-in-Original dated 05.02.2024 is set aside and consequential relief is granted as per law.

Classification of goods - optical fibre cables - mis-classification - suppression - test report and sample testing - Burden of proof - Extended period of limitation - Adjudicating Authority - Refund claim - Larger Bench decision -stay by the Supreme Court - Circular No. 12/2006-Cus - HELD THAT:- Considering the factual details and the consistent view of the coordinate Benches of the Tribunal that suppression clause would not be applicable in such cases, we do not find any necessity to interfere with the Order passed by the Adjudicating Authority dropping the confirmed demand. Accordingly, we dismiss the appeal filed by the Revenue.

Prima facie it appears that after about 4 years from the date of decision of LB in the case of Vodafone[2018 (1) TMI 959 - CESTAT MUMBAI (LB)], Revenue suddenly became wiser and invoked the extended period provisions and initiated the present proceeding in a hurried way without having drawn any sample for the past consignments. The Board Circular dated 28.02.2006 clarifies that necessary verification is required to be taken up in each and every case to come to the correct conclusion about the classification. Even as the Board Circular is not binding on the assessee, it is very much binding on the Revenue, so long as it does not run contrary to any HC/SC decision. Therefore, non-drawal of samples and testing the same proves fatal to the case of the Revenue in the present proceedings.

We note that the LB decision of Vodafone, has held that goods are classifiable under CTH 9001 00 00 which has been stayed and the issue is sub-judice before the Supreme Court. Therefore, the classification of the goods in question in the present case, is not within our jurisdiction. Hence, we are not even attempting to go into the arguments adduced by both the sides to pitch for the classification to be adopted.

We have found that that Revenue has not made out any case of suppression and the issue is that of interpretation. Hence, we have held that the dropping of the demand pertaining to the extended period by the Adjudicating authority is correct.

There is no allegation to the effect that the goods under litigation are different from the goods that were tested and the Report was generated on 10.1.2014. On the other hand, except for presumptions and assumptions, without drawing any sample and getting them tested, the Revenue has not made out any case against the appellant for the consignments imported during the period under question. The CBEC had issued the Instructions way back in 2006 to get the consignments verified properly before finalizing the classification.

Therefore, we set aside the confirmed demand and allow the appeal of the importer to this extent.

Appeal filed by the Revenue is dismissed and the appeal filed by the importer stands allowed with consequential relief, if any, as per law.

Mis-declaration and undervaluation of furniture and furniture parts, based on the printouts of emails and statements of persons recorded u/s 108 -Relevancy of statements recorded - Mandatory procedure for admissibility of statements in adjudication - Admissibility of computer printouts and electronic records - Adjudicating authority's duty to examine witnesses and form opinion before admitting statements - Opportunity for cross-examination -Redetermination of transaction value -applicability of section 138B and section 138C - HELD THAT:- In Shri T.N. Malhotra, Managing Director vs Pr. Commissioner of Customs, New Delhi [2024 (6) TMI 202 - CESTAT NEW. In this decision, the Bench examined the provisions of section 108 of the Customs Act, but it appears that the provisions of section 138B of the Customs Act were not brought to the notice of the Division Bench. As a result, the Bench examined whether the statements made were voluntary or under pressure. It is for this reason that the Bench relied upon the statements.

Thus, it has to be held that the statements of persons recorded under section 108 of the Customs Act could not have been relied upon by the Principal Commissioner for rejecting the transaction value and re-determining the same.

The finding regarding under-valuation of furniture and furniture parts is based on the printouts of original invoices recovered from the email and various statements made under section 108 of the Customs Act. A perusal of the order passed by the Principal Commissioner shows that no finding has been recorded regarding compliance of section 138C of the Customs Act. In the absence of any certificate having been issued under section 138C of the Customs Act, no reliance can be placed on the printouts of emails.

There is nothing on the record to show that Panchnama was drawn regarding the printouts of the email. The statements made under section 108 of the Customs Act were also retracted by the appellants. Thus, the compliance of section 138C of the Customs Act had not been satisfied.

It is not possible to sustain the order dated October 28, 2020 passed by the Principal Commissioner that rejects the declared value of the goods under rule 12 of the 2007 Valuation Rules and re-determines it under rule 3. Nor is it possible to sustain the imposition of penalties upon the appellants.

The impugned order dated October 28, 2020, insofar as it concerns these six appeals, is set aside and all the six appeals are allowed.

Applicability of section 138B and section 138C - Relevancy of statements u/s 138B - Admissibility of computer printouts and electronic records u/s 138C - Mandatory procedure for admitting investigation statements​​​​​​​ - Adjudication proceedings requirement of examination of witness and judicial opinion before admitting statements - Opportunity for cross-examination​​​​​​​ - Rejection and re-determination of declared value under rule 12 and rule 3 of - Penalties under section 112(a)(ii) and section 114AA of the Customs Act - HELD THAT:- In Shri T.N. Malhotra, Managing Director vs Pr. Commissioner of Customs, New Delhi [2024 (6) TMI 202 - CESTAT NEW. In this decision, the Bench examined the provisions of section 108 of the Customs Act, but it appears that the provisions of section 138B of the Customs Act were not brought to the notice of the Division Bench. As a result, the Bench examined whether the statements made were voluntary or under pressure. It is for this reason that the Bench relied upon the statements.

Thus, it has to be held that the statements of persons recorded under section 108 of the Customs Act could not have been relied upon by the Principal Commissioner for rejecting the transaction value and re-determining the same.

No finding has been recorded regarding the requirement of a certificate under section 138C of the Customs Act. The statements made under section 108 of the Customs Act were retracted by the appellants.

There is nothing on the record to show that Panchnama was drawn regarding the printouts of the email. The statements made under section 108 of the Customs Act were also retracted by the appellants. Thus, compliance of section 138C of the Customs Act had not been satisfied.

In this view of the matter, it is not possible to sustain the order dated February 12, 2024 passed by the Principal Commissioner that rejects the declared value of the goods under rule 12 of the 2007 Valuation Rules and re-determines it under rule 3. Nor is it possible to sustain the imposition of penalties upon the appellants.

The impugned order dated February 12, 2024, insofar as it concerns these four appeals, is set aside and all the four appeals are allowed.

Relevancy and admissibility of statements recorded u/s 108 - Admissibility of computer printouts and electronic records - Rejection and re-determination of transaction value under Customs Valuation Rules, 2007 - Requirement of certificate u/s 138C(4) - Retracted statements and evidentiary effect - Adjudicating authority's obligation to examine witness and permit cross-examination - Mandatory procedural safeguards in adjudication proceedings - applicability of section 138B and section 138C - HELD THAT:- In Shri T.N. Malhotra, Managing Director vs Pr. Commissioner of Customs, New Delhi [2024 (6) TMI 202 - CESTAT NEW. In this decision, the Bench examined the provisions of section 108 of the Customs Act, but it appears that the provisions of section 138B of the Customs Act were not brought to the notice of the Division Bench. As a result, the Bench examined whether the statements made were voluntary or under pressure. It is for this reason that the Bench relied upon the statements.

Thus, it has to be held that the statements of persons recorded under section 108 of the Customs Act could not have been relied upon by the Principal Commissioner for rejecting the transaction value and re-determining the same.

There is nothing on the record to show that Panchnama was drawn regarding the printouts of the email. The statements made under section 108 of the Customs Act were also retracted by the appellants. Thus, compliance of section 138C of the Customs Act had not been satisfied.

In this view of the matter, it is not possible to sustain the order dated December 15, 2023 passed by the Principal Commissioner that rejects the declared value of the goods under rule 12 of the 2007 Valuation Rules and re-determines it under rule 3. Nor is it possible to sustain the imposition of penalties upon the appellants.

