TaxTMI Updates e-Newsletter
Feb 03,2024

Appellate authority's power to remit to the adjudicating authority - Scope of appellate powers under Section 107(11) of the CGST Act, 2017 - Writ court's supervisory jurisdiction where statutory appellate forum is not constituted - Maintainability of writ petition despite existence of a statutory appeal provision when remedy is illusory

Scope of appellate powers under Section 107(11) of the CGST Act, 2017 - Appellate authority's power to remit to the adjudicating authority - The impugned order of the Appellate Authority remanding the matter to the original adjudicating authority for de novo adjudication is contrary to the statutory mandate in Section 107(11) and is unsustainable. - HELD THAT: - The Court examined the operative portion of the appellate order which set aside the order under appeal and remanded the matter to the original adjudicating authority for de novo adjudication. Section 107(11) prescribes that the Appellate Authority may, after further inquiry, confirm, modify or annul the order appealed against and expressly provides that it shall not refer the case back to the adjudicating authority that passed the said order. The impugned remand therefore falls outside the three statutorily permitted outcomes and represents a failure by the Appellate Authority to exercise its jurisdiction in accordance with law. Where an appellate authority acts beyond or contrary to the statutory prescription, the writ court is entitled to intervene at the threshold and set aside such action. Consequently the remanding direction in the impugned order cannot be sustained; the matter must be placed back before the Appellate Authority to decide within the statutory four-corners by hearing the parties afresh. [Paras 7, 8]

Impugned order setting aside and remanding the matter is set aside; matter remitted to the Appellate Authority to pass a fresh order in accordance with Section 107(11) after affording parties opportunity of hearing.

Writ court's supervisory jurisdiction where statutory appellate forum is not constituted - Maintainability of writ petition despite existence of a statutory appeal provision when remedy is illusory - The preliminary objection that the writ petition is not maintainable because an appeal lies under Section 112 is rejected. - HELD THAT: - The Revenue submitted that the impugned order is appealable under Section 112 and urged non-interference by the writ court. The Court noted, however, that the Tribunal (appellate forum) has not yet been constituted, rendering the statutory remedy presently unavailable. In such circumstances, and given the Appellate Authority's failure to act within the bounds of its statutory powers, the writ court need not decline relief on the ground of availability of an alternative statutory remedy that is effectively non-existent. Accordingly the objection as to availability of statutory appeal was not sustained and the writ petition was entertained to correct the illegality in the appellate order. [Paras 6]

Preliminary objection overruled; writ petition maintainable because the appellate forum is not constituted and the statutory remedy is illusory at present.

Final Conclusion: The writ petition is allowed: the appellate order remanding the matter to the original adjudicating authority is set aside, the petition is held maintainable in view of non-constitution of the Tribunals, and the matter is remitted to the Appellate Authority to decide afresh in accordance with Section 107(11) after hearing the parties.

Interest on delayed carry forward of transitional CENVAT/Input Tax credit - transitional migration of credits under Section 140 of the Central Goods and Services Tax Act, 2017 - no automatic payment of interest on delayed refunds under Section 56 - treatment of writ petition as a representation for administrative adjudication - requirement of a speaking order

Interest on delayed carry forward of transitional CENVAT/Input Tax credit - transitional migration of credits under Section 140 of the Central Goods and Services Tax Act, 2017 - no automatic payment of interest on delayed refunds under Section 56 - requirement of a speaking order - Direction to treat the pending writ petition as a representation and require respondents to decide the claim for interest on the delayed carry forward of admitted transitional CENVAT credit - HELD THAT: - The petition sought carry forward of transitional CENVAT credit and interest on its delayed carry forward. The respondents informed the Court that the subject carry forward arose during the transitional migration of taxpayers under Section 140 and that there is no automatic entitlement to interest on delayed refunds under Section 56; the department indicated that an appropriate order would be passed if an application were filed. Rather than require fresh filing, the Court directed that the petition be treated as a representation confined to the question of grant of interest on the delay in carrying forward the admitted credit, and that the respondents pass a reasoned (speaking) order on that question in accordance with law within four weeks. The Court thereby refrained from pronouncing on the substantive entitlement to interest and left that legal and factual determination to the respondents' adjudication, preserving the petitioner's right to pursue further remedies if dissatisfied with the outcome. [Paras 3, 4, 5, 6]

Petition to be treated as a representation; respondents to pass a speaking order within four weeks on the grant of interest for delayed carry forward of the admitted transitional CENVAT credit, without the Court deciding the substantive entitlement to interest.

Final Conclusion: The Court did not adjudicate the substantive entitlement to interest; it directed that the writ petition be treated as a representation and that respondents decide, by a speaking order within four weeks, whether interest is payable on the delayed carry forward of the admitted transitional CENVAT credit, leaving the petitioner free to pursue further legal remedies if aggrieved.

Requirement of issuance of show cause notice under Section 74(1) of the Uttar Pradesh Goods and Services Tax Act, 2017 - consequences of non issuance of mandatory notice - statutory procedural sequence under Section 74 (interaction of sub sections 74(5), 74(7) and 74(1))

Requirement of issuance of show cause notice under Section 74(1) of the Uttar Pradesh Goods and Services Tax Act, 2017 - consequences of non issuance of mandatory notice - Impugned orders passed without issuance of a show cause notice under Section 74(1) of the Act are without basis and liable to be set aside. - HELD THAT: - The record shows a notice under Section 74(5) was issued on June 4, 2021 asserting tax liability. The court observed that upon non payment, Section 74(7) requires the proper officer to issue a notice under Section 74(1) before passing any adjudicatory order. That mandatory procedural step was not followed and no show cause notice under Section 74(1) was issued; instead the order dated July 30, 2021 was passed. For failure to comply with the statutory procedure of issuing the show cause notice, the orders impugned lack legal basis and must be quashed and set aside. [Paras 3, 4, 5]

Impugned orders dated July 30, 2021 and August 31, 2022 are quashed and set aside for non issuance of the mandatory show cause notice under Section 74(1).

Statutory procedural sequence under Section 74 (interaction of sub sections 74(5), 74(7) and 74(1)) - remand for fresh proceedings after compliance with mandatory notice requirement - Respondents permitted to proceed afresh after issuance of the statutory notice under Section 74(1). - HELD THAT: - Having quashed the impugned orders for procedural non compliance, the court left open the right of the respondents to continue the matter, provided they first issue the notice required by Section 74(1) and thereafter follow the statutory procedure before passing any adjudicatory order. The order therefore sets aside the past adjudication but does not preclude fresh proceedings in conformity with the Act. [Paras 6]

Respondents are at liberty to proceed in the matter after issuing notice under Section 74(1) of the Act.

Final Conclusion: Writ petition allowed: impugned orders dated July 30, 2021 and August 31, 2022 quashed for failure to issue the mandatory show cause notice under Section 74(1); respondents may initiate fresh proceedings only after issuing the statutory notice and following the prescribed procedure.

Violation of principles of natural justice - right to personal hearing - remand for fresh consideration - quashing of assessment order for breach of natural justice - opportunity of being heard under Section 75(4) of the Tamil Nadu Goods and Services Tax Act, 2017

Violation of principles of natural justice - right to personal hearing - opportunity of being heard under Section 75(4) of the Tamil Nadu Goods and Services Tax Act, 2017 - quashing of assessment order for breach of natural justice - remand for fresh consideration - Whether the assessment order dated 30.12.2023 was vitiated by failure to grant a personal hearing and thereby breached principles of natural justice, warranting quashing and remand. - HELD THAT: - The petitioner received intimation in Form GST-DRC-01A on 27.09.2023 and a show cause notice in Form GST-DRC-01 on 29.09.2023. The petitioner replied on 30.10.2023 and expressly requested a personal hearing to place documents. A reminder was issued on 18.12.2023 and the petitioner sought an extension by reply dated 25.12.2023. The respondent proceeded to pass the assessment order on 30.12.2023 without providing the requested personal hearing or addressing the extension request. The court found that the petitioner's request for a personal hearing was disregarded and that the failure to afford a reasonable opportunity of being heard amounted to a breach of the principles of natural justice and of the opportunity contemplated by Section 75(4) of the Tamil Nadu GST Act. For these reasons the impugned order could not stand and interference was warranted.

Impugned assessment order dated 30.12.2023 quashed; matter remanded for reconsideration after providing a reasonable opportunity, including a personal hearing, and fresh assessment to be passed within two months of receipt of this order.

Final Conclusion: The High Court quashed the assessment order for breach of natural justice by failure to grant the requested personal hearing, and remanded the matter for fresh consideration after affording a reasonable opportunity, including a personal hearing, with directions to pass a fresh assessment order within two months.

Refund of unutilized accumulated Input Tax Credit - zero rated supply - requirement to upload shipping bill details in Form GSTR-1 - ICEGATE verification of shipping bill/EGM details - permissibility of amendment/rectification of Form GSTR-1 after claim - consideration of hardcopy shipping bills where portal constraints operate - power to remove difficulties and permit verification beyond strict electronic non-compliance

Requirement to upload shipping bill details in Form GSTR-1 - refund of unutilized accumulated Input Tax Credit - zero rated supply - ICEGATE verification of shipping bill/EGM details - Whether the petitioner's refund claim for unutilized accumulated input tax credit on account of zero-rated supplies could be considered despite non-uploading of shipping bill details in Form GSTR-1, and whether the authorities should permit amendment and accept hardcopy shipping bills for verification. - HELD THAT: - The court found that the petitioner possessed genuine shipping bills which were not uploaded in the portal due to a misconception of law and subsequent portal restriction which prevented amendment of Form GSTR-1 after claiming refund. While the statutory and administrative regime requires shipping bill details to be reflected and allows verification through ICEGATE/EGM and GSTR-1 Table 9, there is no suggestion that the shipping bills were generated later or are inauthentic. The appellate authority relied on Circular No. 125/44/2019 regarding electronic verification, and the respondents asserted that the system is maintained electronically without manual intervention. The court observed that rigid insistence on electronic compliance, without any allegation of inauthenticity, would unjustly deprive the petitioner of a substantial refund. Accordingly, the authorities ought to have power to remove difficulties in appropriate cases and permit rectification or accept hardcopies for verification so that genuineness can be tested through the prescribed electronic checks (including ICEGATE) after allowing amendment. [Paras 19, 20, 21, 22, 23]

Respondent no.2 is directed to take into consideration the hardcopy shipping bills submitted by the petitioner, permit amendment of Form GSTR-1 for verification, and if the bills are found genuine, consider the petitioner's refund claim in accordance with law within eight weeks.

Final Conclusion: Writ petition dismissed; court directed the Assistant Commissioner to permit amendment of Form GSTR-1, consider the hardcopy shipping bills for electronic verification (including ICEGATE checks), and decide the petitioner's refund claim in accordance with law within eight weeks.

Audit report as foundation for initiation of proceedings under Section 73 or Section 74 of the CGST Act - requirement of findings of fraud, wilful-misstatement or suppression of facts in an audit report - jurisdiction to proceed under Section 74 - Form GST DRC-01A and Rule 142(1) of the CGST Rules - prospective operation of amendment to Rule 142(1) - challenge to show cause notice by writ jurisdiction (interference with show cause notice) - use of consolidated accounts versus unit-wise consideration in issuing show cause notice

Audit report as foundation for initiation of proceedings under Section 73 or Section 74 of the CGST Act - requirement of findings of fraud, wilful-misstatement or suppression of facts in an audit report - jurisdiction to proceed under Section 74 - Whether an audit report must record findings of fraud, wilful-misstatement or suppression of facts before the proper officer may initiate proceedings under Section 74. - HELD THAT: - The Court examined Section 65(7) which permits the proper officer to initiate action under Section 73 or Section 74 where an audit results in detection of tax not paid or short paid or ITC wrongly availed or utilised. The statutory text requires the audit report to disclose such detection; it does not mandate that the audit report itself contain findings of fraud, wilful-misstatement or suppression of facts. Sub-section (7) gives the proper officer the option to proceed under Section 73 or Section 74. If proceedings are initiated under Section 74, the proper officer must make the necessary allegations of fraud, wilful-misstatement or suppression of fact in the show cause notice; the requirement of such allegations lies with the show cause notice and not as a precondition that must appear in the audit report. The petitioner did not dispute that such assertions are made in the impugned show cause notice. [Paras 5, 6]

An audit report need not record findings of fraud, wilful-misstatement or suppression of facts for the proper officer to initiate proceedings under Section 74; the validity of initiating Section 74 cannot be defeated on that ground.

Form GST DRC-01A and Rule 142(1) of the CGST Rules - prospective operation of amendment to Rule 142(1) - challenge to show cause notice by writ jurisdiction (interference with show cause notice) - Whether failure to issue intimation in Form GST DRC-01A (in light of amendment to Rule 142(1)) vitiates the impugned show cause notice dated 14.12.2023. - HELD THAT: - The Court noted that Rule 142(1) of the CGST Rules had been amended by substituting 'shall' with 'may', and the impugned show cause notice was issued on 14.12.2023, after the amendment. Even assuming the amendment operates prospectively, the notice-date falls subsequent to the amendment and therefore the amendment applies insofar as the impugned notice is concerned. The petitioner's contention that absence of Form GST DRC-01A intimation invalidates the show cause notice was not found to justify interference under writ jurisdiction. [Paras 7]

The objection based on non-issuance of intimation in Form GST DRC-01A does not invalidate the show cause notice dated 14.12.2023.

Use of consolidated accounts versus unit-wise consideration in issuing show cause notice - challenge to show cause notice by writ jurisdiction (interference with show cause notice) - Whether taking expenditure figures from the petitioner's consolidated balance sheet instead of unit-wise figures for the specified GST registration vitiates the show cause notice. - HELD THAT: - The petitioner's contention that only unit-specific expenditure ought to have been considered was examined. The Court held that this contention, which seeks to challenge the factual basis of the demand, did not warrant pre-emptive interference with the show cause notice under Article 226. The petitioner remains free to raise and substantiate this objection in response to the show cause notice and before the adjudicating authority. [Paras 7, 8]

Use of consolidated expenditure figures, standing alone, does not justify quashing the show cause notice; the petitioner may respond and have the matter adjudicated in the statutory proceedings.

Final Conclusion: Writ petition dismissed; no interference with the show cause notice dated 14.12.2023. Petitioner is granted liberty to reply to the show cause notice; no order as to costs.

Power of arrest under the CGST Act, 2017 - reasons to believe - applicability of Section 41A Cr.P.C. guidelines to arrests under special statutes - formation of reasons to believe requires a nexus between material and belief - admissibility of statements recorded under the GST Act in prosecution - bail is the rule and jail is the exception

Power of arrest under the CGST Act, 2017 - reasons to believe - formation of reasons to believe requires a nexus between material and belief - bail is the rule and jail is the exception - Validity of the arrest of the applicant under the CGST Act, 2017 and the necessity of continued detention - HELD THAT: - The Court examined the statutory scheme under Section 69 read with Section 132 of the CGST Act, 2017 and the guidance of the Supreme Court in Arnesh Kumar and Satender Kumar Antil. Section 69 permits arrest where the Commissioner has reasons to believe that a person committed specified cognizable and non-bailable offences; however 'reasons to believe' must be founded on information and exhibit a rational nexus between the material available and the formation of belief, not mere suspicion. The material on record included the search, seizure of mobile phones and documents, and admissions in a recorded statement that the applicant had obtained multiple GST registrations on the same PAN and had issued invoices without supply. Taking into account the nature of the offences, maximum punishment (up to five years), partial payment of tax by the applicant, the completion of investigation, and the principle that bail is the rule and jail the exception, the Court found further incarceration unnecessary and that detention in jail was not required. [Paras 17, 18, 23, 24, 25]

Arrest was not a ground for continued detention; applicant to be released on bail subject to conditions.

Applicability of Section 41A Cr.P.C. guidelines to arrests under special statutes - power of arrest under the CGST Act, 2017 - Whether the safeguards and recording requirements in Section 41A Cr.P.C. and the directions in Arnesh Kumar / Satender Antil are inapplicable to arrests under the CGST Act - HELD THAT: - The Court considered contentions that Section 41A Cr.P.C. and the guidelines in Arnesh Kumar do not bind GST officers by reason of the CGST Act being a special statute with its own arrest provision. It held that statutory conferral of power to arrest under Section 69 does not render the protections and principles against arbitrary arrest inapplicable; the guidelines and the requirement that reasons for arrest be rationally grounded are of general application and must inform exercise of arrest powers under the CGST Act, particularly where punishments are for terms less than seven years. The distinction in language between 'reasons to be recorded' (Section 41A) and 'reasons to believe' (Section 69) does not justify ignoring the mandate that arrests be supported by cogent reasons and not mere suspicion. [Paras 13, 19, 20, 21, 22]

Safeguards and principles expounded in Arnesh Kumar and Satender Antil apply to arrests under the CGST Act and must inform exercise of power under Section 69.

Admissibility of statements recorded under the GST Act in prosecution - relevancy of statements recorded in response to summons - Legal relevance and immediate evidentiary effect of the applicant's recorded statement made pursuant to summons under the CGST Act - HELD THAT: - The Court noted that Section 136 of the CGST Act makes statements recorded in response to summons relevant for prosecution in specified circumstances, but their substantive admissibility arises at trial subject to the conditions in Section 136. While the recorded admissions form part of the material relied upon for forming reasons to believe, Section 136 itself operates at the stage of trial and does not automatically convert a recorded statement into conclusive evidence for all purposes at the investigation stage. [Paras 16]

Recorded statement is material for investigation and formation of belief but its formal admissibility in prosecution is governed by Section 136 and is to be determined at trial.

Final Conclusion: Criminal application allowed; applicant granted bail in the DGGI/INTL/1082/2023 case on furnishing P.R. bond and surety, subject to conditions including cooperation with investigation, surrender of passport and travel restrictions.

Ex-parte order - order under Section 73 of the CGST Act - service of notice via GST portal / View Notices and Orders - opportunity of hearing / rule of natural justice - quashing and remand for fresh adjudication

Ex-parte order - service of notice via GST portal / View Notices and Orders - opportunity of hearing / rule of natural justice - quashing and remand for fresh adjudication - Impugned order dated 13.06.2022 passed under Section 73 was issued and operated without giving the petitioner an opportunity to reply or an oral hearing and was therefore liable to be quashed and set aside, with the proceedings remitted for fresh consideration after affording opportunity. - HELD THAT: - The Court examined the manner in which notices and orders are required to be made available on the GST portal and relied on the portal guidance (reproduced at Exhibit B2) which directs users to Services > User Services > View Notices and Orders. The record showed that the impugned order had not been placed where users are instructed to view/download notices and demand orders and was not otherwise communicated to the petitioner; the order was uploaded only in the "Additional Notices and Order Section" at a later date. In these circumstances, the petitioner could not reasonably be held at fault for not noticing the show cause notice or order on the portal and had no opportunity to file replies or seek an oral hearing before the order was passed. Applying the principles of fair procedure and opportunity to be heard, the Court held that the ex-parte order cannot stand, quashed the impugned order dated 13.06.2022 and remitted the proceedings to the designated officer for fresh adjudication after giving the petitioner an opportunity to reply to the show cause notice and to be heard. The Court kept all contentions open and permitted the petitioner to file its reply within four weeks. [Paras 11, 12, 13, 15]

Impugned order dated 13.06.2022 quashed and set aside; proceedings remitted for fresh decision after giving the petitioner opportunity to reply and an oral hearing.

