TaxTMI Updates e-Newsletter
Feb 05,2022

Interim liberty for foreign travel - Return of passport by trial court - Restrictive conditions to protect prosecutorial interest - Restraint on transfer of assets - Custodial interrogation and arrest under the CGST regime - Offence under the Central Goods and Services Tax Act, 2017

Interim liberty for foreign travel - Return of passport by trial court - Restrictive conditions to protect prosecutorial interest - Restraint on transfer of assets - Permission granted to the petitioner to travel abroad for business and directing the trial court to return the passport, subject to specified conditions. - HELD THAT: - The Court considered the seriousness of the allegations under the Central Goods and Services Tax Act, 2017 and the prosecutorial interest, but found on the material placed by the petitioner - including business reasons for foreign travel, family and property details and previous compliance including deposit orders - that the petitioner is unlikely to abscond. Balancing those factors, the Court held that interim permission for foreign travel could be granted while protecting the respondents' interests by imposing conditions: return of passport by the trial court to the petitioner (on assumption it was produced); filing an affidavit within seven days detailing immovable properties; prohibition on selling or transferring the properties described; prior intimation of travel plans to respondent no.2 seven days before departure; furnishing cell number and email to respondent no.2 three days before departure; return of passport to the trial court within three days of arrival in India; and informing the concerned court about the passport's return after filing the affidavit. These measures were considered adequate to ensure the petitioner's return and safeguard the investigation/prosecution. [Paras 6]

Application allowed; Court of JMFC, Vashi directed to return the passport to the petitioner and the petitioner granted liberty to travel abroad subject to the enumerated conditions.

Final Conclusion: Interim permission to travel abroad granted to the petitioner with directions to the trial court to return the passport and with specific conditions (affidavit of immovable properties, prohibition on transfer, prior travel intimations, contact details, and prompt return of the passport) to protect the interests of the respondents; interim application disposed of accordingly.

Quashing of summary orders - show-cause notice under Section 73 of the Central Goods and Services Tax Act, 2017 - opportunity of being heard - decision on merits uninfluenced by earlier conclusions - quashing of garnishment and attachment order

Quashing of summary orders - quashing of garnishment and attachment order - Impugned summary Orders dated 12 December 2019 and 31 December 2019 (Exhibits D and E) and the consequent garnishment and attachment Order dated 10 December 2021 were legally unsustainable and required to be set aside. - HELD THAT: - The State, through its learned AGP, stated on record that there were no reasoned orders other than the summary Orders of 12 December 2019 and undertook that a show-cause notice under the CGST and MGST Acts would be issued and a fresh order would be passed after giving the petitioner an opportunity of hearing. Accepting the statement and in view of the absence of reasoned orders, the Court found the impugned summary Orders to be unsustainable. Consequentially, the garnishment and attachment Order founded upon those impugned Orders could not survive and was set aside. The Court therefore quashed and set aside the specified impugned orders. [Paras 4, 6, 7]

Impugned Orders dated 12 December 2019 and 31 December 2019 are quashed and set aside; the garnishment and attachment Order dated 10 December 2021 is also quashed and set aside.

Show-cause notice under Section 73 of the Central Goods and Services Tax Act, 2017 - opportunity of being heard - decision on merits uninfluenced by earlier conclusions - Respondents are permitted and directed to issue a fresh show-cause notice, afford the petitioner an opportunity of hearing, and decide the matter afresh on merits in accordance with law. - HELD THAT: - On the State's undertaking, the Court authorised issuance of a show-cause notice under Section 73 of the CGST Act and the corresponding provision of the MGST Act and directed that the petitioner be given an opportunity to file a reply and to be heard. The Court emphasised that the respondents must decide the matter on its own merits without being influenced by observations or conclusions in the quashed orders. The Court prescribed a timeline for compliance: decision to be rendered as expeditiously as possible and not later than twelve weeks from receipt of this Order, and communication of that decision to the petitioner within one week of passing it. This constitutes a remand for fresh consideration to be undertaken in accordance with law. [Paras 5, 6]

Respondents may issue a show-cause notice, grant opportunity of hearing and reply, and decide the matter afresh on merits within twelve weeks, communicating the decision within one week of passing it.

Final Conclusion: The writ petition is allowed: the impugned summary orders and the consequent garnishment/attachment order are quashed; respondents are permitted and directed to issue a show-cause notice, afford the petitioner a hearing, and decide the matter afresh on merits in accordance with law within the stipulated timelines; no order as to costs.

Quashing of show-cause notice for absence of reasons - restoration of GST registration where suspension exceeds statutory period - requirement of reasons and material particulars in show-cause notices - limitations on suspension and cancellation of GST registration under the Delhi GST Rules

Quashing of show-cause notice for absence of reasons - restoration of GST registration where suspension exceeds statutory period - limitations on suspension and cancellation of GST registration under the Delhi GST Rules - Validity of the impugned show-cause notice dated 11th November, 2021 and the consequence of continued suspension of the petitioner's GST registration. - HELD THAT: - The Court found that the impugned show-cause notice contained no factual foundation or reasons and was not supported by any document or form justifying suspension. Having regard to Rule 21A and Rule 22(3) of the Delhi GST Rules, 2017, which prescribe the temporal limits for suspension and cancellation proceedings, the petitioner's registration could not legally remain suspended for more than thirty days. In light of the absence of material particulars and the fact that the suspension had continued for over two months, the Court quashed the impugned notice and directed immediate restoration of the petitioner's GST registration.

Impugned show-cause notice quashed and petitioner's GST registration restored forthwith.

Requirement of reasons and material particulars in show-cause notices - restoration of GST registration where suspension exceeds statutory period - Permissibility and procedure for issuing a fresh show-cause notice and timeframes for response and decision. - HELD THAT: - Although the impugned notice was quashed for want of reasons, the respondents were permitted to issue a fresh detailed show-cause notice provided it specifies all relevant facts and reasons. The Court imposed a strict timeline: a fresh notice may be issued within one week; the petitioner is to respond within seven working days of service; and the respondents must decide the matter in accordance with law within two weeks of receipt of the response. The Commissioner was also directed to issue a practice direction to ensure future notices for cancellation of GST registration are not bereft of material particulars or reasons. These directions effectuate a fresh consideration of the matter in accordance with the statutory time-limits and procedural fairness.

Respondents permitted to issue a fresh detailed show-cause notice within one week; petitioner to reply in seven working days; respondents to decide within two weeks; Commissioner to issue a practice direction to ensure future notices contain material particulars and reasons.

Final Conclusion: The writ petition is allowed: the show-cause notice dated 11th November, 2021 is quashed and the petitioner's GST registration is restored immediately; respondents may issue a fresh detailed notice within prescribed timelines and must decide the matter expeditiously, and the Commissioner is directed to issue a practice direction to ensure future notices contain material particulars and reasons.

Summary order. Respondent Nos.1 and 2 directed to file affidavit in reply within two weeks and indicate whether they agree to pay CGST as per the High Level Committee recommendations; petitioner permitted to file the 14th Finance Commission Report and to amend prayer (within one week); rejoinder to be filed within one week thereafter; respondent No.2 to reply to the amended portion within the same period; matter listed for admission on 1 March 2022.

Anticipatory bail/anticipatory protection - interim protection subject to conditions - notice prior to coercive action - coercive action under the CGST regime - obligation to join investigation and furnish documents - investigation at a nascent stage

Anticipatory bail/anticipatory protection - interim protection subject to conditions - notice prior to coercive action - obligation to join investigation and furnish documents - Grant of limited anticipatory protection to the applicant subject to conditions and prior notice before any coercive action by the revenue. - HELD THAT: - The court recorded that the departmental investigation was at a nascent stage and that there was no material on record indicating the applicant's involvement in the alleged offence; the summons served were vague as to the evidence and documents required. Having regard to these facts and the reliance placed on an earlier High Court order, the court exercised its discretion to afford the applicant interim protection. The protection is not absolute or a grant of anticipatory bail in conventional terms but is conditional: if the authority proposes to proceed with coercive action under the CGST scheme, the authority must serve the applicant with seven days' advance notice. In return for receiving this protection, the applicant is required to appear and join the investigation when directed and to furnish all necessary information and documents. The order thus balances the investigatory needs of the revenue with the applicant's liberty where no material implicating him exists at present.

If coercive action is to be taken against the applicant, the authority shall give seven days' advance notice; the applicant shall appear, join the investigation and furnish necessary information and documents, and, subject to these conditions, interim protection is granted.

Final Conclusion: The anticipatory bail application is disposed of by granting conditional interim protection: the revenue must give seven days' advance notice before taking coercive steps, and the applicant must cooperate with the investigation and produce required documents as directed.

Re-opening of assessment - Reason to believe - Prima facie satisfaction - Cash deposits disclosed in SFT/Form 26AS - Failure to file return - Consideration of objections to notice - Scope of judicial review of reopening

Re-opening of assessment - Reason to believe - Prima facie satisfaction - Cash deposits disclosed in SFT/Form 26AS - Failure to file return - Scope of judicial review of reopening - Validity of the notice dated 30.03.2021 and order dated 16.08.2021 reopening assessment for Assessment Year 2017-18. - HELD THAT: - The Court examined whether the material before the respondents at the time of issuing the notice could furnish a prima facie basis for forming a reason to believe that income had escaped assessment. The respondents had information of large cash deposits recorded in Form 26AS/SFT against the assessee's PAN and the assessee had not filed returns for the relevant year. Applying settled principles that the Court's review is limited to whether prima facie satisfaction could be formed from the material available to the assessing authority, the Court held that the discovery of the substantial cash deposits together with non-filing of returns were sufficient and relevant to constitute reason to believe and to permit reopening within time. The Court therefore found no illegality in the impugned notice or the order disposing of objections and declined to interfere at the interlocutory stage. [Paras 7, 9, 14]

The notice and the order reopening assessment are valid and will not be interfered with.

Consideration of objections to notice - Cash deposits disclosed in SFT/Form 26AS - Whether the objection that the firm had no bank account at the relevant time was considered while disposing objections to the reopening notice. - HELD THAT: - The Court found that the respondents did consider the contention about the non-existence of a bank account in the firm's name and expressly reasoned that the material showed cash deposits against the firm's PAN and that the firm had not filed returns despite such deposits. The Court recorded that the objection was addressed for the limited purpose of deciding whether a prima facie case to reopen existed, and not as a final adjudication of the defense. [Paras 10]

The objection regarding the bank account was considered by the respondents when disposing of objections to the reopening notice.

Consideration of objections to notice - Re-opening of assessment - Scope of further adjudication and treatment of subsequent material (the bank's letter dated 27.08.2021) in the assessment proceedings. - HELD THAT: - While the bank's letter was not before the respondents at the time the reopening order was made, the Court directed that nothing in its dismissal should influence the substantive assessment. The Court made clear that the assessment proceedings must examine the petitioner's defenses, including the subsequently produced bank communication, and verify all material in accordance with law. The Court thereby left the substantive determination of these matters to the assessing process rather than deciding them at the interlocutory stage. [Paras 10, 15]

Assessment proceedings are to consider and verify the bank's letter and the petitioner's defenses; those matters are to be examined during assessment.

Final Conclusion: The petition challenging the reopening notice and the order disposing objections for Assessment Year 2017-18 is dismissed: the material of large cash deposits against the assessee's PAN and non-filing of returns supplied a prima facie reason to believe justifying reopening, and the assessing authority must, in the assessment proceedings, examine and verify the petitioner's defenses including the subsequently produced bank communication.

Validity of the third proviso to Section 254(2A) of the Income-tax Act - Automatic vacation of stay after 365 days - Extension of stay where delay in disposing of appeal is not attributable to the assessee - Article 14 - arbitrariness and discrimination - Principle actus curiae neminem gravabit

Validity of the third proviso to Section 254(2A) of the Income-tax Act - Automatic vacation of stay after 365 days - Extension of stay where delay in disposing of appeal is not attributable to the assessee - Article 14 - arbitrariness and discrimination - Whether a stay granted by the Tribunal can be automatically vacated on expiry of 365 days irrespective of whether the delay in disposing of the appeal is attributable to the assessee. - HELD THAT: - The Court applied the law declared by the Supreme Court in Deputy Commissioner of Income-tax v. Pepsi Foods Ltd., which held that the third proviso to Section 254(2A) is arbitrary and discriminatory insofar as it mandates automatic vacation of stay on expiry of 365 days without regard to whether the delay in disposing of the appeal is attributable to the assessee. The correct reading requires that any order of stay shall stand vacated after the expiry of the period(s) mentioned in the section only if the delay in disposing of the appeal is attributable to the assessee. The High Court accepted that principle as directly applicable to the facts of this case, noting that the Tribunal had found the delay was not attributable to the appellant; consequently the stay was properly continued beyond 365 days. The Court further relied on the legal maxim actus curiae neminem gravabit and the constitutional requirement under Article 14 to avoid a provision that treats unequals as equals or produces capricious results. [Paras 4]

The substantial question of law is answered in favour of the assessee: a stay does not automatically vacate after 365 days unless the delay is attributable to the assessee; the appeal by Revenue is dismissed.

Final Conclusion: Applying the Supreme Court's ruling in Pepsi Foods Ltd., the High Court held that the third proviso to Section 254(2A) must be read to vacate a stay after the prescribed period only when delay in disposing the appeal is attributable to the assessee; on the facts (delay not attributable to the assessee) the Tribunal's grant of stay beyond 365 days was sustained and the revenue's appeal was dismissed.

Taxability of capital contribution under Section 45(3) - validity of reopening assessment and jurisdictional scope of notice under Section 148/Section 147 - revaluation reserve and its tax consequences - distinction between inventory (current asset) and capital asset for capital gains treatment - separate taxable entity of firm and partners' share under Section 10(2A) - allegation of colourable device/sham arrangement to evade tax

Validity of reopening assessment and jurisdictional scope of notice under Section 148/Section 147 - separate taxable entity of firm and partners' share under Section 10(2A) - Whether the notice issued under Section 148 and reassessment under Section 147 were validly initiated against the partner-assessee for the assessment year 2008-09. - HELD THAT: - The tribunal and CIT(A) concluded that the revaluation and any income arising therefrom were matters for assessment of the partnership firm, which is a separate taxable entity. In view of the statutory position that a partner's share in the total income of the firm is not includible in the partner's total income under Section 10(2A), the Assessing Officer had no jurisdiction to entertain a belief that income chargeable to the partner had escaped assessment for the relevant year. On the facts, the reasons recorded did not justify reopening the partner's assessment under Section 147/notice under Section 148 and the reassessment was therefore quashed. [Paras 11, 15, 19]

Notice under Section 148 and reassessment under Section 147 against the partner were invalid; reassessment quashed.

Taxability of capital contribution under Section 45(3) - distinction between inventory (current asset) and capital asset for capital gains treatment - Whether Section 45(3) applied to tax short-term capital gain in the assessment year 2008-09 arising from transfer of land to the partnership firm by way of capital contribution. - HELD THAT: - The tribunal found on the record of the firm's books for the year ended 31.03.2006 that the partners had transferred the land to the firm as current asset/work in progress and that the partners' capital accounts were credited at cost; consequently there was no profit in the hands of the partners upon that transfer. Section 45(3) applies only when a partner transfers a capital asset to the firm by way of capital contribution. In the present facts the transfer in substance was of inventory/current asset and the year of transfer was the financial year ended 31.03.2006; therefore Section 45(3) did not apply to impose tax on the partners for AY 2008-09 merely because the firm later converted inventory into fixed assets or revalued them in 2008. [Paras 11, 12, 15]

Section 45(3) was not attracted for AY 2008-09; no short-term capital gain taxed in partners' hands on that basis.