The impugned order dated December 15, 2023, insofar as it concerns these three appeals, is set aside and all the three appeals are allowed.

Legality of penalty imposition - Revocation of licence - Requirement of notice before undertaking de novo inquiry or re-examination by senior authority - Failure to accord principles of natural justice by not putting party on notice when disagreeing with Inquiry Officer's findings - Review of Inquiry Officer's report by the Commissioner - Customs Broker Licensing Regulations, 2013 - HELD THAT:- No doubt there may not be any bar under the applicable statutes, for a Commissioner to accept or not to accept the report of an Inquiry Officer, but when the Commissioner chooses to take the task upon himself without accepting the report of the Inquiry Officer, the minimum that is required perhaps, is to put the other side on Notice; in any case this is also the mandate of proviso to Regulation 20 (7) of CBLR. When we look at the SCN and the reasoning in the impugned order, we do not find any improvement and the allegations in the SCN stand reiterated. There is no evidence brought out in the Order-in-Original proving the charges levelled in the SCN; the charges are reiterated nothing more. Hence, at the threshold, the impugned order suffers from serious legal infirmity of not following the prescribed procedure and hence, on this ground alone, the same deserves to be set aside.

In view of the above discussion and the decision of Delhi Bench [2016 (5) TMI 602 - CESTAT NEW DELHI], we set aside the impugned order and allow the Appeal.

Applicability of section 138B and section 138C - Relevancy of statements recorded u/s 108 - Retracted statements and evidentiary value -Admissibility of statements in adjudication u/s 138B - Procedure of examination of witness and judicial opinion before admitting statements - Admissibility of computer printouts and documentary reproduction u/s 138C - Adjudicating authority's duty to permit cross-examination - HELD THAT:- In view of the provisions of subsection (2) of section 138B of the Customs Act, the provisions of subsection (1) of the Customs Act shall apply to any proceedings under the Customs Act as they apply in relation to proceedings before a Court. What, therefore, follows is that a person who makes a statement during the course of an inquiry has to be first examined as a witness before the adjudicating authority and thereafter the adjudicating authority has to form an opinion whether having regard to the circumstances of the case the statement should be admitted in evidence, in the interests of justice. Once this determination regarding admissibility of the statement of a witness is made by the adjudicating authority, the statement will be admitted as evidence and an opportunity of cross-examination of the witness is then required to be given to the person against whom such statement has been made. It is only when this procedure is followed that the statements of the persons making them would be of relevance for the purpose of proving the facts which they contain.

There is nothing on the record to show that Panchnama was drawn regarding the printouts of the email. The statements made under section 108 of the Customs Act were also retracted by the appellants. Thus, the compliance of section 138C of the Customs Act had not been satisfied.

In this view of the matter, it is not possible to sustain the order dated December 29, 2023 passed by the Principal Commissioner that rejects the declared value of the goods under rule 12 of the 2007 Valuation Rules and re-determines it under rule 3. Nor is it possible to sustain the imposition of penalties upon the appellants.

The impugned order dated December 29, 2023, insofar as it concerns these four appeals, is set aside and all the four appeals are allowed.

Classification of goods - imported Lauric Acid (claimed under CTH 29157090 with exemption under Notification No.12/2012-Cus, Sl. No.230A) - demanding differential duties - General Rules of Interpretation (GRI 1) - burden of proof on the assessee - self-assessment and review u/s 17 - reassessment/review u/s 28(1) - Notification No.12/2012-Cus (Sl. No.230A) - Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 - Circular No.17/2011-Cus - HELD THAT:- In Commissioner of Customs v Canon India Pvt Ltd, [2024 (11) TMI 391 - SUPREME COURT (LB)], wherein, after examining the changes introduced in Section 17 as amended vide the Finance Act 2011 vis -a-vis the unamended provisions of Section 17.

Therefore, as held by the Apex court, when the ambit of Section 28 allows for review of assessments and reassessments under Section 17, Revenue is not precluded from resorting to Section 28(1) to review the assessment for ascertaining if there has been a short levy, and such review would also take in its fold the aspect of the correctness of the classification claimed by the appellant.

Concededly, the appellant classified the “Lauric Acid” imported under tariff item 29157090 as ‘other palmitic acid stearic acid, their salts and esters” and self-assessed the goods to the concessional rate of duty claiming that the goods are covered under Sl.No.230(A) of Notification No.12/2012-Cus. The description of the goods against the said Sl.No.230A no doubt is “All goods for use in the manufacture of soaps and oleochemicals”, but the appellant’s entitlement to the same hinges on the Lauric Acid imported being covered under the said chapter sub heading 291570, the sub heading referred to in the said Sl.No.230 (A).

We find that the chapter sub-heading from 2915.11 to 2915.70 specifically cover certain saturated acyclic monocarboxylic acid and their derivatives, and lauric acid is not covered thereunder. We find that the Ld. A.R has rightly placed reliance on the decision of a coordinate bench of this Tribunal as reported in M/s. Hindustan Unilever Ltd v. The Commissioner of Custom [2025 (2) TMI 111 - CESTAT CHENNAI]. It is seen that in this case, where revenue classified Lauric Acid under Tariff Item 29159090 as against the appellant’s claimed classification of 29157090, similar to the instant case; this Tribunal had come to the conclusion that the claim of classification of Lauric Acid imported under Tariff Item 29157090 as claimed by the appellant therein, cannot be countenanced and had rejected the appeals.

Thus, we are of the considered view that the impugned orders do not warrant any interference and uphold the same.

Resultantly, the Appeals are dismissed.

Dismissal of Petition filed under Section 213(b) of the Companies Act, 2013 as being not maintainable - failure to issue notice to the respondents - recovery of dues or dishonoured cheques - non-compliances are regulatory lapses enforceable by the Registrar of Companies under Sections 92, 137, and 454 - no prima facie evidence of systemic fraud or intent to defraud creditors - HELD THAT:- The allegations merely relate to the recovery of dues or dishonoured cheques as non- compliance of statutory nature/regulatory lapses are very well enforceable by the ROC under Section 92, 137 and 454 of the Companies Act, 2013 and there is no prima facie evidence of any systematic fraud with an intention to prima facie defraud its members, creditors or any other stake holders. The appellant has already filed complaints before the said statutory authorities and no concrete/final findings have come in the said complaints till date and it also shows the appellant has been taking recourse to alternative remedies. There could be no violation of natural justice either as hearing has since been given to the appellant by the Ld. NCLT.

The Ld. NCLT was right in rejecting the company petition in limine, without issuing notice to the Respondents on the grounds viz (i) the allegations merely relate to recovery of dues or dishonoured cheques; (ii) non-compliances are regulatory lapses enforceable by the Registrar of Companies under Sections 92, 137, and 454, and (iii) there is no prima facie evidence of systemic fraud or intent to defraud creditors. Thus, the complaint/petition under Section 213 of the Companies Act, 2013 appears to be an act of frustration of the appellant in not recovering his dues.

Appeal dismissed.

Restriction on AGM for adoption of financial statements and deferring other agenda items - Principal Trustee could exercise voting rights of the Trust and preside as Chairperson of the AGM or not - appontment of Chairperson/Observer for overseeing the AGM and future proceedings qua ensuing Meetings for fair and transparent conduct - HELD THAT:- The NCLAT is not inclined to accept the submissions made by the Appellant, since these three agendas were only deferred and as pointed out the matter is pending for disposal on 27.01.2026, hence, the Ld. NCLT is requested to take up the issues concerning the remaining three agendas and to pass directions thereof.

It is submitted passing of an order and keeping in view the interest of the company shall not suffice and it needs to be directed that Mr. Brij Mohan Khanna should also follow the interim directions - There is no need to give such a direction as if order dated 02.09.2025 is violated, the Appellant shall have the right to take action qua such violation, including filing of Contempt, if any.