Final Conclusion: The ex parte order dated 13.06.2022 is quashed and set aside. The matter is remitted to the designated officer for fresh adjudication after affording the petitioner an opportunity to file its reply (within four weeks) and to be heard; all contentions are kept open. No costs.

Prohibition on duplicate adjudication for the same subject-matter - jurisdictional allocation between Central and State under sub-clause (b) of Section 6(2) of the CGST/SGST scheme - interim restraint on proceedings pending resolution of representation

Prohibition on duplicate adjudication for the same subject-matter - jurisdictional allocation between Central and State under sub-clause (b) of Section 6(2) of the CGST/SGST scheme - Whether the CGST authorities could proceed with the Show Cause Notice dated 27.12.2023 when SGST authorities had already initiated proceedings by Show Cause Notice dated 01.12.2023 in respect of the same alleged wrongful availing of Input Tax Credit for June, 2018 March, 2019. - HELD THAT: - The Court noted that the SGST authorities had initiated proceedings by Show Cause Notice dated 01.12.2023 and that the petitioner had filed a reply to that notice. In view of the statutory prescription contained in sub-clause (b) of sub-section (2) of Section 6 of the CGST/SGST scheme concerning allocation of jurisdiction between Centre and State and the avoidance of overlapping proceedings, the CGST authorities ought not to have issued a second Show Cause Notice on the same subject-matter dated 27.12.2023 while the SGST proceedings remained pending. Having regard to the materials on record and the competing notices, the Court directed that the respondent CGST authorities shall not proceed further in terms of the Show Cause Notice dated 27.12.2023 until the next date of listing so that the representation filed before the CGST authorities can be considered and further instructions obtained. [Paras 6]

CGST authorities restrained from proceeding with the Show Cause Notice dated 27.12.2023 until the next date of listing.

Final Conclusion: Proceedings under the Show Cause Notice dated 27.12.2023 issued by the CGST authorities are stayed temporarily; the CGST shall not proceed further on that notice till the next listing, having regard to the prior SGST proceedings and the allocation of jurisdiction under sub-clause (b) of Section 6(2).

Failure to consider documentary evidence - reconsideration on production of GSTR-9C - opportunity of hearing - set aside and remand for fresh decision - CBIC guidelines on recovery proceedings

Failure to consider documentary evidence - reconsideration on production of GSTR-9C - opportunity of hearing - CBIC guidelines on recovery proceedings - Orders of the adjudicating authority and the appellate authority were passed without considering the GSTR-9C submitted by the petitioner and without giving an appropriate opportunity to explain the short payment. - HELD THAT: - The court found on the material before it that the petitioner admitted inadvertent short deposit of tax which was rectified by filing GSTR-9C, but that submission was not considered by either the adjudicating authority or the appellate authority. The petitioner relied upon the CBIC guidelines dated January 7, 2022, which recognise that genuine differences between GSTR-1 and GSTR-3B may exist and require that an opportunity be given to explain such differences and short payments. Given the absence of consideration of the GSTR-9C and the factual commonality, the court concluded that keeping the writ pending for filing of affidavits would only delay resolution. The court therefore set aside the impugned orders and remanded the matter to the adjudicating authority to revisit the issue after taking the GSTR-9C into account, to grant an opportunity of hearing to the petitioner to place all supporting documents, and to decide the matter afresh in accordance with law and the CBIC guidelines. [Paras 7, 8, 9]

Impugned orders set aside; matter remanded to the adjudicating authority to consider the GSTR-9C, grant hearing, and decide afresh within eight weeks from communication of the order.

Final Conclusion: The High Court allowed the writ petition by setting aside the orders of the adjudicating and appellate authorities for failure to consider the GSTR-9C; directed the adjudicating authority to reconsider the claim after granting an opportunity of hearing and to decide the matter within eight weeks.

Filing of GSTR-3B returns under Section 39 - credit to the Government not later than the last date for filing the monthly returns - discharge of tax liability upon deposit by generation of GST PMT-06 - interest liability confined to delayed payment after the due date under Section 50(1)

Filing of GSTR-3B returns under Section 39 - credit to the Government not later than the last date for filing the monthly returns - discharge of tax liability upon deposit by generation of GST PMT-06 - interest liability confined to delayed payment after the due date under Section 50(1) - Validity of the impugned proceeding dated 07.06.2023 passed for belated filing of GSTR-3B returns for 2017-2018 in light of earlier decision in W.P.No.16866 of 2023. - HELD THAT: - The Court applied the principle enunciated in W.P.No.16866 of 2023 (para 72) that where tax collected by a registered person is credited to the account of the Government not later than the last date for filing the monthly returns, the tax liability is discharged from the date of such credit. The Court noted that payment made by generation of GST PMT-06 is immediately credited to the Government account and, for accounting purposes, thereafter deemed credited to the electronic cash ledger as per the Explanation to Section 49(11). Consequently, where such credit to the Government occurs on or before the last date for filing the monthly return, liability is treated as discharged and any liability to pay interest arises only for the delayed period of payment after the due date under Section 50(1). Applying that law to the facts before it, the Court found the impugned proceeding to be untenable and quashed it. [Paras 4, 6]

Impugned proceedings dated 07.06.2023 quashed; writ petition allowed.

Final Conclusion: The writ petition is allowed; the impugned proceedings in GSTN 33AAGCS6736C1ZI/2017-2018 dated 07.06.2023 are quashed in view of the Court's earlier ruling that credit to the Government on or before the last date for filing monthly returns discharges the registered person's liability, and interest is payable only for any delayed payment after the due date. No costs.

Requirement to provide opportunity of personal hearing where an adverse decision is contemplated - principles of natural justice - audi alteram partem - written reply to show-cause notice does not substitute for personal hearing - adjucatory rehearing to be conducted by an officer other than the one who issued the show-cause notice

Requirement to provide opportunity of personal hearing where an adverse decision is contemplated - principles of natural justice - audi alteram partem - Whether Sub-section (4) of Section 75 of the GST Act mandates grant of an opportunity of personal hearing when an adverse decision is contemplated even if no written request is made - HELD THAT: - The Court held that sub-section (4) of Section 75 plainly requires that an opportunity of hearing be granted in two situations: (a) where a written request is received from the person chargeable, and (b) where any adverse decision is contemplated against such person. The statutory language is clear and unambiguous and the use of the word 'or' indicates that the second limb operates independently of any written request. Accordingly, when an adverse decision is contemplated, the authority is obliged to grant an opportunity of hearing; failing to do so violates the statutory mandate and the principle of audi alteram partem. The Court rejected the contention that furnishing a written reply to a show-cause notice alone satisfies the requirement of 'opportunity of hearing', explaining that the statutory scheme contemplates both submission of reply and a separate stage for personal hearing (date, time, venue), and that the two are distinct. [Paras 8, 9, 10, 11, 12]

Sub-section (4) of Section 75 mandates grant of an opportunity of personal hearing where an adverse decision is contemplated; omission to provide such hearing vitiates the decision-making process as violative of natural justice and the statute.

Written reply to show-cause notice does not substitute for personal hearing - adjucatory rehearing to be conducted by an officer other than the one who issued the show-cause notice - The consequence of non-provision of personal hearing and the remedial direction for further proceedings - HELD THAT: - Having found failure to provide the statutorily mandated personal hearing, the Court set aside the impugned post-show-cause proceedings and directed that the petitioners be afforded an opportunity of hearing. The Court required that the hearing be conducted by an officer other than the officer who issued the show-cause notice, thereby mandating fresh adjudication of the demand after granting the opportunity of personal hearing. The Court expressly refrained from expressing any opinion on the merits of the tax demand. [Paras 12, 13, 15]

Proceedings set aside; respondents directed to grant personal hearing and to re-adjudicate the matter through a different officer; no opinion expressed on merits.

Final Conclusion: Writ petitions allowed to the extent that impugned post-show-cause proceedings are set aside for non-compliance with Sub-section (4) of Section 75; petitioners to be granted personal hearing and fresh adjudication by an officer other than the one who issued the show-cause notice; no adjudication on merits expressed.

Interim restraint on passing final adjudicatory order - proceedings may continue but final order shall not be passed - time-bar of show cause notices - extension of limitation under Section 168A of the Central Goods & Services Tax Act, 2017 - service by dasti

Interim restraint on passing final adjudicatory order - proceedings may continue but final order shall not be passed - Interim direction restraining passing of any final adjudicatory order in the present proceedings pending further orders of the High Court. - HELD THAT: - The Court issued notice and, as an interim measure, permitted the impugned proceedings to continue subject to a restraint that no final order shall be passed in the matters till the next date. The direction was granted in light of connected proceedings and pending challenges elsewhere to the notifications relied upon by the petitioners, and in order to preserve the parties' positions until fuller consideration. The order is interlocutory and does not decide the merits of the underlying contentions raised in the petitions.

Proceedings to continue but final order shall not be passed pending further orders of the Court.

Time-bar of show cause notices - extension of limitation under Section 168A of the Central Goods & Services Tax Act, 2017 - Preliminary challenge to the notices dated 27.12.2023 and to the notifications extending limitation was noted and listed for further consideration; no adjudication on merits was undertaken. - HELD THAT: - Counsel for petitioners urged that the show cause notices for financial year 2018-19 were time barred and assailed notifications issued under Section 168A extending the time-limit for passing orders under Section 73(10). The Court recorded these submissions, observed that similar challenges are pending before other High Courts, and did not decide the substantive legality or time bar issue at this stage. Those contentions remain for determination on merits on the returnable date.

Contentions regarding time bar and validity of the extension notifications stood noted and retained for adjudication on the returnable date.

Service by dasti - Directions as to service of notice and appearance of respondents were ordered. - HELD THAT: - The Court accepted service on behalf of certain respondents and directed dasti service upon other respondents along with listing the matters for the specified date. The Registrar was directed to place a copy of the order on the file of connected cases to ensure uniform interim treatment. These are procedural directions necessary to secure effective adjudication on the next hearing.

Notice accepted for some respondents; dasti service directed for others and matters listed as directed.

Final Conclusion: Interim order recorded: notice issued, limited procedural directions given (including dasti service), and an interlocutory restraint imposed that proceedings may continue but no final order shall be passed until further orders of the High Court; substantive challenges to time bar and to the notifications under Section 168A reserved for adjudication on the returnable date.

Statutory limitation for filing appeal - initiation of recovery before expiry of limitation - non-implementation of recovery notice within statutory period - appeal with pre-deposit under Section 107 - instalment payment of tax liability under Section 80 - manual filing where electronic system fails

Statutory limitation for filing appeal - initiation of recovery before expiry of limitation - non-implementation of recovery notice within statutory period - Validity and implementability of the recovery notice dated 01.01.2024 issued before expiry of the three month period available for filing an appeal. - HELD THAT: - The court held that Section 78 of the Act affords the assessee three months from service of the order to make payment and that recovery proceedings cannot be validly initiated or implemented within that statutory period. Consequently, a notice of recovery issued within the three month limitation could not be acted upon during the statutory period. The conclusion is based on the temporal protection conferred by Section 78 which postpones enforceability of recovery until the limitation for payment has expired. [Paras 7, 11]

The impugned notice issued within the three month period could not be implemented; recovery cannot be proceeded with during the statutory period.

Appeal with pre-deposit under Section 107 - statutory limitation for filing appeal - Right and duty of the petitioner to file appeal against the liability comprised in Sl. No. 1 within the unexpired three month statutory period and consequences of failure to do so. - HELD THAT: - The court noted that the order dated 01.11.2023 is appealable and that the period of limitation for filing an appeal under Section 107(1) is three months, which had not expired. The petitioner was permitted to file the statutory appeal within the remaining period after complying with the applicable legal requirements. The court clarified that if the petitioner fails to file the appeal within the statutory period, the respondents would be at liberty to proceed further pursuant to the impugned notice in respect of the amount under Sl. No. 1. [Paras 5, 12, 13]

Petitioner may file appeal in respect of Sl. No. 1 within the statutory three month period; failure to file entitles respondents to proceed under the impugned notice.

Instalment payment of tax liability under Section 80 - manual filing where electronic system fails - Obligation of the authority to consider a manual application under Section 80 for fixing instalments where the electronic system allegedly does not accept an application limited to part of the liability. - HELD THAT: - The court accepted the petitioner's contention that the petitioner wished to seek instalments for the amount under Sl. No. 2 and that the electronic system would not accept an application confined to that part of the liability. The petitioner was directed to file an appropriate manual application under Section 80 within one week from receipt of the order; the authority was directed to consider the request for fixing instalments in accordance with law. The court further observed that if the petitioner fails to approach the authority as directed, the authority would be free to proceed with recovery in respect of Sl. No. 2. [Paras 6, 9, 14, 15, 16]

Petitioner to file manual Section 80 application within one week; authority to consider request for instalments as per law, failing which authority may proceed with recovery for Sl. No. 2.

Final Conclusion: Writ petition disposed of by directing that (a) recovery notice issued within the three month limitation cannot be implemented during the statutory period; (b) the petitioner may file appeal in respect of Sl. No. 1 within the unexpired limitation period, failing which respondents may proceed; and (c) the petitioner may file a manual Section 80 application within one week for instalments in respect of Sl. No. 2, which the authority shall consider in accordance with law.

Search and seizure - order sheet / note sheet as internal official document - disclosure of investigation records and protection of informant identity - show cause notice does not mark culmination of investigation - DGGI powers of investigation and issuance of show cause notices

Search and seizure - order sheet / note sheet as internal official document - disclosure of investigation records and protection of informant identity - Validity of the Deputy Director, DGGI's refusal to furnish certified copies of the search warrant and order sheet/note sheet on the ground that they are internal official documents and disclosure would impede investigation. - HELD THAT: - The Court accepted the DGGI's position that while the search warrant had been shown and acknowledged at the time of search, there is no absolute rule requiring copies of the search warrant or internal order sheets to be supplied on demand. The Court held that issuance of a show cause notice is an interim step and does not conclude the investigative process; disclosure of order sheets/note sheets at that stage would risk revealing sources of information, the identity of informants and material relating to third parties or ongoing investigations, thereby prejudicing ongoing inquiries and prospective prosecutions. For these reasons the Court found that disclosure at the stage when adjudication and prosecutorial decisions remain pending would impede the process of investigation and could unfairly advantage the person under investigation. Applying these considerations, the Court upheld the impugned rejection letters refusing certified copies. [Paras 14, 15, 16, 17, 18]

The rejection letters refusing certified copies of the search warrant and order sheet/note sheet are upheld and the prayers for disclosure are refused.

Show cause notice does not mark culmination of investigation - DGGI powers of investigation and issuance of show cause notices - Legality of the show cause notices issued by the Deputy Director, DGGI for alleged non payment of GST on works contract services. - HELD THAT: - The Court observed that issuance of show cause notices by the DGGI followed completion of the investigative steps by the intelligence unit and that the DGGI is empowered to conduct investigation and issue show cause notices which are thereafter to be adjudicated by the competent Central Tax authority. The Court found that mere issuance of show cause notices does not mean the investigative process has reached finality, but did not find any illegality in issuance of the notices themselves. On the material placed before it the Court concluded that the show cause notices impugned in these petitions were issued in accordance with law. [Paras 14, 18]

The show cause notices issued by the Deputy Director, DGGI for non payment of GST on works contract services are held to have been issued in accordance with law.

Final Conclusion: All challenged rejection letters and related writ petitions are dismissed; the Petitioner's requests for certified copies of the search warrant and order/note sheets are refused, and the show cause notices issued by the DGGI are upheld as lawful.

Income Declaration Scheme, 2016 - Adjustment of advance and self-assessment tax against IDS liability - Declaration deemed never to have been made for non-payment within prescribed time - Misrepresentation or suppression of facts under IDS - Rectification under Section 154 vis-a -vis proceedings under the IDS - Remand for verification of declaration and accounts

Adjustment of advance and self-assessment tax against IDS liability - Income Declaration Scheme, 2016 - Misrepresentation or suppression of facts under IDS - Remand for verification of declaration and accounts - Whether the amount paid by the petitioner as advance tax and self-assessment tax for Assessment Year 2012-13 can be adjusted against the tax liability declared under the Income Declaration Scheme, 2016. - HELD THAT: - The Court recognised that the petitioner satisfied the eligibility requirements of Section 183 of the Finance Act, 2016 and that IDS, 2016 is a beneficial code. However, the respondent had rejected adjustment of the pre-paid amounts (allowing only TDS). The Court observed an apparent inconsistency between the large pre-payments made in AY 2012-13 and the much smaller quantum of tax declared under the IDS for that year, raising an issue of correctness of the declaration and possible misrepresentation or suppression. Consequently, rather than finally adjudicating entitlement to adjustment, the Court set aside the impugned rejection order for a limited purpose and remitted the matter to the respondent/Assessing Officer to examine the petitioner's accounts for AY 2012-13, verify the correctness of the declaration (and arithmetical computations in the Scheme quantification), and thereafter determine whether the declaration can be accepted or denied under the provisions of the Income Tax Act and the IDS, 2016. [Paras 19, 21, 22, 23, 24]

Impugned order set aside for limited purpose; matter remitted to respondent/Assessing Officer to examine accounts for AY 2012-13, verify correctness of the declaration and arithmetical computations, and decide acceptance or denial under the IDS, 2016.

Rectification under Section 154 vis-a -vis proceedings under the IDS - Income Declaration Scheme, 2016 - Whether a rectification petition under Section 154 of the Income Tax Act, 1961 is maintainable to seek correction of Form-4 or other action in relation to a declaration made under the Income Declaration Scheme, 2016. - HELD THAT: - The Court accepted the respondent's position that the IDS, 2016 is a self-contained statutory scheme and only specified provisions of the Income Tax Act (as incorporated by the IDS) apply to proceedings under it. The petitioner had not sought amendment/rectification of an order of the kind contemplated by Section 154 of the Income Tax Act. Accordingly, the remedy under Section 154 was not the appropriate avenue for seeking rectification of matters under the IDS. In view of the remand and the order in the first petition, no separate relief was required in the petition seeking direction to decide the Section 154 application. [Paras 12, 13, 14, 15, 25]

Petition seeking direction to consider rectification under Section 154 dismissed/closed; no direction to dispose Section 154 application made as Section 154 is not the appropriate remedial provision for IDS proceedings and no further order required in view of the remand in the related petition.

Final Conclusion: The rejection order under the IDS, 2016 is set aside for a limited purpose and the matter is remitted to the respondent/Assessing Officer to verify the petitioner's accounts for AY 2012-13, examine the correctness of the declaration and arithmetic quantification under the Scheme, and thereafter accept or deny the declaration under the IDS and Income Tax law; the petition seeking rectification under Section 154 is closed as Section 154 is not the appropriate remedy for matters under the IDS, 2016.

Sanction under Section 151(ii) vs Section 151(i) - validity of reassessment notice under Section 148 - invalidity of notice for want of proper sanction - power to initiate reassessment proceedings under Section 151(ii)

Sanction under Section 151(ii) vs Section 151(i) - validity of reassessment notice under Section 148 - invalidity of notice for want of proper sanction - Whether the notice dated 01/07/2022 issued under Section 148 is vitiated because the prior approval recorded pertains to Section 151(i) instead of the applicable Section 151(ii), and the consequent remedy. - HELD THAT: - The Court applied its earlier decision in Siemens Financial Services Pvt. Ltd. (Writ Petition No. 4888 of 2022) (decided 25/09/2023) holding that for Assessment Year 2016-17 the sanction required to initiate reassessment proceedings by notice under Section 148 must be under Section 151(ii) and not under Section 151(i)Section 151(i) and not to Section 151(ii). That factual position is not disputed by the respondents. Applying the precedent, the sanction is invalid and the notice under Section 148 and all consequential action stand vitiated. The Court declined to adjourn the matter pending any proposed challenge to the Siemens decision in the Apex Court and observed that the respondents remain free to initiate proceedings with proper sanction under Section 151(ii) if they so choose.

