TaxTMI Updates e-Newsletter
Feb 10,2021

Advance ruling under the GST Act - Jurisdiction of Authority for Advance Ruling in relation to supply of services - Maintainability of application by a person who is not the supplier - Supply of maintenance services by a residential welfare association - Rejection of application under section 98(2)

Advance ruling under the GST Act - Maintainability of application by a person who is not the supplier - Jurisdiction of Authority for Advance Ruling in relation to supply of services - Whether the Authority for Advance Ruling can entertain the applicant's request on the question of GST treatment of maintenance services when the applicant is not the supplier of those services. - HELD THAT: - The Authority noted that an advance ruling is a decision on questions specified in the GST Act insofar as they relate to supplies of goods or services being undertaken or proposed to be undertaken by the applicant. The present application concerns the supply of maintenance services by the residential welfare association; the applicant is a recipient/owner and not the provider of those services. Because the question relates to the RWA's supply and the applicant does not himself supply the service, the Authority lacks jurisdiction to decide the substantive question posed. Consequently, the application is not maintainable before this Authority and must be declined under the statutory provision dealing with rejection of applications. [Paras 3, 4, 5]

Application not maintainable because the applicant is not the supplier of the service; Authority cannot give an advance ruling and the application is rejected under section 98(2).

Final Conclusion: The application for an advance ruling is rejected for lack of jurisdiction to decide a question concerning the supply of maintenance services by the RWA when the applicant is not the supplier.

Taxability under Entry 3(vii) of Notification No. 8/2017 - Integrated Tax (Rate) - works contract involving earthwork exceeding 75% of contract value - definition of "Governmental Authority" in para 5(ix) of the IGST Notification - works contract within the meaning of section 2(119) of the GST Act

Taxability under Entry 3(vii) of Notification No. 8/2017 - Integrated Tax (Rate) - works contract involving earthwork exceeding 75% of contract value - works contract within the meaning of section 2(119) of the GST Act - The applicant's supply is taxable under Entry 3(vii) of the IGST Notification as a works contract where earthwork constitutes more than 75% of the contract value. - HELD THAT: - Entry 3(vii) applies to composite supplies that are works contracts as defined in section 2(119) and where earthwork exceeds 75% of the contract value, supplied to specified government recipients. The allotment order and Annexure A describe the contract as excavation of the lakebed involving mechanical earthwork in various soils and emphasise earthwork excavation. The Superintending Engineer certified that material involvement is less than 2% of the total work order. On these facts the supply falls within the statutory definition of a works contract and the element of earthwork exceeds the 75% threshold. Consequently, the first two conditions of Entry 3(vii) are satisfied and the supply is taxable under that entry. [Paras 4]

The supply qualifies as a works contract dominated by earthwork exceeding 75% of the contract value and is therefore taxable under Entry 3(vii) of the IGST Notification.

Definition of "Governmental Authority" in para 5(ix) of the IGST Notification - The Wular Conservation and Management Authority is a "Governmental Authority" within the meaning of para 5(ix) of the IGST Notification. - HELD THAT: - Para 5(ix) defines a Governmental Authority as an authority, board or body set up by statute or established by government with ninety per cent or more participation by way of equity or control to carry out functions akin to those entrusted to municipalities or panchayats. The recipient was constituted under section 3(1) of the Jammu and Kashmir Development Act, 1970 by the State (now Union Territory) through departmental notifications; the Board is under full governmental control; and its powers and functions relate to preservation, conservation and ecological protection broadly corresponding to Article 243W functions of municipalities. On these findings the recipient meets the statutory definition of a Governmental Authority for the purposes of Entry 3(vii). [Paras 4]

The Wular Conservation and Management Authority is a Governmental Authority within para 5(ix) of the IGST Notification.

Final Conclusion: The Authority rules that the applicant's supply of dredging/earthwork services to the Wular Conservation and Management Authority is taxable under Entry 3(vii) of Notification No. 8/2017 - Integrated Tax (Rate), as amended.

Limitation for filing appeal under Section 107 - condonation of delay limited to one month beyond three months - assessment under Section 62 - best judgment assessment and deemed withdrawal on filing valid return within 30 days - appealability of assessment order versus recovery notice in FORM GST DRC-07

Limitation for filing appeal under Section 107 - condonation of delay limited to one month beyond three months - Whether the statutory appeals filed by the petitioner were barred by limitation and whether the delay was condonable. - HELD THAT: - Section 107 provides a three months period for filing appeals from communication of the order with a further power in Sub section (4) to condone delay for one additional month upon sufficient cause; no condonation is available beyond that one month. The appeals in question were filed on 10.03.2020 and, on the admitted chronology, were delayed by more than four months beyond the prescribed period. The Appellate Authority therefore correctly found the appeals to have suffered uncondonable delay and rejected them on that ground. [Paras 8, 12]

Appeals were time barred; delay was not condonable and rejection on that ground was upheld.

Assessment under Section 62 - best judgment assessment and deemed withdrawal on filing valid return within 30 days - appealability of assessment order versus recovery notice in FORM GST DRC-07 - Whether the appeals filed by the petitioner challenged the recovery notice in FORM GST DRC-07 or the assessment order made to the best of the officer's judgment under Section 62, and the effect of non filing of return within 30 days on appealability. - HELD THAT: - Under Section 62(1) the proper officer may make a best judgment assessment where returns are not filed; Section 62(2) deems such assessment to be withdrawn only if a valid return is furnished within thirty days of service of the assessment order, though liability for interest and late fees continues. In the present case no valid returns were filed within thirty days of the ASMT 13 assessment orders; consequently the assessment orders were not deemed withdrawn and remained appealable. The recovery notices in FORM GST DRC 07 were issued thereafter to effect the demand. The appeals on record were directed against the assessment made under Section 62 (ASMT 13) and not confined to the DRC 07 notices; no amendment was sought to reframe the appeals. Therefore the appellate authority correctly proceeded on the basis that the ASMT 13 assessment orders were the appealable orders. [Paras 9, 10, 11]

The assessment orders under Section 62 were not deemed withdrawn (no valid return filed within 30 days); the appeals were against those ASMT 13 assessment orders and not merely against the FORM GST DRC 07 recovery notices.

Final Conclusion: The writ petition is dismissed. The High Court upheld the appellate authority's rejection of the appeals as time barred and found that the assessment orders under Section 62 remained in force (not withdrawn by any return filed within 30 days), so the appeals as filed were correctly treated as appeals against those assessment orders.

Attachment of bank account - No GST implications - Recall of attachment instructions - Direction to communicate with bank within stipulated time

Attachment of bank account - No GST implications - Recall of attachment instructions - Whether the attachment of the petitioner's bank account should continue in view of information furnished and the respondent's satisfaction that the transactions pertain to the petitioner and have no GST implications, and whether the respondent should be directed to recall the attachment instructions. - HELD THAT: - The Court recorded that, following the respondent's verification arising from information furnished by the petitioner's father, the transactions in the petitioner's account were found to relate solely to the petitioner and to have no GST implications. The respondent informed the Court of its satisfaction that there was no need to continue the attachment. In light of that finding, the Court allowed the petition and directed the respondent to recall the earlier instructions for attachment issued to the bank. The Court specified a date by which the respondent must communicate the recall to the petitioner's bank.