Lastly it is urged without any voting per Section 104 of the Companies Act, 2013, Mr. Brij Mohan Khanna has been appointed as a Chairperson of the AGM. There is no serious counter to this argument, hence we direct provisions of Section 104 (supra) be followed for appointment of Chairperson in the meeting.

The appeal stands disposed of with a request to the Ld. NCLT to hear on 27.01.2026 upon remaining agendas, and to dispose of the issue raised in an expeditious manner - The appeal is accordingly disposed of.

Financial debt - authenticity and genuineness of contractual documents - fraudulent transaction - summary jurisdiction of the Adjudicating Authority - Extinguishment of claims on approval of resolution plan - Bonafide of claim -verification of claims by the IRP/RP under Regulations 10, 12 and 13 of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - Appeal to the Appellate Tribunal - Section 66 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The sum was provided as an advance and was treated as a liability and not a borrowing in the balance sheet and therefore does not partake the character of financial debt. We therefore find that the Adjudicating Authority did not commit any infirmity in holding that the advance purportedly given by the Appellant not having been classified as a borrowing in the balance sheet, hence, this amount did not acquire the colour of financial debt.

On the allegation of the loan transaction having been labelled as a sham and bogus transaction simply because the Corporate Debtor had purchased an Audi-6 Car, it is the case of the Appellant that this was a misplaced contention as there is nothing on record to show that no funds were available with the Corporate Debtor at the time of purchase of Audi Car barring the loan amount given by the Appellant. It is the contention of the Appellant that when the bank statement of the Corporate Debtor placed at page 192 of the APB clearly shows that Rs 48,50,000/- had been received in the account of the Corporate Debtor from the Appellant, this clearly and effectively demonstrated that there was infusion of funds by the Appellant into the account of the Corporate Debtor. Hence, the Adjudicating Authority had erroneously questioned the genuineness of the loan transaction on account of purchase of a car.

As the loan was used for purchase of an Audi A6 Car for personal use of the Appellant, the Adjudicating Authority has correctly held that the Appellant has filed a claim to recover the sum purportedly advanced by him to the Corporate Debtor which not having been utilised for the purpose for which the sum was advanced tantamount to defrauding the creditors of the Corporate Debtor.

From a plain reading of Clause 2, it is amply clear that the loan was to be used for development of land and Clause 2.2 made it adequately clear that diversion of the loan for any other business purpose was not permissible. However, when we look at the bank statement of the Corporate Debtor as placed at page 314 of the APB it is clear that the same day i.e. 19.04.2007 when the alleged secured loan was disbursed, the same day there has been a pay-out of the same amount from the account of the Corporate Debtor for the purpose of purchasing an Audi A6 Car which use clearly did not conform to the stipulations of Clause 2.2 of the Loan Agreement. The Appellant being a Director of the Corporate Debtor at that point of time cannot disclaim responsibility that the purported loan advanced to the Corporate Debtor had not been utilised for the beneficial interest of the Corporate Debtor as contemplated in the Loan Agreement.

Given this backdrop, we find that there is sufficient basis in the findings returned by the Adjudicating Authority that the loan transaction not being genuine, the claim filed by the Appellant was not found to be genuine and therefore rejected. Further, the transaction carried out under the Loan Agreement having found to have defrauded by the creditors of the Corporate Debtor, the Adjudicating Authority has not committed any infirmity rejected in declaring the impugned transaction to be null and void.

Appeal lacks substance and accordingly is dismissed.

Permission to travel abroad during insolvency proceedings- safeguarding creditors' interests and prevention of asset dissipation - personal bankruptcy and administration of bankrupt's estate - cooperation with the Bankruptcy Trustee - security deposit and surety obligations as pre-conditions to leave the country - Adjudicating Authority (National Company Law Tribunal) - National Company Law Appellate Tribunal - whether the conditionalities imposed by the Adjudicating Authority at para 33 which has been assailed by the Appellant warrants any interference. - HELD THAT:- The condition placed at para 33(a) directing the Appellant to make arrangements for deposit of Rs 40 Cr. as security, we are of the view that this stringent conditionality imposed by the Adjudicating Authority cannot be sustained since the Appellant has already been declared bankrupt and a Bankruptcy Trustee has already been appointed to administer the asset and estate of the bankrupt Appellant. When the Appellant has already become a bankrupt, it follows therefrom that the Appellant cannot be expected to have any source available with him which he could tap for the purpose of provisioning this Security Deposit amount.

We also do not find any material placed on record either by Respondent No.1 or Respondent No.2 to show that the Appellant was in possession of a sum of the magnitude of Rs 40 Cr or in a position to muster such a sizeable resource. Hence, we are inclined to agree with the Appellant that imposition of such an impossible condition which by its very nature cannot be practically fulfilled tantamount to blocking any possibility of the Appellant to travel abroad.

We are therefore of the view that this condition deserves to be relaxed. As regards the condition placed at para 33(b) which mandates execution of bonds of two solvent sureties of Rs 50 Cr. each, we are of the view that this conditionality is reasonable and justified as the Adjudicating Authority is rightly persuaded that in the conspectus of given facts and circumstances, there is a pressing need to adequately safeguard the interests of the financial creditors also. We therefore do not feel it necessary to dilute this conditionality laid down in the impugned order at para 33(b). The other conditions at para 33(c) to (l) not having been disputed by the Appellant, we not feel the need of interfering with them.

We allow the Appeal and accordingly modify the directions contained in para 33 of the impugned order

Related party within the meaning of Section 5(24)(h) of the IBC - non-binding term sheet subject to contract - eligibility to submit a resolution plan (ineligibility under Section 29A) - finality of adjudicating authority's earlier finding / preclusion of re-agitation - viability and requirements of a resolution plan under Section 30(2) and Section 31 of the IBC

Related party within the meaning of Section 5(24)(h) of the IBC - non-binding term sheet subject to contract - SRA is a related party of the Corporate Debtor within the meaning of Section 5(24)(h) of the IBC - HELD THAT: - The Tribunal held that the non-binding term sheet dated 09.06.2022 was expressly 'subject to contract' and contained condition precedents; no definitive investment agreement was ever executed and no allotment of shares occurred. The deposit made by the investor was returned prior to filing of the Section 7 petition. On these facts the essential ingredient of a person being in a position to give advice, directions or instructions to directors/partners/managers of the corporate debtor was absent. Reliance on authorities recognising that a non-binding term sheet is merely an offer unless definitive documentation is executed supported the conclusion. Thus, the SRA could not be characterised as a related party under the statutory definition and was not ineligible to submit a resolution plan. [Paras 11, 12, 16]

SRA is not a related party within the meaning of Section 5(24)(h) and therefore not ineligible to submit the Resolution Plan.

Finality of adjudicating authority's earlier finding / preclusion of re-agitation - Permissibility of raising the ineligibility objection again after dismissal of IA No.5201 of 2024 - HELD THAT: - The Tribunal noted that the Adjudicating Authority, in its order dated 15.09.2025, had considered the same term sheet and held that the SRA was not a related party. That order and its finding on ineligibility were not challenged and have attained finality. Having earlier rejected the appellant's challenge to SRA's eligibility, the appellant could not re-agitate the same point in the present appeal. The Tribunal therefore treated the earlier adjudication as conclusive on the issue of eligibility. [Paras 15, 16]

The appellant is precluded from re-opening the already-decided issue of SRA's ineligibility; the earlier finding in IA No.5201 of 2024 is final.

Final Conclusion: The appeal is dismissed: the SRA was correctly held not to be a related party on the facts (non-binding term sheet, no definitive agreement, deposit refunded), and the appellant is precluded from re-agitating the eligibility issue which the Adjudicating Authority had earlier finally decided; the approval of the Resolution Plan is not interfered with.