The notice dated 01/07/2022 under Section 148 and consequential actions are quashed and set aside for want of valid sanction; respondents may take steps under Section 151(ii) if desired.

Final Conclusion: Petition allowed: the reassessment notice dated 01/07/2022 (relating to Assessment Year 2016-17) and all consequential action are quashed for want of valid sanction under the correct clause; respondents may obtain sanction under Section 151(ii) and proceed afresh if so advised.

Validity of proceedings u/s 153C - Admissibility of loose sheets/diaries as evidence under Section 34 of the Evidence Act - Assessment of income of any other person under Section 153C of the Income tax Act - Requirement of recorded satisfaction and satisfaction note prior to invoking Section 153C - Person specific nature of search under Section 132 and distinction between 'searched person' and 'other person' - Transfer/centralization of cases under Section 127 - requirement of notice, reasons and reasonable opportunity - Application of Section 69A/Section 68 principles for deeming unexplained money - Writ jurisdiction under Article 226 despite availabilty of alternative statutory remedy - recognised exceptions

Admissibility of loose sheets/diaries as evidence under Section 34 of the Evidence Act - Application of V.C. Shukla and Common Cause on loose papers - Diaries/loose sheets seized from third party do not constitute admissible books of account and cannot, without independent corroboration, sustain additions or proceedings. - HELD THAT: - The Court applied the principles in CBI v. V.C. Shukla and Common Cause to hold that unbound/loose sheets are not 'books' within the meaning of Section 34 and hence are of little or no evidentiary value absent independent corroboration. The assessment action and notices which rest solely or substantially on such diaries/loose sheets are contrary to the law laid down by the Apex Court and therefore void. The court observed lack of corroborative material, unavailability of panchanama entries for loose sheets and the retraction of statements relied upon, and concluded that additions based on those materials cannot be sustained. [Paras 25, 26, 42, 43, 51]

Proceedings and assessments founded on the loose sheets/diaries are set aside as contrary to settled law and cannot be relied upon without corroboration.

Transfer/centralization of cases under Section 127 - requirement of notice, reasons and reasonable opportunity - Requirement of communication of reasons for transfer - Transfer/centralization under Section 127 must comply with the requirement of recording reasons and affording/communicating reasonable opportunity; failure to satisfy principles of fair play and communicate reasons vitiates the transfer. - HELD THAT: - The Court examined Section 127 and relevant precedents holding that recording and communication of reasons for transfer are mandatory to enable the assessee to challenge the transfer. On the material before it the court found the process did not satisfy the statutory requirement of fair play and communication and observed authorities' failure to comply with Section 127 procedures, rendering the centralization/transfer susceptible to challenge. The court treated this infirmity as material to the jurisdictional validity of subsequent proceedings. [Paras 28, 29, 31, 41, 43]

Centralization/transfer that does not satisfy the procedural mandate in Section 127 is invalid and undermines subsequent actions premised on that transfer.

Assessment of income of any other person under Section 153C of the Income tax Act - Requirement of recorded satisfaction and satisfaction note prior to invoking Section 153C - Person specific nature of search under Section 132 and distinction between 'searched person' and 'other person' - Notices issued under Section 153C were invalid because essential conditions (satisfaction as to ownership/pertinence, distinction between searched person and other person, and satisfaction note for each assessment year) were not satisfied or properly recorded. - HELD THAT: - The Court analysed Section 153C's scheme and the requirement that an AO of the searched person be 'satisfied' that seized books/documents/assets belong to or pertain to an 'other person' before those materials are transmitted and notices issued. It found the material before the revenue did not establish the requisite satisfaction for the relevant assessment years, consolidated satisfaction notes were used improperly, and the searched/other person distinction was misapplied (material seized from the assessee's own premises or otherwise not shown to belong to an 'other person'). Applying Super Malls and related decisions, the Court held that the statutory pre conditions were not met and quashed the Section 153C notices and consequent assessments for the relevant years. [Paras 32, 33, 36, 51, 53]

Notices and assessments under Section 153C are quashed for want of the mandatory satisfaction and procedural compliance required by the statute.

Writ jurisdiction under Article 226 despite availability of alternative statutory remedy - recognised exceptions - The High Court was justified in entertaining the writ petitions despite alternative statutory remedies because the proceedings impugned were shown to be without jurisdiction or in violation of settled legal principles. - HELD THAT: - The Court reviewed the doctrine that alternative statutory remedies ordinarily preclude writ relief but recalled recognised exceptions (acts wholly without jurisdiction, violation of natural justice, or where remedy is ineffective). Given the grave jurisdictional and legal infirmities found in the transfer, the reliance on inadmissible loose sheets and failure to comply with Section 153C/127 mandates, the Court held that exceptional circumstances warranted exercise of writ jurisdiction under Article 226 rather than relegation to statutory appeals. [Paras 44, 45, 46, 55]

Writ petitions were maintainable and properly entertained in view of jurisdictional defects and legal infirmities in the revenue proceedings.

Final Conclusion: The Division Bench confirmed the Single Judge's order: Section 153C notices and the resulting assessments for the specified assessment years were quashed and the matters remanded for fresh consideration only after compliance with statutory preconditions and reasonable opportunity; the Revenue's intra court appeals were rejected.

Penalty for concealment or furnishing inaccurate particulars of income - tax audit report accompanying return and effect of a computational/uploading error - intention to conceal income or to furnish inaccurate particulars - scrutiny assessment under section 143(3) and detection of error during assessment

Penalty for concealment or furnishing inaccurate particulars of income - intention to conceal income or to furnish inaccurate particulars - tax audit report accompanying return and effect of a computational/uploading error - Validity of penalty proceedings in view of ITAT's finding that the error in the return was inadvertent and there was no intention to conceal or furnish inaccurate particulars - HELD THAT: - The Tribunal found, on the facts, that the assessee had filed the tax audit report along with the return and that the discrepancy in the return arose from an inadvertent mistake by the CFO while uploading the return, not from any deliberate concealment. The High Court agreed with the ITAT's factual conclusion, noting that the tax audit report was furnished and that the error was a computational/uploading mistake analogous to the factual scenario in the cited authority where penalty was set aside. Because the ITAT's conclusion rests on findings of fact about absence of intent and the nature of the error, the Court declined to interfere with the Tribunal's order setting aside penalty proceedings. [Paras 5, 6, 7]

ITAT's finding that there was no intention to conceal and that penalty was not justified is upheld; appeal dismissed on this issue.

Tax audit report accompanying return and effect of a computational/uploading error - scrutiny assessment under section 143(3) and detection of error during assessment - Correctness of CIT(A)'s factual finding that the tax audit report was not filed - HELD THAT: - The Court noted an erroneous factual finding by the Commissioner of Income Tax (Appeals) to the effect that the tax audit report was not filed. The record and the Assessing Officer's acceptance demonstrate that the tax audit report dated 2nd May 2012 was furnished with the return. This factual correction supports the Tribunal's conclusion that the discrepancy was an uploading/computational error rather than deliberate concealment. [Paras 4]

CIT(A)'s finding that the tax audit report was not filed is erroneous; record shows the tax audit report was furnished.

Final Conclusion: The High Court concurs with the ITAT's factual findings that the discrepancy in the return arose from an inadvertent uploading/computational error and there was no intention to conceal income; the CIT(A)'s contrary factual finding was erroneous. The appeal is dismissed.

Taxability of waiver of loan - waiver of loan - nature of loan (working capital v. acquisition of capital assets) - writ jurisdiction where alternative efficacious remedy exists - remand to Tribunal for reconsideration - precedent application (Mahindra & Mahindra Ltd.)

Taxability of waiver of loan - nature of loan (working capital v. acquisition of capital assets) - precedent application (Mahindra & Mahindra Ltd.) - Whether the nature of the loan (working capital or for acquisition of capital assets) is relevant to the tax treatment of waiver of loan for Assessment Year 2006-2007. - HELD THAT: - The Court agreed with the Single Judge that the characterisation of the loan as for working capital or for acquisition of capital assets is immaterial to the legal consequence of the waiver. The benefit of waiver in the case is 'in the shape of money' and therefore falls outside the ambit of Section 24 (iv) of the Income Tax Act as held by the Single Judge. The Court accepted that the assessee had loans waived by a Consortium of Banks and endorsed the view in paragraphs 31 and 32 of the impugned order that the nature of the loan should not alter the tax treatment in the facts of this case. [Paras 10]

Court affirmed the Single Judge's conclusion that the nature of the loan does not affect the tax treatment of the waiver and upheld the findings supporting that view.

Writ jurisdiction where alternative efficacious remedy exists - remand to Tribunal for reconsideration - Whether the writ petition was maintainable despite the existence of an alternative efficacious remedy by way of appeal. - HELD THAT: - The Court acknowledged the general rule that writ jurisdiction should not be exercised where an alternative efficacious statutory remedy exists. However, having regard to the circumstances-particularly that the issue was considered to be covered by Mahindra & Mahindra Ltd. and the Single Judge entertained the petition-the High Court declined to interfere. The Court noted that the matter had been remitted to the ITAT and the Miscellaneous Petition was pending, and observed that appellate interference with the Single Judge's decision to exercise writ jurisdiction was not appropriate in the facts and circumstances. [Paras 11, 12]

Court declined to interfere with the Single Judge's exercise of writ jurisdiction and dismissed the intra-court appeal.

Final Conclusion: Appeal dismissed. The High Court upheld the Single Judge's view that the nature of the loan (working capital or for capital assets) does not alter the tax treatment of its waiver for AY 2006-07, and declined to disturb the exercise of writ jurisdiction in the circumstances, the matter having been remitted to the ITAT for reconsideration.

Faceless assessment scheme - procedure under Section 148A - reassessment under Section 148 - interim stay of notice - arraying of parties

Arraying of parties - Leave to array the National Faceless Assessment Centre as respondent No. 3 was granted. - HELD THAT: - The Court, after producing the order, allowed the petitioner's prayer to add "Assessment Unit, Income Tax, National Faceless Assessment Centre, New Delhi" as respondent No. 3. This direction was procedural and granted to ensure proper representation of the authority implicated by the challenged notices and order. [Paras 1]

Leave granted to array respondent No. 3.

Faceless assessment scheme - procedure under Section 148A - reassessment under Section 148 - interim stay of notice - Interim relief by staying the operation and effect of the impugned notices and order was granted. - HELD THAT: - The petitioner challenged issuance of show-cause notices under Section 148A(b), the order under Section 148A(d) and the subsequent notice under Section 148, contending non-compliance with the CBDT E Assessment Scheme and lack of required approvals and personal hearing. The Court did not adjudicate the merits of those contentions but, exercising its discretionary power, stayed the operation and effect of the specified notices and order pendente lite to preserve the petitioner's position until the next listed date. [Paras 14]

Operation and effect of the specified notices and order stayed until the next hearing.

Final Conclusion: The petition was permitted to the extent of adding the National Faceless Assessment Centre as respondent No. 3, and the Court granted an interim stay of the operation and effect of the impugned notices and order pending further hearing (listed for 5.12.2023).

Genuineness of purchases and accommodation entries - reassessment and reopening under section 147/148 of the Income tax Act, 1961 - onus on the assessee to prove genuineness of claimed purchases - reasonable percentage disallowance to prevent revenue leakage - reliance on information from DGIT (Investigation) to initiate reassessment

Genuineness of purchases and accommodation entries - onus on the assessee to prove genuineness of claimed purchases - reasonable percentage disallowance to prevent revenue leakage - Appropriate adjustment for alleged bogus purchases reflected in books of account for the assessment years 2009-10 and 2010-11 - HELD THAT: - On information from DGIT (Investigation) that the assessee was a beneficiary of accommodation entries, reassessment proceedings were lawfully initiated and notices issued. The assessee failed to produce the suppliers summoned by the AO or the documentary evidence (delivery challans, transport documents) to establish that purchases corresponded to actual supply despite claiming use of materials in construction and payments by account payee cheque. The AO nonetheless did not disallow the entire purchases but made a limited disallowance (12.5% for 2009-10 and 10% for 2010-11). Having regard to (i) failure of the assessee to substantiate the claimed purchases, and (ii) the Revenue's acceptance that materials were used in construction work, the Tribunal held that a reasonable, moderate disallowance is appropriate to safeguard revenue without negating legitimate expenditure. The Tribunal therefore reduced the disallowance and substituted an 8% disallowance of the disputed purchases for both assessment years, observing that this approach prevents revenue leakage while reflecting the factual matrix and appellate moderation of the AO's additions. The Tribunal noted consonance with the view taken by the jurisdictional High Court in earlier precedent and accordingly partly allowed the appeals. [Paras 4, 5]

Disallowance restricted to 8% of the disputed purchases in both assessment years; appeals partly allowed.

Final Conclusion: The Tribunal partly allowed the appeals and reduced the disallowance on alleged bogus purchases to 8% of the disputed purchases for assessment years 2009-10 and 2010-11, finding the assessee failed to prove genuineness of purchases though materials were used in construction.

Disallowance under section 40(a)(ia) for failure to deduct tax at source - certificate under section 197(1) for lower deduction of TDS - reassessment under section 147 and ex parte assessment under section 144 - appellate review of factual verification in absence of assessee's representation

Disallowance under section 40(a)(ia) for failure to deduct tax at source - certificate under section 197(1) for lower deduction of TDS - appellate review of factual verification in absence of assessee's representation - Validity of disallowance of contractual payments on account of failure to deduct TDS and sustainment of that disallowance on appeal where the assessee did not substantiate exemption by a section 197(1) certificate and did not appear before appellate authorities. - HELD THAT: - The A.O. disallowed the payment to the contractor under section 40(a)(ia) on the ground that tax was not deducted at source and the claimed lower deduction certificate under section 197(1) was not issued in the contractor's name as confirmed by the TDS authority. The assessment was completed under section 144 read with section 147 after the assessee failed to comply with notices and did not file a return in response to the notice under section 148; the CIT(A) affirmed the disallowance noting absence of explanation or documentary evidence from the assessee despite opportunities to be heard. The Tribunal, adjudicating ex parte because the assessee failed to appear, examined the record and found nothing to corroborate the assessee's claim of a valid section 197(1) certificate or to controvert the A.O.'s finding; in view of the unverified claim and contemporaneous confirmation from the TDS authority, the Tribunal saw no reason to interfere with the A.O.'s and CIT(A)'s conclusions and accordingly dismissed the grounds of appeal. [Paras 5, 6]

Grounds of appeal dismissed and disallowance under section 40(a)(ia) sustained; appeal dismissed.

Final Conclusion: The Tribunal, after ex parte adjudication due to non-appearance of the assessee, upheld the disallowance of the contractual payment under section 40(a)(ia) for failure to deduct tax at source in AY 2011-12 and dismissed the appeal.

Reopening of assessment under Section 147/148 of the Income tax Act - treatment of sale proceeds as unaccounted business income versus trading business income - explanation of share sale proceeds by documentary evidence (broker records, demat statements, transaction particulars) - inapplicability of precedent treating LTCG findings to reverse declared trading income (Swati Bajaj)

Treatment of sale proceeds as unaccounted business income versus trading business income - explanation of share sale proceeds by documentary evidence (broker records, demat statements, transaction particulars) - treatment of unexplained credits/u/s 68 by reference to business records - Addition made by the Assessing Officer treating sale proceeds of VAS Infrastructure Ltd. as unaccounted business income was not justified and was deleted. - HELD THAT: - The Tribunal found that the assessee consistently treated dealings in the scrip as trading (business) activity and did not claim short term or long term capital gains. During assessment proceedings the assessee furnished purchase and sale details, broker particulars, credit notes and demat account transaction records which were not considered by the Assessing Officer or CIT(A). The summons/statement of an alleged entry provider was not verified against the assessee nor was the assessee afforded opportunity to confront that statement. The sale was executed through a SEBI registered broker and the trading profit/loss in the scrip was reflected in the audited books. On these facts the sale proceeds were satisfactorily explained as arising from trading and could not be treated as unexplained business income or as unexplained credits requiring addition. The Tribunal therefore held that the addition confirmed by the lower authorities was not sustainable. [Paras 7, 8]

Addition deleted and appeal allowed in respect of the impugned sale proceeds.

Inapplicability of precedent treating LTCG findings to reverse declared trading income (Swati Bajaj) - The decision in Swati Bajaj relied upon by the Revenue was held not to apply to the facts of this case. - HELD THAT: - The Tribunal observed that Swati Bajaj concerned a factual scenario where long term capital gains were in issue, whereas in the present case the assessee had declared the dealings as trading/business income supported by records. Because the characterisation and evidentiary basis here differed, the precedent relied upon by the Assessing Officer/CIT(A) was inapplicable. [Paras 7]

Reliance on Swati Bajaj rejected; precedent held inapplicable.

Final Conclusion: The appeal is allowed: the addition made by the Assessing Officer and confirmed by the CIT(A) in respect of sale of VAS Infrastructure Ltd. was deleted as the sale proceeds were satisfactorily explained as trading/business transactions and the precedent relied upon by the Revenue was held not to apply.

Penalty under section 270A - Mis-reporting and under-reporting of income - Attraction of section 270A(9)(c) - mis-reporting in consequence of under-reporting - Requirement of demonstrating nexus between expenditure and income - Evidentiary standard: genuineness, identity and creditworthiness of parties

Penalty under section 270A - Attraction of section 270A(9)(c) - mis-reporting in consequence of under-reporting - Requirement of demonstrating nexus between expenditure and income - Evidentiary standard: genuineness, identity and creditworthiness of parties - Whether penalty under section 270A was rightly imposed for mis-reporting and under-reporting of income for AY 2020-21 - HELD THAT: - The Tribunal found that the assessee had during assessment proceedings furnished books of account, audit report, ledger entries, bank statements, confirmations and ITRs of the counterparties, and had given specific explanation for short-term borrowings and for the interest expense claimed. The assessee also produced receipt from LIC and particulars of loans and parties, and explained that the interest expenditure was incurred wholly and exclusively for earning income on maturity of LIC policy and related transactions. On the materials placed before the Assessing Officer and reiterated before the CIT(A), the Tribunal held that the assessee had established the nexus between the interest expenditure and the income source and had addressed genuineness, identity and creditworthiness of the relevant parties. Consequently, the factual and evidentiary foundation required to invoke section 270A(9)(c) was absent and the invocation of penalty on the basis of alleged mis-reporting/under-reporting was not justified. The Tribunal concluded that both the Assessing Officer and the CIT(A) erred in sustaining the penalty in these circumstances.

Penalty under section 270A set aside; invocation of section 270A(9)(c) not attracted and penalty quashed for AY 2020-21.

Final Conclusion: Appeal allowed; penalty imposed under section 270A for assessment year 2020-21 is quashed and the order confirming the penalty is set aside.