Petition allowed; respondent directed to send, on or before the stipulated date, communication to the bank recalling the attachment instructions and to lift the attachment.

Final Conclusion: The petition was allowed and the respondent was directed to recall the attachment of the petitioner's bank account by communicating with the bank within the time specified, the Court acting on the respondent's satisfaction that the account transactions related to the petitioner and raised no GST implications.

Power of inspection, search and seizure - Proviso to Section 67(2) - prohibition on removal of goods - Return of seized goods under Section 67(7) - Extension of period under proviso to Section 67(7)

Return of seized goods under Section 67(7) - Extension of period under proviso to Section 67(7) - Power of inspection, search and seizure - Validity of the order of prohibition dated 4 July 2019 passed under Section 67(2) of the GST Act and entitlement to return of seized articles under Section 67(7). - HELD THAT: - The Court examined subsection (7) of Section 67 which mandates that where goods are seized under subsection (2), if no notice in respect thereof is given within six months of seizure the goods shall be returned to the person from whose possession they were seized, subject only to a permissible extension of six months on sufficient cause. The respondents stated that no notice as contemplated by subsection (7) has been issued and no extension has been granted. In consequence, the prohibition order dated 4/7/2019 has ceased to have effect. Applying the statutory prescription in Section 67(7) and its proviso, the Court concluded that the impugned prohibition order is no longer sustainable and directed that the seized articles be returned to the writ applicant if not already returned. [Paras 6, 7]

Impugned order of prohibition dated 4/7/2019 quashed and set aside; seized articles to be returned to the writ applicant if not already returned.

Final Conclusion: Writ petition allowed to the extent that the prohibition order dated 4 July 2019 is quashed and the seized articles are directed to be returned to the petitioner in view of non compliance with the time limit in Section 67(7) and absence of any extension.

Release of seized consignment on furnishing bank guarantee - consideration by assessing authority for release pending adjudication - adjudication under the Goods and Services Tax - opportunity of being heard

Release of seized consignment on furnishing bank guarantee - consideration by assessing authority for release pending adjudication - Liberty to furnish a bank guarantee to the assessing authority for release of the consignment and vehicle covered by the impugned notices issued under Section 129 of the GST Act, and the obligation of that authority to consider release. - HELD THAT: - The Court held that the petitioner has an adequate remedy by approaching the 1st respondent and offering a bank guarantee for the amounts specified in Exts.P3 to P3(c). The 1st respondent is obliged to consider the petitioner's proposal of a bank guarantee and, if furnished within the stipulated time, to consider release of the consignment and vehicle without avoidable delay. Thereafter the 1st respondent must complete the adjudication under the GST Act after affording the petitioner the requisite opportunity of being heard. The Court relied on the settled principle (as reflected in W.P.(C)No.17379/2020) that such procedural relief is to be considered by the administrative authority and issued a limited direction to enable the petitioner to avail that remedy.

Petitioner granted liberty to approach the 1st respondent with a bank guarantee within three days; the 1st respondent to consider release and thereafter complete adjudication after hearing, expeditiously and in any event within one month of receipt of the bank guarantee.

Final Conclusion: Writ petition disposed of by granting the petitioner leave to approach the 1st respondent with a bank guarantee within three days for consideration of release of the consignment and vehicle; the 1st respondent to consider release without avoidable delay and complete adjudication after hearing within one month of the bank guarantee being furnished.

Appeal under Section 107 of the GST Act - Final order of confiscation in FORM GST MOV-11 - Direction to Appellate Authority to complete hearing and pass final order - Consideration of precedents while deciding appeals

Appeal under Section 107 of the GST Act - Final order of confiscation in FORM GST MOV-11 - Direction to Appellate Authority to complete hearing and pass final order - Consideration of precedents while deciding appeals - The Appellate Authority was directed to hear and decide two appeals filed against the final orders of confiscation (one relating to goods and one relating to the vehicle) and to consider the principles in the stated precedents. - HELD THAT: - The Court recorded that two appeals had been preferred by the writ applicants against the final order of confiscation reflected in FORM GST MOV-11, one concerning the goods and the other concerning the vehicle. Counsel for the writ applicants had completed arguments and the Department's hearing was fixed for 22.01.2021. In view of these developments, the Court directed the Appellate Authority to complete the hearing of both appeals and to pass the final order by 31.01.2021. The Court also expected the Appellate Authority to keep in mind the legal principles explained in Synergy Fertichem (P) Limited v. State of Gujarat and Insha Trading Co. v. State of Gujarat and Others while deciding the appeals. The writ petitions and accompanying application were disposed of subject to the completion of the appellate process, and the applicants were left free to pursue further legal remedies if aggrieved by the Appellate Authority's order. [Paras 2, 3, 4, 5]

Hearing of both appeals to be completed and final orders to be passed by the Appellate Authority by 31.01.2021, with directions to consider the cited precedents; writ petitions disposed of accordingly.

Final Conclusion: Both writ applications and the civil application were disposed of by directing the Appellate Authority to conclude hearing and pass final orders on the two appeals against confiscation by 31.01.2021, with liberty to the applicants to pursue further legal remedies if aggrieved.

Interim relief against freezing of bank account - Recording of statement for verification - Assistance and cooperation in investigation - Directions to appear before authority for verification - Adjournment and listing for further hearing

Interim relief against freezing of bank account - Application for exemption (CM APPL. 1891/2021) was allowed subject to exceptions and extant rules. - HELD THAT: - The Court granted the application filed for exemption, directing that the relief be subject to just exceptions and in accordance with prevailing rules. The order records the grant of the exemption application without elaboration of additional legal reasoning, and disposes of that application accordingly.

Exemption application allowed subject to just exceptions and as per extant rules; application disposed of.

Recording of statement for verification - Assistance and cooperation in investigation - Directions to appear before authority for verification - Request by respondents to record the petitioner's father's statement for verification of the petitioner's bank-account-related stand was acceded to and a direction was issued for appearance. - HELD THAT: - On instructions from the concerned officer, respondents informed the Court that the petitioner's father's ITR for AY 2020-21 contains details of the petitioner's bank account and sought to record his statement to verify the petitioner's assertions regarding the account for which de-freezing was sought. The petitioner's counsel raised no objection and confirmed willingness of the petitioner and her father to cooperate. The Court directed the father to appear before the Commissioner (GST), East on the specified date and time for recording his statement, thereby permitting the authority to verify the matter as part of the ongoing proceedings.

Respondents permitted to record the father's statement; father directed to appear before the Commissioner (GST), East on 27th January, 2021 at 11:30 AM; matter listed for further hearing on 1st February, 2021.

Final Conclusion: The Court allowed the exemption application subject to exceptions and extant rules, disposed of that application, and directed that the petitioner's father shall appear for recording of his statement to enable verification by the GST authority; the writ petition was listed for further hearing.