Pre-existing dispute- notice of dispute - operational creditor - Rejection of Section 9 application for pre-existing dispute - HELD THAT:- When notice of dispute has been issued by the corporate debtor u/s 9(5)(ii)(d) Adjudicating Authority is obliged to reject the application. The submission appellant that letter which was written by one Director of the corporate debtor does not bind other Directors and atleast that was a dispute interse between company and cannot be basis for reliance by the Adjudicating Authority.

When the letter which was written by one Director of the operational creditor to the corporate debtor and has been referred to and relied in reply to the demand notice, the contents of the reply to the demand notice cannot be said to be a moonshine defence and the reply to demand notice is based on facts and is not unsupported by materials and in the present case Adjudicating Authority having relied on the reply to the demand notice has come to the conclusion that there is a pre-existing dispute. We thus do not find any error in the order warranting interference by this Appellate Tribunal.

We, however, make it clear that dismissal of Section 9 application shall not preclude the appellant to claim its dues, if any, against the corporate debtor in accordance with law.

We dismiss the appeal.

Approved resolution plan binding on stakeholders including personal guarantors - consequential directions for implementation of an approved resolution plan - finality of appellate orders and res judicata effect on implementation - inclusion of thirdparty/guarantor land in assets of corporate debtor (challenge under Section 18(1)(f) contested) - avoidance and setting aside of fraudulent/undervalued transactions as part of CIRP implementation

Approved resolution plan binding on stakeholders including personal guarantors - consequential directions for implementation of an approved resolution plan - finality of appellate orders and res judicata effect on implementation - inclusion of thirdparty/guarantor land in assets of corporate debtor (challenge under Section 18(1)(f) contested) - Legality of the Adjudicating Authority's impugned order allowing prayers (a), (b) and (c) of I.A. No.1576/2022 as consequential directions for implementation of the earlier orders dated 04.07.2022. - HELD THAT: - The Tribunal examined whether the impugned order amounted to a fresh adjudication or merely implemented earlier orders approving the resolution plan and setting aside a lease deed. It noted that the resolution plan approved by the Adjudicating Authority (04.07.2022) - which included provisions treating specified guarantor/thirdparty land as part of the corporate debtor's assets and directing transfer and registration for implementation - had been challenged before this Appellate Tribunal and those appeals were dismissed, with no further challenge before the Supreme Court. The Adjudicating Authority had also set aside the lease deed as a preferential/fraudulent transaction in proceedings under avoidance provisions. Given that the plan approval and avoidance orders had attained finality, the directions in I.A. No.1576/2022 were characterised as consequential steps to give effect to those final orders rather than as a fresh, substantive determination on title. The Tribunal rejected the appellant's contention that the 04.07.2022 orders were per incuriam for allegedly ignoring the contention about noninclusion of thirdparty property (referenced to Section 18(1)(f)), holding that those contentions could not be reopened because the appellate orders had become final. On that basis the Tribunal found no illegality in the Adjudicating Authority granting the limited reliefs in I.A. No.1576/2022 to effect implementation of the approved plan and vesting/registration directions. [Paras 29, 30, 31, 32, 33]

The appeal is dismissed; no illegality found in the impugned order insofar as it gave consequential directions to implement the earlier, final orders approving the resolution plan and setting aside the lease deed.

Final Conclusion: The Appellate Tribunal dismissed the appeal, holding that the impugned order merely issued consequential directions to implement earlier orders (dated 04.07.2022) which had attained finality; the Tribunal declined to reopen questions already finally adjudicated.

Effect of bankruptcy order - estate of the bankrupt - unfreezing of the bank account and permission to utilise the deposited funds without restriction - ‘bankruptcy estate’ or are ‘excluded assets’ within the meaning of Section 79(14)(b) of the IBC - administration and distribution of estate of bankrupt - after-acquired property of bankrupt - vesting of estate of bankrupt in bankruptcy trustee - Bankruptcy Trustee duties and powers - NCLT / Adjudicating Authority - Ejusdem generis - HELD THAT:- There are no material on record with respect to any amount which according to the Appellant was to be kept in trust. There being no material on the record, we are of the view that the present is not a case for applicability of Section 155(2)(b) and Appellant having not established that any amount was held by the bankrupt on trust for any other person no direction could have been passed for release of such amount.

The word ‘administration’ which occurring in Section 136 of the IBC provides that bankruptcy trustee shall conduct the administration and distribution of the estate of the bankrupt. Thus, the said provision entrust the administration of the estate of the bankrupt on bankruptcy trustee. It is true that the estate of the bankruptcy trustee is essentially for distribution of the estate of bankrupt in accordance with provision of Chapter V of Part III and the assets are to be distributed amongst the creditors as provided under Section 128(1)(b). The entire estates of the bankrupt having been taken under by the bankruptcy trustee which estate are essentially for distribution amongst the creditors.

In the present appeal, the Appellant has filed additional affidavit bringing on record subsequent communication communicating requirement of Rs. 2,50,000/- to discharge past and upcoming liabilities and medical requirements. In the Affidavit, Appellant has also brought on record medical prescriptions and medical bills. However, the said claim was rejected by the bankruptcy trustee. The Appellant further contended that the bankruptcy trustee is charging Rs. 45,000 per month per matter as bankruptcy trustee fee and spending almost Rs. 75,000/- on litigation but has not considered the request of the bankruptcy trustee to release any amount as prayed by bankruptcy trustee.

The estate of the bankrupt being under the administration of the bankruptcy trustee and the bankruptcy trustee himself having taken the stand for specific purpose, bankrupt should approach the NCLT for filing an application. We are of the view that it is open for the Appellant to make appropriate application before the NCLT seeking any direction for release of any amount from the estate of the bankruptcy estate which NCLT can consider and decide in accordance with law. Application which has given rise to this Appeal having contained only prayer for defreezing account which prayer was rightly rejected by NCLT, we do not find any ground to interfere with the impugned order.

We have noticed above Section 159 of the IBC which clearly provides that assets acquired after bankruptcy commencement date can be claimed by the bankruptcy trustee by giving a notice. The scheme of Section 159 thus, clearly indicates that the assets acquired subsequent to bankruptcy commencement order shall not automatically vest with the bankruptcy trustee. Thus, the amount which has been received in the account of the Corporate Debtor subsequent to 06.11.2024 which has not been claimed by the bankruptcy trustee by giving a notice under Section 159 has to be released in favour of the Appellant.

The Adjudicating Authority's order rejecting the prayer to unfreeze the account is upheld; amounts credited to the account after the bankruptcy commencement date which the trustee has not claimed under Section 159(1) are to be released to the bankrupt; and the bankrupt remains entitled to approach the NCLT for directed release of specific amounts for legitimate purposes, to be considered with opportunity to the trustee.

Interim finance raised with CoC approval - conflict of interest and fiduciary duty of resolution professional - reasonableness and transparency of CIRP costs and professional fees - professional misconduct and Code of Conduct of resolution professional - priority of insolvency resolution process costs - Appellate Tribunal jurisdiction u/s 61 of the IBC - Whether the remarks of the Adjudicating Authority describing the professional conduct of the RP as “deplorable” was unwarranted or not. - HELD THAT:- This was a clear case of conflict of interest since Vishal, on the one hand, was financing the Corporate Debtor through the RP, and on the other hand, was dipping into the corpus of interim finance through the RP by claiming legal fees. The RP had also not disclosed to the CoC the relationship it had with the Resolve as the Loan Agreement had been executed by RP without placing the specific terms thereof for approval of the CoC. This non-disclosure to the CoC of appointment of related parties as interim finance provider and legal professional by the RP clearly violated the principles of transparency and fiduciary duty exercisable by the RP under the IBC.