Reopening of assessment under section 147 - notice under section 148 - reasons to believe - application of mind - information from Investigation Wing not being tangible material - live link between material and belief - borrowed satisfaction - quashing of reassessment

Reopening of assessment under section 147 - notice under section 148 - reasons to believe - application of mind - information from Investigation Wing not being tangible material - live link between material and belief - quashing of reassessment - Reopening of assessment was invalid and reassessment quashed. - HELD THAT: - The Assessing Officer recorded reasons for reopening on the basis that no return had been filed and on information from DDIT(Inv.) that the assessee had invested more than 15 crores in construction of house property. Both premises were flawed: the assessee had in fact filed the return for AY 2009-10, and the reasons did not set out any particulars or the basis for the figure of more than 15 crores. The AO neither demonstrated a live link between tangible material and the belief that income had escaped nor undertook independent enquiries; the reopening proceeded on a bald reproduction of the Investigation Wing's report, amounting to a borrowed satisfaction. In those circumstances the reasons at best amounted to suspicion and failed the statutory requirement of an application of mind to form a reasoned belief that income had escaped assessment. Reliance upon the Investigating Wing's information without verification and on incorrect factual premises rendered the reopening invalid; accordingly the reassessment under section 143(3) read with section 147 was quashed. The Tribunal applied the principles and precedents cited by the parties to reach this conclusion. [Paras 8, 9, 14, 15]

Reassessment proceedings initiated by issue of notice under section 148 and completed under section 147 are quashed for lack of application of mind and absence of live link between material and reasons to believe.

Final Conclusion: The reassessment for AY 2009-10 is quashed; the assessee's appeal is partly allowed on this ground and the Revenue's appeal is dismissed as infructuous.

Income to be taxed under the head "income from other sources" on consideration received for issue of shares exceeding fair market value - valuation by Discounted Cash Flow Method as determinative of fair market value for premium on issue of shares - distinct treatment of non-resident and resident subscribers for applicability of section 56(2)(viib) - entitlement to depreciation based on date of commercial production/put to use - remand for production of documentary evidence and fresh adjudication - limitation and time-bar under section 153 read with exclusion period for exchange of information

Income to be taxed under the head "income from other sources" on consideration received for issue of shares exceeding fair market value - valuation by Discounted Cash Flow Method as determinative of fair market value for premium on issue of shares - distinct treatment of non-resident and resident subscribers for applicability of section 56(2)(viib) - Addition under section 56(2)(viib) of the Act of Rs. 14,18,234/- on account of excess share premium on allotment to resident subscribers. - HELD THAT: - The assessee issued shares at a premium of Rs. 440 per share. A valuation report dated 30.11.2015 prepared under the Discounted Cash Flow Method placed the fair market value at Rs. 431.65 per share (including face value). The Assessing Officer accepted the DCF valuation in respect of shares allotted to the non-resident subscriber but disallowed the excess premium in respect of resident subscribers and made addition under section 56(2)(viib). The Tribunal examined the valuation report on record and noted it was prepared in accordance with the Income Tax Rules and DCF norms and found no inconsistency. Having accepted the valuation for non-resident allotments, the Tribunal held that similar treatment must apply to resident allotments and therefore deleted the addition made by the Assessing Officer. [Paras 12, 13]

Addition under section 56(2)(viib) of Rs. 14,18,234/- deleted.

Entitlement to depreciation based on date of commercial production/put to use - remand for production of documentary evidence and fresh adjudication - Claim for full-year depreciation of Rs. 44,39,156/- where Assessing Officer treated assets as put to use for less than 180 days. - HELD THAT: - The Assessing Officer found, on the basis of excise returns, that commercial production commenced in March 2013 and assets were put to use for less than 180 days; accordingly depreciation at half rate was allowed and excess claim disallowed. The assessee contended that trial production and put-to-use occurred earlier (August 2012) but did not produce excise records before the AO. The Tribunal concluded that the factual question of when assets were put to use required verification and therefore remitted the issue to the Assessing Officer with directions to examine excise records and documentary evidence and to adjudicate the claim in accordance with law. [Paras 21, 22]

Issue remitted to the Assessing Officer for verification of excise records and fresh adjudication.

Limitation and time-bar under section 153 read with exclusion period for exchange of information - Challenge that the assessment order dated 30.12.2016 was time-barred under section 153. - HELD THAT: - The assessee argued the assessment should have been completed within two years from the end of the financial year and thus was time-barred. The Tribunal noted that the case had been referred to the Division FT&TR for exchange of information and that the time taken to exchange information (one year) is to be excluded for limitation purposes. Applying the exclusion, the Tribunal held the assessment was within the extended time and dismissed the limitation plea. [Paras 24]

Limitation objection dismissed; assessment held within time.

Final Conclusion: The appeal is partly allowed: the addition under section 56(2)(viib) is deleted; the depreciation claim issue is remitted to the Assessing Officer for verification and fresh adjudication on production of excise records; and the objection to limitation under section 153 is dismissed.

Compensation received on termination or modification of contract chargeable under profits and gains of business or profession - distinction between "business" and "profession" for taxing provisions - non-renewal of contract does not amount to termination/retrenchment - compensation in connection with termination of employment chargeable under section 56(2)(xi)

Compensation received on termination or modification of contract chargeable under profits and gains of business or profession - distinction between "business" and "profession" for taxing provisions - Whether compensation of Rs. 3 crores paid pursuant to non-renewal/settlement of contract is taxable under the head "Profits and gains of business or profession" under the provision applied by the Assessing Officer. - HELD THAT: - The Tribunal examined the wording of the charging provision and concluded that where the Legislature intends to cover both business and profession it uses both words; use of the word "business" alone does not include "profession." Reliance was placed on the reasoning of the Supreme Court that clauses using only "business" must be read as excluding "profession." Applying that principle, the Tribunal held that the provision invoked by the Assessing Officer does not, on its language, encompass receipts of a professional such as the assessee. The Tribunal therefore found that the compensation cannot be treated as taxable under the head "Profits and gains of business or profession" on the facts of this case. [Paras 21, 22, 23, 24, 31]

Addition made under the head "Profits and gains of business or profession" was deleted.

Non-renewal of contract does not amount to termination/retrenchment - compensation in connection with termination of employment chargeable under section 56(2)(xi) - Whether the compensation is taxable under the provision dealing with payments in connection with termination of employment (as applied by the Revenue). - HELD THAT: - The Tribunal considered the factual matrix including the contractual clause providing for expiry if not renewed, the absence of an employer-employee relationship, the settlement before the High Court, and statutory definitions distinguishing retrenchment from non-renewal. It held that the word "termination" in the provision invoked contemplates termination of employment and that non-renewal of a contract of engagement (and the settlement arising therefrom) is not equivalent to termination of employment or retrenchment. On these facts, the provision relating to payments in connection with termination of employment did not apply. [Paras 27, 28, 29, 30, 33]

Addition made under the provision dealing with payments in connection with termination of employment was deleted.

Consistency of assessee's stand regarding nature of receipt - Whether the assessee had taken inconsistent stands before authorities such as to justify the addition. - HELD THAT: - The Tribunal reviewed the record and observed that the assessee did not include the compensation in her profit and loss account and consistently maintained that the receipt was a capital receipt. Payment of self-assessment tax was described as precautionary to avoid interest and did not amount to an admission that the receipt was taxable. The allegation of contradictory stands was found to be factually incorrect. [Paras 11, 35]

Allegation of inconsistent or contradictory stand against the assessee disallowed.

Final Conclusion: The Tribunal allowed the appeal for A.Y. 2020-21, held that the compensation received on non-renewal/settlement is neither taxable as profits and gains of business or profession nor as payment in connection with termination of employment, and directed deletion of the addition.

Principles of natural justice - insufficient notice / inadequate time to comply with statutory notice - Standard Operating Procedure dated 19.11.2020 issued by CBDT (minimum 15 days to comply with notice) - remand for de novo consideration

Principles of natural justice - insufficient notice / inadequate time to comply with statutory notice - Standard Operating Procedure dated 19.11.2020 issued by CBDT (minimum 15 days to comply with notice) - remand for de novo consideration - Cancellation of provisional registration and denial of registration under section 12AB was set aside and remitted for fresh adjudication. - HELD THAT: - The CIT, Exemption issued a notice giving the appellant less than one week to furnish information, which is contrary to the CBDT SOP requiring a minimum of 15 days to respond to notices. The Tribunal found that granting such an unreasonably short period amounted to a violation of the principles of natural justice. Reliance was placed on recent judicial authority observing that insufficient time to respond to a notice vitiates the proceedings. In view of this procedural infirmity, the Tribunal did not decide the merits of the registration application but remitted the matter to the CIT, Exemption for de novo consideration in accordance with law. [Paras 3]

Matter remitted to the file of the CIT, Exemption for de novo consideration; cancellation of provisional registration set aside.

Principles of natural justice - insufficient notice / inadequate time to comply with statutory notice - Standard Operating Procedure dated 19.11.2020 issued by CBDT (minimum 15 days to comply with notice) - remand for de novo consideration - Denial of approval under section 80G(5)(iv) was remitted for fresh consideration consequent to the remand on registration under section 12AB. - HELD THAT: - The Tribunal observed that the order cancelling the registration under section 12AB was vitiated for want of adequate notice and, since the approval under section 80G is linked to registration, the appeal against denial of 80G approval was also remitted. The Tribunal directed that the CIT, Exemption reconsider the matters afresh in accordance with law, without deciding the substantive entitlement to approval under section 80G. [Paras 3]

Appeal against denial of approval under section 80G(5)(iv) remitted to the CIT, Exemption for de novo consideration.

Final Conclusion: Both appeals were partly allowed: the orders denying registration under section 12AB and approval under section 80G(5)(iv) were set aside to the extent indicated and remitted to the CIT, Exemption for de novo consideration due to failure to grant adequate time to comply with the notice, contrary to the applicable SOP and principles of natural justice.

International transaction - Business restructuring / amalgamation as international transaction - Arm's length principle / arm's length price - Transfer pricing provisions (Chapter X) - Benchmarking under other method (Rule 10AB) - Re characterisation and substance over form - NCLT sanction does not preclude transfer pricing scrutiny - Valuation reports based on management determined consideration not admissible for benchmarking - Treatment of cash payment as deemed loan and benchmarking of interest - Interest on Compulsory Convertible Debentures (CCDs) - admissibility linked to ALP of underlying consideration - Restoration of claim for advance tax and TDS credit to Assessing Officer for verification

International transaction - Business restructuring / amalgamation as international transaction - Transfer pricing provisions (Chapter X) - Arm's length principle / arm's length price - Whether the merger/amalgamation transaction between the assessee and its associated enterprise falls within the scope of 'international transaction' under section 92B and is amenable to Chapter X transfer pricing scrutiny - HELD THAT: - The Tribunal held that the corporate reorganisation by way of amalgamation constitutes a transaction of business restructuring and therefore falls within the definition of 'international transaction' in section 92B, including transactions of business restructuring irrespective of immediate effect on profits, income, losses or assets. The Tribunal rejected the assessee's submission that payment of merger consideration on capital account prevents application of Chapter X, noting that Chapter X provides a mechanism to compute arm's length price even where the computation involves notional assumptions. The Tribunal further observed that NCLT sanction and RBI approval operate in different spheres and do not oust the statutory duty of the Transfer Pricing Officer to compute ALP under the Act; the NCLT record itself reserved tax issues to Income Tax authorities. Having concluded that the merger consideration (and interest on CCDs) can bear on profits, the Tribunal affirmed the jurisdiction and applicability of transfer pricing provisions to the transaction. [Paras 18, 20, 21, 22, 25]

Transaction of amalgamation is an 'international transaction' within section 92B and Chapter X applies; the TPO/AO may compute arm's length price for the merger consideration and related interest.

Benchmarking under other method (Rule 10AB) - Valuation reports based on management determined consideration not admissible for benchmarking - Arm's length principle / arm's length price - Whether the valuation reports prepared on management determined purchase consideration could be adopted by the assessee as the 'other method' under Rule 10AB to establish ALP for the merger consideration - HELD THAT: - The Tribunal examined the valuation reports relied upon by the assessee and found both reports recorded that the purchase consideration was determined by the management. Rule 10AB requires the 'other method' to take into account prices charged in similar uncontrolled transactions under similar circumstances; such benchmarking requires a higher degree of independence in valuation. The Tribunal agreed with the TPO that the valuation reports lacked scientific independence and were not suitable for benchmarking the merger consideration. Consequently the lower authorities' rejection of those valuation reports for determining ALP was upheld. [Paras 26, 28, 29, 34]

Valuation reports which reflect management determined consideration are not acceptable for benchmarking under Rule 10AB; the TPO/AO rightly rejected them.

Re characterisation and substance over form - Treatment of cash payment as deemed loan and benchmarking of interest - Arm's length principle / arm's length price - Whether the cash component of the merger consideration (Rs. 100 crore) could be treated as a deemed loan and interest imputed and, if so, whether the rate applied by the TPO (SBI PLR + spread) was appropriate - HELD THAT: - The Tribunal agreed with the lower authorities that in substance the merger was a relocation of shares within the group without transfer of underlying assets by the ultimate parent; issuance of CCDs and cash were found to represent excessive payment in the facts. The TPO's treatment of the cash as a deemed loan and imputation of interest was sustained in principle. However, on the question of appropriate benchmark for interest, the Tribunal accepted the assessee's jurisdictional High Court precedent that the interest rate for a loan should be determined with reference to the country where the loan is received/consumed. Consequently, the Tribunal directed the TPO/AO to compute interest on the deemed loan in conformity with the authority cited (Tata Autocomp Systems Ltd.), modifying the benchmarking to that extent. [Paras 34, 35]

Cash payment may be re characterised as a deemed loan for TP purposes and imputed interest may be charged; benchmarking rate to be computed in conformity with the cited jurisdictional High Court authority (as directed).

Interest on Compulsory Convertible Debentures (CCDs) - admissibility linked to ALP of underlying consideration - Arm's length principle / arm's length price - Whether the interest paid on CCDs ought to be allowed where the CCD issuance itself was held not to be at arm's length - HELD THAT: - The TPO had held that the CCDs and cash represented excessive consideration and, because the CCD issuance was not at arm's length, the ALP of interest on such CCDs should be treated as nil. The Tribunal agreed with the lower authorities that the CCDs and cash constituted excessive payment and upheld the TPO/AO's benchmarking in respect of CCD interest (i.e., denial insofar as the underlying CCD consideration was not at ALP). No defect in the TPO's conclusion on CCDs was found on the facts. [Paras 8, 35]

Disallowance/adjustment of interest on CCDs upheld because the issuance was held not to be at arm's length.

Restoration of claim for advance tax and TDS credit to Assessing Officer for verification - Whether the assessee's claims for advance tax credit and TDS credit should be granted - HELD THAT: - The Tribunal found merit in the assessee's grounds 17 and 18 regarding short grant of advance tax and TDS credit and restored those matters to the file of the Assessing Officer with directions to grant credit in accordance with law after necessary verification. The direction contemplates factual/verification exercise by the AO rather than final adjudication by the Tribunal. [Paras 39]

Claims for advance tax and TDS credit restored to AO for verification and grant in accordance with law.

Initiation of penalty proceedings - prematurity - Whether initiation of penalty proceedings under section 270A should be quashed as premature - HELD THAT: - The Tribunal noted that initiation of penalty proceedings was premature at the stage and consequently dismissed the ground challenging initiation of penalty proceedings. The Tribunal did not undertake substantive adjudication on merits of any penalty liability. [Paras 41]

Challenge to initiation of penalty proceedings dismissed as premature.

Final Conclusion: The Tribunal held that the merger/amalgamation constituted an 'international transaction' within section 92B and Chapter X applied; the assessee's valuation reports were rightly rejected for benchmarking under Rule 10AB; the TPO's re characterisation of cash as a deemed loan and denial of interest on CCDs was sustained in principle, but the rate applicable to the deemed loan interest is to be recomputed in conformity with the cited jurisdictional High Court authority; grounds 3-15 were dismissed, ground 16 allowed as to method (statistical), claims for advance tax and TDS credits were restored to the AO for verification, and the challenge to initiation of penalty proceedings was dismissed as premature.

Findings of fact - substantial question of law - appellate interference

Findings of fact - substantial question of law - appellate interference - CESTAT's conclusions are findings of fact and do not raise any substantial question of law warranting interference by this Court. - HELD THAT: - The Court heard learned counsel for the parties and examined the impugned conclusions of the Customs, Excise & Service Tax Appellate Tribunal. The Tribunal's determinations were identified as findings of fact. No substantial question of law was found to arise from those factual findings, and therefore the Court was not inclined to exercise its appellate jurisdiction to interfere with the Tribunal's conclusions. In view of the absence of any substantial question of law, interference was declined and the appeals were dismissed. [Paras 2]

Appeals dismissed for lack of any substantial question of law arising from the CESTAT's factual findings.

Final Conclusion: Having found the CESTAT's determinations to be findings of fact which do not raise any substantial question of law, the Supreme Court declined to interfere and dismissed the appeals; pending applications stand disposed of.

Amendment of documents under Section 149 of the Customs Act - Proviso requiring documentary evidence in existence at time of clearance - Remand for verification of documentary evidence - Preferential origin documents - Form I and certificate of origin

Amendment of documents under Section 149 of the Customs Act - Proviso requiring documentary evidence in existence at time of clearance - Scope and interpretation of Section 149 of the Customs Act as to when a proper officer may authorise amendment of a bill of entry after clearance for home consumption. - HELD THAT: - The Court construed Section 149 and its proviso, observing that the principal clause permits the proper officer to authorise amendment of any document after presentation. The proviso conditions post-clearance amendments on the basis of documentary evidence that was in existence at the time the goods were cleared, deposited or exported. The Court emphasised that the proviso requires existence of the documentary evidence at the relevant earlier time but does not mandate that such evidence must have been produced or submitted at the time of clearance. Consequently, the Deputy Commissioner's restricted view that Section 149 is confined to rectification of inadvertent and/or bona fide errors was held to be a misconstruction unsupported by the language of the provision. The correct legal position is that amendment after clearance is permissible if it is based on documentary evidence which was in existence at the time of clearance, irrespective of whether that documentary evidence had been produced at that earlier point. [Paras 7, 8, 9]

Section 149 permits amendment after clearance where documentary evidence in support of the claim was in existence at the time of clearance; the Deputy Commissioner erred in treating the provision as limited to inadvertent or bona fide errors.

Remand for verification of documentary evidence - Preferential origin documents - Form I and certificate of origin - Whether the applications to amend the specified bills of entry should be reconsidered having regard to the existence, at the time of clearance, of the relevant preferential origin documents. - HELD THAT: - The Court found that the proper enquiry under Section 149 is factual - to determine whether documentary evidence supporting exemption from Basic Customs Duty was in existence at the time the goods were cleared. The Deputy Commissioner had not undertaken this determination but rejected the amendment requests on the basis of the misconceived legal test. The matter was therefore remanded to the Deputy Commissioner to ascertain, for the bills of entry identified in the impugned order, whether Form I (for Sl. Nos.1-8) and both the certificate of origin and Form I (for Sl. Nos.9-21) were in existence at the time of clearance. The petitioner is to be afforded a personal hearing and the exercise is to be completed within two months from receipt of the order. [Paras 10, 11]

Matter remitted to the Deputy Commissioner for fresh consideration to verify existence of the specified preferential origin documents at the time of clearance and to decide the amendment applications after a personal hearing within two months.

Final Conclusion: The impugned order is set aside to the extent it applied a restricted test; the matter is remanded for fresh consideration limited to verifying whether the requisite preferential origin documents were in existence at the time of clearance, and the petitioner shall be given a personal hearing with the exercise to be completed within two months.