Section 244A interest on delayed refund - withholding of refund under Section 241A - speaking order requirement - remedy by judicial review against tax authorities' decision

Section 244A interest on delayed refund - speaking order requirement - Petitioner's claim for interest under Section 244A for the period 1st December, 2019 to 31st August, 2020 was directed to be processed by the Revenue within a stipulated time and, if refused, by way of a speaking order permitting challenge. - HELD THAT: - The Court did not decide on the substantive entitlement to interest under Section 244A. Instead, exercising supervisory jurisdiction, the Court directed the respondent to consider and process the petitioner's request for interest on the refund amount within four weeks. If the Revenue concludes that interest is not due or payable, that conclusion must be communicated to the petitioner by a speaking order. The petitioner was permitted to avail remedies against any such speaking order. The direction implements the court's earlier order setting aside the withholding under Section 241A and ensures administrative action on the pending claim for interest without the writ petition being kept pending. [Paras 4, 5]

Respondent to process the Section 244A interest claim within four weeks and, if denying interest, to issue a speaking order; petitioner's remedies against such order remain open.

Final Conclusion: Writ petition disposed directing the Revenue to process the petitioner's claim for interest under Section 244A for the period 1st December, 2019 to 31st August, 2020 within four weeks, and to issue a speaking order if interest is denied, with liberty to the petitioner to challenge such order.

Maintainability of successive writ petition - rectification under Section 154 of the Income Tax Act, 1961 - remedy for non-compliance by invocation of contempt of court - liberty to pursue alternative legal remedies

Maintainability of successive writ petition - rectification under Section 154 of the Income Tax Act, 1961 - remedy for non-compliance by invocation of contempt of court - liberty to pursue alternative legal remedies - Petition seeking same reliefs as earlier disposed writ petition is ex facie not maintainable and dismissal with liberty to pursue appropriate remedies for non-compliance. - HELD THAT: - The petitioner had earlier obtained an order directing respondents to decide rectification applications and a request letter seeking certain tax adjustments. The petitioner instituted a fresh writ petition seeking the same reliefs and complained of non-compliance of that earlier direction. The Court held that a fresh writ seeking identical reliefs is, on its face, not maintainable. Where non-compliance with the Court's order is alleged, the remedy is to invoke the contempt jurisdiction of the Court or such other remedies available in law; duplicative writ proceedings are not the appropriate course. The Court therefore declined to examine the merits of the underlying tax claims and dismissed the petition, while granting liberty to the petitioner to pursue remedies available under law for the alleged non-compliance.

Writ petition dismissed as ex facie not maintainable; petitioner granted liberty to pursue appropriate remedies (including contempt jurisdiction) for alleged non-compliance; merits not examined.

Final Conclusion: The petition is dismissed as an impermissible repeat of earlier proceedings; the petitioner may pursue remedies available under law for alleged non-compliance of the Court's earlier order; the Court did not consider the merits of the tax claims.

Corroboration of confession by seized material - admissions recorded under section 132(4) - retraction of statement and evidentiary value - use of stamp valuation / registration authority adjudication as relevant evidence - remand for fresh consideration to assessing officer

Corroboration of confession by seized material - admissions recorded under section 132(4) - retraction of statement and evidentiary value - Addition towards on-money payment for purchase of property based on seized executive diary and the assessee's statement recorded during search. - HELD THAT: - The Tribunal found that the Assessing Officer's addition was not founded solely on the statement recorded during search but was supported by an incriminating executive diary seized at the time of search. When confronted with the diary, the assessee admitted maintaining it and confirmed its contents, including payment over and above the consideration in the registered deed; although the assessee later retracted the admission, the authorities were entitled to act where the confession was corroborated by seized material. The bench recognised the settled principle that a confession alone is insufficient, but held that corroboration by independent seized documents renders the admission usable for making additions. The Tribunal therefore sustained the factual finding that evidentiary material collected during the search supported the addition. [Paras 4, 8]

The addition upheld to the extent it was based on diary entries corroborating the statement recorded during search; the confession, being corroborated, could be relied upon.

Use of stamp valuation / registration authority adjudication as relevant evidence - remand for fresh consideration to assessing officer - Whether the adjudication/orders of the Chief Revenue Officer / Inspector General of Registration (valuation for stamp duty) were considered before making the addition and consequent direction for fresh decision. - HELD THAT: - Although the Tribunal accepted that the diary and the statement corroborated each other, the bench held that the Assessing Officer ought to have considered the order/report of the Chief Revenue Officer / Inspector General of Registration (dated 11.02.2013), which had adjudicated the value of the property for stamp duty and was placed before the authorities. The Tribunal observed that while the Assessing Officer is not bound to accept the stamp authority's valuation, that adjudication is a relevant piece of evidence to ascertain the correct facts regarding the value of the property and therefore should have been examined before reaching a conclusion on on-money. In the circumstances the matter was set aside and remanded to the Assessing Officer to reconsider the issue in the light of the registration authority's order and other available evidence, and to proceed in accordance with law (including, if necessary, further enquiry or referral to a DVO). [Paras 5, 8]

Matter remanded to the Assessing Officer to reconsider the addition after taking into account the order of the Chief Revenue Officer / Inspector General of Registration and other relevant evidence, and to decide the issue in accordance with law.

Final Conclusion: The appeal is allowed for statistical purposes by setting aside the Tribunal's earlier order and remanding the matter to the Assessing Officer for fresh adjudication on the question of on money having regard to the registration authority's valuation and other evidence; the finding that the diary corroborated the confession remains recognised but the AO must re-evaluate the claim in light of the stamp valuation and applicable legal principles.

Levy of penalty under section 271(1)(c) for concealment of income or furnishing of inaccurate particulars - natural justice - requirement to specify which limb of penalty is invoked - mistake apparent from record under section 254(2) - curability of defect under section 292B

Mistake apparent from record under section 254(2) - levy of penalty under section 271(1)(c) for concealment of income or furnishing inaccurate particulars - Whether the Revenue's Miscellaneous Application under section 254(2) discloses a "mistake apparent from record" warranting rectification of the Tribunal's order deleting the penalty. - HELD THAT: - The Tribunal considered the Revenue's plea that its order dated 27.03.2019 contained a mistake apparent from record which should be rectified. After hearing parties and examining authorities relied upon, the Tribunal held that the Revenue's contentions merely sought re-argument of the correctness of the Tribunal's conclusions and did not show any patently evident error capable of correction under section 254(2). The Tribunal upheld its prior reasoning that the penalty order was vitiated by vagueness in the charge and that principles of natural justice required the Assessing Officer to indicate the specific limb under which penalty was proposed. On this basis, the Miscellaneous Application did not satisfy the narrow statutory test of a mistake apparent from record and was therefore liable to be dismissed. [Paras 6]

Miscellaneous Application under section 254(2) does not disclose a mistake apparent from record and is dismissed.