It is well settled that RP is an administrator of the IBC and is expected to work under the directions of the CoC. The relationship between the RP and the CoC is required to be one characterised by trust, confidence and transparency. There is however nothing paced on record by the RP to substantiate that the CoC was also kept apprised of this aspect of related party arrangements which was required under Section 28(1)(f) of the IBC. The manner in which the RP has raised interim finance and appropriated amounts out of the same largely towards his own fees and fees of the legal professional who was a related party shows lack of transparency on the part of the RP. The Adjudicating Authority has therefore rightly observed that the RP had raised interim finance from a related party for the purpose of clearing his own dues and that of related party. In this backdrop, the Adjudicating Authority was not off the mark in finding the conduct of the RP to be deplorable and deprecatory.

We find no good grounds to disagree with the Adjudicating Authority that the interim finance had been raised by the RP from a related party and has been used to clear his own fees as well as that of the legal professional. We have already noticed that the approval of the first CoC to the raising of interim finance was only preliminary and prefatory in nature and that the RP had gone ahead and inked the Loan Agreement with the interim finance provider without obtaining formal approval of the CoC on the terms and conditions of the Loan Agreement. It is for the CoC to ratify, modify or set aside the CIRP cost and in the present case when CIRP cost was not shown to have been placed before the CoC for its examination, consideration and decision, it was not open for the RP to expend on CIRP costs unilaterally.

We therefore do not find any infirmity with the directions of the Adjudicating Authority in the impugned order not to allow refund of interim finance to the interim finance provider in respect of interest payment and processing fees. We have however find sufficient basis in the contention of Religare that the interim finance has been misused by the RP to pay his own fees and that of the legal professional despite objections raised by the CoC that no substantial work was done during the period when the Section 12A application was pending.

We are of the considered view that there is adequate justification for rationalising the fees appropriated by the RP for himself and the legal professional and to that extent disagree with the Adjudicating Authority for having allowed the entire amount of Rs. 64,74,109/- to the RP and in directing the Liquidator to reimburse this amount in full. We are of the view that it would be reasonable to restrict this amount to Rs. 50 lakhs only and hold that the impugned order passed by the Adjudicating Authority dated 18.04.2024 requires to be modified to that extent.

In sum, all the three Appeals allowed.

Condonation of 455 days delay in refiling the Company Appeal - refiling delay was caused since the Appellant and the counsel were not co-located and also because the Registry had not described the defects appropriately in the defect sheet besides their being divergence of opinion on the computation of period of delay in refiling - HELD THAT:- The IBC is a special and self-contained enactment which was enacted to streamline the bankruptcy proceedings so as to create a climate of expeditious and time-bound closure of insolvency resolution proceedings. In the present case, there is a clear delay of 455 days, and that being so, it is required to find out whether the cause for not refiling the appeal on time was reasonable and justifiable and whether the delay was unavoidable and beyond the control of the Applicant.

It is found that after the initial measures taken by the Applicant to cure the defects pointed out each time within a reasonable time until September 2025, there has been incomprehensible slackness thereafter to remedy the defects pointed out by the Registry. And when we look at the nature of defects which needed redressal, it was basically related to computing the number of days of delay in refiling of the appeal. By all stretch of reasoning, this arithmetical computation of delay was a very trivial matter shorn of complexities which could have been cured easily had the Applicant demonstrated due diligence. However, the explanation which was offered orally during the hearing was that the delay was principally caused because the Applicant, their counsel, and the Registry were not co-located which explanation fails to inspire the confidence. Allowing condonation of delay of a magnitude of 455 days for such light-weighted, feeble and frivolous reasons fails to satisfy persuasively. Keeping in view that time is of essence in CIRP proceedings, the Applicant cannot be shown any indulgence by condonation of the protracted refiling delay of 455 days.

There are no merit in this application seeking condonation of 455 days delay in refiling the appeal. The refiling delay application is rejected.

Impleadment of the Appellant - seeking for the dissolution - proceedings u/s 54 - effective opportunity to be heard - HELD THAT:- As a matter of fact, after meticulously going through the order of liquidation dated 23.11.2022, we find that, the Appellant had been effectively participating in the liquidation proceedings.

Ld. Tribunal while passing the impugned order of 21.08.2025, without considering the aspect of the necessity of the Appellant being impleaded, has proceeded to pass the impugned order on merits thereby closing the application holding that, no orders could be passed on it owing to the earlier order of 17.10.2024 which has been kept in abeyance.

Exclusively owing to the fact that the impugned order does not embark upon or record any finding to meet the pleadings that were raised by the Appellant in his respective Interlocutory Applications, which were the subject matter of consideration as preferred in IA (IBC) / 2369 (CHE) / 2023 and there is no adjudication on the merits of the application, coupled with the fact that the reason assigned for passing of the order dated 17.10.2024, do not repose much confidence, as it is not foundationed on any legal sound basis, the impugned order dated 21.08.2025 is hereby quashed.

The proceedings of IA (IBC) / 2369 (CHE) / 2023 is revived back to its original number, with a request to the Ld. NCLT, Chennai, to decide the IA (IBC) / 2369 (CHE) / 2023 afresh on its merits after giving an effective opportunity to the Appellant to have his say in the proceedings of Section 54 of the I & B Code, 2016, before the Ld. NCLT, Chennai.

The consequential effect of the above directions would be that the impleadment of the Appellant, being IA, as respectively preferred in each of the Company Appeals would be deemed to be allowed.

CIRP - Settlement after payment of entire claimed debt as basis for setting aside admission - Challenged the order by which an application filed u/s 7 of the Code by Respondents No. 1 to 3 was admitted for the resolution - absence of any other creditor's claim - Respondent No. 4 (IRP) has submitted that after the admission of the application filed u/s 7 and pursuant to his appointment, he made the publication on 15.06.2025 and fixed the last date for submission of the claims by the creditors as 27.06.2025. - HELD THAT:- Keeping in view the law laid down by this Court in the case of Sachin Malde [2025 (4) TMI 1751 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI [LB]], we are of the considered opinion that in the absence of any claim made by the creditors other than the one who have filed the application under Section 7, despite the fact that due publication was made by the IRP, this court can exercise jurisdiction for settling the dispute between the parties, before this court, in spite of asking the financial creditor to file an application under Section 12A of the Code in terms of the decision of the Hon’ble Supreme Court in the case of Glass Trust Company LLC [2024 (10) TMI 1185 - SUPREME COURT (LB)]

Consequently, the present appeal is hereby disposed of by setting aside the impugned order.

Abuse of dominance - prima facie case - closure of information under Section 26(2) - principles of natural justice - power of the Commission to regulate its procedure - Regulation 19 of the Competition Commission of India (General) Regulations, 2009 - relevant market delineation for non-coking coal - commercial dispute vs. competition concern

Principles of natural justice - closure of information under Section 26(2) - power of the Commission to regulate its procedure - Regulation 19 of the Competition Commission of India (General) Regulations, 2009 - Whether the Commission violated principles of natural justice by closing the information without issuing notice or holding a hearing under Section 26(2) of the Competition Act, 2002. - HELD THAT: - The Tribunal examined Section 26(2) which mandates that where the Commission is of the opinion that no prima facie case exists, it shall close the matter forthwith and send a copy of its order to the parties concerned; no notice is envisaged at this stage. Regulation 19 of the Commission's General Regulations echoes subsection (2) and requires communication of the closure order to the parties. Section 36(1) requires the Commission to be guided by principles of natural justice and permits the Commission to regulate its own procedure, but neither the statutory provision nor the Regulations require issuance of notice to the informant before closure under Section 26(2). The impugned order went beyond mere closure by examining the merits, delineating the relevant market for noncoking coal, and recording reasons why the respondent was not dominant; thus the Commission issued a speaking order and balanced statutory requirements with reasoning. Consequently, the complaint that natural justice was denied was found untenable. [Paras 7, 9, 10, 13]

No violation of principles of natural justice; Commission was not required to give notice before closure under Section 26(2) and the impugned speaking order complied with statutory provisions and Regulations.