Confiscation under Section 111(d) - Strict liability in confiscation and penalty under Section 111 and Section 112(a) - Mens rea and knowledge requirement under Section 112(b) and penalty for use of false material under Section 114AA - Redemption of confiscated goods and fine under Section 125 - Judicial exercise of discretion in fixation of redemption fine and penalty

Confiscation under Section 111(d) - Strict liability in confiscation and penalty under Section 111 and Section 112(a) - Whether goods imported using forged WPC licences were liable to confiscation under Section 111(d) notwithstanding absence of mens rea on the part of the importers. - HELD THAT: - The Court found as undisputed that import required a WPC licence and that the licences used were forged. Section 111(d) makes goods imported contrary to a prohibition under the Act liable to confiscation. The provision operates on a strict liability basis and does not require mens rea. Consequently, goods imported without valid WPC licences satisfied the conditions of Section 111(d) and were liable to confiscation. The Court expressly answered the framed question of law against the appellants on this point. [Paras 20, 21, 22, 23, 36]

Goods imported using the forged WPC licences were liable to confiscation under Section 111(d); no mens rea is required for confiscation under that provision.

Strict liability in confiscation and penalty under Section 111 and Section 112(a) - Mens rea and knowledge requirement under Section 112(b) and penalty for use of false material under Section 114AA - Whether penalty under Section 112(a) could be imposed on the appellants despite their contention of lack of knowledge, and how Section 112(a) contrasts with Section 112(b) and Section 114AA. - HELD THAT: - Section 112(a) penalises acts or omissions which render goods liable to confiscation and, like Section 111, applies on a strict liability principle without requiring mens rea. By contrast Section 112(b) requires knowledge or reason to believe and thus requires proof of mens rea. Section 114AA imposes a higher penalty where knowing or intentional use of false material is established. The Court held that application of Section 112(a) to the appellants was legally correct because it does not require mens rea; had the authorities proven knowing use of false documents they could have invoked Section 114AA with a greater penal potential, but that was not necessary for upholding the penalty under Section 112(a). [Paras 30, 31, 32, 33, 36]

Penalty under Section 112(a) was lawfully imposed on a strict liability basis; Section 112(b) requires mens rea, and Section 114AA applies where knowing use of false material is established.

Redemption of confiscated goods and fine under Section 125 - Judicial exercise of discretion in fixation of redemption fine and penalty - Whether the quantum of the redemption fine and penalty was excessive or warranted interference by the Court. - HELD THAT: - The adjudicating authority imposed a redemption fine under Section 125 and penalties under Section 112(a) well below the maximum permissible (being less than the full value of the goods). The Court reviewed the proportionality submissions and held that the Commissioner exercised discretion judicially; the Tribunal upheld that exercise and such factual exercise of discretion did not raise a substantial question of law. Given that the authority could have imposed stiffer penalties but did not, the Court found no infirmity warranting interference. [Paras 38, 39, 41, 42, 43]

The quantum of redemption fine and penalty falls within judicial discretion of the authority and does not warrant interference; the discretion was judicially exercised.

Final Conclusion: The Court answered the framed question of law against the appellants: goods imported using forged WPC licences are liable to confiscation under Section 111(d) and penalties under Section 112(a) may be imposed on a strict liability basis; the redemption fine and penalties imposed were within judicial discretion. There being no infirmity, the appeals are dismissed.

Delay and laches - Demand for justice for issuance of mandamus - Maintainability of money claim in a writ petition - Cause of action cannot arise from a prospective pronouncement of law - Refund of anti-dumping duty

Demand for justice for issuance of mandamus - Enforceable legal right - Absence of prior demand for justice and lack of an enforceable legal right defeats maintainability of mandamus. - HELD THAT: - The Court held that a writ of mandamus requires a distinct demand for justice and an existing judicially enforceable right. The petitioner made no prior representation or refund application pointing out illegality in the notifications and therefore failed to establish the prerequisite demand and refusal that would justify issuing mandamus. Authorities were cited for the principle that mandamus will not issue in absence of a mandatory duty shown to have been breached and a prior demand having been made and refused. [Paras 14, 15, 16, 17]

Prayer for mandamus is not maintainable for want of a prior demand for justice and an enforceable legal right.

Delay and laches - Equitable discretion under Article 226 - Petition is barred by delay and laches and therefore not entertainable in exercise of writ jurisdiction. - HELD THAT: - Applying established principles, the Court found the petitioner's belated approach fatal. Delay and laches are relevant equitable considerations in exercise of Article 226 jurisdiction; an inordinate and unexplained delay may prejudice third parties and disturb settled positions. The Court relied upon authorities holding that writ relief is normally refused where there is negligence or omission to assert rights and where delay causes injustice, and concluded that the petition could not be allowed on this ground. [Paras 19, 20, 21, 22]

Writ petition is liable to be dismissed on grounds of delay and laches.

Cause of action cannot arise from a prospective pronouncement of law - A cause of action does not arise merely because a subsequent Supreme Court decision prospectively declares a legal position. - HELD THAT: - The Court rejected the petitioner's contention that the Supreme Court's decision in Kumho Petrochemicals gave rise to a fresh cause of action to attack earlier notifications and seek refunds. It held that accepting such a premise would unsettle concluded actions and create chaos; a prospective judicial pronouncement does not retroactively confer a cause of action to unsettle settled transactions where no grievance was earlier asserted. [Paras 23, 24]

Prospective judicial pronouncement does not, by itself, create a cause of action to maintain the writ.

Maintainability of money claim in a writ petition - Refund of anti-dumping duty - A writ seeking a simplicitor money refund is not ordinarily maintainable; no undisputed right to refund was shown. - HELD THAT: - The Court observed that where the principal relief sought is a money refund, the petitioner stands in the position of a plaintiff in a civil suit and must satisfy limitation and related principles. Authorities establish that writs for pure money claims are ordinarily not maintainable and that refund relief may be granted only where there is no disputed question of fact and the government is withholding money without legal authority. The petitioner failed to demonstrate an undisputed entitlement or that retention breached Article 265 such as to permit summary refund relief. [Paras 25, 26, 27, 28]

Claim for refund of anti-dumping duty cannot be entertained in the writ petition as framed.

Final Conclusion: The writ petition is dismissed for want of maintainability: no prior demand for justice was made, the petition is barred by delay and laches, a cause of action did not arise merely from a subsequent Supreme Court pronouncement, and a simplicitor money claim for refund is not maintainable; petition rejected, no costs.

Export authorization for psychotropic substances under the NDPS Act - confiscation under Section 113(d) of the Customs Act, 1962 - penalty under Section 114(i) of the Customs Act, 1962 - mens rea not required for penalty under Section 114(i) - limitation under Section 28 of the Customs Act not applicable to confiscation or penalty

Export authorization for psychotropic substances under the NDPS Act - Appellant was required to obtain export authorization for Alprazolam tablets under the NDPS Act and Rules. - HELD THAT: - The Tribunal found that Alprazolam tablets are included in the schedule of psychotropic substances and that export of such goods requires authorization from the Narcotics Commissioner under Rule 58 of the NDPS Rules read with Section 8 of the NDPS Act. The defence of ignorance of the legal requirement was rejected as untenable in view of the statutory provisions governing export of scheduled psychotropic substances. [Paras 2, 5]

Requirement to obtain export authorization under the NDPS Act was applicable and not complied with by the appellant.

Confiscation under Section 113(d) of the Customs Act, 1962 - penalty under Section 114(i) of the Customs Act, 1962 - Goods exported without required authorization were liable for confiscation and justified invocation of penalty under Section 114(i). - HELD THAT: - The Tribunal held that the exported Alprazolam tablets were liable for confiscation under Section 113(d) and that imposition of penalty under Section 114(i) followed from that liability. The adjudicating authority's finding that the goods were liable for confiscation was upheld as supported by the statutory scheme and material on record. [Paras 2, 4, 5]

Goods were liable for confiscation and penalty under Section 114(i) was justified.

Mens rea not required for penalty under Section 114(i) - Mens rea is not a requisite for imposing penalty under Section 114(i) of the Customs Act, 1962. - HELD THAT: - The Tribunal accepted the departmental submission and held that Section 114(i) does not require proof of intent; the sole condition for imposition is that the goods are liable for confiscation. Consequently, the appellant's plea that there was no intention to contravene the law did not preclude imposition of penalty under the provision. [Paras 4, 5]

Penalty under Section 114(i) can be imposed without proof of mens rea where goods are liable for confiscation.

Limitation under Section 28 of the Customs Act not applicable to confiscation or penalty - Limitation prescribed by Section 28 of the Customs Act applies to recovery of duty but does not bar confiscation proceedings or imposition of penalty. - HELD THAT: - Relying on the Division Bench view cited, the Tribunal observed that Section 28 governs limitation for recovery of duty but there is no corresponding limitation for initiating confiscation or penalty proceedings. The appellant's reliance on limitation was therefore rejected and past clearances were held not to validate subsequent prohibited exports. [Paras 4, 5]

Limitation under Section 28 does not preclude confiscation or imposition of penalty in the present case.

Appellate reduction of penalty - The appellate forum reduced the penalty imposed by the adjudicating authority. - HELD THAT: - While upholding the substantive findings on liability and applicability of penalty, the Tribunal exercised its remedial discretion to mitigate the monetary penalty imposed by the adjudicating authority, reducing it from the originally imposed amount to a lesser amount. [Paras 5, 6]

Penalty confirmed in principle but reduced by the Tribunal.

Final Conclusion: Appeal dismissed on merits; findings that export authorization under the NDPS Act was required, that the goods were liable for confiscation, and that penalty under Section 114(i) could be imposed without proof of mens rea were upheld. Limitation under Section 28 held inapplicable to confiscation and penalty. Penalty reduced by the Tribunal and the order is disposed accordingly.

Restoration of name struck off from Register - Applicability of Condonation of Delay Scheme (CODS) 2018 - Disqualification of directors versus striking off of company - Exercise of discretionary relief by appellate tribunal - Directions for compliance and consequential punitive action

Restoration of name struck off from Register - Exercise of discretionary relief by appellate tribunal - Appeal allowing restoration of the appellant company's name in the Register subject to conditions. - HELD THAT: - The Tribunal applied the relevant precedent of the NCLAT Principal Bench and, having regard to the appellant's business of providing mental healthcare, the existence of creditors and ongoing plans, exercised its discretionary power to set aside the NCLT order and restore the company's name. The appellant consented to comply with statutory provisions and to pay the requisite charges and late fees. The Tribunal therefore directed restoration on payment of costs and compliance within specified timeframes. [Paras 14]

Appeal allowed; impugned order set aside and company to be restored subject to conditions in paragraph 14.

Applicability of Condonation of Delay Scheme (CODS) 2018 - Disqualification of directors versus striking off of company - CODS Scheme 2018 is not applicable to companies already struck off; CODS is aimed at disqualified directors and defaulting companies to become compliant, not to confer a special privilege for restoration of struck off companies. - HELD THAT: - On construing the CODS Scheme 2018 and the quoted High Court interim orders, the Tribunal held that CODS was intended to provide an opportunity to disqualified directors and defaulting companies to regularise compliance for the purpose of avoiding director disqualification. The scheme does not, as a matter of law, automatically entitle struck off companies to restoration without following the statutory restoration process and paying applicable fees. The Madras High Court interim directions relied upon by the appellant were not a substantive grant of restoration rights to struck off entities. [Paras 11, 12]

CODS 2018 not applicable as a standalone basis to restore a struck off company; restoration must follow the statutory route and conditions imposed by the Tribunal.

Disqualification of directors versus striking off of company - Disqualification of directors for continuous non-filing and striking off of a company are distinct consequences and must be treated separately. - HELD THAT: - The Tribunal explained that failure to file returns can lead to two separate consequences under the statute: disqualification of directors after a continuous three-year default, and striking off of the company after a two-year default. The orders and remedies applicable to director disqualification (including CODS) are distinct from the statutory mechanism for restoration of a struck off company. [Paras 9, 13]

Distinction affirmed: remedies for director disqualification under CODS do not equate to automatic restoration of a struck off company.

Directions for compliance and consequential punitive action - Restoration is subject to payment of cost and filing of all outstanding statutory returns with payment of requisite and late fees; Registrar remains entitled to take punitive or other action for past non-compliance. - HELD THAT: - The Tribunal conditioned restoration on payment of a cost to the RoC and on filing all annual returns and balance sheets with payment of applicable charges and late fees within specified time limits. The RoC was left free to initiate any punitive measures under the Companies Act for prior non-filing or late filing against the company and its directors. [Paras 14]

Restoration granted on stipulated payments and filings; RoC may take punitive steps thereafter.

Final Conclusion: The appeal is allowed to the extent that the appellant company's name is restored in the RoC register subject to payment of costs and statutory/late fees and filing of outstanding returns within the prescribed time; CODS 2018 does not confer an independent right to restore a struck off company and the RoC remains entitled to take punitive action for prior non-compliance.

Condonation of delay - Interference with order of the National Company Law Appellate Tribunal - Dismissal of appeals

Condonation of delay - Delay in filing the petitions was condoned. - HELD THAT: - The Court considered the application for condonation of delay and granted relief, recording satisfaction with the explanation for the delay and permitting the proceedings to continue despite the lapse of time. [Paras 1]

Delay condoned.

Interference with order of the National Company Law Appellate Tribunal - Dismissal of appeals - No interference was warranted with the NCLAT order dated 10 October 2023 and the appeals were dismissed. - HELD THAT: - After consideration of the challenge to the National Company Law Appellate Tribunal's order, the Court found no reason to disturb that order and therefore declined to exercise appellate or supervisory jurisdiction to set it aside. Consequently, the appeals arising from the NCLAT decision were dismissed and any pending applications were disposed of. [Paras 2, 3, 4]

Appeals dismissed; pending application, if any, disposed of.

Final Conclusion: The Supreme Court condoned the delay in filing and, upon review, declined to interfere with the NCLAT order of 10 October 2023; the appeals were dismissed and any pending applications disposed of.

Judicial review of NCLAT orders - interference with appellate tribunal decision - company insolvency appeal - dismissal for lack of merit

Judicial review of NCLAT orders - interference with appellate tribunal decision - company insolvency appeal - Supreme Court declined to interfere with the National Company Law Appellate Tribunal's judgment dated 12 January 2024 in Company Appeal (AT) (Insolvency) No. 201 of 2023 and dismissed the civil appeal. - HELD THAT: - The Court reviewed the impugned judgment of the NCLAT and found no reason to disturb its conclusions. Having considered the submissions, the Bench did not identify any error warranting appellate intervention under the supervisory jurisdiction of this Court in relation to the insolvency appeal. No part of the NCLAT's decision was set aside or remitted for reconsideration.

The appeal is dismissed and the NCLAT judgement dated 12 January 2024 is affirmed.

Final Conclusion: The Civil Appeal is dismissed; the impugned judgment of the National Company Law Appellate Tribunal dated 12 January 2024 is upheld and pending applications, if any, are disposed of.

Commercial wisdom of the committee of creditors - compliance with Section 30(2) of the Insolvency and Bankruptcy Code - treatment of disputed claims in the corporate insolvency resolution process - finality of an approved resolution plan upheld on appeal - confidentiality of the resolution plan

Finality of an approved resolution plan upheld on appeal - commercial wisdom of the committee of creditors - Whether the prayer in I.A. No. 3954 of 2021 to reject the Resolution Plan could be acceded to after the Adjudicating Authority had approved the plan and this Tribunal had upheld that approval. - HELD THAT: - The Tribunal noted that the Resolution Plan submitted by Respondent No. 3 was approved by the CoC with the requisite voting share and that the Adjudicating Authority allowed I.A. No. 1538 of 2021 by order dated 10.05.2022. This approval has subsequently been upheld by this Tribunal in C.A.(AT) Ins. No. 920 of 2022, wherein the plan was held to comply with mandatory requirements. Given that the plan has been judicially sustained, the prayer seeking its rejection in I.A. No. 3954 of 2021 could not be accepted. The Court treated the prior appellate upholding as determinative of the challenge to rejection of the plan and declined to re-open matters already decided by the Tribunal. [Paras 8, 9, 16]

Prayer to reject the Resolution Plan cannot be accepted where the plan has been approved by the Adjudicating Authority and upheld by this Tribunal; appeal dismissed on this ground.

Compliance with Section 30(2) of the Insolvency and Bankruptcy Code - treatment of disputed claims in the corporate insolvency resolution process - Whether the Resolution Plan was non-compliant with Section 30(2) of the Code because it contemplated reimbursement from NHAI for cost claims while the appellant's claim was kept in the disputed category in the CIRP. - HELD THAT: - The Court examined the contention that Schedule 6 (Cost Claims) of the plan referred to contractor claims (including the appellant's) as amounts to be recovered from NHAI, while the appellant's claim remained categorised as 'disputed' in the CIRP. The Tribunal reiterated that the approval of a resolution plan is an exercise of the CoC's commercial wisdom, which is reviewable only on limited grounds, principally non-compliance with Section 30(2). No material was shown to demonstrate that the plan failed to meet the mandatory requirements under Section 30(2). Further, the appellant's claim had been collated, verified and categorised as disputed by the Resolution Professional, a categorisation which the appellant did not challenge before the Adjudicating Authority. In these circumstances, absence of a provision to pay an unadmitted/disputed claim in the plan did not amount to non-compliance warranting interference. [Paras 11, 13, 15]

No ground found to hold the Resolution Plan non-compliant with Section 30(2) on account of the treatment of the appellant's claim; the CoC's approval stands.

Treatment of disputed claims in the corporate insolvency resolution process - confidentiality of the resolution plan - Whether the appellant was entitled to a copy of the Resolution Plan and whether the appellant could challenge the Resolution Professional's categorisation of its claim at the stage of approval of the plan. - HELD THAT: - The Court recorded that the appellant had requested a copy of the approved Resolution Plan and contended against the plan's provisions in relation to its claim. The respondents relied on the confidentiality of the resolution plan and on the fact that the appellant had not challenged the RP's decision to keep its claim under the disputed category during the CIRP. The Tribunal observed that the appellant did not file any challenge to the categorisation before the Adjudicating Authority and that a party cannot, at the plan-approval stage, resurrect objections which were not pressed earlier regarding claim verification and categorisation. Accordingly, the appellant was not entitled to have the plan set aside on the basis of those unchallenged categorizations or merely on the ground that the plan was confidential and a copy was not furnished. [Paras 5, 13, 15]

Appellant not entitled to set aside the approved plan for not receiving a copy or for the RP's unchallenged categorisation of its claim; confidentiality and prior absence of challenge preclude relief.

Final Conclusion: The Appellant's challenge to the rejection of I.A. No. 3954 of 2021 fails: the Resolution Plan was approved by the Adjudicating Authority and upheld by this Tribunal, the plan was not shown to be non-compliant with Section 30(2) of the Code in respect of the appellant's disputed claim, and no entitlement was established to set aside the plan or to receive a copy on the grounds advanced; appeal dismissed.