Natural justice - requirement to specify which limb of penalty is invoked - curability of defect under section 292B - Whether the omission to specify the limb (concealment or furnishing inaccurate particulars) in penalty initiation is a curable defect under section 292B or renders the penalty invalid for want of adherence to natural justice. - HELD THAT: - The Tribunal reviewed precedents relied upon by both parties, including decisions of the Bombay and Karnataka High Courts and the Pune Bench of the Tribunal. It accepted the line of authority emphasizing that the Assessing Officer must make clear which limb of section 271(1)(c) is alleged to have been contravened so that the assessee has a fair opportunity to defend. The Tribunal agreed with earlier pronouncements that failure to record such satisfaction or to indicate the precise charge is not a mere formal defect curable under section 292B, since it goes to the jurisdictional and natural justice aspects of levy of penalty. Consequently, the defect in the penalty initiation rendered the penalty invalid and justified its deletion. [Paras 5, 6]

Omission to specify the limb is not a curable defect under section 292B; for lack of proper specification and breach of natural justice the penalty is invalid.

Final Conclusion: The Miscellaneous Application filed by the Revenue under section 254(2) seeking rectification was dismissed; the Tribunal's order deleting the penalty for A.Y. 2011-12 is upheld as there was no mistake apparent from record and the omission to specify the limb of penalty was not curable under section 292B.

Most Appropriate Method (MAM) - Resale Price Method (RPM) - Transactional Net Margin Method (TNMM) - comparability under Rule 10B(2) - adjustment under Section 92CA(3) - adjustment for non-operating/extraordinary items (goodwill amortization) - natural justice - disclosure of search process

Most Appropriate Method (MAM) - Resale Price Method (RPM) - Transactional Net Margin Method (TNMM) - comparability under Rule 10B(2) - Whether RPM was the MAM for benchmarking purchase of traded goods and whether TNMM adopted by the TPO/DRP was appropriate - HELD THAT: - The Tribunal examined the factual position that the assessee is a trader reselling goods purchased from associated enterprises with no value addition, and acknowledged RPM as a standard method in such factual scenarios. However, selection of MAM requires reliable comparables and a valid benchmarking exercise. The Tribunal found that the assessee's proposed comparables did not satisfy comparability thresholds in practice and that the TPO/DRP had valid reasons to question the comparables' functional similarity under Rule 10B(2). Given the lack of proper comparables for RPM in the record for the year under consideration, RPM failed the benchmarking threshold. TNMM, being more tolerant of certain functional differences and adaptive for entity-level analysis, was therefore held to be the appropriate method on the facts of this assessment year. Prior acceptance of RPM in a subsequent assessment year was held not to be determinative for the year under adjudication. Consequently the challenge to rejection of RPM and adoption of TNMM was dismissed. [Paras 7, 10, 11, 23]

RPM rejected as MAM and TNMM upheld as the Most Appropriate Method for Assessment Year 2012-13

Natural justice - disclosure of search process - comparability under Rule 10B(2) - Validity of the assessee's search process and whether the TPO could reject that search process without adequate reasons - HELD THAT: - The Tribunal compared the quantitative filters used by both parties and observed that five of six quantitative filters used by the TPO matched those used by the assessee; the single omitted filter related to exclusion for peculiar economic circumstances. The TPO did not give cogent reasons why that filter was inapplicable. On that limited point the Tribunal found the TPO was not justified in rejecting the assessee's search filter and allowed the ground directed to the rejection of the assessee's search process. [Paras 11, 13]

Assessee's objection to rejection of its search process allowed (Ground 3.1.1)

Comparability under Rule 10B(2) - Whether the three comparables selected by the assessee were wrongly rejected by the TPO as functionally dissimilar - HELD THAT: - The Tribunal reviewed the assessee's TP study and the TPO's reasons. The TPO explained that the three companies relied on by the assessee did not meet the trading-activity threshold (trading revenue >75%) and were functionally different in their trading activities. The Tribunal accepted the TPO's justification that the comparables were not functionally similar for benchmarking the assessee's trading of spares used in engine-based power plants and rejected the assessee's contention to reinstate those comparables. [Paras 14, 16]

Assessee's selected comparables rejected - Ground 3.1.2 dismissed

Natural justice - disclosure of search process - Whether the TPO's conduct in carrying out a fresh search process without supplying the detailed search process to the assessee violated principles of natural justice - HELD THAT: - The assessee argued that it was entitled to the information used against it to enable meaningful objections. The Tribunal, however, concluded that because it had earlier held the assessee's search process objection unsustainable overall (except as to one filter which it allowed), the plea that the fresh search process was not furnished did not warrant relief and dismissed the objection in that respect. [Paras 17, 19]

Ground 3.1.3 dismissed

Comparability under Rule 10B(2) - cherry picking - Whether the comparables selected by the TPO were inadmissible (cherry-picked) and not comparable to the assessee - HELD THAT: - The Tribunal noted the assessee's contention that TPO's selected comparables belonged largely to the auto/manufacturing sector and were functionally dissimilar. While the Tribunal observed the assessee's argument to be genuine, it also held that since RPM was not the MAM for this year, there was no reason to disturb the comparables chosen by the TPO for application of TNMM. Therefore the challenge that TPO's comparables were improper or cherry-picked was dismissed on the facts. [Paras 20, 23]

Ground 3.1.4 and Ground 5 dismissed

Adjustment for non-operating/extraordinary items (goodwill amortization) - remand for verification - Whether amortization of goodwill is an extraordinary/non-operating item requiring adjustment for PLI computation and whether the matter required verification - HELD THAT: - The assessee contended that goodwill amortization arising from a business purchase is non-operating/extraordinary and should be excluded or adjusted when computing the operating PLI under TNMM. The TPO treated the amortization as operating; the Tribunal examined the submissions, observed the competing positions including the assessee's FAR analysis omission of goodwill from assets employed and that treating goodwill as non operating may affect PLI materially. The Tribunal accepted that the question warranted fresh verification and directed remand to the TPO/AO for proper verification, with opportunity to the assessee to be heard. [Paras 24, 26]

Ground 6 partly allowed for statistical purpose and remanded to TPO/AO for verification

Adjustment under Section 92CA(3) - statistical verification / segment aggregation - Whether the TPO erred in aggregating trading and service segments for benchmarking the purchase of traded goods and whether the adjustment should be restricted to the trading segment - HELD THAT: - The assessee showed calculations that, if only the trading segment were considered, the proposed TP adjustment would reduce. The Tribunal found the assessee's contention to be prima facie plausible and directed the TPO to verify the computation; if correct, the excess portion of the adjustment was to be deleted. The direction required factual verification by the TPO/AO. [Paras 27, 29]

Ground 7 partly allowed - matter remanded to TPO for verification and adjustment to be restricted if verified

Adjustment under Section 92CA(3) - Whether the entire TP order should be quashed for non-application of mind and copy paste reasoning - HELD THAT: - The Tribunal reviewed the TPO's order and the assessee's allegations of repetition, copy-paste and non-application of mind. It found that the TPO had provided reasons for its choices and that the case laws relied on by the assessee were not factually on point. The Tribunal concluded that the TPO's order was not vitiated in its entirety to warrant quashing and dismissed the plea to quash the order. [Paras 30, 32]

Ground 8 dismissed

Final Conclusion: The appeal is partly allowed in part and otherwise dismissed. RPM was rejected and TNMM was upheld as the Most Appropriate Method for AY 2012-13; the assessee's search-process objection (one filter) was allowed; three challenges to rejected comparables and allegations of cherry picking were dismissed; the treatment of goodwill amortization was remanded to the TPO/AO for verification; aggregation of trading and service segments was remanded for verification and possible reduction of the adjustment; the challenge to quash the TP order was dismissed. Appeal disposed accordingly.