Relevant market delineation for non-coking coal - abuse of dominance - commercial dispute vs. competition concern - Whether the material before the Commission established dominance or an abuse by the respondent in the relevant market such that investigation should continue. - HELD THAT: - The Commission applied earlier coal precedents to delineate the relevant product and geographic market as production and sale of noncoking coal to thermal power generators in India, noting lack of substitutability of imported coal. It considered production shares and ownership structure, observed that the respondent's share in noncoking coal production was meagre and that it is not related to Coal India Limited (CIL), and concluded the respondent is a competitor to CIL and not dominant. The Commission therefore held that no case of contravention of Section 4 was made out and that the dispute appeared commercial in nature with remedies lying elsewhere. [Paras 8, 11, 12, 13]

Commission concluded no prima facie case of dominance or abuse; information closed as a commercial dispute without competition concern.

Final Conclusion: Appeal dismissed. The Tribunal upheld the Commission's closure of the information under Section 26(2) as lawful and not in breach of natural justice; the Commission's speaking order that no prima facie case of dominance or abuse existed was sustained and the appellant's remedy was held to lie before an appropriate forum other than the Commission.

Seeking grant of bail - Money Laundering - proceeds of crime - diversion/siphoning off the said loan amount, thereby failing to repay the said loan amounts to the banks - key member in the crime conspiracy - reasonable grounds to believe or not - applicability of the twin conditions for bail u/s 45 of the PMLA - it was held by High Court that 'Considering the entirety of facts and circumstances, the Court is inclined to grant bail to the present applicant. The applicant is therefore directed to be released upon his furnishing a personal bond in the sum of Rs. 1 lakh with two sureties of the like amount each to the satisfaction of learned trial court/Duty Magistrate, subject to fulfilment of conditions imposed.'

HELD THAT:- The Apex Court is not inclined to interfere with the impugned judgment and order of the High Court; hence, the special leave petition is dismissed.

Money Laundering - scheduled offences - attachment of properties - validity of encumbrance of a third party in a property attached under PMLA - Appellate Tribunal is the appropriate forum for such a bonafide third party with prior interest in the property to seek redress or not.

Money Laundering - scheduled offences - attachment of properties - validity of encumbrance of a third party in a property attached under PMLA - HELD THAT:- In the present case it is not disputed even by the respondent directorate that the appellant Bank is a bonafide third party which had a legitimate and prior interest in the properties which subsequently became the subject-matter of attachment under the PMLA. Therefore, in accordance with the order of the Hon’ble Delhi High Court, the attachment would have to take a back seat, allowing the Bank to enforce its claim by disposal of the subject property. Only the remainder of the value of the property, if any, thereafter is to be made available to for purposes of PMLA.

Appellate Tribunal is the appropriate forum for such a bonafide third party with prior interest in the property to seek redress or not - HELD THAT:- The Appellate Tribunal may pass such orders as it thinks fit “confirming, modifying or setting aside the order appealed against”. An aggrieved party is entitled to invoke the said jurisdiction of the Appellate Tribunal. But, at the same time, the Act also confers jurisdiction on the Special Court to entertain such claim for purposes of restoration of the property during the trial of the case under section 8. The jurisdiction of the Appellate Tribunal and the Special Court in this regard may be co-ordinate, to an extent. However, it has further been held that where the order confirming the attachment has attained finality, or if the order of confiscation has been passed or, further if the trial of a case for the offence under Section 4 PMLA has commenced, the claim of a party asserting to have acted bonafide or having legitimate interest will have to be inquired into and adjudicated upon only by the special court.

The present appeals filed before this Appellate Tribunal are hereby dismissed.

Extended period of limitation - intermediary service - service tax - finality of Tribunal's order - imposition of service tax during the normal period on the ground that IDP Education India Pvt. Ltd. was acting as an ‘intermediary’ between the foreign service providers - HELD THAT:- The learned Counsel in support of his submission that once the issue on merits for the normal period is settled in their favour, the question whether extended period of limitation was invocable or not becomes immaterial.

We, therefore, dismiss the Revenue’s appeal and uphold the findings of the Adjudicating Authority in dropping the demand towards the extended period.

Scope of show cause notice - classification of taxable services -Demand of service tax on data analysis services under the category of ‘Survey and Exploration of Mineral, Oil & Gas Services’ under Section 65(104a) read with section 65(105)(zzv) - Benefit of doubt - allegation of suppression - HELD THAT:- The proposition is settled over the period that the authorities cannot go beyond the scope of the show cause notice to confirm the demand, contrary to what has been proposed therein. On that basis we uphold the submissions of the learned counsel for the appellant that the impugned order upholding the classification contrary to what was proposed in the show cause notice is not sustainable and needs to be set aside.

The allegation of suppression is not sustainable as the Department itself was not clear on the classification of the services. The proposal for classifying the services in the SCN and the one adopted by the Adjudicating Authority substantiates the plea. In fact, in the later decision in the case of the appellant themselves [Final Order [2024 (4) TMI 36 - CESTAT NEW DELHI]], it was decided that the activity undertaken by the appellant with effect from June 1, 2007 the same pertains to mining services made taxable under Section 65(105)(zzzy) of the Act and service tax under TTA Service cannot be charged from the appellant prior to June 1, 2007. The issue being one of interpretation, the benefit of doubt should go in favour of the appellant. In the circumstances, no malafidies can be attributed to the appellant.

We are afraid to agree with the justification given by the learned Special Counsel of the changed classification adopted by the Commissioner to maintain uniformity of classification. The Commissioner was required to adjudicate within the scope of the show cause notice and if he was of the view that the services in question are not covered under the proposed classification, the proper course was to drop the proceedings but he could not have substituted the classification on the basis of an earlier show cause notice dated October 23, 2008 alleging that the said services were classifiable under ‘Technical Testing and Analysis Services’.

We are, therefore, of the view that the impugned order needs to be set aside as being beyond the scope of the show cause notice. The appeal is, accordingly allowed.

Taxability of services -Dredging service - definition of "dredging" - service tax liability - Requirement of dredging apparatus - Binding effect of coordinate bench precedent - Whether the activity with respect to the work undertaken by the appellant pertaining to Buckingham Canal amounts to dredging service is the only issue that arises for our consideration. - HELD THAT:- We find that a coordinate bench of this tribunal has earlier considered the issue regarding activities, similar to that which have been undertaken by the appellant in the present appeal, which were alleged to be dredging services carried out in Buckingham Canal, in the decision in Ramalingam Construction Company (P) Ltd versus CCE & ST, [2018 (7) TMI 620 - CESTAT CHENNAI] We find that this tribunal, after extensively dwelling on the same, had decided the matter in favour of the appellant therein.

We are therefore bound by the aforesaid decision of the coordinate bench and respectfully following the same, we hold that the activities undertaken by the appellant pertaining to Buckingham Canal cannot be considered to be “Dredging Services” so as to be exigible to tax under the Finance Act, 1994. Therefore, the impugned Order in Appeal cannot sustain and is liable to be set aside. Ordered accordingly.