Revaluation reserve and its tax consequences - allegation of colourable device/sham arrangement to evade tax - Whether the revaluation of land and buildings by the firm on 31.03.2008 produced taxable income for the partners (and whether the revaluation was a colourable device to evade tax). - HELD THAT: - The tribunal and CIT(A) re-examined the facts including the rapid market rise, revised guideline values, accounting treatment and the stated purpose of revaluation to justify bank finance. They held that revaluation of an asset is not a business transaction giving rise to pecuniary gain taxable in the hands of partners where the firm alone is the taxable entity for its profits; the revaluation was undertaken to reflect market value and to support borrowing and was not a colourable device. On the factual findings there was no withdrawal from capital accounts and no realisation of income by the partners; therefore the revaluation profit could not be taxed in the partners' hands for AY 2008-09. [Paras 15, 16, 17, 18]

Revaluation reserve did not give rise to taxable income in partners' hands and was not a colourable device; additions on that account were deleted.

Final Conclusion: The High Court, after considering the factual findings recorded by the CIT(A) and the tribunal, held that no substantial question of law arose: the reassessments were invalidly initiated against the partners; Section 45(3) did not apply for AY 2008-09 as the transfer was of inventory and not a capital asset in the year of transfer; and the revaluation undertaken by the firm did not create taxable income in the partners' hands. The revenue's appeals are dismissed.

Sale of carbon credits - capital receipt - revenue receipt - deduction under Section 80IA - declaration of law by precedent - scope of appellate jurisdiction of the Tribunal

Sale of carbon credits - capital receipt - revenue receipt - deduction under Section 80IA - declaration of law by precedent - Whether receipts from sale of Carbon Emission Reduction (carbon credits) are capital receipts and not taxable, and the consequence of that characterisation on a claim under Section 80IA. - HELD THAT: - The Court held that receipts from sale of carbon credits are capital in nature and not business income. This conclusion is supported by earlier authorities relied upon by the Tribunal and the Andhra Pradesh High Court, which found carbon credits to be an offshoot of environmental concerns and not generated in the course of the taxpayer's business activity; accordingly the proceeds are capital receipts. The Court referred to Supreme Court decisions distinguishing capital and revenue nature of receipts and applying tests such as enduring benefit and fixed versus circulating capital, and found those tests consistent with treating carbon-credit receipts as capital. The Court also explained that, if such receipts are capital and thus excluded from total income, they cannot be included for computing eligible profits for deduction under Section 80IA; therefore an assessee's attempt to claim a Section 80IA deduction in respect of such receipts does not preclude the Tribunal or the Court from recognising their capital character. The Court further observed that a precedent which declares the legal character of such receipts is a declaration of what the law always was and cannot be made inapplicable to earlier assessments. Applying these principles, and following the line of authority treating sale of carbon credits as capital receipts, the substantial question of law was answered against Revenue.

Receipts from sale of carbon credits are capital receipts (not taxable as business income) and, consequently, cannot be included for computation of eligible profits under Section 80IA; the substantial question of law is answered against the Revenue.

Final Conclusion: The appeal is dismissed; the substantial question of law is answered in favour of the assessee and against the Revenue, holding sale of carbon credits to be a capital receipt not taxable and not includible for Section 80IA purposes.

Interest income assessable as business income - direct nexus between deposits and business activity - application of precedent on similar facts

Interest income assessable as business income - direct nexus between deposits and business activity - application of precedent on similar facts - Interest earned on fixed deposits created from business funds, including borrowed funds, in the course of the assessee's business is to be treated as income from business and not income from other sources. - HELD THAT: - The parties jointly submitted that substantial questions relating to classification of interest income (questions 1 and 2) were covered by this Court's decision in JVS Exports (paras 28-31), which held that fixed deposits created by the bank from export sale proceeds and retained as additional security were transactions connected and closely linked with the assessee's business activity. Relying on that precedent and the concession recorded, the Court applied the same principle to the present facts and answered the substantial questions in favour of the assessee. The Court recorded its conclusion that the interest income is connected with and arises out of the business, and therefore is assessable as business income rather than under the head 'other sources'. [Paras 7]

Questions 1 and 2 are answered in favour of the assessee; the interest income is to be treated as business income.

Set-off of interest on borrowed capital - proportionate interest under Section 57(iii) - principle of mutuality - The remaining substantial questions (relating to set-off of interest on borrowed capital, claim under Section 57(iii), and the principle of mutuality) were not decided on merits and were left open for determination in an appropriate case. - HELD THAT: - The Court expressly confined its decision to the classification issue and, while disposing of the appeal on that basis, left the other substantial questions (questions 3 to 6) open. No adjudication on the merits of those contentions was undertaken; the parties were left to raise and have those issues decided in an appropriate forum or case. [Paras 7]

Questions 3 to 6 are left open for determination in an appropriate case.

Final Conclusion: The appeal is allowed insofar as the interest on fixed deposits created from business funds (including borrowed funds) is held to be business income (questions 1 and 2 answered for the assessee); the other substantial questions are left open for adjudication in an appropriate case. Appeal disposed of; no costs.

Admission of additional evidence under Rule 46A - Genuineness, identity and creditworthiness under section 68 - Addition under section 68 and consequential disallowance of interest - Remand report verification by the Assessing Officer - Reasonable opportunity to produce evidence

Admission of additional evidence under Rule 46A - Reasonable opportunity to produce evidence - Remand report verification by the Assessing Officer - Whether the CIT(A) contravened Rule 46A in admitting additional evidence furnished by the assessee during appellate proceedings. - HELD THAT: - The Tribunal examined the sequence by which the assessee was served a short notice by the AO and was unable, for want of sufficient time, to produce detailed documents during assessment. The assessee applied to the CIT(A) for admission of additional evidence under Rule 46A, which the CIT(A) forwarded to the AO for comments and a remand report. The AO in his remand report confirmed verification of the documents, including PAN/IT returns, bank statements, confirmations and statements of creditors, and thereby verified identity, creditworthiness and genuineness of transactions in respect of the creditors. The CIT(A) relied on the AO's remand report in admitting the evidence and in reaching his conclusions. On these facts the Tribunal concluded that the CIT(A) had not violated Rule 46A, because the additional evidence was the subject of due process - it was forwarded to the AO, sufficient opportunity was afforded for rebuttal, and the AO himself verified and reported on the evidence. [Paras 7, 8, 9]

No contravention of Rule 46A; admission of additional evidence by the CIT(A) was valid.

Genuineness, identity and creditworthiness under section 68 - Addition under section 68 and consequential disallowance of interest - Remand report verification by the Assessing Officer - Whether the additions made by the AO under section 68 and the corresponding disallowance of interest were justified. - HELD THAT: - The CIT(A), on the basis of the AO's remand report and the additional documents, found that for fifteen creditors the identity, creditworthiness and genuineness of the unsecured loan transactions were established (except in the case of one creditor). The CIT(A) accordingly deleted the principal addition except for a small sum in respect of one creditor and deleted the corresponding interest disallowance except for the interest attributable to that creditor. The Tribunal accepted the CIT(A)'s factual conclusion because it rested on the AO's own verification recorded in the remand report and because the assessee had been prevented from producing the evidence earlier for reasons of insufficient time. The Tribunal therefore found no infirmity in the deletions made by the CIT(A). [Paras 4, 7, 8, 9]

The deletions of the additions and corresponding interest disallowance by the CIT(A) are upheld, with only the small part of the addition and interest relating to one creditor sustained.

Final Conclusion: The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s admission of additional evidence and his deletions of the additions under section 68 and the corresponding interest disallowance except as to a limited amount relating to one creditor.

Deductibility of employees' contribution to Provident Fund and ESI - treatment under Section 43B vs Section 36(1)(va) of the Income-tax Act - payment before the due date of filing return under Section 139(1) - effect of Finance Act, 2021 explanatory memorandum in condoning pre-01-04-2021 defaults

Deductibility of employees' contribution to Provident Fund and ESI - payment before the due date of filing return under Section 139(1) - treatment under Section 43B vs Section 36(1)(va) of the Income-tax Act - Whether the addition towards employees' contribution to PF and ESI, disallowed on the ground that payments were not made before the due date under Section 36(1)(va), was exigible where such payments were made after the statutory due date but before the due date for filing return under Section 139(1). - HELD THAT: - The Tribunal noted that the employees' contributions to PF and ESI were paid after the statutory due date but before the due date for filing the return under Section 139(1). The coordinate bench decision in Value Momentum Software Services Pvt. Ltd. was relied upon, where it was held that such belated payments, if made before the due date for filing the return, did not merit disallowance under the provisions as interpreted by the Tribunal. The judgment further observed the explanatory memorandum to the Finance Act, 2021, which indicates the legislative treatment condoning defaults prior to 01-04-2021, reinforcing the view that the contributions paid before the return filing due date should not be disallowed. Applying that reasoning, the Tribunal found no merit in the Revenue's contention that Section 36(1)(va) required disallowance notwithstanding payment before the return filing due date, and directed deletion of the addition. [Paras 2, 3, 5]

The addition of Rs. 1,04,21,060 made towards employees' PF and ESI contribution was deleted and the assessee's grounds on this issue were allowed.

Final Conclusion: Appeal allowed: the Tribunal deleted the disallowance of employees' PF and ESI contributions for AY 2018-19, holding that payments made before the due date for filing the return under Section 139(1) are not liable to disallowance, following the coordinate bench decision and the legislative treatment indicated in the Finance Act, 2021 explanatory memorandum.

Penalty under Section 271(1)(c) of the Income-tax Act - ad-hoc/estimated disallowance of expenses - concealment of particulars of income - furnishing inaccurate particulars of income - onus of proof on the Revenue to establish concealment - rectification under Section 154 of the Act - condonation of delay - penalty not attracted where additions are made on estimate basis in absence of concrete evidence of concealment

Penalty under Section 271(1)(c) of the Income-tax Act - ad-hoc/estimated disallowance of expenses - concealment of particulars of income - onus of proof on the Revenue to establish concealment - Sustainability of penalty under Section 271(1)(c) for disallowance of expenses made on an ad hoc/estimated basis. - HELD THAT: - The Tribunal examined whether penalty under Section 271(1)(c) can be sustained where the Assessing Officer made a 25% disallowance of expenses on an ad hoc/estimated basis without pointing to any specific instance of bogus expenditure or other adverse material indicating concealment or furnishing of inaccurate particulars. Relying on settled precedents and a line of decisions of High Courts and coordinate Benches of the Tribunal, the Court reiterated that clause (c) of Section 271(1)(c) is attracted only where there is concealment of particulars of income or furnishing of inaccurate particulars and that mere assessment or addition on estimate does not, by itself, constitute concealment. The Assessing Officer in the present case made the disallowance on a broad unverifiability/TDS compliance premise but did not bring forward concrete evidence to discharge the onus of proving concealment or inaccuracy. In those circumstances, and having regard to the consistent authorities cited, the Tribunal concluded that the penalty confirmed by the CIT(A) in respect of the ad hoc disallowance was not sustainable and was liable to be cancelled. [Paras 3, 8, 16]

Penalty under Section 271(1)(c) confirmed by lower authorities in respect of the ad hoc/estimated disallowance of expenses is cancelled as there was no evidence of concealment or furnishing of inaccurate particulars.

Final Conclusion: Delay in filing the appeal was condoned and, on merits, the penalty under Section 271(1)(c) upheld below in respect of ad hoc estimated disallowance of expenses was quashed; the assessee's appeal is allowed.

Valuation of unquoted shares - Discounted Cash Flow (DCF) method - Net Asset Value (NAV) method - method prescribed in Rule 11UA(2) - assessability under section 56(2)(viib) and section 68 - onus on assessee to prove valuation projections

Valuation of unquoted shares - Discounted Cash Flow (DCF) method - Net Asset Value (NAV) method - method prescribed in Rule 11UA(2) - assessability under section 56(2)(viib) and section 68 - onus on assessee to prove valuation projections - Whether the Assessing Officer was entitled to change the method of valuation from DCF (as adopted by the assessee) to NAV and sustain additions under section 56(2)(viib) and section 68. - HELD THAT: - The Tribunal held that Rule 11UA(2) gives the assessee the option to adopt either the NAV formula or the DCF method to determine fair market value of unquoted shares. Consistent with the precedents followed by the Tribunal, the AO cannot change the method of valuation chosen by the assessee; however, the AO is entitled to scrutinise the valuation report, require explanation, and if not satisfied, obtain a fresh valuation or determine valuation himself on the same DCF basis. Scrutiny must be confined to facts and data available on the valuation date and actual subsequent results cannot be used to impugn projections. The primary onus to demonstrate correctness of projections, discounting factors and terminal value rests on the assessee and should be discharged by empirical data, industry norms or other reliable material. In view of these principles the Tribunal admitted additional valuation-related documents filed by the assessee, set aside the appellate order confirming the additions and restored the matter to the AO to re-decide the valuation and consequent additions after giving the assessee an opportunity and following the directions that the basis of valuation must remain DCF while permitting scrutiny and, if necessary, a fresh DCF valuation by an independent valuer. [Paras 6, 7, 8, 9]

Order of ld. CIT(A) set aside; all issues remitted to the AO to decide afresh on the basis that the DCF method (if chosen by the assessee) cannot be replaced by NAV, subject to the AO's scrutiny and requirement of supporting material by the assessee.

Final Conclusion: Appeal allowed for statistical purposes; additions upheld by lower authorities set aside and matter remitted to the Assessing Officer for fresh adjudication in accordance with the Tribunal's directions that the DCF method, if adopted by the assessee, must be the basis while the AO may scrutinise, seek corroborative material or obtain a fresh DCF valuation and afford the assessee opportunity of hearing.

Deductibility of employees' contribution under section 36(1)(va) - deposit before due date of return under section 139(1) - parity between employees' and employer's contribution - effect of Finance Act, 2021 Explanation 2 excluding section 43B for due date under section 36(1)(va) - temporal applicability of statutory amendment from assessment year 2021-22

Deductibility of employees' contribution under section 36(1)(va) - deposit before due date of return under section 139(1) - effect of Finance Act, 2021 Explanation 2 excluding section 43B for due date under section 36(1)(va) - temporal applicability of statutory amendment from assessment year 2021-22 - parity between employees' and employer's contribution - Whether disallowance under section 36(1)(va) is warranted for employees' EPF and ESI contributions deposited after the due date under the respective statutes but before the due date for filing return under section 139(1) for AY 2018-19. - HELD THAT: - The Tribunal recorded that it was admitted the assessee deducted employees' share of EPF and ESI and deposited the same after the statutory due date under the respective labour enactments but before the due date for filing the return under section 139(1). Reliance was placed on High Court authority recognising no distinction between employees' and employer's contribution and allowing deduction where the deposit is made before the due date of return. The Tribunal noted the subsequent amendment by the Finance Act, 2021 (Explanation 2 to section 36(1)(va)) which provides that section 43B shall not determine the due date for this clause, and observed that this amendment has effect from 01.04.2021 and applies to assessment year 2021-22 and thereafter. Since the assessment year before the Tribunal is 2018-19, the amendment does not apply; accordingly the pre-amendment position permitting deduction where payment was made before the due date of filing the return governs the case. Applying that principle, the disallowance confirmed by the CIT(A) was not warranted and the addition was deleted. [Paras 4, 5]

Addition under section 36(1)(va) deleted and appeal allowed.

Final Conclusion: For AY 2018-19 the Tribunal allowed the appeal, holding that employees' EPF and ESI contributions deposited before the due date for filing return under section 139(1) are deductible under section 36(1)(va); the Finance Act, 2021 amendment does not apply to the assessment year in question.