Characterisation of hundi receipts as corpus (capital) donations - exemption under the Income Tax Act for corpus donations under section 11(1)(d) - Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, 1987 - treatment of donations as contributions to capital - capital receipts versus revenue receipts - generalia specialibus non derogant - repugnancy under Article 251 of the Constitution

Characterisation of hundi receipts as corpus (capital) donations - capital receipts versus revenue receipts - exemption under the Income Tax Act for corpus donations under section 11(1)(d) - Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, 1987 - treatment of donations as contributions to capital - Hundi receipts described as corpus donations are capital receipts and eligible for exemption under the Income Tax Act. - HELD THAT: - The Tribunal found that the assessee's hundi receipts were donor contributions specifically directed to the corpus of the temple trust and that neither the Assessing Officer nor the Commissioner (Appeals) disputed that these sums represented hundi donations. The Andhra Pradesh Endowments Act expressly treats 'donations in cash or kind by the donors as contributions to capital' as not being income of the institution. Applying that statutory characterisation to the facts, the Tribunal concluded these receipts are capital (corpus) and not revenue. Consequently, such corpus donations are within the scope of exemption under the Income Tax Act, including the provision dealing with corpus donations embedded in the income-tax exemption framework, and the Assessing Officer's treatment of the hundi receipts as regular income was unsustainable. The Tribunal therefore directed deletion of the impugned addition.

Impugned addition deleted; hundi receipts held to be corpus (capital) donations and not taxable as revenue, allowing the appeal.

Generalia specialibus non derogant - repugnancy under Article 251 of the Constitution - Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, 1987 - treatment of donations as contributions to capital - State endowment law's classification of donations as corpus does not conflict with or become repugnant to the Income Tax Act and may govern the legal character of such receipts. - HELD THAT: - The Revenue contended that Union taxation law should override the State endowment statute. The Tribunal reiterated the general principle that a specific provision prevails over a general one but found no repugnancy between the Endowments Act and the Income Tax Act under Article 251. Because the Endowments Act expressly treats the relevant donations as contributions to capital, that statutory characterisation does not offend the tax law; accordingly, the State Act's classification was operative to establish the capital nature of the hundi receipts for tax purposes, and there was no legal basis to treat them as taxable revenue receipts.

State endowment statute's classification upheld; no repugnancy found and Revenue's contention rejected.

Final Conclusion: The Tribunal allowed the appeal for A.Y. 2013-14, holding that the assessee's hundi receipts were corpus (capital) donations as recognised by the Andhra Pradesh Endowments Act and therefore not taxable as revenue under the Income Tax Act; the Assessing Officer's addition was deleted.

Addition based on seized documents - undisclosed cash loan - burden of proof and suspicion not sufficient for addition - verification with books of account and corroborative evidence - interest computation on alleged undisclosed loans - invocation of section 115BBE in consequence of alleged undisclosed income - search and seizure material as basis for substantive additions

Addition based on seized documents - undisclosed cash loan - verification with books of account and corroborative evidence - search and seizure material as basis for substantive additions - Whether the addition of Rs. 25,00,000 as an undisclosed cash loan to M/s Columbus Overseas LLP, made by treating a seized handwritten memorandum as proof of a separate cash transaction distinct from the bank-mediated loan recorded in books, was sustainable. - HELD THAT: - The Tribunal examined the seized handwritten page and the documentary material produced by the assessee (ledger, bank statement, Form 26AS and accounting entries). The assessee explained that the seized page was a rough memorandum used for administrative purposes recording various advances, tentative repayment dates and interest schedules, and that the specific Rs. 25,00,000 loan to Columbus Overseas LLP was advanced through banking channel on 14.08.2015 and duly recorded; interest thereon was reflected in books and supported by TDS entries. The Revenue's reliance on two entries in the same seized paper to draw a general inference that all dates against entries denote fresh cash advances was held to be an impermissible generalisation: other entries included future dates (after date of search) and multiple entries with identical dates which, if read as actual cash advances, would lead to an implausible conclusion. In absence of any independent corroborative material found on search or further inquiry with the counterparty, and given that the assessee's documentary evidences supported the recorded bank transaction and interest receipts, the addition premised solely on the seized memorandum and suspicion could not be sustained. The Tribunal therefore directed deletion of the addition. [Paras 22]

Addition of Rs. 25,00,000 as undisclosed cash loan deleted.

Interest computation on alleged undisclosed loans - burden of proof and suspicion not sufficient for addition - verification with books of account and corroborative evidence - Whether the addition of alleged interest of Rs. 2,00,000 (computed on the alleged undisclosed cash loan) was sustainable when the principal addition was held to be unsupported. - HELD THAT: - The interest addition was purely consequential upon the finding of a separate undisclosed cash loan. The assessee produced evidence that interest on the bank-mediated loan was recorded in its books, received through banking channels and reflected in Form 26AS; no independent inquiry was made by the AO of the counterparty to substantiate an additional cash interest receipt. As the principal addition was set aside for lack of corroboration and because assumptions alone cannot justify an income addition, the consequential interest addition based on that assumption likewise could not be sustained. [Paras 22]

Consequential interest addition of Rs. 2,00,000 deleted.

Invocation of section 115BBE in consequence of alleged undisclosed income - burden of proof and suspicion not sufficient for addition - Whether invoking the special tax treatment under section 115BBE (in respect of the impugned amount) was justified in view of the findings on the primary addition. - HELD THAT: - Section 115BBE was invoked by the AO because he treated the impugned sum as undisclosed income. The Tribunal found that the underlying addition lacked adequate evidentiary basis and was deleted. Since the foundational finding of undisclosed income was not sustained, the invocation of the special charging provision was misplaced. Where the substantive addition is set aside for want of proof, any special tax treatment premised on that addition cannot survive. [Paras 22]

Invocation of section 115BBE quashed as misplaced consequent on deletion of the addition.

Final Conclusion: On the evidence and explanations placed on record, the Tribunal held that the seized handwritten memorandum could not, by itself and without corroboration, form the basis for treating the bank-recorded loan as a distinct undisclosed cash transaction; accordingly the addition of Rs. 25,00,000 and the consequential interest and invocation of section 115BBE were deleted and the assessee's appeal allowed.