Commercial wisdom of Committee of Creditors - Evaluation matrix - Challenge Process - Determination of NPV by the Consolidated CoC and its advisors is binding - Committed repayment schedule vs. security receipts classification - Modification of financial proposal subsequent to Challenge Process - Scope of limited judicial review under Section 30(2) of the IBC - Reservation of CoC to approve any resolution plan in its commercial wisdom

Evaluation matrix - Modification of financial proposal subsequent to Challenge Process - Commercial wisdom of Committee of Creditors - Allocation of marks for equity allotment to financial creditors to the Appellant was correctly not made by the CoC and the Adjudicating Authority did not err in rejecting the challenge. - HELD THAT: - The Court found that the Appellant's final Resolution Plan filed on 18.01.2023 (which included an option for CoC to elect equity in lieu of profit sharing) amounted to a change in the financial proposal submitted after the Challenge Process. The Challenge Process Document required that financial proposals during the Challenge Process be unconditional and irrevocable and not modified thereafter. The Appellant's earlier submissions (31.12.2022, 14.01.2023) did not contain an equity allotment; the equity option was introduced only in the 18.01.2023 filing. Further, even on the 18.01.2023 plan the equity election was contingent on an affirmative election by the CoC, which did not occur. The evaluation matrix required a minimum threshold for scoring on equity (threshold not met by Appellant) and, in any event, marks could not be awarded for a post-Challenge conditional option. On these bases the non-allocation of equity marks complied with the Process Document and Evaluation Matrix and did not infringe the CoC's commercial decision-making. The Adjudicating Authority therefore rightly dismissed IA No.413/KB/2023. (See paras 16-19, 30.) [Paras 16, 18, 19]

No marks were payable to the Appellant on equity allotment; IA No.413/KB/2023 was rightly rejected and the process in relation to equity scoring was not vitiated.

Challenge Process - Determination of NPV by the Consolidated CoC and its advisors is binding - Committed repayment schedule vs. security receipts classification - Commercial wisdom of Committee of Creditors - Scope of limited judicial review under Section 30(2) of the IBC - Computation of NPV of Respondent No.2 (NARCL) by the CoC and its advisors treating the security receipts as backed by committed NCDs (and therefore not subject to 60% discount) was in accordance with the Process Document and Evaluation Matrix and not open to challenge by the Appellant. - HELD THAT: - The Challenge Process Document made the Consolidated CoC's and its advisors' determination of NPV binding on Eligible Resolution Applicants and required the use of the discount rates set out in the Evaluation Matrix. The Respondent's Resolution Plan disclosed security receipts backed by committed NCDs redeemable from recoveries of underlying assets; both NARCL and the CoC advisors calculated NPV treating these instruments as having a committed repayment schedule (and thus not attracting the 60% discount applicable to plain SRs/PTCs). The Court held that interpretation and application of the CoC-authored Process Document and Evaluation Matrix is for the CoC and its advisors (the author of the document is the best interpreter where two interpretations are possible). Given the clauses reserving the CoC's commercial discretion (including sub-clause 3.3 reserving the right to approve any plan in its commercial wisdom) and settled Supreme Court law limiting judicial review under Section 30(2) to specified parameters, the Appellant could not challenge the NPV determination merely because it preferred a different quantitative outcome. The Adjudicating Authority therefore correctly rejected the Appellant's IA challenging the NPV computation. (See paras 20-26, 30-32.) [Paras 25, 26, 30, 31, 32]

The NPV as determined by the CoC and its advisors for Respondent No.2 was valid and not susceptible to the Appellant's challenge; IA No.557/KB/2023 was rightly dismissed and the approval of the Resolution Plan was not vitiated by the NPV computation.

Final Conclusion: The Adjudicating Authority did not err in rejecting the applications filed by the Appellant challenging (i) non-allocation of marks for equity allotment and (ii) the NPV computation for Respondent No.2. The determination and scoring by the Consolidated CoC and its advisors, conducted under the Challenge Process and Evaluation Matrix and within the CoC's commercial wisdom, were binding and not amenable to the Appellant's challenge; the appeal is dismissed and the Resolution Plan stands approved.

Framing of charge under Sections 227 and 228 of the CrPC - prima facie case / strong suspicion test for proceeding to trial - admissibility under Section 27 of the Indian Evidence Act - admissibility of electronic records and timing of certificate under Section 65B of the Indian Evidence Act - proof of demand and acceptance as essential ingredients under Sections 7 and 13(1)(d) of the Prevention of Corruption Act - confession of a co-accused and statement recorded under Section 164 CrPC

Framing of charge under Sections 227 and 228 of the CrPC - prima facie case / strong suspicion test for proceeding to trial - Whether the material produced by the prosecution was sufficient to prima facie frame charges against the petitioner. - HELD THAT: - The court applied the settled standard for framing charge - the judge must sift and evaluate prosecution material to see if a prima facie case or strong suspicion exists that would justify trial, without conducting a mini-trial. The material relied upon by prosecution must be such as can be translated into evidence at trial. On examining the prosecution material (including disclosure, audio/video recordings, CFSL reports and witness statements), the Court found that though certain incriminating material existed, the overall material was not sufficient to establish demand and acceptance by the petitioner so as to sustain framing of charges. Consequently the Court held that the trial court's order framing charges was not legally sustainable and quashed the same. [Paras 15, 16]

The impugned order framing charges is set aside and the petitioner is discharged.

Admissibility under Section 27 of the Indian Evidence Act - Whether the disclosure statement of the co-accused which led to recovery of spy-watch and hard disks was admissible under Section 27 of the Indian Evidence Act. - HELD THAT: - The Court examined the requirements of Section 27 and the authorities summarising its scope. It held that the disclosure made by the accused on 16.11.2012 led to recovery of hard disks and a spy-watch and thereby triggered Section 27; the discovery of the recordings in consequence of that disclosure rendered the relevant portion of the disclosure admissible for the purpose of proving the discovered facts. Delay in recording the disclosure did not vitiate its operation under Section 27 in the facts of the case. [Paras 11]

The recovery consequent to the disclosure falls within Section 27 and the disclosure is not rendered inadmissible on that ground.

Admissibility of electronic records and timing of certificate under Section 65B of the Indian Evidence Act - Whether absence of a Section 65B certificate at the charge framing stage rendered the electronic audio/video recordings inadmissible. - HELD THAT: - The Court applied the law in Anvar and Arjun Panditrao Khotkar and related authorities, recognising that a Section 65B certificate is required when electronic records are produced in evidence but that the certificate need not necessarily be filed at the charge framing stage. The certificate can be produced at an appropriate stage of the trial and the trial court has discretion to summon the relevant persons where certificate is not produced. CFSL reports in the present case confirmed continuity and absence of tampering in the recordings. Thus absence of a certificate at the present stage did not render the prosecution case invalid for the purposes of framing charge. [Paras 12]

Lack of a Section 65B certificate at the charge framing stage was not fatal; the certificate can be filed later and the electronic records are not excluded at this stage.

Proof of demand and acceptance as essential ingredients under Sections 7 and 13(1)(d) of the Prevention of Corruption Act - confession of a co-accused and statement recorded under Section 164 CrPC - Whether the prosecution had established prima facie the essential ingredients of demand and acceptance/obtainment under Sections 7 and 13(1)(d) PC Act so as to proceed to trial. - HELD THAT: - The Court reviewed the authorities that demand and acceptance (or obtainment) are sine qua non for offences under Sections 7 and 13(1)(d), and that such facts can be proved by direct or circumstantial evidence. The Court critically examined the transcripts of the audio/video recordings and other material relied upon: it found that the recordings and other material at best indicated delivery of cash on specific dates but did not, on the material before it, sufficiently establish that the petitioner had demanded or accepted the gratification. The statement of the co accused under Section 164 was recognised as weak corroborative evidence, especially given the withdrawal of approver application and the general principle that confession of a co accused cannot by itself suffice where other evidence is unsatisfactory. Weighing the prosecution material as a whole, the Court concluded that the foundational facts necessary to infer demand and acceptance were not made out prima facie. [Paras 13, 14]

Material on record is insufficient to prima facie establish demand and acceptance under Sections 7 and 13(1)(d); charges cannot be sustained and the petitioner is to be discharged.

Final Conclusion: The petition under Section 482 CrPC is allowed. The order dated 12.09.2019 framing charges under Section 120B IPC and Sections 7 and 13(1)(d) read with 13(2) of the PC Act is quashed and set aside and the petitioner is discharged; the trial court is informed for compliance.

Grant of bail under Section 45(1)(ii) of the PMLA - prima facie satisfaction of absence of guilt - requirement of predicate offence for invocation of PMLA - mens rea and bona fide purchaser defence in money laundering prosecutions - non compliance with Section 19 of PMLA and grounds of arrest - proportionality of pre trial detention and right to speedy trial

Grant of bail under Section 45(1)(ii) of the PMLA - prima facie satisfaction of absence of guilt - proportionality of pre trial detention and right to speedy trial - Whether the petitioner satisfied the twin conditions in Section 45(1)(ii) of the PMLA for grant of regular bail and whether bail should be granted. - HELD THAT: - The Court applied Section 45(1)(ii) of the PMLA and the standard of prima facie satisfaction as explained in Vijay Madanlal Choudhary, holding that no meticulous inquiry is required but a prima facie satisfaction that the accused is not guilty and is not likely to commit an offence while on bail suffices. On the Cheshire Home Road allegation the record does not prima facie connect the petitioner to the creation of the alleged forged deed; statements relied upon by ED do not implicate the petitioner in preparing the forged document and the petitioner produced banked consideration and books of account showing legal sources. With respect to the two other properties (Pugru and Siram), there is no predicate offence reported or pending enquiry against the petitioner. The Court also considered the prolonged pre trial incarceration, the stage of the proceedings, the number of witnesses and documents and relevant authority on speedy trial and bail in economic offences, concluding that continued detention would serve no purpose. Balancing these factors the Court found both limbs of Section 45(1)(ii) satisfied - that there are reasonable grounds to believe the petitioner is not guilty and that he is not likely to commit an offence while on bail - and therefore directed release on bail subject to conditions. [Paras 21, 22, 23]

Petitioner granted regular bail on furnishing bond and sureties, subject to conditions specified by the Special Judge, PMLA, Ranchi.

Requirement of predicate offence for invocation of PMLA - mens rea and bona fide purchaser defence in money laundering prosecutions - Whether allegations relating to the Pugru Mauza and Siram Mauza properties prima facie make out the offence of money laundering under PMLA where no scheduled offence/predicate FIR or complaint is shown to be pending against the petitioner. - HELD THAT: - Relying on the principle that PMLA action cannot be based on mere assumption that property is proceeds of crime and that a scheduled offence must have been committed and be registered or the subject of a pending enquiry/complaint, the Court observed that no scheduled offence has been reported or is pending in respect of the Pugru and Siram lands. In absence of any predicate offence, and given the Supreme Court's exposition in Vijay Madanlal Choudhary that 'derived or obtained' connotes criminal activity already accomplished, the Court held that the allegations regarding these two properties do not prima facie constitute offences under Sections 3/4 of the PMLA against the petitioner. The rival title/contention disputes over these lands are inappropriate to decide in a bail proceeding and do not justify continued custodial detention under PMLA. [Paras 20, 21]

Allegations as to Pugru Mauza and Siram Mauza do not, on the record before the court, prima facie establish an offence under the PMLA.

Non compliance with Section 19 of PMLA and grounds of arrest - medical grounds for bail - Whether non compliance with Section 19(1) (written grounds of arrest) and the petitioner's medical condition justified grant of bail. - HELD THAT: - The Court declined to entertain the medical grounds plea because the argument was not pressed during oral submissions and because PMLA does not, by itself, confer bail as a matter of right on health grounds. With respect to alleged non compliance with Section 19, the Court held that the decision in Ram Kishor Arora (cited by ED) is squarely applicable and therefore the non compliance contention did not persuade the Court to order bail on that basis. The Court therefore did not grant bail on the grounds of medical exigency or Section 19 non compliance. [Paras 16]

Medical and Section 19 non compliance grounds were not accepted as independent bases for bail in this proceeding.

Final Conclusion: The High Court granted regular bail to the petitioner under Section 45(1)(ii) of the PMLA on prima facie findings that the petitioner is not guilty of offences under the PMLA and is not likely to commit an offence while on bail; the Court also held that allegations concerning two properties lack the requisite predicate offences to sustain PMLA prosecution at this stage. Bail was ordered on specified bond and surety conditions and subject to usual judicial safeguards, with observations being tentative and without prejudice to trial.

CENVAT credit - input service - exempted service - sale of space or time for advertisement - TV or Radio Programme Production Service - ineligible credit under CENVAT Credit Rules, 2004 - telecast charges as input for generation of Free Commercial Time - precedent and judicial discipline of the Tribunal

CENVAT credit - input service - sale of space or time for advertisement - telecast charges as input for generation of Free Commercial Time - exempted service - Entitlement to CENVAT credit of service tax paid on telecast fees paid to broadcasters in relation to televising the appellant's own programmes and obtaining Free Commercial Time (FCT) which is sold as 'sale of space or time for advertisement' service. - HELD THAT: - The Tribunal found that telecast charges paid to broadcasters are integrally connected to the appellant's ability to obtain Free Commercial Time from the broadcaster. Those free time slots are the means by which the appellant provides the output service of 'sale of space or time for advertisement' and thereby generates taxable revenue. Although production of programmes for the appellant's own account is not a taxable 'programme production' service (and thus may be an exempted activity), the telecast charges are used for providing a distinct output service (sale of space/time for advertisement). Consequently, the telecast charges qualify as input services used in the provision of the taxable output service and are not rendered ineligible for CENVAT credit merely because the appellant also produces exempted output. The Tribunal applied its earlier decisions in the appellant's favour on identical facts and, following judicial discipline, held that the disallowance of input service credit by the adjudicating authority was unjustified and required setting aside.

Disallowance of CENVAT credit on telecast fees set aside; appellant entitled to credit and appeals allowed.

Final Conclusion: The Tribunal set aside the Commissioner's orders confirming demand of CENVAT credit for the periods in question, allowing the appeals and holding that telecast charges paid to obtain Free Commercial Time are eligible as input service credit when used to provide 'sale of space or time for advertisement' services; relief granted accordingly.

Renting of immovable property service - characterisation of licence fee as rent or commercial consideration - consideration linked to gross room/food & beverage income rather than fixed rent - application of coordinate-bench precedent and judicial discipline - service tax liability on licence agreements

Renting of immovable property service - characterisation of licence fee as rent or commercial consideration - application of coordinate-bench precedent and judicial discipline - Demand of service tax under 'renting of immovable property service' on licence fees received by the appellant - HELD THAT: - The tribunal examined whether the licence fee charged by the appellant fell within 'renting of immovable property service' or was a commercial consideration outside that category. The licence agreement provided for licence fees calculated as percentages of Gross Room Income and Food & Beverage Income, and was amended to state that licence fee was inclusive of service tax. The Bench followed the earlier decision of a co ordinate Chennai Bench in the appellant's own case and the reasoning in M/s. Grand Royale Enterprises Ltd., where similar arrangements-fees fluctuating with turnover/profits rather than fixed rent-were held not to constitute renting of immovable property. Finding no change in the material facts or circumstances, the tribunal applied the coordinate bench precedent by judicial discipline and concluded that the demand under 'renting of immovable property service' could not be sustained.

Impugned demand under 'renting of immovable property service' is set aside and the appeals are allowed.

Final Conclusion: The tribunal allowed the appeals, holding that licence fees dependent on hotel turnover/profits do not constitute 'renting of immovable property service', set aside the impugned order and dismissed the service tax demand for the stated periods, with consequential reliefs as per law.

CENVAT credit reversal on common input services - exempted services (including services on which no service tax is leviable) - Rule 6(3) of the CENVAT Credit Rules, 2004 - 6% reversal - Rule 2(e) definition of exempted services - penalty under Rule 15 of the CENVAT Credit Rules, 2004 read with section 78 of the Finance Act, 1994 - section 80 waiver of penalty

CENVAT credit reversal on common input services - Rule 6(3) of the CENVAT Credit Rules, 2004 - 6% reversal - Rule 2(e) definition of exempted services - exempted services (including services on which no service tax is leviable) - Whether works contract services rendered to Chennai Airport, which are not leviable to service tax under clause (zzzza) of Section 65(105), fall within the scope of 'exempted services' under Rule 2(e) and attract reversal under Rule 6(3). - HELD THAT: - The Tribunal held that the definition of 'exempted services' in Rule 2(e) expressly includes 'services on which no service tax is leviable under section 66 of the Finance Act, 1994'. Therefore, services rendered to Chennai Airport, on which no service tax is leviable by virtue of clause (zzzza) of Section 65(105), qualify as 'exempted services' for the purposes of the CENVAT Credit Rules. Consequently, where common input/input services have been used for both taxable and such exempted services, the obligation to reverse an amount equal to 6% of the value of the exempted services under Rule 6(3) is attracted. Applying this principle, the demand equal to 6% of the value of the exempted services was rightly confirmed by the authorities and is upheld along with interest. [Paras 6, 7]

Demand for reversal equal to 6% of the value of services rendered to Chennai Airport upheld; amount confirmed along with interest.

Penalty under Rule 15 of the CENVAT Credit Rules, 2004 read with section 78 of the Finance Act, 1994 - section 80 waiver of penalty - Whether penalty imposed under Rule 15 read with section 78 is sustainable in view of payment made and absence of evidence of suppression or intent to evade tax. - HELD THAT: - The Tribunal recorded that the appellant had already paid the amount equal to 6% on 28.2.2013 and that there was no evidence on record demonstrating suppression of facts or an intention to evade payment of tax. On these facts, the Tribunal found the case fit for relief under section 80 of the Finance Act, 1994 and exercised its power to waive the penalty. Consequently, the penalty imposed under Rule 15 read with section 78 was set aside by invoking section 80. [Paras 8, 9]

Penalty under Rule 15 read with section 78 waived by invoking section 80; penalty set aside.

Final Conclusion: The Tribunal upholds the demand for reversal of CENVAT credit equal to 6% of the value of services rendered to Chennai Airport (treated as exempted services) along with interest, and sets aside the penalty imposed under Rule 15 read with section 78 by invoking section 80.

Extended period of limitation - suppression of facts - support service of business or commerce - small-scale exemption - cum-tax value - penalty

Extended period of limitation - suppression of facts - Whether the Department could invoke the extended period of limitation to confirm the demand for 2006-07 - HELD THAT: - The Tribunal held that invocation of the extended period was not sustainable. The appellant had disclosed the nature of the transactions in response to the summons dated 21.06.2006 and furnished information during subsequent audits; no show-cause notice was issued immediately after those disclosures. Following the principle that "suppression" requires failure to disclose full information with intent to evade payment, and having regard to the audit history and earlier disclosures, the Department failed to establish suppression or wilful misstatement to justify invoking the extended period. [Paras 8]

Extended period of limitation cannot be invoked for the demand relating to 2006-07.

Support service of business or commerce - small-scale exemption - cum-tax value - Whether the amounts retained by the appellant from caterers constituted taxable "support service of business or commerce" and could be subjected to service tax - HELD THAT: - On the merits the Tribunal found the demand unsustainable. It is an admitted fact that the caterers paid service tax on the gross amounts collected from members, which included the sums retained by the appellant. The transactions with the two caterers were similar and the First Appellate Authority itself had partly allowed relief in respect of one caterer. Applying the principles in the cited precedents, the Tribunal held that benefit of the small-scale exemption (Notification No. 6/2005) and entitlement to cum-tax value under Section 67, where applicable, ought to be considered; consequently confirmation of service tax demand was not sustainable. [Paras 9, 10]

The confirmation of service tax demand on the amounts retained from caterers is unsustainable; appellant entitled to consequential relief including consideration of small-scale exemption and cum-tax value benefit as per law.