Reopening of assessment under section 147/148 - reason to believe - borrowed satisfaction - failure to disclose fully and truly all material facts (proviso to section 147) - admissions and material seized during search relied upon by the Investigation Wing - opportunity for cross-examination and principles of natural justice - disallowance of bogus purchases - quantification of addition by applying a reasonable gross profit percentage - binding precedent of Coordinate/Division Bench

Reopening of assessment under section 147/148 - reason to believe - borrowed satisfaction - failure to disclose fully and truly all material facts (proviso to section 147) - admissions and material seized during search relied upon by the Investigation Wing - Validity of reassessment initiated by issue of notice under section 148 read with section 147 - HELD THAT: - The Tribunal held that the Assessing Officer had 'reason to believe' that income had escaped assessment on the basis of information and materials received from the Investigation Wing, including admissions and seized material from the entry-provider groups. The Tribunal applied the settled principle that 'reason to believe' requires cause or justification and need not amount to final adjudication; preliminary information from the investigation authority was sufficient to form a bona fide belief for reopening. The assessee's contention that the reopening was barred by the four-year period was rejected because the assessee did not place on record the documents allegedly furnished during the original assessment; the Tribunal found no material to show that full and true disclosure of all material facts had been made earlier and accordingly held that the proviso to section 147 did not bar reassessment. The Tribunal further relied on and followed binding decisions of the jurisdictional High Court and Coordinate Bench holding that information from investigation of known entry operators suffices to justify reopening. [Paras 14, 15, 17, 18]

Reopening under section 147/148 was validly initiated and ground challenging jurisdiction is dismissed.

Opportunity for cross-examination and principles of natural justice - admissions and material seized during search relied upon by the Investigation Wing - fraud vitiates everything - Whether assessee was entitled to cross-examination of persons whose statements and investigation materials were relied upon - HELD THAT: - The Tribunal found no merit in the challenge that denial of opportunity to cross-examine the entry-provider witnesses vitiated the proceedings. It noted that the assessee did not request cross-examination during assessment, that the entities were interlinked and known to each other, and that the Assessing Officer had relied on investigation material and admissions which, in the factual matrix, justified not providing cross-examination. The plea based on precedents invoking natural justice was considered but rejected on facts because the assessee had not cooperated in reassessment and failed to produce documents earlier. [Paras 16]

Ground based on denial of cross-examination and breach of natural justice is dismissed.

Disallowance of bogus purchases - quantification of addition by applying a reasonable gross profit percentage - binding precedent of Coordinate/Division Bench - Extent of addition to be made on account of alleged bogus purchases - HELD THAT: - On the merits the Tribunal accepted that while the Assessing Officer treated the impugned purchases as bogus and made a 100% addition, the Assessing Officer had not carried out independent enquiry and had not disputed the assessee's sales or rejected books. Applying the principle that tax can be levied only on the income element and having regard to industry norms, low gross profit disclosed by the assessee, and binding decisions of the Coordinate Bench and High Court, the Tribunal held that a partial disallowance was appropriate. Following the Coordinate Bench precedent which considered comparable facts, the Tribunal reduced the addition to a specified gross profit percentage of the impugned purchases as a reasonable measure to meet potential revenue leakage. [Paras 17, 18, 19, 20, 21]

Addition on account of alleged bogus purchases is restricted to a proportionate percentage of the impugned purchases (as directed by the Tribunal following the Coordinate Bench), and the assessee's appeal is partly allowed on this issue.

Final Conclusion: The Tribunal held the reassessment proceedings under section 147/148 to be valid, rejected the complaint regarding denial of cross-examination, and, following binding Coordinate Bench authority, reduced the addition on account of alleged bogus purchases to a proportionate percentage rather than sustaining a 100% disallowance; the assessee's appeal is partly allowed.

Allowability of ESOP expense under section 37(1) - contingent liability versus liability incurred on rendition of services - remand for verification of computation of deduction under section 10A - carry forward of long term capital loss - admission and adjudication of additional ground on deductibility of education cess - transfer pricing: exclusion of a comparable and application of TNMM with OP/TC as PLI - computation of interest under sections 234B/234C/234D of the Act - disposal of rectification application for credit of tax paid

Allowability of ESOP expense under section 37(1) - contingent liability versus liability incurred on rendition of services - Deductibility of ESOP expense of Rs.1,52,46,000/- charged as employee cost - HELD THAT: - The Tribunal examined the nature of ESOPs and accepted that by granting options the employer obtains assurance of service during the vesting period and thereby incurs liability for discounted issue of shares as quid pro quo. Following the Special Bench decision in Biocon Ltd., as affirmed by the Karnataka High Court, the Tribunal held that the discount on employee stock options vested during the year is not a contingent liability but a liability incurred on rendering of services and is allowable as revenue deduction under section 37(1). The revenue pointed to contingency of vesting; the Tribunal rejected that contention on applicability of the cited precedents and directed allowance of the claimed ESOP expense. [Paras 2]

ESOP expense of Rs.1,52,46,000/- allowed as deduction under section 37(1).

Remand for verification of computation of deduction under section 10A - Claim for enhanced deduction under section 10A (revised amount per auditor's certificate) and its quantification - HELD THAT: - The assessee sought to have a higher deduction under section 10A as per an auditor's certificate dated 11.10.2010 and filed letters during assessment proceedings. The Tribunal noted that the audit certificate and detailed workings were on record and that lower authorities gave no independent finding on the computation of the enhanced claim. Given the absence of adjudication on the veracity of the enhanced workings, the Tribunal remanded the matter to the Assessing Officer for verification and decision in accordance with law. [Paras 3]

Issue remanded to the AO for verification of the enhanced section 10A claim and adjudication in accordance with law.

Carry forward of long term capital loss - Allowance and carry forward of Long Term Capital Loss of Rs.26,29,364/- - HELD THAT: - The Tribunal examined the return and schedules and found that the long term capital loss was correctly reflected in Schedule CFL and the workings in the paper book, but was omitted inadvertently from the computation of income. There was no substantive finding by revenue to disallow the genuine claim. The Tribunal rejected the DRP's conclusion and directed the AO to allow the long term capital loss to be carried forward. [Paras 4]

Long Term Capital Loss of Rs.26,29,364/- to be allowed and carried forward to subsequent years.

Disposal of rectification application for credit of tax paid - Pending rectification application dated 30.03.2015 for grant of tax credit - HELD THAT: - The assessee had filed a rectification application seeking credit for tax paid which remained undecided. The Tribunal directed the Assessing Officer to dispose of the rectification application in accordance with law, treating the matter as pending before the AO. [Paras 5]

AO directed to decide the rectification application dated 30.03.2015 regarding tax credit.

Computation of interest under sections 234B/234C/234D of the Act - Computation of interest consequential to assessment and correctness of basis for section 234C - HELD THAT: - The Tribunal held that interest consequences are consequential and remitted computation to the AO to be carried out if leviable. It further directed that interest under section 234C be computed on the returned income and not on assessed income, following settled legal position. [Paras 6]

AO to compute interest under sections 234B/234C/234D as applicable; section 234C to be computed on returned income only.

Admission and adjudication of additional ground on deductibility of education cess - Admission and adjudication of additional ground claiming deduction for Education Cess and Higher & Secondary Education Cess - HELD THAT: - The Tribunal admitted the additional ground as a pure legal issue and, relying on the jurisdictional High Court authority in Sesa Goa Ltd. and other High Court precedent, held that education cess and higher & secondary education cess are not income tax within the meaning of section 40(a)(ii) and are allowable as deduction in computing business income. Although a contrary coordinate bench view was cited, the Tribunal followed binding High Court precedent. [Paras 7]

Additional ground allowed; education cess and higher & secondary education cess held deductible in computing business income.

Transfer pricing: exclusion of a comparable and application of TNMM with OP/TC as PLI - Transfer pricing adjustment - exclusion of Accentia Technologies Ltd. from comparables and direction to rework ALP - HELD THAT: - The Tribunal reviewed the TPO's selection of comparables under TNMM with OP/TC as the PLI. Relying on the Tribunal's earlier decision in the assessee's own case for A.Y.2008-09, it concluded that Accentia Technologies Ltd. is functionally dissimilar (ownership of intangibles, different functional profile and low employee cost) and must be excluded from the comparable set. The Tribunal directed the TPO/AO to exclude Accentia and rework the arm's length margin; if exclusion brings the assessee within the tolerance band, no adjustment would be required. [Paras 8]

Accentia Technologies Ltd. to be excluded from comparables; TPO/AO to rework ALP and consequential adjustment in accordance with directions.

Final Conclusion: The appeal is partly allowed: ESOP expense allowed; long term capital loss to be carried forward; rectification application to be decided; interest to be computed as directed; enhanced section 10A claim remanded to AO for verification; additional ground on education cess allowed; transfer pricing comparables to be revised by excluding Accentia and ALP reworked; overall appeal disposed of partly in favour of the assessee for A.Y.2010-11.

Section 40(a)(ia) disallowance for failure to deduct tax at source - TDS short or wrong deduction does not attract Section 40(a)(ia) if tax has been deducted - Assessee in default under Section 201(1)/(1A) for short or non-payment of TDS - Ad-hoc disallowance impermissible without specific defects pointed out in claimed expenditure

Section 40(a)(ia) disallowance for failure to deduct tax at source - TDS short or wrong deduction does not attract Section 40(a)(ia) if tax has been deducted - Assessee in default under Section 201(1)/(1A) for short or non-payment of TDS - Whether compensation paid for breach of contract could be disallowed under Section 40(a)(ia) where TDS was deducted albeit at a lower/wrong rate - HELD THAT: - The Tribunal examined the Assessing Officer's conclusion that compensation paid by the assessee was in the nature of interest and therefore attracted higher-rate TDS, and that short/wrong deduction amounted to non-deduction for the purposes of Section 40(a)(ia). The Tribunal held that once TDS has been deducted on a payment, the payment cannot be disallowed under Section 40(a)(ia) merely because the rate or TDS provision applied was lower or different. The object of Section 40(a)(ia) is to ensure levy and tracking of tax by requiring deduction at source; where deduction has in fact been made, any shortfall is a matter for assessment of the deductor as an assessee in default under Section 201(1)/201(1A), recoverable with consequences under those provisions, but does not justify disallowance of the underlying expenditure under Section 40(a)(ia). In view of divergent High Court authorities the Tribunal followed the Calcutta High Court view favourable to the assessee and the Supreme Court principle that, when two views are possible, the view beneficial to the assessee may be followed. On these grounds the Tribunal directed deletion of the disallowance made under Section 40(a)(ia). [Paras 8]

Disallowance under Section 40(a)(ia) deleted; compensation payments allowed as deduction because TDS had been deducted though at lower/wrong rate.

Ad-hoc disallowance impermissible without specific defects pointed out in claimed expenditure - Whether the Assessing Officer's ad-hoc disallowance of foreign travel expenses was justified and the appropriate quantum of disallowance - HELD THAT: - The Tribunal observed that the Assessing Officer accepted that the foreign travel expenditure was incurred for business purposes but made an ad-hoc disallowance without pointing to specific defects in the evidence. While noting the assessee's failure to produce adequate supporting documents for sizeable foreign travel claims, the Tribunal exercised its discretion in the interest of justice to moderate the disallowance. Rather than sustaining the full ad-hoc reduction, the Tribunal directed the Assessing Officer to restrict the disallowance to a specified reduced sum, thereby striking a balance between the absence of specific objections and the insufficiency of supporting evidence. [Paras 10]

Ad-hoc disallowance reduced; Assessing Officer directed to restrict disallowance of foreign travel expenses to a lesser specified amount.

Final Conclusion: Appeal partly allowed: disallowance under Section 40(a)(ia) deleted and the ad-hoc disallowance of foreign travel expenses reduced by directing a restricted, lesser disallowance; other reliefs and consequential directions to be given effect accordingly.

Employee's contribution to Provident Fund and ESI - deduction under Section 36(1)(va) of the Income-tax Act - application of Section 43B to employee's contribution - due date for crediting employee contributions - statutory due date under labour laws versus due date for filing return under Section 139(1) - prospective operation of the Finance Act, 2021 amendment (Explanation 2 to Section 36(1)(va))

Employee's contribution to Provident Fund and ESI - deduction under Section 36(1)(va) of the Income-tax Act - due date for crediting employee contributions - statutory due date under labour laws versus due date for filing return under Section 139(1) - Whether employee contributions to PF/ESI remitted after the statutory due date but before the due date for filing return are allowable as deduction under Section 36(1)(va) for AY 2019-20. - HELD THAT: - The Tribunal examined the facts that the assessee remitted employees' contributions within the due date for filing the return under Section 139(1) though after the statutory due dates under PF/ESI laws. Relying on the reasoning of Coordinate Benches and High Court and Supreme Court precedents discussed in Adyar Ananda Bhavan Sweets India P. Ltd. v. ACIT, the Tribunal observed that prior to the amendment by Finance Act, 2021 there was judicial authority supporting allowance of deduction where payment was made before filing the return. The Tribunal noted that Finance Act, 2021 inserted Explanation 2 to Section 36(1)(va) and related explanations to Section 43B effective from 1.4.2021 (applicable to AY 2021-22 onwards) and that those amendments were intended to clarify the law for future years. Applying those constructional principles and following the Coordinate Bench decision, the Tribunal held that the amended provisions do not apply to assessment year 2019-20 and therefore the assessee is entitled to the deduction for contributions paid before filing the return. [Paras 6, 7]

The assessee's claim for deduction is allowed for AY 2019-20 as the Finance Act, 2021 amendment does not apply retrospectively to that year.

Final Conclusion: The appeal is allowed: the delayed remittances of employees' PF/ESI contributions (made before the due date of filing the return) are deductible for AY 2019-20, the Finance Act, 2021 clarification (Explanation 2 to Section 36(1)(va)) applying from AY 2021-22 onwards and not to AY 2019-20.

Deductibility of employees' contribution to provident fund and ESI - payment before the due date of filing return under section 139(1) - application and retrospectivity of amendments by Finance Act, 2021 to section 36(1)(va) and section 43B - prohibition on retrospective effect where amendment alters existing law - precedential effect of jurisdictional High Court decision

Deductibility of employees' contribution to provident fund and ESI - payment before the due date of filing return under section 139(1) - precedential effect of jurisdictional High Court decision - Employees' contribution to PF and ESI paid before the due date of filing the return is allowable as deduction for the relevant assessment year. - HELD THAT: - The Tribunal followed the binding decision of the jurisdictional High Court in Essae Teraoka Pvt. Ltd. v. DCIT and the earlier coordinate ITAT decision in M/s. Shakuntala Agarbathi Company v. DCIT, holding that the term 'contribution' in the relevant enactments includes the employees' share and that payment of that contribution on or before the due date for furnishing the return under section 139(1) entitles the employer to deduction. Applying that precedent to the facts-where the assessee had remitted the employees' contribution before the due date for filing the return-the Tribunal concluded that the Assessing Officer's disallowance of the employees' contribution was not sustainable and directed deletion of the addition. [Paras 7]

Disallowance of employees' contribution to PF/ESI deleted and deduction granted as payment was made before the due date of filing the return.

Application and retrospectivity of amendments by Finance Act, 2021 to section 36(1)(va) and section 43B - prohibition on retrospective effect where amendment alters existing law - Amendments by the Finance Act, 2021 to section 36(1)(va) and section 43B are not clarificatory for the purposes of the relevant assessment year and do not apply retrospectively to the assessment year under consideration. - HELD THAT: - The Tribunal examined whether the Finance Act, 2021 amendments are merely clarificatory and thus retrospective. Relying on the principle that a provision said to be "for removal of doubts" cannot be treated as retrospective if it alters the law as previously understood, and noting the jurisdictional High Court's construction that earlier law permitted deduction where payment was made before the return due date, the Tribunal held that the 2021 amendment changes the legal position adversely to the assessee. The memoranda and enactment expressly made the amendment effective from 01.04.2021 (assessment year 2021-22 onwards). Consequently, the amendment does not apply to the assessment year before the Tribunal. [Paras 7]

Finance Act, 2021 amendments to section 36(1)(va) and section 43B are prospective and do not apply to AY 2018-2019.