Rejection of the refund claim filed by the appellant in view of the provisions of Section 102 and 103 of the Finance Act, 1994 - services of resurfacing and allied work at an Air Force Station - non-payment of service tax in view of the exemption under Sl. No. 12(a) of N/N. 25/2012-ST dated 20.06.2012 - applicability of principles of unjust enrichment -amount was merely a deposit or duty - HELD THAT:- There is no dispute that the said services were provided by the appellant to the Air Force Station, MES even prior to 01.04.2015 and no service tax was paid in view of the exemption under the existing Entry 12(a) of the Exemption N/N.25/2012 dated 20.06.2012. The Department never raised any objection to the applicability of the said exemption on the services rendered by the appellant. The exemption under Sl No. 12(a) was omitted w.e.f. 01.04.2015 vide N/N. 6/2015 dated 01.03.2015 and as a result the appellant paid the service tax. The exemption was reintroduced under Sl No. 12A of N/N. 9/2016 dated 01.03.2016.

Except for the last part of Sl. No.12A providing for exemption in respect of contract, which has been entered into prior to 1st March, 2015 and on which appropriate stamp duty, where applicable, had been paid prior to such date, the contents of both the entries are absolutely same. There is no distinction in the nature of services prescribed in the two entries which are similarly worded and, therefore, the services which were eligible under Sl.No.12(a) continue to be eligible under Sl. No. 12A. It is not the case of the Revenue that the services provided by the appellant when Sl. No.12(a) was prevalent has undergone any change.

Sub-rule (ii) of Rule 2A has been couched very liberally so as to include all types of additions and alterations to abandoned or damaged structures that make them workable. Applying the same, the necessary conclusion would be that resurfacing and relaying of the runway would amount to additions and alterations to the damaged runway - The services being rendered to MES, a Department of Ministry of Defence which is responsible for the security and safety of the nation, the requirement under Section 102(a) that services are meant predominantly for use other than for commerce, industry, or any other business or profession is satisfied.

The relevant clause in Section 102 reads as, “on which appropriate stamp duty, where applicable, had been paid before that date”. The fallacy in the argument of the Revenue is that they have completely ignored the words, “where applicable”, the simple interpretation of which is, where stamp duty is not applicable, the said requirement will not be enforced. In the present case the service recipient which is the Ministry of Defence, Government of India, were not required to pay stamp duty on such agreements.

Having held that Section 103 contains a self-contained code, a complete mechanism for claiming refund, the High Court rejected the contention that sub-section (3) of Section 103 retains the period of limitation of one year prescribed in the Excise Act and is aimed to protect such a refund application which cover the period beyond such period and concluded that for claiming refund under the said provision, limitation period prescribed elsewhere cannot be adopted ignoring the period prescribed in sub-section (3) of Section 103. Thus the applicability of the provisions of Section 11B are completely ruled out. The contention of the Revenue that the refund cannot be allowed because of the bar in terms of unjust enrichment for claiming refund would not apply to the refunds sought under Section 102/103, where the only requirement is that the assessee satisfies the mandatory conditions provided therein.

The principle of unjust enrichment as provided in Section 11B(2) of CEA will also not be applicable for the reason that in the refund claim, the appellant had categorically prayed that the amount of Rs.3,40,58,797/- be refunded directly to the account of the service recipient who have reimbursed the said amount to the appellant - the appellant cannot be said to have passed on the burden of tax to any other person - there are no reason to justify that the principle of unjust enrichment can be applied in this case.

Whether amount was merely a deposit and not duty? - HELD THAT:- The Tribunal is concurred with the view taken by the Tribunal in M/s. Amit Rishabh [2025 (10) TMI 1350 - CESTAT NEW DELHI] that the amount of service tax cannot be considered to be merely a deposit as Section 102 (2) makes it clear that refund shall be made of all such service tax which has been collected but which would not have been so collected had sub-section(1) been in force all material times. Further, sub-section (3) also makes it clear that an application for the claim of refund of service tax shall be made within a period of six months - logically the amount in question cannot be construed as deposit.

The appellant is entitled to the refund as claimed, however, the same shall be decided by the Assistant Commissioner, on MES being impleaded as a co-applicant in the refund application. The appeal is, accordingly allowed by way of remand.

Short payment of service tax - demand based on the difference between the Balance Sheet and the ST 3 returns without providing any explanation - demand of Service Tax as ‘declared service’ on account of penalty received for breach of contracts - Demand of Service Tax under Section 66A of the Act on account of consultancy services received from foreign companies - Recovery of CENVAT Credit of Rs.10,03,651/- availed by the appellant-assessee during the relevant period - Demand alongwith penalty.

Demand raised and confirmed by comparing the audited profit & loss account and the corresponding year’s Service Tax Return (ST-3) filed by the appellant-assessee, but without analysing the nature of service to determine whether a taxable service liable to Service Tax has been rendered or not - HELD THAT:- Admittedly, the appellant-assessee herein is primarily engaged in the business of purchase and sale of various goods through e-commerce route. The income generated from its business operations are reported in the Profit and Loss Account. The various sources of income of the assessee includes sale of goods; sale of services (domestic and export); Interest on deposits with Banks and others; Dividend from Investment; Profit on sale of investments etc. - it is found that all these incomes are not generated from rendering of any taxable services. It is found that the ld. adjudicating authority, in the impugned order, has construed the difference between the amount shown in the balance sheet and the ST-3 returns as a taxable amount without giving any reason for coming to such conclusion. If the Department wants to demand Service Tax on this amount, then the onus lies on the Department to establish that these amounts have been received towards rendering of taxable service, which has not been done in this case. It is a settled position of law that no demand of Service Tax can be made simply based on the basis of the difference between the Balance Sheet and the ST 3 returns without providing any explanation - the demand raised and confirmed simply on the basis of the difference between the Balance Sheet and the ST 3 returns in the present case, without providing any explanation, is not sustainable and hence, the same is set aside.

Demand of Service Tax as ‘declared service’ on account of penalty received for breach of contracts - HELD THAT:- The appellant-assessee has agreed to the said liability and paid the said amount along with applicable interest much before the issue of the impugned Show Cause Notice. Hence, the imposition of penalty in respect of this amount is not warranted and accordingly, the same is set aside.

Demand of Service Tax under Section 66A of the Act on account of consultancy services received from foreign companies - HELD THAT:- It is observed that the assessee has already paid the said amount along with applicable interest much before the issue of the impugned Show Cause Notice. Therefore, no penalty can be imposed in respect of this amount as well and accordingly, the same is set aside.

Recovery of CENVAT Credit of Rs.10,03,651/- availed by the appellant-assessee during the relevant period - Convention Services - General Insurance Service - Premium paid for Group Accidental Insurance policy taken for the employees - various business support services in the form of fees paid for participating in the conference & seminar organised by various Chamber of Commerce and Industry Bodies - denial on the ground that the amendment brought in the definition of ‘input service’ w.e.f. 01.04.2011 vide Notification No. 3/2011-CE (NT), dated 01.03.2011 has deleted the words “activities relating to business” in the inclusive part of the said definition - HELD THAT:- The word "include" in the statutory definition is generally used to enlarge the meaning of the preceding words and it is by way of extension, and not with restriction. Any service cannot be considered to be outside the ambit of input services simply because it is not covered by the inclusive part. Hence, till any service is covered by the first limb, it is sufficient enough to consider as an input service only - there is no dispute in this case that those input services were used for provision of output services. As the utilisation of these services in providing output service is not in dispute, the appellant/assessee is eligible for availing CENVAT credit on all those input services. Hence, the denial of CENVAT Credit confirmed in the impugned order set aside. As the appellant is found to be eligible for the CENVAT Credit, the question of demanding interest or imposing penalty does not arise and hence the same is set aside.