Penalty - Whether penalties and interest imposed by the adjudicating authority were sustainable - HELD THAT: - Having held that the extended period was not invokable and that the demand on merits was unsustainable, the Tribunal also found the imposition of penalties and interest untenable. The Tribunal noted that the appellant had bona fide and arguable grounds for its stand and that the confirmation of demand with interest and penalties could not be sustained in the circumstances. [Paras 10]

Penalties and interest as confirmed are not sustainable and are set aside.

Final Conclusion: Appeal allowed; confirmation of service tax demand with interest and imposition of penalties set aside and appellant granted consequential relief in accordance with law.

Business Auxiliary Service - Technical Inspection and Certification - reverse charge mechanism - discounts in sale invoices versus consideration for services - service provider and service recipient located in non-taxable territory - penalties imposed for failure to register and pay service tax

Business Auxiliary Service - Technical Inspection and Certification - discounts in sale invoices versus consideration for services - Liability of the appellant to pay Service Tax under Business Auxiliary Service and Technical Inspection and Certification in respect of deductions shown in export invoices - HELD THAT: - The Tribunal found that the Show Cause Notice did not identify the service provider, the service recipient or the consideration passing between them, and there was no evidence that the appellant made any payment to the alleged service provider. The deductions in the export invoices (described as bonus, recycling compensation and inspection charges) were held to pertain to the sale transaction between the appellant and the overseas buyer and to operate as discounts, not as payments for services rendered to the appellant. M/s. JPS Trading, Dubai acted as a buying agent for the foreign buyer and the quality checks were effected through Fashion Force; insofar as these services were arranged for the foreign buyer and the provider/receiver were situated outside the taxable territory, they did not give rise to a taxable service liability on the appellant under the reverse charge mechanism. The Tribunal therefore concluded that the demand and penalties based on BAS and Technical Inspection and Certification lacked factual and legal basis. [Paras 6, 7, 8, 9]

Demand and penalties under Business Auxiliary Service and Technical Inspection and Certification set aside; appellant not liable to pay service tax on the deductions shown in export invoices

Final Conclusion: Impugned Order-in-Appeal No. 359/2013 dated 31.10.2013 is set aside and the appeal is allowed with consequential reliefs as per law.

Taxability of banking and other financial services deducted by foreign banks - Liability under reverse charge as service recipient - Applicability of tribunal precedents resolving res integra on bank collection charges

Taxability of banking and other financial services deducted by foreign banks - Liability under reverse charge as service recipient - Applicability of tribunal precedents resolving res integra on bank collection charges - Amount deducted by foreign banks towards banking charges is not taxable under the category of 'banking and other financial services' as against the exporter. - HELD THAT: - The Tribunal examined whether charges deducted by foreign banks in the course of realization of export proceeds attract service tax as 'Banking and Other Financial Services' payable by the exporter under reverse charge. Relying on the coordinate-bench decisions (including M/s. Kadri Mills and earlier decisions cited therein), the Tribunal held that the services of the foreign bank were rendered to the Indian bank (which had engaged the foreign bank) and not to the exporter. In such circumstances, the exporter cannot be treated as the service recipient liable under reverse charge and the demand of service tax on such foreign bank charges is unsustainable. As the issue was resolved on merits by applying the cited precedents, there was no need to adjudicate separately on invocation of the extended period or on the legality of penalties in this appeal. The impugned order demanding service tax on the foreign bank charges was therefore set aside.

Impugned order set aside; appeal allowed with consequential relief, if any.

Final Conclusion: The Tribunal allowed the appeal, set aside the demand of service tax on charges deducted by foreign banks (for the period October 2007 to March 2012), holding that the exporter was not the service recipient liable under reverse charge, and granted consequential relief as per law.

Penalty under Section 78 of the Finance Act, 1994 - suppression of facts - Bar on issuance of show cause notice where tax and interest have been paid under Section 73(3) of the Finance Act, 1994 - liability reflected in balance sheet and accounts - penalty leviable only for fraud, collusion, wilful mis-statement or suppression of facts - appropriation of tax and interest

Penalty under Section 78 of the Finance Act, 1994 - suppression of facts - Bar on issuance of show cause notice where tax and interest have been paid under Section 73(3) of the Finance Act, 1994 - liability reflected in balance sheet and accounts - Whether the penalty imposed under Section 78 can be sustained for the period October 2011 to September 2012 in the absence of evidence of suppression of facts where service tax and interest were paid and the liability was reflected in accounts. - HELD THAT: - The Tribunal noted that the show cause notice arose from an audit but the appellant had paid the service tax along with interest in November 2012 and had reflected the liability in its balance sheet and other financial documents. Reliance was placed on the bar in sub-section (3) of Section 73 which precludes issuance of a show cause notice where the amount of service tax with interest has been paid as ascertained. The authority's proceedings alleged suppression of facts; however no specific evidence of suppression, fraud, collusion or wilful mis-statement was produced. The Tribunal further noted that a subsequent decision of the High Court upholding the Tribunal's view for a later period treated published balance sheet disclosure and subsequent payment as inconsistent with suppression. In absence of any material to substantiate intentional suppression to evade tax, the statutory predicate for levying penalty under Section 78 was not made out.

Penalty under Section 78 set aside for the period October 2011 to September 2012 for lack of evidence of suppression of facts; confirmation and appropriation of service tax and interest left undisturbed.

Final Conclusion: The appeal is allowed to the extent of deleting the penalties imposed under Section 78 for October 2011 to September 2012 for want of any evidence of suppression; the demand for service tax and interest and their appropriation are maintained.

Classification of service - dredging service - works contract service - liability of principal versus subcontractor - admission of additional grounds - remand for fresh fact finding - speaking and reasoned order - right to personal hearing

Admission of additional grounds - classification of service - Additional grounds filed by the appellants are admitted to be taken on record for adjudication on merits. - HELD THAT: - The Tribunal considered applications for allowing additional grounds which related to the proper classification of the services rendered by the appellants. Because the additional grounds concerned the central controversy of classification (whether the services fall under dredging service or works contract service), the Tribunal held that those grounds merit consideration and directed that they be taken as part of the appeal records for determination on merits. This decision reflects the Tribunal's view that grounds which affect substantive classification should not be excluded at the threshold and ought to be adjudicated on their merits. [Paras 1]

Applications for additional grounds are allowed and the additional grounds are to be included in the appeal records for decision on merits.

Dredging service - works contract service - liability of principal versus subcontractor - remand for fresh fact finding - speaking and reasoned order - right to personal hearing - Impugned orders set aside and matter remanded to original authority for fresh fact finding on classification of services and on whether any service tax liability attaches to the appellants or should be determined with reference to the subcontractor who executed the work. - HELD THAT: - The Tribunal found that the adjudicating authorities did not address crucial submissions: that the services ought to be treated as works contract service rather than dredging service, and that the actual execution by the subcontractor (and any consequent liability) had not been examined. As those vital aspects were not dealt with, the Tribunal set aside the impugned orders and remanded the matters to the original authority for an open and fresh adjudication. The remand requires the original authority to consider all allegations in the show cause notices afresh, to give the appellants opportunity of personal hearing, and to pass a reasoned and speaking order after taking into account submissions already made and any further submissions. [Paras 3, 4]

Impugned orders are set aside and the matters are remanded to the original authority for fresh, reasoned adjudication with opportunity for personal hearing.

Final Conclusion: All appeals (by the assessee appellants and by Revenue) are allowed to the extent they are remanded for fresh fact finding and adjudication on the classification of services and on the question of liability vis a vis the subcontractor; miscellaneous applications are disposed of.

Refund of service tax - unjust enrichment - exemption under Mega Exemption Notification (entry 12A) - stamp duty condition for exemption - requirement of challan details in ST-3 returns - centralised registration - bunching of appeals and precedent acceptance by Revenue

Refund of service tax - exemption under Mega Exemption Notification (entry 12A) - Validity of Commissioner (Appeals) order allowing refund of service tax paid in respect of works falling under entry 12A for the period 2015-16. - HELD THAT: - The Tribunal considered the Commissioner (Appeals) finding that refund claims filed by branches were admissible on merits because all units formed a single corporate entity and the exemption under entry 12A rendered tax paid in FY 2015-16 refundable under the statutory scheme. Having regard to a prior Division Bench Final Order on the same issue in favour of the respondent and the subsequent acceptance of that order by the revenue authorities, the Tribunal found no merit in the revenue appeals against the Commissioner (Appeals) and upheld the refund allowance.

Appeals dismissed; Commissioner (Appeals) order allowing refund sustained.

Requirement of challan details in ST-3 returns - refund of service tax - Whether omission of challan details from branch ST-3 returns justified denial of refund when challans are reflected in the head office ST-3. - HELD THAT: - The Commissioner (Appeals) accepted the appellants' explanation that total tax was discharged by the head office and that challan details appear in the head office ST-3 returns. The Tribunal, having regard to the earlier decision favourable to the respondent and the revenue's acceptance of that decision, found no basis to disturb the Commissioner (Appeals) conclusion that the omission by branches was a technical defect not warranting denial of substantive refund relief.

Appeals dismissed; omission of challan details in branch returns not a ground to deny refund in the circumstances.

Unjust enrichment - refund of service tax - Whether the refund claims were barred by the doctrine of unjust enrichment. - HELD THAT: - The Commissioner (Appeals) found that appellants had borne the incidence of service tax (supported by the balance sheet showing the amount as receivable) and therefore the refund claims were not hit by unjust enrichment. The Tribunal, following the same reasoning endorsed by a prior Division Bench order accepted by revenue, concluded there was no merit in the revenue contention and did not disturb the finding that unjust enrichment bar was not attracted.

Appeals dismissed; findings that refund claims are not barred by unjust enrichment upheld.

Stamp duty condition for exemption - exemption under Mega Exemption Notification (entry 12A) - Contended non-compliance with stamp duty condition for applicability of the exemption under notification dated 01.03.2016. - HELD THAT: - The revenue urged that appropriate stamp duty, where applicable, had to be paid for contracts entered prior to 01.03.2015 and that this point was not considered by the Commissioner (Appeals). The Tribunal, however, having regard to the earlier CESTAT order on identical issue and the revenue's subsequent acceptance of that order, found no substance in reopening the matter and dismissed the appeals without examining the point afresh.

Appeals dismissed; revenue's contention on stamp duty did not lead to setting aside the Commissioner (Appeals) order.

Centralised registration - Effect of centralised registration granted to the corporate entity on the validity of earlier unit-wise registrations and the refund claims filed by branches. - HELD THAT: - The Commissioner (Appeals) treated filing of refund claims by branches as a minor technical infraction after the grant of centralised registration and did not consider it a ground to deny refunds. The Tribunal, referencing the identical earlier decision and its acceptance by the revenue, found no merit in the revenue's contention that centralised registration rendered branch refund claims void and dismissed the appeals.

Appeals dismissed; centralised registration did not invalidate the refunds claimed by branches in the circumstances.

Bunching of appeals and precedent acceptance by Revenue - Whether the appeals should be maintained in view of an earlier Division Bench order on identical issue and the revenue's acceptance of that order. - HELD THAT: - The Tribunal noted the revenue's communication that a Division Bench Final Order in an identical matter had been accepted by the competent revenue authority. The appeals were bunched and, relying on the prior Final Order and the stated acceptance by the revenue, the Tribunal concluded there was no merit in the present appeals and proceeded to dismiss them.

Appeals dismissed; prior adjudication and revenue's acceptance were determinative in disposing the appeals.

Final Conclusion: The Tribunal dismissed all three revenue appeals against the Commissioner (Appeals) order which had allowed the refund claims for service tax paid in relation to work contracts for the period 2015-16, concluding that in view of an earlier Division Bench order on identical issues and the revenue's acceptance of that decision there was no merit in disturbing the Commissioner (Appeals) findings on exemption applicability, challan/ST-3 particulars, unjust enrichment and centralised registration.

Summary order. The Special Leave Petition is dismissed for non-compliance of the order dated 09.05.2017; pending applications, if any, stand disposed of.

Entertainment of Special Leave Petition - dismissal of Special Leave Petition on account of tax effect - tax effect as ground for non-admission - question of law kept open for future adjudication

Entertainment of Special Leave Petition - tax effect as ground for non-admission - dismissal of Special Leave Petition on account of tax effect - Present Special Leave Petitions not entertained and dismissed because the office report recorded a tax effect of Rs. 60,35,409/-. - HELD THAT: - The Court recorded the office report quantifying the tax effect at Rs. 60,35,409/- and, solely on that basis, declined to entertain the petitions. Having reached that conclusion, the petitions were dismissed without consideration of the merits. The Court's decision is confined to non-admission of the Special Leave Petitions on the stated monetary ground. [Paras 1, 2]

Special Leave Petitions dismissed on the ground of the tax effect indicated in the office report; petitions not entertained on merits.

Question of law kept open for future adjudication - Whether or not any question of law arises was not decided; the question of law is left open. - HELD THAT: - Although the petitions were dismissed for the stated monetary reason, the Court expressly refrained from deciding any substantive question of law and left that question open for determination in appropriate proceedings. No adjudication on the merits of the legal controversy was undertaken. [Paras 3]

Question of law remains undecided and is kept open for future consideration.

Final Conclusion: The Special Leave Petitions are dismissed because the office report records a tax effect of Rs. 60,35,409/-, and the Court declines to entertain the petitions on that ground; any substantive question of law is left open.

Protective show cause notice - finality of orders passed on revision/appeal - infructuousness of proceedings following final administrative orders - writ of certiorari - writ of prohibition

Protective show cause notice - finality of orders passed on revision/appeal - infructuousness of proceedings following final administrative orders - writ of certiorari - writ of prohibition - Whether the show cause cum demand notice issued on 20.12.2011 was a protective notice and had become infructuous in view of the Commissioner (Appeals) decision allowed and the Revisionary Authority upholding that decision, thereby justifying quashing of the notice and prohibition of further proceedings. - HELD THAT: - The Court found on the record that the petitioner's rebate claims for 2008-2009 were allowed by the Commissioner (Appeals) and that the Revisionary Authority later rejected the revision filed by the Commissioner of Central Excise, thereby upholding the admissibility of the rebate. The impugned show cause notice was issued while revision was pending and, having regard to the grounds set out in the notice (paras 7 and 8 of the show cause notice as considered by the Court), was in the nature of a protective show cause notice. Given that the Revisionary Authority confirmed the Commissioner (Appeals) order and those orders had attained finality - a factual position not disputed by the revenue - there was no justification for proceeding with adjudication on the protective notice. Consequently the proceedings under the show cause notice had become infructuous and judicial intervention was warranted by way of certiorari and prohibition to prevent further action pursuant to that notice (see paras 6-8). [Paras 7, 8]

The show cause cum demand notice dated 20.12.2011 is quashed as infructuous and respondents are prohibited from taking further steps pursuant thereto; petition allowed in terms of prayers (a) and (b).

Final Conclusion: The petition under Article 226 succeeds: the protective show cause notice dated 20.12.2011 is quashed and further adjudicatory steps pursuant to it are prohibited, the reliefs under the prayers granted; no costs.

Principal to principal basis - job worker - transaction value under Section 4(1)(a) of the Central Excise Act, 1944 - valuation under Rule 10A for goods manufactured by job workers - contract manufacturing as distinct from job work - brand ownership and quality control not determinative of manufacture

Principal to principal basis - job worker - transaction value under Section 4(1)(a) of the Central Excise Act, 1944 - valuation under Rule 10A for goods manufactured by job workers - contract manufacturing as distinct from job work - Characterisation of the relationship between M/s. Tescom (manufacturer) and M/s. Roca (buyer) and consequent correctness of valuation adopted by M/s. Tescom - HELD THAT: - The Tribunal examined the contractual terms and factual matrix and held that the supply and sale arrangement between M/s. Tescom and M/s. Roca was on a principal to principal basis. The Agreement expressly stated that TEPL (Tescom) is fully responsible for manufacture, sale and supply and that the parties are not agents of one another, and permitted both parties freedom to deal with third parties. Applying the tests laid down in earlier Tribunal precedents (including Sujhan Instruments and decisions relied upon in the Tribunal's earlier orders concerning Inova), the Court emphasised that a job worker, for the purpose of Rule 10A, must manufacture on inputs supplied (and not paid for) by the principal. Here the essential indicia of job work were absent: the urinal casings were procured by Tescom on purchase (i.e., not supplied free), the other inputs were procured and owned by Tescom, invoices were raised and duty was discharged at Tescom's factory gate, and there was no evidence of any clandestine flow-back or additional consideration. Mere affixation of the buyer's brand, quality checks by the buyer or that a large proportion of finished goods are sold to the buyer do not convert the transaction into job work. Accordingly the transaction value adopted by Tescom falls within Section 4(1)(a) and the valuation demand premised on Rule 10A is unsustainable. [Paras 9, 10, 11]

The transaction is on principal to principal basis; the value adopted by M/s. Tescom is the transaction value under Section 4(1)(a) and the demand under Rule 10A cannot be sustained.

Penalties - brand ownership and quality control not determinative of manufacture - Sustainability of penalties imposed on M/s. Roca for alleged connivance with M/s. Tescom - HELD THAT: - Having held that the supply relationship was on principal to principal basis and that Tescom was not a job worker, the Tribunal concluded that the foundational premise for imposing penalties on Roca - namely that Roca had supplied inputs free or that Tescom acted as Roca's job worker - failed. The Tribunal followed its earlier reasoning and precedent which indicate that where the contractual terms and commercial realities demonstrate contract manufacturing (purchase of inputs, invoicing, discharge of duty by the manufacturer), penalties predicated on job work/connivance allegations cannot be sustained. [Paras 11, 12]

Penalties imposed on M/s. Roca are set aside as unsustainable.

Final Conclusion: Impugned orders of duty demand, interest and penalties are set aside; appeals are allowed with consequential reliefs as per law.

Classification of goods under Central Excise Tariff - Non-alignment between HSN and Central Excise Tariff - HSN not to be relied upon - Interpretation of heading - Rule 3(a) of Rules for Interpretation of Central Excise Tariff - Clandestine removal - requirement of independent investigation and dispatch/realisation evidence - Penalty not imposable where demand for duty is unsustainable

Classification of goods under Central Excise Tariff - Non-alignment between HSN and Central Excise Tariff - HSN not to be relied upon - Interpretation of heading - Rule 3(a) of Rules for Interpretation of Central Excise Tariff - Ball point pen ink manufactured by the appellant is classifiable under Central Excise Tariff Sub heading 3215.10 (writing ink) which attracts nil rate of duty. - HELD THAT: - The Tribunal applied the Supreme Court's ratio in Camlin Ltd. that where the entries in the HSN and the statutory Tariff are not aligned, HSN cannot be relied upon for classification under the Tariff. A comparison of the entries shows that HSN divides heading 32.15 into printing and other inks, whereas the Central Excise Tariff divides it into writing ink (3215.10) and others (3215.90); hence the entries are not aligned. Consequently the adjudicating authority's reliance on HSN to classify ball point pen ink under 3215.90 is unsustainable. Applying the Tariff entries (and the principle that the heading providing the specific description is to be preferred), ball point pen ink falls under 3215.10 and attracts nil duty. [Paras 5, 6]

Classification confirmed as under Sub heading 3215.10 (writing ink); demand based on classification under 3215.90 set aside.

Clandestine removal - requirement of independent investigation and dispatch/realisation evidence - Allegations of clandestine removal were not established. - HELD THAT: - Revenue compared clearances of the Thane unit (on which duty-paid invoices existed) with total production as reflected in a balance sheet that covered both Thane and Goa units, without accounting for clearances from the Goa unit. No further investigative steps were undertaken - such as examining transport dispatch particulars, receipts from dealers, or realisation of sale proceeds - which are necessary to infer clandestine removals. Applying the principle in the cited authority, the material did not establish clandestine removal. [Paras 7]

Demand premised on clandestine removal is set aside for want of requisite investigation and proof.