Final Conclusion: The appeal is allowed: the employees' contribution to PF/ESI remitted before the due date of filing the return is deductible for AY 2018-2019, and the Finance Act, 2021 amendments to section 36(1)(va) and section 43B do not apply to the assessment year in issue.

Provisional release under Section 110A of the Customs Act, 1962 - security by bond in place of bank guarantee for provisional release - quantification of duty and furnishing of bond as condition for release - release without prejudice to ongoing investigation and adjudication - balance of convenience in respect of perishable agricultural produce - waiver of demurrage and container detention charges to be governed by rules

Provisional release under Section 110A of the Customs Act, 1962 - quantification of duty and furnishing of bond as condition for release - Direction to provisionally release the seized consignment of black pepper on specified conditions mirroring the ratio in Al Qahir International - HELD THAT: - The Court held that the captioned petition is directly covered by earlier decisions (including the Division Bench order in Al Qahir International) and, applying the same reasoning, directed provisional release of the seized consignment. The release is conditioned on the Customs authority quantifying the customs duty and bond amounts, communicating the same to the importer, and release of the goods within one week of remittance of the quantified duty and execution of the required bond. The Court noted the identical factual matrix and followed the precedent ratio without expressing any view on the merits of allegations underlying seizure. The balance of convenience in favour of release was also recognised given the commodity's perishable nature.

The Joint Commissioner of Customs to quantify duty and bond amounts, communicate them to the petitioner, and release the consignment within one week of remittance/execution of bond.

Security by bond in place of bank guarantee for provisional release - provisional release under Section 110A of the Customs Act, 1962 - Form of security for provisional release as settled by the Division Bench in Al Qahir International - HELD THAT: - The Court accepted the Division Bench modification in Al Qahir International whereby the Single Judge's requirement of furnishing a bank guarantee was modified to permit execution of a bond to the same value. Applying that modification, the Court directed release on execution of bond (and not insisting on a bank guarantee), while ensuring adequate security for potential interest, penalty or charges.

A bond to the quantified value will suffice as security for provisional release in place of a bank guarantee.

Release without prejudice to ongoing investigation and adjudication - Provisional release does not impede or influence the ongoing investigation or adjudicatory process - HELD THAT: - The Court made it explicit that the order for provisional release would not inhibit independent inquiry; show-cause notices and adjudication proceedings may continue and reach their own conclusion uninfluenced by the release order. The Court refrained from expressing any opinion on the merits of the allegations that led to seizure.

Adjudication and investigation to proceed to their logical end independently; the release order is without prejudice to such processes.

Waiver of demurrage and container detention charges to be governed by rules - Claim for waiver of demurrage and container detention charges left open for consideration by the authorities under applicable regulations - HELD THAT: - Consistent with earlier orders relied upon, the Court declined to direct waiver itself and left the issue of demurrage and container detention waiver to be pursued and decided by the competent authorities in accordance with the relevant rules and regulations.

The question of waiver of demurrage and container detention charges is to be decided by the authorities in accordance with applicable rules and regulations.

Final Conclusion: Writ petition disposed by directing provisional release of the seized black pepper consignment on payment of quantified duty and execution of bond (bond substituting for bank guarantee as per Division Bench precedent), with release without prejudice to ongoing investigation and adjudication; the issue of waiver of demurrage/ detention charges left to authorities under applicable rules; no order as to costs.

Liberty to file online application for SEIS and other benefits - processing of application in accordance with law - interim protection pending adjudication of writ petition - acceptance of online application despite deletion of entry - outcome of writ petition to govern final entitlement

Liberty to file online application for SEIS and other benefits - processing of application in accordance with law - Petitioner permitted to file online application for SEIS and other benefits and such application shall be processed in accordance with law. - HELD THAT: - The Court, having noted that an identical question is pending in earlier writ petitions and in the interest of protecting parties' rights, granted the Petitioner leave to submit an online application for SEIS and other benefits which form part of the petition. The order expressly provides that any application received pursuant to this liberty shall be processed according to law, preserving the statutory and administrative framework for adjudication. The Court proceeded on an interim basis to enable the petitioner's access to the portal and to ensure statutory processes are not circumvented while the writ petition is pending.

Petitioner may file the online application and the application, if received, shall be processed in accordance with law.

Acceptance of online application despite deletion of entry - interim protection pending adjudication of writ petition - Respondents directed to accept the Petitioner's online application on the portal if submitted on or before 31 January 2022 notwithstanding deletion of the Petitioner's entry. - HELD THAT: - Counsel for the Petitioner explained that the Petitioner's entry has been deleted from the respondents' records, which might prevent online submission or cause rejection. To obviate prejudice, the Court directed the respondents to accept any application submitted on the portal by the petitioner within the stipulated interim period. The direction is protective and procedural, leaving all contentions regarding eligibility and merits open for adjudication in the writ petition.

Respondents must accept the Petitioner's online application on the portal if submitted on or before 31 January 2022, with merits and eligibility kept open.

Outcome of writ petition to govern final entitlement - interim protection pending adjudication of writ petition - Any decision on the application including denial of benefits under the impugned notification shall be subject to and governed by the ultimate outcome of the writ petition; respondents permitted to file affidavit-in-reply by 15 March 2022. - HELD THAT: - The Court made clear that the interim directions do not pre-empt the final adjudication; any processing, decision or denial arising from applications filed pursuant to this order will remain subject to the eventual decision in the writ petition. Simultaneously, the respondents were granted time to file an affidavit-in-reply by a specified date, with provision for rejoinder, thereby preserving adversarial process and permitting the merits to be canvassed and decided in due course.

Decisions on applications remain subject to the final outcome of the writ petition; respondents to file affidavit-in-reply by 15 March 2022 with opportunity for rejoinder.

Final Conclusion: Interim directions granted permitting the Petitioner to submit an online application for SEIS and related benefits by 31 January 2022; respondents directed to accept such application on the portal despite deletion of entry, the application to be processed in accordance with law, and any final entitlement to remain subject to the outcome of the writ petition, with respondents given liberty to file their affidavit-in-reply.

Suspension of licence under Customs Brokers Licensing Regulations, 2013 - opportunity of hearing and timelines under Regulation 19 - procedure for revoking licence or imposing penalty under Regulation 20 - suspension lapsing for non-finalization of proceedings - show cause notice under Section 124 of the Customs Act, 1962 and penalties under Sections 112A and 114AA

Suspension of licence under Customs Brokers Licensing Regulations, 2013 - opportunity of hearing and timelines under Regulation 19 - suspension lapsing for non-finalization of proceedings - Whether the suspension order dated 15.06.2018 continued in force where no further order was passed after the hearing held on 28.06.2018 in terms of Regulation 19. - HELD THAT: - The Court recorded that the Commissioner suspended the petitioner's licence under Regulation 19(1) on 15.06.2018 and a hearing was conducted on 28.06.2018, but no subsequent order was passed either to continue the suspension or to revoke it as contemplated by the Regulations. The statutory scheme requires the authority, after suspension and hearing, to take a decision within the prescribed course; where that procedure has not culminated in an order continuing suspension or in proceedings under the procedure for revocation/penalty, the suspension cannot be permitted to subsist indefinitely. Applying these principles, and having regard to the respondent's failure to conclude proceedings as required, the Court held that the suspension has outlived its period of validity and is no longer in force. [Paras 11, 13]

The impugned suspension order dated 15.06.2018 is no longer in force.

Procedure for revoking licence or imposing penalty under Regulation 20 - show cause notice under Section 124 of the Customs Act, 1962 and penalties under Sections 112A and 114AA - Whether the respondents are precluded from initiating or continuing proceedings to revoke the licence or impose penalty and what course the respondents may pursue going forward. - HELD THAT: - The Court observed that the proper procedure for revocation or imposition of penalty is prescribed under Regulation 20, which includes issuance of a notice, an opportunity to file a written statement, inquiry by the nominated officer, preparation of an inquiry report and consideration by the Commissioner before passing final orders. Although the suspension has lapsed, the Court granted liberty to the respondents to examine on merits whether proceedings under Regulation 20 should be initiated or continued, and noted that the show cause proceedings under Section 124 of the Customs Act, 1962 (and related penalty provisions) remain without prejudice to those proceedings. The Court did not decide the merits of any penalty or revocation but left the matter to be considered and determined in accordance with law and the prescribed procedure. [Paras 12, 14, 15]

Liberty granted to respondents to initiate or continue proceedings under Regulation 20 and to proceed with the show cause notice; the Court did not adjudicate the merits of those proceedings.

Final Conclusion: The writ petition is disposed of holding that the suspension order of 15.06.2018 has ceased to be in force; respondents are, however, at liberty to examine and, if warranted, initiate or continue proceedings under Regulation 20 and the pending show cause proceedings in accordance with law, and the order is without prejudice to those proceedings.

Violation of principles of natural justice - appeal against communication: computation of limitation under Section 128 of the Customs Act, 1962 - power to amend bill of entry under Section 149 of the Customs Act, 1962 - remand for de novo consideration

Appeal against communication: computation of limitation under Section 128 of the Customs Act, 1962 - The dismissal of the appellant's appeal as time-barred by treating it as an appeal against original assessments was unsustainable. - HELD THAT: - The Court found that the petitioner had filed an appeal against the communication dated 21.07.2020 and not directly against each original bill of entry. Section 128 provides a 60-day limitation period from the date of communication of a decision or order by a lower officer, with an additional period under the proviso where sufficient cause is shown. The Commissioner (Appeals) rejected the petitioner's appeal on the ground that change of classification should have been sought within three months of assessment and therefore the appeals were time barred. The High Court held that dismissal on that limitation premise could not stand in respect of the appeal against the impugned communication, which was filed within the prescribed time from that communication, and therefore the impugned order cannot be sustained on the limitation ground. [Paras 16, 18, 19]

Impugned order dismissing the appeal as time-barred is quashed insofar as it rejects the appeal filed against the communication dated 21.07.2020.

Violation of principles of natural justice - power to amend bill of entry under Section 149 of the Customs Act, 1962 - The third respondent's disposal of the Section 149 applications without affording a personal hearing amounted to a breach of principles of natural justice. - HELD THAT: - The Court noted that the third respondent disposed of the petitions under Section 149 by a communication dated 21.07.2020 without calling the petitioner for a personal hearing or issuing a show-cause notice as to why the applications should not be rejected. The High Court held that the third respondent ought to have afforded an opportunity of hearing before rejecting the applications, and that this procedural omission vitiated the decision-making process in relation to the Section 149 requests. [Paras 16, 17, 18]

The communication rejecting the Section 149 applications without hearing is liable to be set aside for breach of natural justice.

Remand for de novo consideration - power to amend bill of entry under Section 149 of the Customs Act, 1962 - The matter is remitted to the Commissioner (Appeals) for fresh, merits-based consideration including affording the petitioner an opportunity to be heard on whether amendment under Section 149 is permissible and any consequential relief. - HELD THAT: - Having found procedural infirmity and that the appeal against the communication was wrongly dismissed on limitation grounds, the Court declined to express any opinion on the substantive merits of whether the bills of entry were amendable under Section 149. Instead, the Court quashed the impugned appellate order and remitted the matter to the second respondent to decide the appeal on merits after hearing the petitioner, permitting de novo consideration in accordance with law and relevant precedents invoked by the parties. [Paras 18, 19, 20]

Impugned order quashed and case remitted to the Commissioner (Appeals) to decide the appeal on merits after affording an opportunity of hearing; petitioner to be heard.

Final Conclusion: Writ petition allowed to the extent that the impugned appellate order is quashed for breach of natural justice and improper reliance on limitation; matter remitted to the Commissioner (Appeals) for fresh adjudication on merits after hearing the petitioner. No costs.

Classification of goods - machine consisting of individual components - composite machine rule - self-assessment - suppression of facts - extended period of limitation - exemption notification - confiscation and penalty under the Customs Act - redemption fine

Self-assessment - suppression of facts - extended period of limitation - exemption notification - Whether the show cause notice invoking extended limitation period on ground of suppression was maintainable where goods were examined and cleared by departmental officers - HELD THAT: - The Tribunal found on the record that the Bills of Entry filed online were subjected to open examination by customs officers and inspection endorsements recorded that the packages were opened, examined and forwarded to the concerned group for assessment. In those circumstances the assessment could not be treated as self-assessment by the importer. Claiming an exemption notification and obtaining assessment after departmental examination did not constitute suppression with intent to evade duty so as to invoke the extended limitation period. Consequently the adjudicating authority's invocation of extended limitation and allegations of suppression were held unsustainable and the Order-in-Original confirmed on that basis did not survive legal scrutiny. (Relied upon the factual examination endorsements and inspection reports in the record.) [Paras 10, 11, 12, 13]

Show cause notice invoking extended limitation period for suppression set aside; appeal of the importer allowed on limitation grounds and adjudicating order set aside; revenue appeal against non-imposition of redemption fine dismissed.

Final Conclusion: The importer's appeal is allowed on the ground that departmental examination precluded treatment as self-assessment and suppression; the Order-in-Original is set aside and the revenue's appeal seeking redemption fine fails.

Certificate of Origin - Denial of preferential tariff benefit - Burden on customs to verify authenticity - AIFTA Rules 2009 procedures for verification - Operational Certification Procedure (OPC) - Remand for verification and fresh adjudication

Certificate of Origin - Burden on customs to verify authenticity - Denial of preferential tariff benefit - Validity of Revenue's denial of exemption on the basis of alleged doubtful Country of Origin Certificate without obtaining verification from the issuing government. - HELD THAT: - The Tribunal found that two Country of Origin (COO) certificates were produced, and the appellant explained that a corrected COO was issued by a different authorised signatory of the exporting country due to an HSN error. A clarification from the first signatory stated that both signatories were authorised. On the record the COO signed by the second signatory prima facie appears genuine. The Tribunal held that the department, which entertained doubt about authenticity, bore the burden of obtaining verification from the Indonesian authorities before denying the benefit of the exemption notification. The Revenue did not discharge this burden or follow the verification process under the relevant procedures, and therefore its denial of the exemption was not sustainable.

Impugned order denying exemption set aside; departmental denial of benefit without obtaining verification is unjustified.

AIFTA Rules 2009 procedures for verification - Operational Certification Procedure (OPC) - Remand for verification and fresh adjudication - Appropriate remedy and further course of action where authenticity of COO is in doubt. - HELD THAT: - Instead of arriving at a final adverse conclusion, the Tribunal directed that the department must obtain verification from the concerned Indonesian authorities regarding the genuineness of the COO signed by the second signatory. The Tribunal expressly remanded the matter to the adjudicating authority for a fresh order after such verification, noting the procedural mechanisms under AIFTA/OPC that govern verification of COO had not been followed. The remand is for fresh consideration and adjudication on receipt of verification, not for determination of the COO's authenticity by the Tribunal.

Appeal allowed by way of remand; matter remitted to the adjudicating authority to obtain verification from the issuing authorities and pass a fresh order preferably within three months.

Final Conclusion: The Tribunal set aside the order denying exemption, held that the department failed to discharge its burden of verifying the Country of Origin certificate before rejecting preferential relief, and remitted the matter to the adjudicating authority to obtain authentication from the Indonesian authorities and pass fresh orders within a stipulated period.