Revenue expenditure versus capital expenditure - Research and Development expenditure - Enduring benefit test - Purpose test - Treatment in books of account not determinative - Remand for classification of expenditure

Revenue expenditure versus capital expenditure - Research and Development expenditure - Enduring benefit test - Purpose test - Treatment in books of account not determinative - Whether the R&D expenditure incurred in the listed assessment years is revenue or capital in nature and to what extent the claimed amounts are allowable as business expenditure or require capitalization and depreciation. - HELD THAT: - The Tribunal reviewed the factual matrix and legal principles distinguishing revenue and capital expenditure, emphasising that no single test applies and that the characterisation depends on commercial nature, purpose, and whether the advantage is in the capital field. The assessee had capitalized R&D as intangible assets in the balance sheet while claiming the amounts as deductions in returns; earlier assessment years (2007-08 and 2008-09) contained a detailed bifurcation where revenue components were allowed and capital components were granted depreciation. For the assessment years under appeal, the assessee did not place a clear, itemised bifurcation on record showing which portions of the R&D outlay constituted revenue expenditure and which constituted capital expenditure. Because the classification of individual sub-heads (salaries, materials, professional charges, etc.) was not separately presented for the years in issue, the Tribunal found it appropriate to remit the matter to the CIT(Appeals) to undertake a proper classification exercise. The CIT(A) is to determine, on verification, which portions constitute revenue expenditure and ought to be allowed as business expenditure and which portions constitute capital expenditure and should be disallowed with depreciation being granted on such capitalised items as per law. The Tribunal also recognised settled propositions that accounting treatment alone is not decisive and that factual verification is necessary to apply the enduring-benefit and purpose tests. [Paras 38]

The issue is remitted to the file of the CIT(Appeals) for fresh consideration and classification of R&D expenditure into revenue and capital components, with allowance of revenue portion and grant of depreciation on capital portion as appropriate.

Final Conclusion: All appeals are partly allowed for statistical purposes and the question of classification of R&D expenditure for AYs 2009-10, 2011-12, 2012-13, 2013-14, 2014-15 and 2015-16 is remitted to the CIT(A) for fresh adjudication (revenue portion to be allowed; capital portion to be disallowed with depreciation to be considered).

Reopening of assessment beyond four years - proviso to section 147 (failure to disclose fully and truly all material facts) - borrowed satisfaction in formation of reasons to believe - prima facie material for assumption of jurisdiction under section 147 - revocability of transfer - test under section 63 - eligibility for exemption under sections 11 and 12 - effect of registration under section 12AA/12A - investment mode under section 11(5) - deposits in scheduled bank - application of section 13(1)(c)(ii) r.w.s.13(2)(g) - unreasonable payments to persons specified in section 13(3) - limited taxation of income attributable to violation vs. denial of entire exemption

Reopening of assessment beyond four years - proviso to section 147 (failure to disclose fully and truly all material facts) - borrowed satisfaction in formation of reasons to believe - Validity of reassessment proceedings initiated by issuance of notice under section 148 and assumption of jurisdiction under section 147 for AY 2008-09. - HELD THAT: - The Tribunal examined the reasons recorded by the Assessing Officer and found that the AO's belief of escapement of income was founded on re-appreciation of the trust deed, audited financial statements and Form 10B which were already on record at the time of the original assessment completed under section 143(3). No new tangible material was shown to have come into AO's possession and the recorded reasons did not allege any failure on the part of the assessee to disclose fully and truly all material facts - a condition mandated by the proviso to section 147 where reopening is sought after the four-year period. The Tribunal applied authorities holding that reopening beyond four years requires an identifiable failure of disclosure discernible from the reasons and that mere reappraisal of primary documents already furnished cannot sustain reassessment. Because the AO's reasons amounted to a re-evaluation of existing material (and reflected borrowed satisfaction), the jurisdictional precondition for reopening under section 147 was not satisfied and the notice under section 148 and consequent reassessment were quashed. [Paras 11, 12, 17, 18]

Notice under section 148 and reassessment under section 147 quashed for want of jurisdiction; cross-objection allowed.

Eligibility for exemption under sections 11 and 12 - effect of registration under section 12AA/12A - revocability of transfer - test under section 63 - investment mode under section 11(5) - deposits in scheduled bank - application of section 13(1)(c)(ii) r.w.s.13(2)(g) - unreasonable payments to persons specified in section 13(3) - Whether the Assessing Officer was justified in denying exemption under sections 11 and 12 and making additions on account of (a) alleged revocable trust/private benefit, (b) violation of section 11(5) in mode of investment, and (c) excessive/unauthorised payment of salary to persons specified in section 13(3). - HELD THAT: - On merits the Tribunal upheld the CIT(A)'s findings. The registration under section 12A/12AA and prior recognition by higher authorities were found to be material and there was no express clause making the transfer revocable as per the test in section 63; consequently the trust was held irrevocable. The amounts deposited in Lord Krishna Bank were accepted as deposits in a scheduled bank after reference to the RBI schedule, negating the AO's allegation of violation of section 11(5). With respect to payments to specified persons, the assessee produced qualifications, experience and evidence of services rendered; the Tribunal found that the CIT(A) satisfactorily concluded that the payments were not excessive or in violation of section 13(3), and noted that the Revenue placed no adverse material contradicting those findings. Applying the principle that only the part of income actually applied in violation may be taxed (and in any event on the record before it), the Tribunal confirmed deletion of the additions and held that triggers for section 13(1)(c)(ii) were not established. [Paras 25, 26, 27, 28, 29]

Findings of the CIT(A) confirming registration/status, validity of investments, and reasonableness of salaries upheld; additions deleted and Revenue's appeal dismissed.

Final Conclusion: The reassessment proceedings initiated by notice under section 148/assumption of jurisdiction under section 147 for AY 2008-09 are quashed for lack of jurisdiction. On merits, the Tribunal confirms the CIT(A)'s findings that the trust is irrevocable and registered under section 12A, the investments did not violate section 11(5), and payments to specified persons did not attract section 13(1)(c)(ii); consequently the additions were deleted and the Revenue's appeal is dismissed.

Deemed consideration under Section 56(2)(vii)(b) - date of agreement versus date of registration - provisos to Section 56(2)(vii)(b) - relevance of stamp valuation authority's market value - judicial quashing of governmental enhancement of stamp valuation - use of valuation adopted in vendor's assessment as guide

Deemed consideration under Section 56(2)(vii)(b) - judicial quashing of governmental enhancement of stamp valuation - relevance of stamp valuation authority's market value - Whether invoking the deeming provision of Section 56(2)(vii)(b) on the basis of enhanced stamp valuation was sustainable in view of the High Court having set aside the Government order enhancing stamp valuation. - HELD THAT: - The Tribunal found that the High Court in Public Interest Litigation No. 274 of 2013 set aside the Government order dated 30/03/2013 that had enhanced stamp valuation rates; that finding, if operative for the relevant period, negates the basis for adopting the enhanced stamp duty value when invoking Section 56(2)(vii)(b). The Tribunal observed that the Assessing Officer in the buyer's assessment proceeded to apply the stamp valuation authority's enhanced values without verifying whether the Government order remained in force or had been quashed for the relevant period. Given that the High Court's order goes to the validity of the Government enhancement, the Tribunal concluded that it would be erroneous to apply the enhanced stamp valuation in the buyer's case without first verifying the legal effect of the High Court order. In the interest of justice the Tribunal therefore remitted the matter to the Assessing Officer to verify whether the enhancement has been struck down and, if so, to assess the income of the assessee without invoking Section 56(2)(vii)(b). The Tribunal directed that the Assessing Officer afford the assessee opportunity of hearing before passing further orders. [Paras 9, 10]

Matter remitted to the Assessing Officer to verify effect of the High Court order dated 23/09/2013; if the Government enhancement of stamp valuation has been struck down, assess the assessee without invoking Section 56(2)(vii)(b).