Penalty not imposable where demand for duty is unsustainable - Penalties imposed on the appellants under Rule 173Q and the equal penalty on the appellant are not sustainable and are quashed. - HELD THAT: - Having held that ball point pen ink attracts nil duty and that clandestine removals were not proved, the foundational causes for imposing penalties fail. Penalties premised on the demand for duty or on alleged clandestine clearances cannot stand where the substantive demands themselves have been set aside. [Paras 8, 9]

All penalties imposed in the impugned order are quashed.

Final Conclusion: The impugned order in original is set aside: the classification demand regarding ball point pen ink and the demand for clandestine removals are quashed, penalties imposed on the appellants are vacated, and the appeals are allowed.

Admissibility of statements recorded under Section 14 - Relevance of recorded statements under Section 9D - Right to cross examination and order of evidence under Section 138, Indian Evidence Act - Burden on Revenue to prove non receipt of inputs - Conditions for availing Cenvat credit under the Cenvat Credit Rules, 2004 - Reliance on transporter statements and check post reports

Relevance of recorded statements under Section 9D - Right to cross examination and order of evidence under Section 138, Indian Evidence Act - Reliance on transporter statements and check post reports - Statements of transporters and other witnesses relied upon by Revenue without examination in chief and without affording cross examination were not admissible evidence to sustain the demand. - HELD THAT: - The Tribunal held that the adjudicating authority erred in rejecting the appellant's request for cross examination of witnesses whose statements formed the sole basis for the demand. Section 9D prescribes limited circumstances in which statements recorded before a gazetted Central Excise officer are admissible; the adjudicating authority must first form a view on admissibility and only then offer witnesses for cross examination. Section 138 of the Evidence Act prescribes that examination in chief must precede cross examination and re examination. The authorities below did not conduct the requisite examination in chief or permit cross examination, and merely relied on statements and check post reports in isolation. In these circumstances no adverse inference could be drawn against the assessee and the statements could not be acted upon to sustain a demand. [Paras 4]

Statements of transporters and related check post reports not subjected to the statutory sequence of examination and cross examination are inadmissible and cannot form the basis for disallowance of Cenvat credit.

Admissibility of statements recorded under Section 14 - Unsigned statements recorded by DGCEI officers were invalid and could not be relied upon to sustain the demand. - HELD THAT: - The Tribunal noted that several computer typed statements attributed to Senior Intelligence Officers of DGCEI either lacked the officers' names or bore no signatures. Statements recorded under Section 14 must comply with formal requirements; unsigned and unattributed records cannot be treated as valid evidence. Consequently, the unsigned DGCEI statements failed to provide a lawful foundation for the adjudicated demand. [Paras 4]

Unsigned DGCEI statements are not valid evidence and cannot be relied upon for confirming the Cenvat demand.

Conditions for availing Cenvat credit under Cenvat Credit Rules, 2004 - Burden on Revenue to prove non receipt of inputs - Cenvat credit availed on the basis of duty paid import documents, statutory records, bank payments and production records could not be disallowed solely on the basis of uncorroborated transporter statements; Revenue failed to discharge burden of proving non receipt or diversion of inputs. - HELD THAT: - The Tribunal examined Rule 3, Rule 4 and Rule 9 of the Cenvat Credit Rules, 2004 and observed that entitlement to credit requires receipt of inputs in the factory under valid duty paying documents and utilisation in manufacture. In the present case the appellant had recorded receipts in statutory books, payments were made through banking channels, materials were reflected in production and final products were cleared on payment of duty. Revenue produced no corroborative evidence to show non receipt, diversion, or alternative sourcing that would explain manufacture despite non receipt. Precedents were noted where denial of credit on the basis of isolated transporter statements or minor documentary discrepancies was set aside where statutory records and other indicia supported receipt and use. Given Revenue's failure to discharge the evidentiary burden, the disallowance of credit was unsustainable. [Paras 4]

Cenvat credit could not be denied; Revenue failed to prove non receipt or diversion and the demand based on uncorroborated material is not sustainable.

Final Conclusion: Impugned order in original confirming disallowance of Cenvat credit (and consequential interest/penalty) is set aside; appeals allowed and the Cenvat demand is held unsustainable in view of inadmissibility of relied statements and absence of corroborative evidence proving non receipt or diversion of inputs.

Eligibility for cash refund of CVD and SAD/IGST paid on Customs Duty paid for failure to fulfil export obligations - Refund claim under Section 142(3) of the CGST Act, 2017 - Inability to take Cenvat credit under GST regime as basis for cash refund - Requirement of documentary bifurcation of Customs Duty components for quantification of refund

Eligibility for cash refund of CVD and SAD/IGST paid on Customs Duty paid for failure to fulfil export obligations - Refund claim under Section 142(3) of the CGST Act, 2017 - Appellant entitled to claim cash refund of the CVD+SAD/IGST portion of Customs Duty paid on account of non-fulfilment of export obligations. - HELD THAT: - The Tribunal, relying on the Larger Bench decision in Bosch Electrical Drive India Pvt Ltd and consistent Tribunal precedents, held that where Customs Duty has been paid for failure to fulfil export obligations and Cenvat credit cannot be availed under the GST regime, the CVD and SAD/IGST component of such paid duty is eligible for cash refund under the statutory regime. The Bench applied the ratio of earlier decisions and allowed the appeal on this legal question, concluding that the appellant is eligible to claim refund of the CVD+SAD/IGST portion paid. [Paras 3]

Appeal allowed insofar as entitlement to cash refund of the CVD+SAD/IGST portion is recognised.

Requirement of documentary bifurcation of Customs Duty components for quantification of refund - Verification by Adjudicating Authority prior to release of refund - Quantification of the refund remitted for fresh verification: appellant must produce documentary evidence clearly bifurcating Basic Customs Duty, CVD, SAD/IGST and interest; Adjudicating Authority to verify and grant refund only for the CVD+SAD/IGST portion. - HELD THAT: - The Tribunal accepted the respondent's submission that the amounts were paid under a common head without bifurcation, making the appellant's quantified refund claim unverifiable on the record. Accordingly, the appellant was directed to produce documents and a clear statement showing the amounts attributable to Basic Customs Duty, CVD, SAD/IGST and interest to substantiate the claimed refund. The matter was remitted to the Adjudicating Authority to verify the documentary evidence and grant refund solely for the CVD+SAD/IGST portion after such verification. [Paras 2, 4]

Refund claim quantification remanded for verification; Adjudicating Authority to allow refund only for the verified CVD+SAD/IGST portion.

Final Conclusion: The appeal is allowed: the appellant is entitled to cash refund of the CVD+SAD/IGST portion of Customs Duty paid for non-fulfilment of export obligations, subject to production of documentary bifurcation and verification by the Adjudicating Authority, which shall grant refund only for the verified CVD+SAD/IGST amount.

Ready Mix Concrete vis-a -vis Concrete Mix distinction - exemption under Notification No.4/97-C.E. for site-manufactured Concrete Mix - extended period of limitation for assessment/demand of Central Excise duty - interpretational dispute on classification and excisability of goods - double taxation arising from concurrent Service Tax and Excise demands

Extended period of limitation for assessment/demand of Central Excise duty - exemption under Notification No.4/97-C.E. for site-manufactured Concrete Mix - Whether the demand of central excise duty for the specified period was sustainable in view of limitation. - HELD THAT: - The Tribunal found that the controversy was essentially an interpretational dispute as to classification and dutiability of concrete produced at site. Although the Supreme Court in L&T settled the classification question in favour of revenue, the Revenue had not invoked the normal limitation period promptly. The adjudicating authorities therefore could not rely on the extended period of limitation by placing reliance on the circular/clarification belatedly; where the Revenue delays in acting, extended limitation cannot be invoked. The Commissioner (Appeals) rightly held the demand to be time-barred in view of the authorities relied upon and set aside the original order confirming duty, interest and penalty. [Paras 4]

Demand for excise duty for the stated period is barred by limitation and the appeal of the Revenue is without merit on that ground.

Ready Mix Concrete vis-a -vis Concrete Mix distinction - interpretational dispute on classification and excisability of goods - double taxation arising from concurrent Service Tax and Excise demands - Characterisation of the goods manufactured at site - whether they are Ready Mix Concrete (RMC) or Concrete Mix (CM) - and the relevance of prior payments of Service Tax. - HELD THAT: - The Tribunal recognised that the question whether site-produced material amounts to RMC or CM is a question of fact/interpretation. It noted that the Supreme Court in L&T treated RMC and CM as distinct products for classification purposes. The Commissioner (Appeals) also observed that the respondent had been paying service tax on consideration (including value of RMC) and VAT on materials, and that treating the same activity as both manufacture (for excise) and service (for service tax) would amount to impermissible double taxation. While the Tribunal accepted the legal distinction addressed in higher authority, it did not overturn the Commissioner (Appeals) on the limitation point and did not admit the Revenue to the extended period to litigate the classification afresh. [Paras 4]

The characterisation issue was acknowledged as interpretational and influenced by Supreme Court precedent, but it did not avail the Revenue because the demand was barred by limitation; the Commissioner (Appeals)'s findings on non-imposition (including concern about double taxation) were sustained inasmuch as they supported setting aside the original demand.

Final Conclusion: The Revenue's appeal is dismissed; the Commissioner (Appeals) order setting aside the original demand (including interest and penalty) was upheld because the demand for the specified periods was time barred and the Revenue could not invoke the extended period of limitation to press the excise demand.

Input Tax Credit - Reversal of input tax credit where goods are sold below purchase or cost price under Section 13(1)(f) of the Uttar Pradesh Value Added Tax Act, 2008 - Reverse input tax credit on manufactured goods sold below cost under Rule 23(6) of the U.P. Value Added Tax Rules, 2008 - Limitation of ITC by reference to tax payable on sale value of goods - Availability of ITC linked to tax actually paid on sale of manufactured goods

Input Tax Credit - Reversal of input tax credit where goods are sold below purchase or cost price under Section 13(1)(f) of the Uttar Pradesh Value Added Tax Act, 2008 - Limitation of ITC by reference to tax payable on sale value of goods - Availability of ITC linked to tax actually paid on sale of manufactured goods - Whether the First Appellate Authority and the Tribunal were legally justified in allowing the assessee the claimed ITC and cancelling the demand raised by the assessing authority. - HELD THAT: - The Tribunal found that the assessee had claimed ITC of Rs. 1,43,83,587 for the relevant year, whereas tax of Rs. 13,27,46,784 had been deposited on the sale of manufactured urea. Applying the statutory scheme embodied in Section 13(1)(f) (and Rule 23(6) addressing reverse credit where goods are sold below purchase/cost price), the Court accepted the Tribunal's conclusion that the rigours of Section 13(1)(f) were not attracted because the tax paid on sales vastly exceeded the ITC claimed. The determinative reasoning is that when tax actually paid on the sale of the manufactured goods is substantially in excess of the input tax credit claimed, the condition for reversal under Section 13(1)(f) does not arise and the assessing authority's demand was properly set aside by the appellate fora. [Paras 8, 9]

The orders of the First Appellate Authority and the Tribunal upholding allowance of the claimed ITC and deleting the assessing authority's demand are affirmed; the revision petition is dismissed.

Final Conclusion: The High Court dismissed the revision petition, upholding the Tribunal's and the first appellate authority's conclusion that Section 13(1)(f) did not apply because tax paid on sales exceeded the ITC claimed, and accordingly declined to interfere with the deletion of the assessing authority's demand.

Capital goods - storage tank - apparatus used for manufacture or processing - revisional jurisdiction - questions of law - presumption of finality of appellate/tribunal findings - interference only for perversity or no evidence

Capital goods - storage tank - apparatus used for manufacture or processing - Whether the Cello used by the assessee is a capital good within the meaning of Section 2(f) of the Act or merely a usable container for supply of manufactured ink. - HELD THAT: - The Court examined the definition of "capital goods" in Section 2(f), noting that it includes "storage tank" as part of plant, machinery, equipment or apparatus used for manufacture or processing of goods. The Tribunal had found as a fact that the Cello is fitted to the plant and machinery where the manufactured ink is directly stored and, although removable and sent to customers for consumption, functions as a storage device integral to the manufacturing process. The Court held that the movable nature of the Cello does not exclude it from being a storage tank or an essential part of the manufacturing process and therefore it qualifies as a "capital good" under the definition relied upon. [Paras 6, 13, 14]

The Cello is a capital good (storage tank) within the meaning of Section 2(f) and the Tribunal's finding to that effect is upheld.

Revisional jurisdiction - questions of law - presumption of finality of appellate/tribunal findings - interference only for perversity or no evidence - The scope of the High Court's revisional jurisdiction in relation to the Tribunal's factual findings in this case. - HELD THAT: - The Court reiterated that its revisional jurisdiction under the Act is limited to questions of law and does not permit reappreciation of evidence or a de novo inquiry into factual findings made by the Tribunal. Citing the statutory scheme and authoritative precedent, the Court observed that interference with tribunal findings is justified only where they are perverse, based on no evidence, or suffer manifest legal error. Applying these principles, the Court found no basis to disturb the Tribunal's fact finding that the Cello functions as part of the manufacturing process. [Paras 8, 9, 10, 11, 12]

Revisional interference is not warranted; the High Court will not reappreciate the Tribunal's factual findings absent perversity or legal illegality.

Final Conclusion: The High Court dismissed both revisions, upholding the Tribunal's finding that the Cello is a capital good (storage tank) used in the manufacturing process and refusing to interfere under its limited revisional jurisdiction.

Application of Section 5 of the Limitation Act, 1963 to revision petitions under Section 72 of the TVAT Act, 2004 - condonation of delay in statutory revision proceedings - absence of express or implied exclusion of the Limitation Act in a special statute (pari materia doctrine) - maintainability of interlocutory application for condonation of delay

Application of Section 5 of the Limitation Act, 1963 to revision petitions under Section 72 of the TVAT Act, 2004 - absence of express or implied exclusion of the Limitation Act in a special statute (pari materia doctrine) - condonation of delay in statutory revision proceedings - Whether Section 5 of the Limitation Act, 1963 is available to condone delay in filing revision petitions under Section 72 of the TVAT Act, 2004 and whether the delay of 239 days should be condoned. - HELD THAT: - The Court applied the ratio of the Apex Court in Superintending Engineer/Dehar Power House Circle Bhakra Beas Management Board v. Excise and Taxation Officer, holding that where a special statute prescribing a limitation period for filing revision is silent and does not expressly or impliedly exclude the Limitation Act, the provisions of Section 5 of the Limitation Act are not ousted. Observing that Section 72 of the TVAT Act prescribes sixty days for filing a revision but contains no provision excluding condonation, the Court held the Limitation Act is applicable by implication on the same reasoning applied to Section 48 of the Himachal Pradesh VAT Act in the cited Apex Court decision. On the facts, the petitioner furnished an explanation (including medical evidence) for the delay and the Court, satisfied with the explanation and mindful of the precedent, exercised its discretion to condone the delay. The Court therefore upheld the maintainability of the interlocutory application under Section 5 of the Limitation Act and allowed condonation for the batch of revision petitions concerning the specified assessment years. [Paras 6, 7, 8]

Section 5 of the Limitation Act, 1963 applies to condone delay in filing revisions under Section 72 of the TVAT Act, 2004; the delay of 239 days is condoned and the interlocutory applications are allowed.

Final Conclusion: Interlocutory applications for condonation of delay (239 days) in preferring the batch of civil revision petitions under Section 72 of the TVAT Act, 2004 (A.Y. 2015-16, 2016-17 & 2017-18) are allowed; the Limitation Act, 1963 applies and the matters are listed for admission.

Writ of Mandamus - Article 32 - Public Interest Litigation - Delay and laches in filing public interest petitions - Non-entertainment of petition masquerading as public interest litigation

Non-entertainment of petition masquerading as public interest litigation - Public Interest Litigation - Petition filed under Article 32 framed as a public interest litigation but relatable to the petitioner's personal grievance is not maintainable and will not be entertained. - HELD THAT: - The Court examined the substance of the petition and the accompanying synopsis and found that the reliefs sought, particularly prayer D, and the factual matrix concerning Frontier Lifeline Private Limited (FLPL) arise from the petitioner's specific grievance about insolvency proceedings and the alleged conduct of creditors and the resolution process. The Court held that a petition purporting to be in public interest cannot be entertained where it is essentially a vehicle to pursue a personal grievance of the petitioner. Having regard to the direct connection between the petitioner and FLPL and the reliefs seeking intervention in those insolvency-related proceedings, the petition was treated as not maintainable as a public interest litigation and rejected on that basis. [Paras 3, 6, 7]

Petition dismissed as not maintainable insofar as it is a public interest petition masking a personal grievance.

Delay and laches in filing public interest petitions - Article 32 - Special Leave Petition was dismissed on account of inordinate delay in filing. - HELD THAT: - The Court noted that the Special Leave Petition suffered a delay of 1615 days. In view of the long delay and having regard to the nature of the petition-being essentially connected to the petitioner's own dispute arising out of insolvency proceedings-the Court exercised its discretion to dismiss the petition. The dismissal for delay was recorded when the matter came up before the Court. [Paras 5]

Special Leave Petition dismissed for delay.

Final Conclusion: The Article 32 petition, framed as public interest litigation but rooted in the petitioner's personal grievance arising from insolvency proceedings concerning FLPL, and filed after an inordinate delay, is dismissed; pending applications stand disposed of.

Instrumentality of the State - Article 12 of the Constitution of India - writ jurisdiction - Government Company / deemed Government Company - deep and pervasive State control - tests in Ajay Hasia - control and shareholding test - audit by the Comptroller and Auditor General as indicia of State character

Instrumentality of the State - Article 12 of the Constitution of India - Government Company / deemed Government Company - control and shareholding test - deep and pervasive State control - audit by the Comptroller and Auditor General as indicia of State character - tests in Ajay Hasia - Respondent company (KITCO) is an instrumentality of the Union of India under Article 12 and is amenable to writ jurisdiction. - HELD THAT: - The court examined the corporate constitutive documents and surrounding factual matrix and found that the large majority of shares in the respondent are held by public sector entities, including SIDBI and other statutory/ public sector institutions; the company is listed as a Central Government company and as a public sector undertaking; its accounts are audited by the Comptroller and Auditor General treating it as a deemed Government company; SIDBI nominates one third of directors including the Chairman and Managing Director and has decisive influence over policy; the State Government also habitually nominates directors and the company is recognised as an accredited Government agency for public works. Applying the established tests for determining whether an entity is an instrumentality of the State (including the criteria in Ajay Hasia), these cumulative factors demonstrate deep and pervasive State control and public character. For these reasons the court disagreed with the earlier Single Judge conclusion in K.J. Johnson that KITCO was not a State, held that the respondent is an instrumentality of the Union under Article 12, and accordingly is subject to writ jurisdiction. [Paras 12, 14, 15]

The respondent company is an instrumentality of the Union of India under Article 12 and is amenable to writ jurisdiction; the earlier finding to the contrary is set aside.

Final Conclusion: The judgment under appeal is set aside; the respondent company is held to be an instrumentality of the Union under Article 12 and the writ petition is to be placed before the learned Single Judge for consideration on merits; writ appeal allowed.