Refund of duty/cess paid under protest - nil assessment of bills of entry - requirement to challenge assessment order before claiming refund - unjust enrichment in refund claims - recovery of sanctioned refund - reliance on accounting records and Chartered Accountant certificate for unjust enrichment

Refund of duty/cess paid under protest - nil assessment of bills of entry - requirement to challenge assessment order before claiming refund - Entitlement to refund of rubber cess paid under protest where the bills of entry were finally assessed at nil and whether the assessee was required to challenge the bills of entry assessment before claiming refund. - HELD THAT: - The Tribunal found that all bills of entry were finally assessed at nil rate of duty and that the rubber cess was subsequently insisted upon by the department and paid by the appellant through separate challans under protest. Where the assessment is nil there is no grievance against the assessment order and therefore no question of challenging the bills of entry arises. The reasoning follows the ratio of SESA GOA LTD. as applied by the Tribunal: the Apex Court decisions relied upon by the revenue presuppose an assessment levying duty which was not appealed; those decisions are inapplicable where the bill of entry shows a nil assessment. Since the rubber cess payment was separate and was not part of any assessed duty in the bills of entry, there was no requirement to challenge the bills of entry before claiming refund of the cess paid under protest, and the sanctioned refunds were rightly awarded.

Refund of rubber cess paid under protest is admissible despite nil assessment of the bills of entry; there was no obligation to challenge the bills of entry before claiming refund.

Unjust enrichment in refund claims - reliance on accounting records and Chartered Accountant certificate for unjust enrichment - Whether the refund is barred by unjust enrichment where the assessee produced books of account showing the amount as receivable and furnished a Chartered Accountant's certificate. - HELD THAT: - The Tribunal examined the material placed before the refund sanctioning authority and noted that the appellant had not debited the rubber cess to profit and loss but had shown the amount as receivable from the Government in the balance sheet under current assets, supported by a Chartered Accountant certificate and an undertaking. The department produced no evidence to discredit the CA certificate or to show that the incidence of the cess had been passed on. On these facts the Tribunal concluded that the appellant had established absence of unjust enrichment. Consequently the refund sanctioned relying on the accounting entries and CA certificate was legal and proper.

The refund is not hit by unjust enrichment on the recorded facts; the assessee's books and CA certificate sufficiently demonstrated non-passage of incidence.

Recovery of sanctioned refund - consequential relief on allowance of refund - Validity of the recovery order consequential to denial of refund and whether that recovery should be vacated in view of the Tribunal's findings on refund and unjust enrichment. - HELD THAT: - The recovery order issued by the Principal Commissioner flowed from the Commissioner (Appeals)'s denial of the refund. Having held that the refund was admissible and not barred by unjust enrichment, the Tribunal concluded that the recovery order could not stand. The appeal against the recovery was therefore allowed as consequential relief.

The recovery order is set aside; consequential relief follows from the Tribunal's allowance of the refund.

Final Conclusion: Impugned orders are set aside. Appeals are allowed: the appellant is entitled to refund of the rubber cess paid under protest, the refund is not barred by unjust enrichment on the facts, and the consequential recovery order is vacated; relief to be given in accordance with law.

Condonation of delay - discretion under proviso to Section 35 of the Central Excise Act - decide appeal on merits - liberal approach to limitation

Condonation of delay - discretion under proviso to Section 35 of the Central Excise Act - decide appeal on merits - liberal approach to limitation - Whether the Commissioner (Appeals) was justified in rejecting the appeal as time-barred without exercising the discretion conferred by the proviso to Section 35 and whether the matter should be remanded for exercise of that discretion and adjudication on merits. - HELD THAT: - The Tribunal found that the Order in Original was received by the appellant on 10th May 2018 and that the appeal was filed on 11th July 2018, resulting in a two day delay beyond the 60 day period. Although no formal application for condonation of delay was filed, the Commissioner (Appeals) had not pointed out the defect and had proceeded to query the merits of the appeal. The proviso to Section 35 confers a discretion on the Commissioner (Appeals) to condone delay for a further period, and that discretion ought to have been exercised rather than resulting in summary dismissal. Given the minuscule delay, absence of malafide and settled jurisprudence preferring adjudication on merits with a liberal approach to limitation, the Tribunal concluded that the appeal should be decided on merits after the Commissioner (Appeals) considers and, if justified, condones the delay. Accordingly the Tribunal remanded the matter for fresh consideration on these lines. [Paras 6, 7, 8]

The matter is remanded to the Commissioner (Appeals) to consider condoning the delay under the proviso to Section 35 and to decide the appeal on merits; appeal allowed by way of remand.

Final Conclusion: The Tribunal allowed the appeal by way of remand, directing the Commissioner (Appeals) to exercise the discretion under the proviso to Section 35 to consider condonation of the short delay and thereafter to decide the appeal on merits.

Summary order. Petitioner not permitted to submit manual SEIS application; petitioner granted liberty to file online application which shall be processed in accordance with law and any decision on grant or denial of benefits (including effect of the impugned notification dated 23.09.2021) shall be subject to the outcome of the writ petition; respondents directed to file reply affidavit by 17.01.2022, rejoinder by 21.01.2022, and matter listed on 25.01.2022; arrangement creates no equity and applies to Writ Petition No. 26441 of 2021.

Oppression and mismanagement under Section 241-242 - interest of the company paramount - interim restraint on alienation of assets and shareholding pending board approval or final disposal - audi alteram partem / natural justice - non-impleaded parties - sanctioned scheme of demerger - implementation not to be impeded by interim order

Interim restraint on alienation of assets and shareholding pending board approval or final disposal - interest of the company paramount - Whether respondents should be temporarily restrained from effecting any transfer, alienation or creation of encumbrance on the shareholding and assets of respondent No.1 (Orient Craft Ltd.) pending board consideration or final disposal of CP No. 81/Chd/Hry/2021. - HELD THAT: - The Tribunal, having regard to the company's heavy losses, the Resolution Plan formulated under RBI guidelines and the absence of any board resolution authorising the proposed sale of the Bhiwadi/Chopanki land, held that transfers or encumbrances affecting the company's assets or shareholding can be effected only after consideration at the Board level and passing of an appropriate resolution. The Tribunal emphasised that at the interim stage the paramount consideration is the interest of the company and its stakeholders, and noted that the sale had not been finalized at board level on the record before it. On that basis the Tribunal granted a temporary restraint on changing the shareholding pattern or disposing/encumbering assets of respondent No.1 except with prior approval of its Board of Directors or until final disposal of the main company petition. [Paras 22, 24, 26, 27, 35]

Respondents are temporarily restrained from changing the shareholding pattern and from transferring, alienating or creating any encumbrance on assets of respondent No.1 including the land in question except with prior approval of its Board of Directors or until final disposal of CP No. 81/Chd/Hry/2021.

Audi alteram partem / natural justice - non-impleaded parties - sanctioned scheme of demerger - implementation not to be impeded by interim order - Whether directions in the earlier interim order could operate against the subsidiaries (O.C. Fashion Pvt. Ltd. and Orient Craft Exchange Ltd.) which were not impleaded in IA(CA) No.10/2021 and whether the interim order would impede implementation of the demerger scheme sanctioned by the Tribunal. - HELD THAT: - Applying the principle of audi alteram partem, the Tribunal found that no adverse order should be passed against parties who were not impleaded in the interim application. The directions in the earlier order that affected the two demerged subsidiaries therefore required modification. The Tribunal also clarified that the modified interim directions shall not impede or thwart the implementation of the scheme of arrangement (demerger) previously sanctioned by the Tribunal, and accordingly withdrew the directions as to those subsidiaries while preserving the interim restraint only against respondent Nos.2 and 3 in respect of respondent No.1. [Paras 33, 34, 35]

Directions against the two subsidiaries are withdrawn because they were not impleaded; the interim order is modified so as not to impede implementation of the demerger scheme, while maintaining the restraint as to respondent No.1 as specified.

Final Conclusion: IA(CA) No.10/2021 is disposed by modifying the interim order: respondent Nos.2 and 3 are temporarily restrained from altering shareholding or alienating/encumbering assets of Orient Craft Ltd. except with prior Board approval or until final disposal of CP No.81/Chd/Hry/2021; directions against the non-impleaded demerged subsidiaries are withdrawn and it is clarified that the interim order will not impede implementation of the sanctioned demerger; CA No.207/2021 is disposed accordingly.

Section 9 application under Insolvency and Bankruptcy Code, 2016 - extension of limitation by account confirmation - forgery and pending criminal proceedings affecting evidentiary reliance - pre-existing dispute - notice of dispute under Section 8(2)(a)

Extension of limitation by account confirmation - forgery and pending criminal proceedings affecting evidentiary reliance - Whether the Section 9 application was time-barred and whether the account confirmation dated 01.04.2017 could extend the period of limitation. - HELD THAT: - The Adjudicating Authority correctly treated the debt as having fallen due on 10.09.2016 as stated in the Section 8 notice and found the Section 9 application filed in November 2019 to be time-barred absent a valid interruption or extension of limitation. The Operational Creditor relied on an account confirmation dated 01.04.2017 allegedly signed by the Corporate Debtor's accountant to obtain an extension. The Corporate Debtor had, however, disputed that document and lodged a criminal complaint alleging its forgery, with an FIR registered and criminal proceedings pending. When the very basis for extension of limitation is under cloud and disputed by the Corporate Debtor, the Adjudicating Authority was entitled to refuse to place reliance on the account confirmation for the purpose of extending limitation. The Adjudicating Authority's conclusion that no error was committed in not treating the application as within time follows from these facts and the pending criminal proceedings challenging the authenticity of the purported acknowledgment. [Paras 6]

Application was barred by limitation and the account confirmation dated 01.04.2017 could not be relied upon in view of the dispute and pending criminal proceedings.

Pre-existing dispute - notice of dispute under Section 8(2)(a) - Whether a pre-existing dispute existed between the parties sufficient to bar admission of the Section 9 application. - HELD THAT: - The Corporate Debtor, by its reply dated 24.04.2019 to the demand notice of 20.03.2019, specifically raised a dispute that it had supplied back similar material on 05.03.2017 following a meeting dated 18.02.2017 and pleaded supporting entries and returns. The Operational Creditor replied on 02.07.2019 denying the Corporate Debtor's allegations and asserting that the return of material never occurred and alleging forgery of documents. Those competing contentions formed a clear pre-existing dispute as recorded in the reply to the demand notice. Such factual disputes as to whether material was returned and the authenticity of supporting documents could not be resolved in summary Section 9 proceedings and therefore constituted a valid ground for rejecting the petition. [Paras 7, 8, 9, 10, 11]

There was a pre-existing dispute as to return of goods and related facts, and the Section 9 application was rightly rejected on that ground.

Final Conclusion: The appeals are dismissed. The Adjudicating Authority did not err in rejecting the Section 9 applications: the petitions were time barred in the absence of a dependable account confirmation (which was disputed and the subject of criminal proceedings), and a pre-existing factual dispute raised in the reply to the demand notice precluded admission under Section 9.

Real dispute - proof of delivery - unimpeachable evidence - Section 9 of the Insolvency and Bankruptcy Code, 2016 - demand notice under section 8 of the Insolvency and Bankruptcy Code, 2016 - operational creditor - corporate debtor

Proof of delivery - unimpeachable evidence - Whether the discrepancies in Invoice No. MPPL/405/15-16 (Invoice 1) and the existence of two versions of the invoice defeated the claim of the operational creditor under Section 9. - HELD THAT: - The Tribunal accepted the Appellant's explanation that the handwritten document was a proforma issued at loading showing an approximate prevailing rate and that the later computerized invoice correctly recorded the applicable rate for the supply. The Appellant demonstrated that credits were given for any short supply arising from differing weigh-bridge records. On that basis the discrepancy between the two invoice versions was explained and not treated as establishing a substantive denial of liability.

Discrepancy in Invoice 1 was satisfactorily explained and was not held to be a fatal impediment to the claim.

Proof of delivery - real dispute - Whether Invoice No. MPPL/062/16-17 (Invoice 2) was supported by cogent proof of delivery such that the Section 9 petition could succeed despite the respondent's denial. - HELD THAT: - The Appellant relied on an e-mail (dated 11.4.2017), quarterly VAT returns and its ledger entries to show supply. The Tribunal held that the e-mail did not amount to confirmation of receipt, the VAT returns and ledger were at best indirect evidence concerning tax compliance and could not substitute for unimpeachable proof of delivery, and the consignment note did not convincingly establish receipt by the Corporate Debtor. Because the Corporate Debtor had specifically disputed delivery in its reply to the demand notice, the operational creditor was required to produce conclusive evidence of supply; it failed to do so and the dispute as to delivery was held to be bona fide.

Claim under Invoice 2 was rejected for want of unimpeachable proof of delivery; a real dispute existed.

Proof of delivery - forgery - real dispute - Whether Invoice No. MPPL/080/16-17 (Invoice 3) was proved to have been delivered to and received by the Corporate Debtor, in view of the respondent's allegation of forgery. - HELD THAT: - The Corporate Debtor alleged forgery of the invoice and disputed the signature on the invoice. The Appellant's reliance on VAT filings and an assertion that the same lorry delivered both items were not substantiated by cogent documentary evidence. In the absence of a receipt or other unimpeachable documentary proof of delivery and given the specific denial of receipt by the Corporate Debtor, the Tribunal concluded that the operational creditor had not established delivery of the goods stated in Invoice 3 and that the dispute was real.

Claim under Invoice 3 was not established; the dispute over delivery and authenticity of the invoice was held to be genuine.

Section 9 of the Insolvency and Bankruptcy Code, 2016 - real dispute - Whether the Section 9 application by the operational creditor should be admitted notwithstanding the respondent's disputes on delivery and invoice authenticity. - HELD THAT: - Applying the principle that the IBC process cannot be used where a 'real dispute' exists, the Tribunal evaluated the documentary evidence submitted in response to the Corporate Debtor's specific denials in its reply to the demand notice. For Invoices 2 and 3 the Appellant failed to produce unimpeachable proof of delivery and could not dispel the respondent's legitimate disputes. Reliance on indirect tax records and ledger entries was held insufficient to defeat a pleaded denial of receipt. The Tribunal therefore sustained the Adjudicating Authority's conclusion that a real dispute existed and that the Section 9 petition lacked merit.

The Section 9 application was correctly dismissed because genuine disputes existed concerning supply and the authenticity/receipt of the invoices; IBC remedy could not be invoked.

Final Conclusion: The appeal is dismissed; the Adjudicating Authority's order rejecting the Section 9 petition was upheld because the operational creditor failed to produce unimpeachable proof of delivery for two of the contested invoices, giving rise to bona fide disputes which precluded initiation of insolvency proceedings under the IBC.

Admissibility of Section 7 petition despite pending challenge to assignment - effect of interim order restraining coercive action on validity of assignment - finality of limitation once affirmed by appellate orders including the Supreme Court - scope for settlement and filing of an application under Section 12A of the Code

Admissibility of Section 7 petition despite pending challenge to assignment - effect of interim order restraining coercive action on validity of assignment - Whether an assignee could be prevented from filing an application under Section 7 of the Code by a pending writ petition challenging the assignment and the interim order passed by the High Court. - HELD THAT: - The Adjudicating Authority's order quoting the High Court's interim order shows the relief granted was limited to consideration of a settlement proposal and a direction that no coercive action be taken until the next listing. That interim order did not stay or suspend the assignment in favour of the respondent-assignee. Consequently, the existence of the writ petition and the limited interim direction did not render the respondent's filing of a Section 7 application impermissible. The Tribunal found no illegality in admission of the Section 7 application on this basis and rejected the appellant's contention that the pendency of the writ petition precluded the filing of the insolvency petition. [Paras 5, 6]

Filing of the Section 7 application by the assignee was not barred by the pendency of the writ petition or by the interim order which only restrained coercive action and did not stay the assignment.