Demand alongwith penalty - HELD THAT:- The demand had been raised in the impugned Show Cause Notice simply by comparing the audited profit & loss account and the corresponding years’ service tax return (ST-3) without analysing the nature of service to determine whether a taxable service liable to service tax has been rendered or not. From a perusal of the impugned order, it can be observed that the ld. adjudicating authority has dropped the demand based on the explanation and Chartered Accountant’s certificate provided by the Appellant. The Ld. adjudicating authority has given a categorical finding for dropping the said demands - the dropping of the demands in the impugned order upheld and appeal filed by Revenue rejected.

Appeal disposed off.

Cenvat Credit entitlement where service tax has been paid by the recipient - Limitation and extended period of demand in tax proceedings - Documentary requirements for availing Cenvat Credit -manufacture of excisable goods namely Duplex Paper - HELD THAT:- The Adjudicating Authorities have denied availment of cenvat credit also for the reason that same has been availed based on GAR-7 Challan. Apparently GAR-7 Challan is not the document mentioned in Rule 9 of the Cenvat Credit Rules, 2004, based whereupon Cenvat Credit can be availed. However, in terms of proviso to Rule 9(2) of the Rules, any other document, if suffice for all the contents of invoice, can entitle the tax payee to avail the Cenvat Credit. GAR-7 Challan is not on record and it is not the case of the department that said challan does not contain the complete particulars as are required under Rule 9 of the Rules.

Hence, refrain to hold that the GAR -7 Challan was ineligible document for availing Cenvat Credit. Support is drawn from the decision of Riya Travels & Tours [2018 (11) TMI 1804 - CESTAT MUMBAI] as is referred on behalf of the appellant. Hence it is held that the order denying availment of cenvat credit and utilization thereof by the appellant/ taxpayee, even for the normal period is not sustainable.

I do not find any loss to the government exchequer nor any irregularity in the modus operandi adopted by the appellant. Hence the order under challenge is hereby set aside and appeal is hereby ordered to be allowed.

Entitlement to exemption by self-credit under refund mechanism - failure to comply with the pre-clearance intimation requirement in para 2D(c) of Notification No.20/2007-CE (i.e., filing option for self-credit prior to the first clearance -Procedural condition v. substantive condition - liberal construction of exemption notifications - condonable procedural lapse - Notification No.20/2007-CE - Notification No.01/2010-CE, condition 5(d) - HELD THAT:- As in similar set of facts in the case of Saraswati Agro Chemicals India Ltd. [2018 (3) TMI 263 - CESTAT CHANDIGARH] this Tribunal has granted the benefit of exemption notification condition 2(D) of the Notification. Following the same we hold that the condition 2(d) of Notification in question is only a procedural lapse and for that substantial benefit cannot be denied to the Respondent as held by this Tribunal in the case ofLux Industries Limited v. commissioner of Central Excise [2024 (9) TMI 238 - CESTAT KOLKATA]

In view of this we do not find any merit in the appeal filed by the Revenue.

Challenge to assessment and first appellate orders - registered company failed to proved C-Forms according to Rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957 read with Section 8(4) of the CST Act, 1956 despite several reminders - HELD THAT:- It is true that the second appeal preferred by the petitioner was dismissed for want of prosecution vide order dated 17.12.2018 but, the learned Tribunal is not in existence, therefore, the matter cannot be remitted back to the learned Tribunal to decide it on merits.

The petitioner supplied dolomite to respondent No. 5 pursuant to various supply orders in the year 2008-09 & 2010-11 and Form-C as required under the law was not issued in favour of the petitioner by respondent No. 5. The Assessing Authority while passing assessment order imposed 5 % tax in absence of Form-C.

Bare reading of Section 8(4) of the CST Act, 1956, would make it clear that purchaser is under obligation to obtain Form C from the prescribed authority and to provide the same to the seller/supplier, but in the present case on account of unavoidable circumstances, the purchaser/respondent No. 5 failed to provide said document/Form-C to the petitioner, therefore, it could not be produced before the Assessment Officer in the year 2015 and an adverse order was passed against the petitioner - The Form-C has already been provided by respondent No. 5 to the petitioner and same has been placed on record, therefore, without making any observation on merits of the case, the petition is disposed of with a direction to the respondent No.4 to decide the matter afresh after affording due opportunity of hearing to the petitioner.

The orders passed by the Assessment Officer & First Appellate Authority are hereby quashed - Petition disposed off.

Entitlement to regular bail u/s 483- Necessity and proportionality of arrest-custodial interrogation-pre-trial incarceration - prima facie case - economic offences - criminal conspiracy - tampering with evidence - Prolonged pre-trial incarceration violates Article 21 - personal liberty - statutory parameters of arrest - documentary and electronic evidence - HELD THAT:- There is no evidence of any physical manifestation of agreement or common design between the Applicant and other accused so as to constitute an offence under Section 120-B IPC. The mere association or communication, without proof of agreement to commit an illegal act, cannot constitute criminal conspiracy. Reliance is placed on Ram Sharan Chaturvedi v. State of M.P [2022 (8) TMI 1606 - SUPREME COURT] wherein the Apex Court held that criminal conspiracy cannot be inferred from mere association or communication.

It is also significant that no summons, notice, or intimation was ever issued to the Applicant after registration of the FIR. No search or seizure was conducted at his premises, and no recovery whatsoever has been effected from his possession. These admitted facts clearly establish that custodial interrogation was neither required nor indispensable for the purpose of investigation.

The arrest of the Applicant has been effected mechanically and as a matter of routine, without recording satisfaction of the mandatory statutory conditions and in complete disregard of the constitutional mandate under Article 21. Such arrest, unsupported by investigative necessity, amounts to punitive detention at the pre-trial stage, which is impermissible in law.

Tested on the anvil of the settled principles laid down by the Apex Court, the arrest of the Applicant in the present case is manifestly arbitrary, unconstitutional, and unsustainable in law. The continued incarceration of the Applicant serves no legitimate purpose of investigation and is liable to be set aside. The Applicant, therefore, deserves to be enlarged on bail in the interest of justice.

It is a settled principle of criminal jurisprudence that a bail proceeding cannot be converted into a mini-trial, and that issues relating to appreciation of evidence, contradictions, omissions or credibility of witnesses are matters squarely within the domain of trial. In this regard, reliance is placed on the authoritative pronouncement of the Apex Court in Vijay Madanlal Choudhary v. Union of India [2022 (7) TMI 1316 - SUPREME COURT (LB)], wherein it has been categorically held that while considering bail, the Court must confine itself to a prima facie view and must refrain from delving into the evidentiary details so as to record findings which may prejudice either side at the stage of trial.

In view of the overwhelming prima facie material, the grave nature and magnitude of the offence, the systematic and organized manner of commission, the Applicant’s influential position, and the real likelihood of obstruction of justice, the Respondent–State submits that no case for grant of bail is made out The instant bail application is devoid of merits, suffers from suppression of material considerations, and, if allowed, would seriously undermine public confidence in the administration of criminal justice.

This Court cannot lose sight of the fact that the Applicant was not named in the FIR, no recovery has been effected from him, and the prosecution case, insofar as the Applicant is concerned, rests primarily on the statement of one Siddharth Singhania, who has merely stated that certain amounts were transferred to him. At this stage, there is no independent material on record demonstrating that such alleged transfer was at the behest of the Applicant or for his benefit.

Having considered the rival submissions, the nature of allegations, the stage of investigation, the period of custody already undergone, parity with co-accused, and the settled principles of law laid down by the Supreme Court, this Court is of the considered opinion that continued incarceration of the Applicant is neither necessary nor justified. The Applicant has made out a case for grant of regular bail. The ends of justice would be adequately served by enlarging him on bail subject to appropriate conditions, without commenting on the merits of the case. Accordingly, the bail application deserves to be allowed.

The Applicant shall be released on regular bail in connection with the subject crime, upon his furnishing a personal bond.