Use of valuation adopted in vendor's assessment as guide - date of agreement versus date of registration - provisos to Section 56(2)(vii)(b) - relevance of stamp valuation authority's market value - If the Government enhancement of stamp valuation remains in force, what value should be adopted for the purpose of Section 56(2)(vii)(b) in the assessee's assessment? - HELD THAT: - The Tribunal noted that in the vendor's assessment the Assessing Officer, after obtaining a valuation report under instructions issued under section 144A and examining facts on record, adopted a combined market value of Rs. 2,03,65,854 rather than the stamp valuation authority's figure of Rs. 4,39,23,056. The Tribunal held that, in cases where the Government enhancement is in effect, it would be inappropriate for the Assessing Officer in the buyer's assessment to adopt the higher stamp valuation without considering the factual verifications and the valuation adopted in the vendor's assessment. Accordingly, the Tribunal directed that where the Government enhancement stands, the Assessing Officer should adopt the value of Rs. 2,03,65,854 (as arrived at in the vendor's proceedings) for the purpose of invoking Section 56(2)(vii)(b), subject to giving the assessee a hearing and verifying facts as necessary. [Paras 11, 13, 15]

If the Government's enhanced stamp valuation is in force, Assessing Officer shall, after due verification and hearing, adopt the value of Rs. 2,03,65,854 (as determined in the vendor's assessment) for the purpose of Section 56(2)(vii)(b).

Final Conclusion: The appeal is partly allowed and remitted to the Assessing Officer with directions to verify the legal effect of the High Court's quashing of the Government enhancement of stamp valuation; if the enhancement is struck down assess without invoking Section 56(2)(vii)(b), and if it remains in force adopt the valuation of Rs. 2,03,65,854 (as determined in the vendor's proceedings) after providing the assessee an opportunity of hearing.

Limitation under section 201(3) - retrospective operation of statutory amendment - obligation to deduct tax under section 192 - bona fide estimate of salary - exemption for medical reimbursement under proviso to section 17(2) - reliance on departmental approval/CBDT letter for grant of exemption - assessee in default under section 201(1) and interest under section 201(1A) - remand for fresh consideration of evidence/certificates (including certificates under section 197)

Jurisdiction to issue notice - change of incumbent under section 129 - Validity of notices and orders issued by ITO (TDS) Ward, Davangere on jurisdictional grounds. - HELD THAT: - The assessee did not raise the jurisdictional objection before the Commissioner (Appeals) and participated in assessment proceedings. The assessment record refers to change in incumbent by formal communication under section 129 dated 24/11/2017 and the assessee took part in the proceedings without objection. In these circumstances the Tribunal found no merit in the challenge to the jurisdiction of the officer who passed the impugned orders and dismissed the ground. [Paras 6]

Ground on jurisdiction dismissed; notices and orders upheld as not vitiated for lack of jurisdiction.

Limitation under section 201(3) - retrospective operation of statutory amendment - Whether the amended limitation (seven years) introduced by Finance Act, 2014 applies retrospectively to revive time barred proceedings or whether the unamended limitation governs the specified assessment years. - HELD THAT: - The Tribunal analysed the legislative history of subsection (3) of section 201, noting prior amendments (Finance Act 2009 and Finance Act 2012) and that the Finance Act, 2014 expressly provided the amended provision to take effect from 1/10/2014. Applying the presumption against retrospective operation, and authority that amendments imposing liabilities are prospective unless a contrary intention is expressed, the Tribunal held that the 2014 amendment did not operate retrospectively. Consequently, where the two year limitation under the unamended provision had already expired before 1/10/2014, the subsequent seven year limitation could not revive those proceedings. On that basis orders under section 201(1)/201(1A) for assessment years 2011-12, 2012-13, 2013-14 and 2014-15 were held time barred and were quashed. [Paras 6]

Impugned orders for AYs 2011-12, 2012-13, 2013-14 and 2014-15 are time barred and set aside; associated demands and interest deleted.

Obligation to deduct tax under section 192 - bona fide estimate of salary - exemption for medical reimbursement under proviso to section 17(2) - reliance on departmental approval/CBDT letter for grant of exemption - Whether the assessee was an 'assessee in default' for failure to deduct TDS on Cash Medical Benefit (CMB) for assessment years 2015-16 and 2016-17. - HELD THAT: - The Tribunal examined the character of the Cash Medical Benefit, the CBDT letter of 20/05/2002 (which treated the CMB as a fixed medical allowance subject to the assessee's satisfaction about actual/incurred expenditure), and the statutory scheme under section 17(2) and section 192 (including the subsequently inserted section 192(2D)). For AYs 2015 16 and 2016 17 the Tribunal held that the assessee had a bona fide belief, based on historical practice, declarations from employees and the CBDT approval, that the payments fell within the remit of proviso to section 17(2) and therefore that tax need not be deducted; Rule 26C did not specifically require collection of medical evidence for the period in question. Given that the employer made an honest estimate of taxable salary and relied on the departmental approval and employee declarations, the Tribunal found the assessee could not be treated as 'assessee in default'. Consequently the demands under section 201(1) were quashed for these heads and the AO was directed to modify interest under section 201(1A) accordingly. [Paras 6]

Assessee not an assessee in default for CMB for AYs 2015-16 and 2016-17; demands set aside and interest to be recalculated accordingly.

Remand for fresh consideration of evidence/certificates (including certificates under section 197) - Treatment of payments to Sodexo SVC India Pvt. Ltd. (TDS rate/certificate issues) for specified branches/years. - HELD THAT: - The Tribunal observed that the authorities below had not considered the evidence and certificates placed on record (including certificates under section 197). The assessee was directed to furnish the relevant details and the matter was remitted for fresh consideration by the Assessing Officer, with opportunity to be heard and in accordance with law. [Paras 8]

Issue remanded to the Assessing Officer for fresh adjudication in light of certificates and evidence; remand allowed for statistical purposes.

Final Conclusion: The Tribunal dismissed the jurisdictional objection; held that the Finance Act, 2014 amendment to section 201(3) is not retrospective and therefore quashed orders under section 201(1)/201(1A) for AYs 2011-12 to 2014-15 as time barred; accepted the assessee's bona fide estimation and CBDT approval in relation to Cash Medical Benefit and held the assessee not to be an assessee in default for the CMB for AYs 2015-16 and 2016-17 (directing modification of interest); and remanded the issue relating to payments to Sodexo for fresh consideration by the Assessing Officer.