Finality of limitation once affirmed by appellate orders including the Supreme Court - Whether the appellant could re-agitate the question of limitation before the Adjudicating Authority after this Tribunal had held the Section 7 application was not time-barred and that view was affirmed by the Supreme Court. - HELD THAT: - This Tribunal had earlier held that the Section 7 application was not barred by limitation. The Supreme Court dismissed the appellant's appeal and while granting liberty to raise permissible objections, did not disturb the Tribunal's conclusion on limitation. The appellate process thereby affirmed the view that the application was not time-barred; the liberty granted could not be read as permission to re-open the settled question of limitation before the Adjudicating Authority. The Adjudicating Authority was not required to re-decide limitation once the appellate conclusion had become final between the parties. [Paras 7, 8]

The objection on limitation could not be re-agitated before the Adjudicating Authority; the question of limitation was final between the parties after affirmation by the Supreme Court.

Scope for settlement and filing of an application under Section 12A of the Code - Whether the appellant's prior efforts to settle with the bank affected the proceedings and what remedy, if any, remained available. - HELD THAT: - The Court observed that efforts to settle do not preclude the appellant from pursuing settlement subsequently. If a settlement is reached, the appellant may place it before the Adjudicating Authority by making the appropriate application under Section 12A of the Code; the Adjudicating Authority, upon being satisfied, may consider and pass such orders as are permissible under law. This observation is advisory and procedural, leaving any consideration of a concrete settlement application to the Adjudicating Authority. [Paras 9]

Settlement remains open to the appellant and can be placed before the Adjudicating Authority by filing an application under Section 12A, which the Authority may consider if satisfied.

Final Conclusion: The appeal is without merit and is dismissed; the admission of the Section 7 petition stands, the limitation issue is final as affirmed on appeal, and the appellant remains free to pursue settlement by an appropriate Section 12A application before the Adjudicating Authority.

Possession and addition of mortgaged leasehold and implied lease lands to liquidation estate - inclusion of third-party assets in liquidation estate - estoppel of guarantors - liquidator's duty to realise liquidation assets - rights of secured creditors under SARFAESI - compliance with Liquidation Process Regulations

Possession and addition of mortgaged leasehold and implied lease lands to liquidation estate - inclusion of third-party assets in liquidation estate - estoppel of guarantors - compliance with Liquidation Process Regulations - Whether the mortgaged leasehold land (express and implied leases) mortgaged by promoters/guarantors can be taken into physical possession and added to the liquidation estate of the Corporate Debtor and whether personal guarantors are estopped from opposing such inclusion. - HELD THAT: - The Tribunal considered that the hospital building and its utilities are constructed on the leasehold portion and that the land and building are effectively inseparable for realisation purposes; sale of the assets separately would be infeasible and would prejudice realisation for stakeholders. Both primary secured creditors did not oppose handing over possession to the liquidator (the second respondent conditionally agreed subject to protection of its interests). The personal guarantors, having granted lease and mortgaged their properties and permitted use by the Corporate Debtor, cannot claim third party protection to thwart liquidation; they are estopped from asserting that such properties are not part of the liquidation estate. The Tribunal observed that the liquidator must be able to take possession and dispose of liquidation assets to conclude the liquidation process and to realise value for claimants. Accordingly, the Tribunal affirmed its earlier order allowing the liquidator to take physical possession and to add the specified mortgaged lands (both express and implied leases) to the liquidation estate, while directing strict adherence to the procedures prescribed in the Liquidation Process Regulations. The Tribunal rejected the contention that inclusion would improperly circumvent rights of secured creditors, noting that protections for their claims will be considered by the liquidator in accordance with the Code and Regulations. [Paras 21, 22, 23]

Application allowed; respondents directed to hand over physical possession of the mortgaged leasehold and implied lease lands to the liquidator and the lands are permitted to be added to the liquidation estate, subject to compliance with the Regulations.

Final Conclusion: The Tribunal affirmed its earlier order dated 01.02.2021 and allowed the liquidator to take possession of, and to add, the mortgaged leasehold (express and implied) lands to the liquidation estate, directing the liquidator to follow the Liquidation Process Regulations; M.A.76/KOB/2020 is disposed of accordingly.

Pre-existing dispute - existence of dispute test under Mobilox - default and operational debt - admission of application under Section 9 of the IBC, 2016 - initiation of corporate insolvency resolution process - moratorium under Section 14 of the IBC, 2016 - appointment of Interim Resolution Professional

Pre-existing dispute - existence of dispute test under Mobilox - The corporate debtor has not established any pre-existing dispute such as would preclude admission of the Section 9 application. - HELD THAT: - The Tribunal examined the corporate debtor's plea of prior dispute relating to alleged discrepancies in log books, monthly reports and falsified invoices and found no documentary communication predating the demand notice to substantiate a 'pre-existing dispute'. Applying the test in Mobilox, the adjudicating authority considered whether the dispute, as pleaded, disclosed a plausible contention requiring further investigation. The corporate debtor failed to place any substantive evidence of a dispute prior to the demand notice; its assertions were held to be unsupported and thus amounted to an impermissible attempt to create a 'moonshine' dispute. [Paras 11, 13, 14]

The contention of a pre-existing dispute is rejected and held to be unsustainable.

Default and operational debt - admission of application under Section 9 of the IBC, 2016 - initiation of corporate insolvency resolution process - The Section 9 application was complete, a default of over the prescribed threshold existed, and the application is admitted initiating the CIRP. - HELD THAT: - The Tribunal found that the applicant had placed relevant documents including invoices, ledger and a dishonoured cheque evidencing part payment and admission of liability. The unpaid operational debt exceeded the statutory threshold and the claim related to services provided within the limitation period. Relying on the statutory scheme and jurisprudence recognizing default upon non-payment, the Tribunal held the application to be complete under the prescribed form and admitted it under Section 9(5), thereby triggering the corporate insolvency resolution process. [Paras 12, 15, 16, 17, 18]

Application under Section 9 is admitted and CIRP is initiated.

Moratorium under Section 14 of the IBC, 2016 - appointment of Interim Resolution Professional - Moratorium is declared and an Interim Resolution Professional is appointed with directions for deposits and consequential actions. - HELD THAT: - Consequent to admission, the Tribunal declared the moratorium and specified the statutory prohibitions that follow. As the applicant had not proposed an IRP, the Tribunal appointed an Interim Resolution Professional subject to standard conditions and directed him to undertake duties under the Code. The operational creditor was directed to deposit an interim amount to meet IRP's expenses, subject to adjustment by the Committee of Creditors. Administrative directions were given for service of the order, supply of records to the IRP, and intimation to the IBBI and ROC. [Paras 18, 19, 20, 21]

Moratorium imposed; IRP appointed and procedural directions (including deposit by operational creditor) issued.

Final Conclusion: The Tribunal rejected the corporate debtor's plea of a pre-existing dispute, held the Section 9 application to be complete and arising from an admitted default above the statutory threshold, admitted the application, initiated CIRP, imposed the moratorium and appointed an Interim Resolution Professional with attendant administrative directions.

Corporate Insolvency Resolution Process (CIRP) - admission of application under Section 7 of the Insolvency and Bankruptcy Code, 2016 - default under insolvency proceedings - moratorium - appointment of Interim Resolution Professional - duties of Interim Resolution Professional - management to cooperate with the IRP - time-bound completion of CIRP

Admission of application under Section 7 of the Insolvency and Bankruptcy Code, 2016 - default under insolvency proceedings - Corporate Insolvency Resolution Process (CIRP) - The petition under Section 7 was admitted and CIRP initiated against the Corporate Debtor on account of default. - HELD THAT: - The Financial Creditor filed an application under Section 7 alleging non-payment of amounts due under invoices. The Corporate Debtor did not dispute the debt but sought time (6-7 months) for repayment and indicated liabilities to other creditors, demonstrating inability to pay presently. Having regard to the undisputed debt, the Corporate Debtor's inability to propose a viable repayment schedule and its existing indebtedness to other creditors, the Tribunal held that the facts constituted a default warranting initiation of CIRP and admitted the company petition. [Paras 5, 6]

Company Petition admitted and Corporate Insolvency Resolution Process ordered to commence.

Appointment of Interim Resolution Professional - moratorium - duties of Interim Resolution Professional - management to cooperate with the IRP - time-bound completion of CIRP - IRP appointed, moratorium declared, and directions issued for conduct and completion of CIRP within a time-frame. - HELD THAT: - Upon admission of the petition, the Tribunal appointed the nominated Insolvency Professional as Interim Resolution Professional and directed him to take charge of the Corporate Debtor's management and perform functions under the Code and Rules. A moratorium was declared in terms of the Code. The directors, promoters and persons associated with management were directed to extend assistance to the IRP. The Tribunal fixed a statutory time-frame, directing completion of the CIRP within 180 days from the date of commencement.

Mr. Rajesh Chillale appointed as Interim Resolution Professional; moratorium declared; management to cooperate; CIRP to be completed within 180 days.

Final Conclusion: The Tribunal admitted the Section 7 petition, initiated CIRP against the Corporate Debtor, appointed an Interim Resolution Professional, declared moratorium, directed cooperation by management and fixed a 180 day period for completion of the CIRP.

Res judicata - pre-existing dispute under Section 5(6) of the Insolvency and Bankruptcy Code - identity of applicant and validity of thumb-impression/attestation - Rule 128 NCLT Rules, 2016 and Form No. NCLT 14

Res judicata - doctrine of constructive res judicata - Whether the present Section 9 application is barred by res judicata in view of the earlier IBC petition which was withdrawn by the applicant with costs. - HELD THAT: - The Tribunal held that the doctrine of res judicata applies where there has been a conscious adjudication on the merits; however, withdrawal of an earlier IBC petition after service upon the respondent and the subsequent conduct of the applicant demonstrated an intention to avoid an adverse adjudication. The earlier petition CP(IB)/03/KOB/2021 was withdrawn by an interlocutory application which was allowed with costs; the Tribunal construed the withdrawal in the factual matrix as an attempt to evade final adjudication and concluded that the present petition is hit by res judicata. The Tribunal relied on established principles that res judicata attains finality where litigation has been actively pursued and an outcome on merits was avoided by withdrawal coupled with conduct indicating apprehension of an adverse order. [Paras 27, 28, 29, 30, 31]

The application is barred by res judicata and cannot be entertained.

Identity of applicant and validity of thumb-impression/attestation - Rule 128 NCLT Rules, 2016 and Form No. NCLT 14 - Whether the Section 9 application was validly filed by the named applicant given absence of his signature and absence of the attestation required for affidavits sworn by illiterate persons. - HELD THAT: - On scrutiny the Tribunal found the application was not signed by the applicant and contained only a left thumb impression without any accompanying attestation or the statutory Form No. NCLT 14 which is mandated where an affidavit is sworn by an illiterate or visually challenged person. In absence of Form NCLT 14 or any explanation for non-signature and attestation, the Tribunal drew an adverse inference that the petition may have been filed without the applicant's actual knowledge or authority. The defect as to identity and verification was therefore held to be material. [Paras 32, 33]

The application is vitiated by non-compliance in respect of the applicant's identity and verification and cannot be allowed to proceed.

Pre-existing dispute under Section 5(6) of the Insolvency and Bankruptcy Code - Whether there existed a pre-existing dispute between the parties which would bar admission of the Section 9 petition. - HELD THAT: - Examining the statutory definition of 'dispute' in Section 5(6) of the Code, which includes disputes as to existence or amount of debt and quality of goods or services, the Tribunal found that a dispute as to quantity/quality of supplied goods had been pleaded and shown on record. The Corporate Debtor had contemporaneous contentions and legal proceedings relating to the High Sea Sale Contract, and the Tribunal accepted that a pre-existing dispute existed which disentitles the operational creditor from invoking the insolvency remedy under Section 9. [Paras 34, 35]

A pre-existing dispute exists between the parties and bars admission of the Section 9 application.

Final Conclusion: The Section 9 application filed by the operational creditor is dismissed as being without merit: it is hit by res judicata, is vitiated by defective verification/absence of required attestation regarding the applicant's identity, and is barred by a pre-existing dispute; the petition is therefore dismissed without costs.

Admission of tax dues - quantified for the purposes of SVLDRS - eligibility to file SVLDRS declaration under inquiry/investigation/audit category - effect of post cut off quantification on eligibility - mandate to grant relief upon valid declaration

Admission of tax dues - quantified for the purposes of SVLDRS - effect of post cut off quantification on eligibility - Admission made by the director and subsequent SVLDRS forms satisfied the requirement of 'tax dues' being 'quantified' for the purpose of eligibility under the SVLDR Scheme. - HELD THAT: - The Court found that the director's recorded statement dated 25th March 2019 admitted unpaid service tax liability for the period October 2015 to June 2017 and that the petitioner thereafter filed SVLDRS 1 and confirmed the quantified estimate in Form SVLDRS 2 and Form SVLDRS 2A. The court accepted the view in Nabeel Construction Pvt. Ltd. that what is relevant for eligibility under the Scheme is an admission of tax dues by the declarant prior to the cut off date and that strict mathematical precision is not required; subsequent departmental quantification post 30th June 2019 does not defeat eligibility. The impugned order's conclusion that quantification was not final by 30th June 2019 was held to be contrary to the Forms SVLDRS 2 / 2A and settled principles that bona fide pre cut off admissions suffice for availing scheme benefits. [Paras 12, 14, 15, 19, 21]

The petitioner's admission in the director's statement and confirmation in SVLDRS forms amounted to quantified tax dues for SVLDRS eligibility and the impugned finding to the contrary was rejected.

Eligibility to file SVLDRS declaration under inquiry/investigation/audit category - mandate to grant relief upon valid declaration - Validity of the Designated Committee's rejection of the SVLDRS 1 declaration and the consequent relief to be afforded to the petitioner. - HELD THAT: - Having held that the petitioner had validly admitted and quantified the tax dues for the purposes of the Scheme, the Court concluded that the Designated Committee's order dated 12th February 2020 rejecting the declaration was contrary to law and to the objectives of the Scheme. The Court quashed the impugned order, held the petitioner eligible to avail the Scheme, and directed the respondents to pass a fresh order granting relief on that basis. The Court also directed deposit of the balance amount within a stipulated period and issuance of a discharge certificate upon payment. [Paras 15, 22, 23]

Impugned order dated 12th February 2020 is quashed; petitioner is held eligible to avail benefits under the Scheme and respondents are directed to grant relief on fresh consideration, subject to deposit and issuance of discharge certificate.

Final Conclusion: Writ petition allowed. The order rejecting the SVLDRS 1 declaration is set aside; the petitioner is declared eligible to avail the Scheme based on the admitted tax dues and the respondents are directed to pass a fresh order granting relief, the petitioner to deposit the balance within the time directed, and the respondents to issue a discharge certificate upon payment.

Deemed sale under Article 366(29A)(d) - transfer of right to use goods - Supply of Tangible Goods Service - mutual exclusivity of VAT and service tax - extended period of limitation - concealment

Deemed sale under Article 366(29A)(d) - transfer of right to use goods - Bharat Sanchar Nigam Ltd. criteria - Whether supply of mobile/transportable gensets (hired for short periods and supplied with technicians/operators and fuel) constituted a 'deemed sale' by transfer of right to use under Article 366(29A)(d) of the Constitution. - HELD THAT: - The Tribunal applied the five-fold test articulated by the Apex Court in Bharat Sanchar Nigam Ltd. to determine whether there is a transfer of the right to use goods. It found that the gensets were available for delivery, their identity was agreed by contract, the clients had the legal right to use them (including consequences of such use), the right to use during the hire period was to the exclusion of the owner, and the owner could not transfer the same right to others during that period. The Tribunal observed that the gensets were dedicated to the clients and remained under the clients' effective control and possession because the clients could decide when to run them, even though operators and fuel were supplied by the appellant. The CBEC circular distinguishing sale and service by reference to transfer of right to use was held to support this conclusion. On these findings the Tribunal concluded that the transactions in question are sales/deemed sales under Article 366(29A)(d). [Paras 15, 16, 17, 18]

Supply of mobile gensets as described constituted a 'deemed sale' by transfer of the right to use under Article 366(29A)(d).

Supply of Tangible Goods Service - mutual exclusivity of VAT and service tax - Whether the confirmed service tax demand on the consideration for supply of mobile gensets was sustainable where the same transactions were treated as sales and VAT/Sales Tax had been discharged. - HELD THAT: - Having held that the transactions were deemed sales, the Tribunal noted that the appellant had discharged liability under the VAT/Sales Tax law as reflected in returns and the Adjudicating Authority's records. The Tribunal treated VAT and service tax as mutually exclusive for the same transaction and, therefore, held there remained no service tax liability on the appellant for the periods in question. Consequently, the impugned demand and penalties in the original order were set aside and the appeal was allowed with consequential reliefs as per law. [Paras 19, 20]

Service tax demand (and related penalties) on those transactions could not be sustained where they amounted to deemed sales and VAT/Sales Tax had been paid.

Extended period of limitation - concealment - Whether the department could invoke the extended period of limitation under the facts of the case. - HELD THAT: - The Tribunal observed that the dispute was one of interpretation of law and that there was no case of concealment or suppression made out against the appellant. In that factual and legal context the Tribunal held that the extended period of limitation was not available to the revenue. [Paras 21]

Extended period of limitation cannot be invoked; only normal limitation would apply.

Final Conclusion: The appeal was allowed: supplies of mobile/transportable gensets (supplied for short periods with technicians/operators and fuel) were held to be 'deemed sales' by transfer of right to use under Article 366(29A)(d), service tax demands and penalties thereon were set aside in view of VAT/Sales Tax having been paid, and the extended period of limitation was held inapplicable.

Transaction of sale of goods versus composite transaction - transfer of property in goods as determinative of sale - service tax liability for outdoor catering - doctrine of unjust enrichment - absence of valuation machinery for bifurcation prior to Rule 2C - effect of unmodified assessments on refund claims

Transaction of sale of goods versus composite transaction - transfer of property in goods as determinative of sale - service tax liability for outdoor catering - Characterisation of the respondent's sale of packed food on trains - whether the transactions involved any service element liable to service tax or were pure sales of goods. - HELD THAT: - On the facts the respondent sold packed food to passengers through hawkers who carried goods and sold at specified prices; passengers were under no obligation to purchase. The Tribunal found these facts were even stronger than those before the Delhi High Court in IRCTC and applied the High Court's reasoning that where property in goods is transferred on being loaded and kept in railway containers/devices, the transaction is one of sale of goods; any heating/serving is incidental. Accordingly, there is no service element attracting service tax in the respondent's direct sales to passengers, and the respondent is entitled to claim refund of service tax paid under mistake of law, subject to the test of unjust enrichment. This conclusion also follows from the statutory exclusion of transfers of title to goods from the definition of service. (Paragraph 14.) [Paras 14]

The sales by the respondent to passengers are transactions of pure sale and not chargeable to service tax; the respondent is entitled to seek refund subject to unjust enrichment verification.

Absence of valuation machinery for bifurcation prior to Rule 2C - determination of value of service portion - Whether the Finance Act or existing rules during the relevant period contained a machinery for bifurcating value into service and sale portions for transactions like the present. - HELD THAT: - The Tribunal noted that Rule 2C of the Service Tax (Determination of Value) Rules, 2006, providing specified percentages for service portion, was introduced only w.e.f. 01.07.2012. Prior to that there was no statutory mechanism to bifurcate the transaction into service and sale components for valuation under service tax. Hence, for the period 2006-07 to 2009-10 there was no rule-based method to compute a separate service component in the respondent's transactions. (Paragraph 15.) [Paras 15]

No machinery existed during the material period to determine a service portion of the transactions; Rule 2C is prospective (w.e.f. 01.07.2012) and does not cover the respondent's transactions in the disputed period.

Effect of unmodified assessments on refund claims - doctrine of unjust enrichment - Whether a refund can be sanctioned where duty has been paid, returns filed and assessments have not been modified; and whether the claim is subject to unjust enrichment. - HELD THAT: - The Tribunal observed that, notwithstanding merits of the refund claim, established precedent requires examination of whether the assessments have been modified or appealed against; where assessments remain unmodified, refund may be barred. The Tribunal directed that the issue of unjust enrichment must be fully examined with opportunity to lead evidence, including whether the tax claimed as refund formed part of consideration or was passed on, and whether assessments have been modified in appeal in light of the Supreme Court's decision in ITC Ltd. (referenced in the order). The Commissioner (Appeals) had failed to engage with the unjust enrichment issue or afford proper opportunity to the respondent. (Paragraphs 16-17.) [Paras 16, 17]

Refund cannot be finally sanctioned without adjudication on whether assessments have been modified; the question of unjust enrichment is remitted for fresh consideration after affording the respondent a reasonable opportunity to lead evidence.

Effect of binding High Court declaration and pendency of appeal - Whether the pendency of SLPs before the Supreme Court in the IRCTC matter or the fact that the respondent was not a party to the IRCTC litigation affects applicability of the Delhi High Court's declaration to the respondent. - HELD THAT: - The Tribunal distinguished the IRCTC factual matrix from the respondent's facts but held that the Delhi High Court's declaration that similar transactions are sales of goods applies to the respondent whose factual position (licensed vendors selling to passengers) is the same or stronger. The pendency of appeals before the Supreme Court and the respondent's non party status do not prevent application of the clarificatory and declaratory pronouncement of the Delhi High Court to the respondent's refund claim in the present facts. (Paragraph 14.) [Paras 14]

The Delhi High Court's ruling applies to the respondent; pendency of SLPs and non party status do not preclude application of that declaration in the respondent's case.

Final Conclusion: The Tribunal held that the respondent's sale of packed food on trains is a transaction of sale (not service) and the respondent may claim refund of service tax paid under mistake, but directed remand to the Commissioner (Appeals) to decide the issue of unjust enrichment and to verify whether assessments have been modified or appealed, after giving the respondent a reasonable opportunity to lead evidence; appeal allowed by way of remand.

Refund under Section 11B - Relevant date for limitation - Adjudication order as relevant date - Limitation period for refund claims

Refund under Section 11B - Relevant date for limitation - Adjudication order as relevant date - Whether the refund claim filed by the appellant was barred by limitation under Section 11B. - HELD THAT: - The tribunal recorded that a show cause notice dated 04.10.2018 was adjudicated in favour of the appellant by order dated 16.12.2019 holding that the appellant was not liable to pay service tax on Renting of Immovable Property Service for residential purposes. The refund claim was filed on 16.09.2020. Under the scheme of Section 11B the refund claim must be filed within one year from the relevant date. The adjudication order which finally determined that the tax was not payable constitutes the relevant date for computing the one-year limitation. Applying that principle, the refund filed on 16.09.2020 falls within one year from the adjudication order dated 16.12.2019 and therefore is not time-barred.

Refund claim is within time and not barred by limitation under Section 11B.

Final Conclusion: The impugned order rejecting the refund as time-barred is set aside; the appeal is allowed and the appellant is entitled to consequential relief.

Condonation of delay - sufficient cause - limitation - grant of interest on refundable amount - Section 35FF - interest from the date of deposit till the date of refund - rate of interest 12% per annum

Condonation of delay - sufficient cause - limitation - Delay in filing the appeal before the Commissioner (Appeals) was condoned. - HELD THAT: - The appellant demonstrated that the delay in filing the appeal was caused by circumstances beyond its control: the theft of the briefcase containing appeal papers while being taken to the advocate, unsuccessful efforts to obtain police assistance, subsequent recovery of documents and completion of drafting, with filing delayed only by intervening weekend days. The Tribunal found this a plausible and sufficient explanation for being prevented from filing within the prescribed period and noted that the appeal was filed within ninety days overall. The Commissioner (Appeals) erred in rejecting the condonation application on limitation grounds. [Paras 2, 3, 6]

Delay before the Commissioner (Appeals) is condoned and the appeal is admitted for hearing.

Grant of interest on refundable amount - Section 35FF - interest from the date of deposit till the date of refund - rate of interest 12% per annum - Interest on the refundable amount is to be granted under Section 35FF at the rate of 12% per annum from the date of deposit until the date of refund. - HELD THAT: - The Tribunal held that Section 35FF applies for grant of interest on amounts refundable pursuant to an appellate order and requires interest to be paid from the date of deposit until refund without discrimination. Having regard to prior Tribunal authority which enhanced the rate of interest on pre-deposits to 12% per annum, the Tribunal directed that interest be allowed at 12% per annum from the date of deposit till the date of refund. The Adjudicating Authority was directed to give effect to this direction within 45 days of receipt or service of the copy of the order. [Paras 7]

Adjudicating Authority to grant interest @ 12% per annum from date of deposit till date of refund and to do so within 45 days of receipt/service of this order.

Final Conclusion: The appeal is allowed: the delay in filing before the Commissioner (Appeals) is condoned and the Adjudicating Authority is directed to grant interest under Section 35FF at 12% per annum from the date of deposit until the date of refund, to be paid within 45 days of receipt/service of this order.

Cenvat credit admissibility for inputs used in manufacturing or fabrication of capital goods - Requirement of one-to-one nexus for availment of credit - Validity of invoices and prescribed document requirements for availment of credit - Extended period of limitation for recovery of Cenvat credit - Penalty and interest for erroneous availment of Cenvat credit

Cenvat credit admissibility for inputs used in manufacturing or fabrication of capital goods - Requirement of one-to-one nexus for availment of credit - Admissibility of Cenvat credit claimed on M.S. bars/rods/angles/channels/beams, H.R. coils and similar articles used in fabrication/support structures for cranes and CCM. - HELD THAT: - The Tribunal held that availment of Cenvat credit is to be determined as on the date of receipt of inputs or capital goods and there is no requirement of strict one to one correlation between each input and a specific capital good. The lower authority had found that the Chartered Engineer's report only showed that such inputs could be used either for foundations/structures or for fabrication of capital goods and therefore disallowed credit. The Tribunal observed that the court below itself found these inputs were required for fabrication of capital goods and essential for manufacture of dutiable goods; there was no allegation of clandestine removal. On these findings the Tribunal set aside the disallowance so far as it related to the disputed amount (held to be admissible). [Paras 17, 18]

Cenvat credit disallowed by the lower authority in respect of the specified iron/steel items is set aside and such credit is held admissible.

Validity of invoices and prescribed document requirements for availment of credit - Admissibility of Cenvat credit claimed against commercial invoices alleged to be defective for not containing required registration/commissionerate details. - HELD THAT: - The Adjudicating Authority had held that certain invoices did not contain registration numbers or details prescribed under the rules and accordingly disallowed credit. The Tribunal examined the invoices placed on record and found they were in proper format, contained the appellant's address, central sales tax and VAT numbers, and separately reflected excise duty; in at least one case the supplier's ECC number was shown. On this factual review the Tribunal concluded the lower findings were erroneous and that the amount in dispute is available as Cenvat credit. [Paras 18]

The credit disallowed on the ground of defective invoices is allowed.

Extended period of limitation for recovery of Cenvat credit - Whether the extended period of limitation for recovery could be invoked in respect of the disputed Cenvat credit. - HELD THAT: - The Tribunal noted there was no material to show the assessee had concealed or clandestinely removed inputs, and the transactions and credits were recorded in books of account and statutory registers maintained in the ordinary course. The Tribunal accepted the submission that mere absence of a separate prior intimation to the Department does not by itself justify invoking the extended limitation where no concealment is alleged and records exist. On this basis the Tribunal found the lower authority's invocation of the extended period to be unsustainable in relation to the credits allowed by it. [Paras 15, 17]

Extended period of limitation was not properly attracted to sustain the disallowance and is not applicable to the credits as decided by the Tribunal.

Penalty and interest for erroneous availment of Cenvat credit - Sustainability of penalties and interest imposed in consequence of the disallowance of Cenvat credit. - HELD THAT: - Having set aside the primary disallowances and found the impugned credits admissible, the Tribunal held that consequential penalties could not stand. The Tribunal therefore modified the impugned order and removed the penalties; interest and quantification where applicable were to follow the modification. [Paras 19]

Penalties imposed in respect of the disallowed credits are set aside; the order is modified accordingly.

Final Conclusion: The appeal is allowed in part; the Tribunal set aside the disallowance of the specified Cenvat credits and allowed the credits supported by invoices, held the extended period of limitation inapplicable on the facts, and quashed the consequential penalties, with the impugned order modified accordingly and consequential benefits granted to the appellant.

Service of notice by refusal under Rule 77(3) of the U.P. Trade Tax Rules - Verification on oath of process-server report - Ex parte assessment order founded on unverified service report - Duty of authority to make further inquiry before treating refusal as proof of service - Limitation for completion of assessment where interim stay was vacated - Impermissibility of supplementing statutory reasons by after the event explanations

Service of notice by refusal under Rule 77(3) of the U.P. Trade Tax Rules - Verification on oath of process-server report - Duty of authority to make further inquiry before treating refusal as proof of service - Validity of service of assessment notices where process-server reported refusal to accept and whether such report could be relied upon without verification on oath or further inquiry. - HELD THAT: - Rule 77(3) mandates that where a person refuses to accept a notice the process-server must submit a report and such report shall be verified on oath; the concerned authority, having regard to the facts and after such further inquiry as it thinks fit, may consider the refusal to be proof of service. Rule 72(g) (under the VAT Rules) further requires that where a return is not verified by affidavit the process-server shall be examined on oath or caused to be so examined. In the present case the authorities below accepted the unverified report of the process-server and relied upon it to treat the notices as served after alleged refusals. The assessing authority and the first appellate authority failed to ensure the mandatory verification/examination on oath or to make the statutory further inquiry before treating the refusal as proof of service. The Tribunal recorded a finding of fact that service upon Mr. Naresh Agarwal was not proper but nevertheless remanded the matter, thereby permitting the Revenue to achieve by indirect means what could not have been done directly. The Court also emphasised that the Department cannot improve or supplement the reasons for a statutory order by after the event explanations or affidavits; reliance upon subsequent or additional material cannot validate an order which was vitiated for want of compliance with mandatory procedural requirements. [Paras 21, 22, 23, 28, 29]

The notices were not validly proved to have been served because the process-server's report was not verified on oath and no mandatory further inquiry was made; the ex parte assessment proceedings founded on such defective service are vitiated and unsustainable.

Ex parte assessment order founded on unverified service report - Limitation for completion of assessment where interim stay was vacated - Impermissibility of supplementing statutory reasons by after the event explanations - Whether the assessment and consequent appellate and tribunal orders could be sustained where the ex parte assessment was passed following alleged impending lapse of limitation but without valid service, and whether the Tribunal's remand cured the defect. - HELD THAT: - Although the assessing authority proceeded on the premise that limitation was near expiry, that urgency did not absolve statutory compliance under Rule 77(3) and Rule 72(g). The assessing authority's reliance on time pressure to pass an ex parte order, and subsequent attempts by Revenue to justify the action by relying on reports or affidavits not forming part of the original reasoning, are impermissible. The Tribunal, while noting improper service, remanded the matter which effectively allowed the Revenue to attempt to cure the defect indirectly; this was not permissible. The cumulative effect of defective service and the authorities' failure to follow mandatory verification/examination procedure rendered the assessment order and the subsequent orders liable to be set aside. [Paras 23, 25, 26, 29, 30]

The ex parte assessment and the impugned orders are set aside as vitiated by defective service and the absence of mandatory verification; the Tribunal's remand did not cure the procedural infirmity.

Final Conclusion: Both revisions are allowed. The assessment order dated 02.04.2012 and the impugned orders of the Tribunal are set aside because the process-server's report of refusal was not verified on oath and no mandatory further inquiry was made before treating refusal as proof of service; consequently the ex parte proceedings are vitiated.

Anticipatory bail - economic offences - custody for investigation to unearth modus operandi - public exchequer / state interest - role of accused beyond professional capacity

Anticipatory bail - economic offences - custody for investigation to unearth modus operandi - public exchequer / state interest - professional capacity vs substantive role - Anticipatory bail in FIR No. 679 dated 13.7.2019 was refused. - HELD THAT: - The court applied the principle that economic offences, which affect the State exchequer and involve organised conspiracies, warrant a more stringent approach to bail. Reliance was placed on precedents recognising economic offences as a class apart and requiring consideration of the nature of accusations, possible tampering with evidence, and the larger public interest. The material on record and the State's pleadings prima facie indicate that the petitioner was alleged to have acted beyond the limited role of a legal professional-managing registrations, IDs and documents, and being implicated in a prepared network of bogus firms facilitating bogus input tax credit. Given these allegations, the court found that custody of the petitioner was necessary to secure disclosure of other persons involved and the modus operandi, and that conferring pre-arrest protection would defeat the deeper probe into the scam. The petitioner's prior grant of ad interim anticipatory bail in a different FIR was held to be inapposite because the factual allegations in the present FIR are different and indicate a more central role. The court therefore concluded that no case was made out for anticipatory bail in the present FIR, while expressly refraining from expressing any opinion on the merits.

Petition dismissed; anticipatory bail refused in FIR No. 679 dated 13.7.2019.

Final Conclusion: Anticipatory bail was refused as the allegations prima facie disclose involvement in organised economic offences affecting the State exchequer and custody was considered necessary for investigation; the earlier ad interim bail in a separate FIR was not found to be determinative.

Appointment of arbitrator under Section 11 of the Arbitration Act - service by advocate's notice and judicial notice of practice - non-arbitrability - limitation as a bar to arbitration - competence-competence principle and reference to Arbitral Tribunal - limited judicial review under Sections 8 and 11 of the Arbitration Act - challenge under Section 34 of the Arbitration Act

Service by advocate's notice and judicial notice of practice - appointment of arbitrator under Section 11 of the Arbitration Act - Whether the High Court erred in appointing the sole arbitrator under Section 11 on the ground of non-service of notice and the appellant's hospitalization. - HELD THAT: - The Court held that the petition under Section 11 was supported by an affidavit of service and a long-standing practice on the Original Side of the Bombay High Court permits reliance on advocate's service when proved. The advocate's notice and copy of the petition were served in November 2019, and the appellant could have made arrangements to contest the petition despite subsequent hospitalization. Further, the appellant had representation before the Arbitral Tribunal at the preliminary meeting and did not preserve his non-appearance claim when filing these appeals. Consequently, the contention that the High Court failed to serve notice and thereby erred in appointing the arbitrator was rejected. [Paras 8, 9]

High Court did not commit error in proceeding under Section 11 and in appointing the arbitrator; the submission of non-service and hospitalization is rejected.

Non-arbitrability - limitation as a bar to arbitration - competence-competence principle and reference to Arbitral Tribunal - limited judicial review under Sections 8 and 11 of the Arbitration Act - challenge under Section 34 of the Arbitration Act - Whether issues of non-arbitrability and limitation were finally concluded by the High Court and/or are precluded from being decided by the Arbitral Tribunal. - HELD THAT: - Relying on this Court's exposition in Vidya Drolia (summarised in paragraph 154), the Court reiterated that judicial review at the Section 11 stage is extremely limited and that the Arbitral Tribunal is the preferred first forum to decide questions of arbitrability (competence-competence), except in manifestly ex facie cases. On the facts, the High Court did not finally decide non-arbitrability or limitation; the impugned order expressly kept contentions open. The parties have avenues to raise these contentions before the Arbitral Tribunal and, post-award (or as permissible), by challenge under Section 34. The appellant has already filed Section 34 petitions challenging the Arbitrator's order overruling Section 16 objections; those proceedings remain available. [Paras 11, 12]

Issues of non-arbitrability and limitation are not finally adjudicated by the High Court and remain open for decision by the Arbitral Tribunal, with available recourse under Section 34.

Final Conclusion: The appeals are dismissed. The High Court's appointment of the arbitrator is sustained and the contentions regarding non-arbitrability and limitation remain open to be agitated before the Arbitral Tribunal and, as permissible, in pending or future proceedings under Section 34. No order as to costs.

Offence under Section 138 of the Negotiable Instruments Act - Rebuttable statutory presumption as to consideration for cheque - Validity of complaint filed by corporate officer without formal authority - Exercise of revisional jurisdiction - perversity test - Reduction of sentence in view of part-payment and realisation of assets

Offence under Section 138 of the Negotiable Instruments Act - Rebuttable statutory presumption as to consideration for cheque - Conviction under Section 138 NI Act sustained where cheques and signatures were admitted and the statutory presumption that cheques were issued for a legally enforceable debt was not rebutted. - HELD THAT: - The record established issuance of the two account-payee cheques and their dishonour for insufficiency of funds. Signatures and execution of the cheques were not disputed. Once execution and signatures are admitted, the statutory presumption attaches that the cheques were issued for a legally enforceable debt; that presumption is rebuttable but the petitioners did not discharge that onus. The courts below considered the evidence and concurrently found the petitioners guilty of the offence under Section 138 of the NI Act. There is no material or legal basis shown to displace the concurrent findings of fact or to hold that the presumption was successfully rebutted.

Conviction under Section 138 NI Act maintained.

Validity of complaint filed by corporate officer without formal authority - Complaint filed by an assistant of the corporate complainant without a formal letter of authority was not vitiated where the defect was procedural and did not go to the root of the matter. - HELD THAT: - The absence of a formal authority/letter of appointment for the Assistant who filed the complaint was held to be a curable procedural irregularity. Relying on the principle that substantive rights should not be defeated by technical defects which do not affect the merits, the Court held that a person by virtue of his office may sign and verify pleadings on behalf of the corporation and that such procedural lapse does not mandate dismissal of the complaint.

Procedural defect did not invalidate the complaint; proceedings were maintainable.

Exercise of revisional jurisdiction - perversity test - High Court, exercising revisional jurisdiction, will not interfere with concurrent findings of fact in absence of perversity in appreciation of evidence. - HELD THAT: - The Court observed that in revision it need not reappraise evidence afresh but must examine whether the courts below committed perversity in appreciating evidence. The concurrent findings-admission of issuance and signatures and non-rebuttal of statutory presumption-did not exhibit perversity. Therefore, there was no ground for interference with the judgments of the trial court and the Sessions Court on the merits.

No interference with concurrent findings; revisional jurisdiction not attracted.

Reduction of sentence in view of part-payment and realisation of assets - Sentence reduced to the period already undergone in view of payment made by the petitioner and realisation by the complainant; directions given for release of amount deposited in treasury and for civil remedies for recovery of compensation. - HELD THAT: - Although conviction was maintained, the Court took a lenient view on sentencing considering that significant amounts had been paid by the petitioner after dishonour and that the complainant had realised amounts from the petitioners' assets. Having regard to these peculiar facts and the death of co-accused persons, the Court reduced the imprisonment to the period already undergone and ordered release of the petitioner if not required elsewhere. The Court further directed that the Rs. 10 lac deposited in the treasury be released to the Corporation on an appropriate application, and left open the complainant's remedy to pursue recovery of compensation by available legal means.

Imprisonment reduced to time already undergone; directions issued for release of treasury deposit to complainant on application and for civil recovery of compensation.

Final Conclusion: The High Court upheld the convictions under Section 138 NI Act and the concurrent factual findings, rejected the challenge to the maintainability of the complaint despite absence of formal authority for the filing officer, exercised restraint in revisional interference for lack of perversity, and on humanitarian and factual grounds reduced the sentence to the time already undergone while providing directions for release of the deposited sum and leaving civil remedies open for recovery of compensation.

Presumption under Sections 118 and 139 of the Negotiable Instruments Act - Rebuttal of statutory presumption on preponderance of probabilities - Foundational facts for operation of statutory presumption (advancement of money and source) - Section 138 of the Negotiable Instruments Act - conviction for dishonour of cheque

Presumption under Sections 118 and 139 of the Negotiable Instruments Act - Rebuttal of statutory presumption on preponderance of probabilities - The statutory presumption in favour of the complainant under Sections 118 and 139 stood rebutted on the material on record. - HELD THAT: - The Court accepted that the statutory presumption arises where signatures on cheques are not denied, shifting the onus to the accused to rebut on a preponderance of probabilities. However, on the facts the complainant's case was weakened by admissions elicited in cross-examination, including inability to furnish particulars of amounts advanced, absence of bank statements or tax return entries showing the alleged advances, and prior withdrawal of an earlier complaint which suggested a settled history between the parties. The accused's statement under Section 313 asserting that the cheques were given to the bank in the context of a loan and misused by the complainant was read in the context of those admissions. Taking these materials together, the Court held that the accused had successfully rebutted the presumption on the required civil standard, entitling the appellate court to overturn the conviction. [Paras 16, 17, 18]

Presumption under Sections 118 and 139 was rebutted and could not sustain conviction.

Foundational facts for operation of statutory presumption (advancement of money and source) - Section 138 of the Negotiable Instruments Act - conviction for dishonour of cheque - The complainant failed to establish the foundational facts necessary for the presumption to operate - namely adequate particulars of the alleged advances and evidence of their source - and therefore conviction under Section 138 could not be sustained. - HELD THAT: - The Court emphasised that operation of the statutory presumption depends on foundational facts established by the complainant, which include details as to when and how amounts were advanced and cogent supporting material as to source of funds. The complainant's failure to mention the advances in income-tax returns, absence of bank withdrawal records, and lack of particulars about the advances were material lacunae. Those deficiencies, considered alongside effective cross-examination and the earlier withdrawn complaint, led the Court to conclude that the foundational requirements were not met and the Magistrate erred in convicting. [Paras 14, 15, 18]

Foundational facts for invocation of the presumption were not proved; conviction under Section 138 therefore could not be upheld.

Section 138 of the Negotiable Instruments Act - conviction for dishonour of cheque - Rebuttal of statutory presumption on preponderance of probabilities - The Sessions Court was justified in reversing the Magistrate's conviction and sentence. - HELD THAT: - Having found that the statutory presumption was rebutted and that foundational facts were not established by the complainant, the High Court held that the Magistrate erred in convicting the accused. The appellate court appropriately reappreciated the evidence (including admissions in cross-examination and the accused's 313 statement) and concluded that interference with the conviction was warranted. The Court noted that precedents holding the burden on the accused once presumption arises remain applicable, but stressed that factual contexts differ and must be analysed in each case. [Paras 11, 17, 20, 21]

Impugned appellate order setting aside conviction and sentence was correct; the appeal is dismissed.

Final Conclusion: The High Court dismissed the appeal; the Sessions Court was correct in quashing the Magistrate's conviction under Section 138 because the statutory presumption under Sections 118 and 139 was rebutted on the preponderance of probabilities and the complainant had failed to establish foundational facts regarding advancement and source of funds.

Offence under Section 138 of the Negotiable Instruments Act - presumption under Sections 118 and 139 of the Negotiable Instruments Act - legal debt or liability - appreciation of oral and documentary evidence - concurrent findings of fact - reasonableness of sentence

Offence under Section 138 of the Negotiable Instruments Act - legal debt or liability - presumption under Sections 118 and 139 of the Negotiable Instruments Act - appreciation of oral and documentary evidence - concurrent findings of fact - Validity of conviction and sentence under Section 138 of the Negotiable Instruments Act for issuance of the cheque in question. - HELD THAT: - The Court upheld the concurrent findings that the cheque in question was issued to satisfy a legally recoverable amount. The trial Court relied on oral evidence and documentary exhibits, including the Applicant's savings account statement and another statement showing the recoverable sum, to conclude that the Applicant had withdrawn Rs.3,00,000 and was liable to repay that amount with interest. The subject cheque was signed by the Applicant and dishonoured. In these circumstances the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act applied and no evidence was placed on record to rebut those presumptions. The High Court found that the Magistrate's conclusion - that the cheque related to a legal debt or liability - was based on proper appreciation and interpretation of the evidence and therefore not erroneous. The sentence imposed was also held to be reasonable on the facts. The Sessions Court correctly dismissed the Appeal against conviction and sentence, and there was no ground for interference with the concurrent orders below.

Conviction under Section 138 and sentence upheld; appeal dismissed and concurrent orders affirmed.

Final Conclusion: The Revision Application is dismissed; concurrent conviction and sentence under Section 138 of the Negotiable Instruments Act are upheld, and amounts deposited, if any, are to be disbursed to the complainant bank.

Presumption under Section 139 of the Negotiable Instruments Act - conviction for offence under Section 138 of the Negotiable Instruments Act - perversity in acquittal - compounding by payment - sentence to imprisonment and fine - consecutive sentences for distinct offences

Presumption under Section 139 of the Negotiable Instruments Act - perversity in acquittal - Whether the presumption under Section 139 of the N.I. Act was attracted and whether the trial court's acquittal was perverse. - HELD THAT: - The court found that the appellants established that the cheques were signed and issued by the respondent and that the statutory presumption under Section 139 of the Negotiable Instruments Act accordingly arose. The respondent did not satisfactorily rebut that presumption; he did not testify and the defence witness called failed to inspire confidence partly because of his involvement in related prosecutions. The trial judge ignored the statutory presumption and treated lacunae in proof of the source of payment as creating reasonable doubt. On the evidence the acquittal amounted to a misreading of the record and bordered on perversity. [Paras 7, 8, 9, 10]

Presumption under Section 139 attracted; acquittal set aside as perverse.

Conviction for offence under Section 138 of the Negotiable Instruments Act - sentence to imprisonment and fine - Whether the respondent should be convicted for the offence under Section 138 of the N.I. Act and what sentence should follow. - HELD THAT: - Having found the presumption unrebutted and the acquittal unsustainable, the court convicted the respondent for the offence under Section 138 of the N.I. Act. On the point of sentence the court considered submissions and concluded that imprisonment of six months coupled with a fine (the judgment specifies the fine ordered) is appropriate, with default imprisonment for a further period as directed by the court. The conviction and sentence were ordered to operate with effect from 31.03.2022. [Paras 11, 12, 13, 14]

Respondent convicted under Section 138; sentenced to six months imprisonment and a fine, with default imprisonment as specified; sentence to operate from 31.03.2022.

Compounding by payment - Whether the offence may be deemed compounded on payment and the terms of such compounding. - HELD THAT: - On instructions the respondent offered to deposit specified sums in court within two months. The court accepted that if the respondent deposits the stated amount in each appeal within two months the offence will be deemed compounded and the respondent will not be required to suffer conviction or sentence. The court directed that, if paid, the Registry/Legal Services Authority ensure expeditious disbursal to the appellants. [Paras 5, 14, 18]

If respondent deposits the directed sums within two months the offence shall be deemed compounded and no conviction or sentence will be suffered; otherwise conviction and sentence will stand.

Consecutive sentences for distinct offences - Whether sentences in the separate appeals should run concurrently or consecutively. - HELD THAT: - The court observed that the convictions relate to distinct offences committed against different complainants. Consequently, there is no basis for concurrent sentences and the respondent must suffer the sentences in each matter separately, to run consecutively as ordered. [Paras 15]

Sentences ordered to run consecutively for the distinct offences; not concurrently.

Final Conclusion: The High Court set aside the trial court's acquittal as perverse, convicted the respondent under Section 138 of the Negotiable Instruments Act, imposed imprisonment and fine (operative from 31.03.2022), directed that payment within two months will compound the offences and avert conviction/sentence, and ordered that sentences in the three matters run consecutively.