Best judgment assessment - ex-parte assessment - estimation of income in absence of books - reconciliation between books of account and Form 26AS - opportunity of hearing - obligation of the assessee to produce evidence

Best judgment assessment - ex-parte assessment - estimation of income in absence of books - reconciliation between books of account and Form 26AS - opportunity of hearing - obligation of the assessee to produce evidence - Whether the assessment completed by the Assessing Officer and confirmed by the Commissioner (Appeals) by estimating profit on turnover as per Form 26AS in the absence of books of account should be sustained or the matter should be remanded for fresh adjudication after allowing the assessee an opportunity to produce books and reconciliation. - HELD THAT: - The Tribunal noted that the Assessing Officer framed the assessment under section 144 read with section 145(3) after the assessee failed to produce books of account and the AO estimated net profit at 5% on receipts shown in Form 26AS. The CIT(A) disposed of the appeal ex parte as the assessee did not appear or file details before him. The record shows the assessee had furnished an explanation to the AO that amounts in Form 26AS included reimbursements not treated as turnover in books, but failed to produce supporting books. The Tribunal observed that while it is the assessee's obligation to appear and produce evidence, the assessee before the Tribunal expressed readiness to file the necessary reconciliation and books to substantiate the claim. In these circumstances, and having regard to the fact that the assessment and appellate orders were rendered without consideration of the books, the Tribunal exercised its discretion to set aside the matter for reconsideration. The AO is directed to afford the assessee an opportunity of hearing, accept and examine the reconciliation and books to verify the claimed distinction between reimbursements and turnover, and redo the assessment after considering the produced evidence, the assessee attending without seeking further adjournments. [Paras 7, 8]

Appeal allowed for statistical purposes and remanded to the file of the Assessing Officer with direction to reopen/redo the assessment after granting opportunity to the assessee to produce books and reconciliation between turnover in books and Form 26AS.

Final Conclusion: The Tribunal set aside the assessment and the CIT(A)'s confirmation and remanded the matter to the Assessing Officer to redo the assessment after giving the assessee an opportunity to produce books of account and reconciliation explaining the difference between turnover in books and receipts shown in Form 26AS; the appeal is allowed for statistical purposes.

Preclusion of appeals for low tax effect under CBDT Circular No. 17/2019 - disallowance of repairs and maintenance expenses (capital versus revenue) - ad hoc disallowance where assessee fails to produce details - remand to the Assessing Officer for fresh examination and verification

Preclusion of appeals for low tax effect under CBDT Circular No. 17/2019 - Whether the revenue appeals for assessment years 2010-11 to 2012-13 are maintainable in view of the low tax effect. - HELD THAT: - The Tribunal observed that the tax effect in respect of the contested issue for assessment years 2010-11 to 2012-13 is admittedly less than Rs. 50 lakhs. In light of CBDT Circular No. 17/2019 dated 8.8.2019, which precludes the revenue from pursuing appeals with such low tax effect, the Tribunal concluded that the revenue is precluded from pursuing these appeals and accordingly dismissed them in limine. [Paras 11]

Appeals for A.Y. 2010-11, 2011-12 and 2012-13 dismissed in limine on account of low tax effect.

Ad hoc disallowance where assessee fails to produce details - remand to the Assessing Officer for fresh examination and verification - Treatment of ad hoc disallowance of helicopter-related operating expenses in A.Y. 2009-10 where the assessee did not furnish details called for. - HELD THAT: - The Assessing Officer made an ad hoc disallowance of helicopter operating expenses because the assessee failed to produce the details sought and did not demonstrate business expediency for purchasing the helicopters. The CIT(A) deleted the ad hoc disallowance for lack of a valid basis for the figure. The Tribunal held that deletion was not justified in view of the assessee's failure to furnish required details before both authorities, but in the interest of natural justice directed that the matter be restored to the file of the Assessing Officer to give the assessee one more opportunity to produce the particulars and for the AO to examine them afresh. [Paras 7, 8, 12]

Order of the CIT(A) deleting the ad hoc disallowance is set aside and the issue is restored to the Assessing Officer for fresh consideration after giving the assessee an opportunity to furnish details.

Disallowance of repairs and maintenance expenses (capital versus revenue) - remand to the Assessing Officer for fresh examination and verification - Whether repairs and maintenance expenses claimed by the assessee are capital in nature (enduring benefit) or revenue in nature for A.Y. 2009-10 (and as common issue in other years). - HELD THAT: - The AO disallowed repairs and maintenance expenditures on a presumption that they conferred an enduring benefit and hence were capital, allowing only depreciation. The CIT(A) deleted the disallowance without examining the nature and particulars of the expenditures. The Tribunal found that neither authority had critically examined the detailed nature of the repairs and maintenance claims; therefore, without such examination one cannot determine whether the expenses are capital or revenue. Consequently, the Tribunal set aside the CIT(A)'s order on this issue and remitted it to the Assessing Officer for fresh examination of the detailed nature of the expenditures. [Paras 5, 6, 13]

Disallowance in respect of repairs and maintenance is set aside and the matter is restored to the Assessing Officer for fresh examination to determine whether the expenses are capital or revenue in nature.

Final Conclusion: The Tribunal dismissed the revenue appeals for A.Y. 2010-11 to 2012-13 in limine for low tax effect; for A.Y. 2009-10 the Tribunal remitted the issues of helicopter operating expenses and the nature of repairs and maintenance expenses to the Assessing Officer for fresh examination after giving the assessee an opportunity to produce the required details.

Chargeability under Section 56(2)(vii)(b) in case of transfer of immovable property - Definition of "relative" and tax exclusion for property received by an HUF from its members - Inapplicability of Section 50C to the purchaser where valuation provisions operate on the transferor

Chargeability under Section 56(2)(vii)(b) in case of transfer of immovable property - Definition of "relative" and tax exclusion for property received by an HUF from its members - Whether the receipt of immovable property by the HUF from its Karta (a member) is chargeable to tax under Section 56(2)(vii)(b). - HELD THAT: - The Tribunal examined the amended contours of Section 56(2)(vii)(b) and the definition of "relative" as expanded by the Finance Act, 2012. On the facts, the transferor was the Karta in his individual capacity and the transferee was the HUF. The Tribunal accepted the contention that, by virtue of the statutory definition, property received by an HUF from its members falls within the exclusion for transfers between relatives and therefore does not attract chargeability under Section 56(2)(vii)(b). The Tribunal held that this statutory definition covers transfers from a member to the HUF and, accordingly, the addition made under Section 56(2)(vii)(b) could not be sustained against the assessee-HUF. [Paras 19, 20]

Addition under Section 56(2)(vii)(b) deleted as the transfer was from a member to the HUF and thus not chargeable.

Inapplicability of Section 50C to the purchaser - Role of stamp valuation authority's value and timing of agreement/registration - Whether Section 50C could be invoked against the assessee-purchaser to adopt the stamp duty valuation as full value of consideration. - HELD THAT: - The Tribunal noted that Section 50C operates as a special provision for determining full value of consideration in the hands of the transferor for computation of capital gains. The CIT(A) had relied on Section 50C and the AO had applied stamp duty value at registration. The Tribunal observed that, in the present case, the assessee was the purchaser (recipient) and not the transferor; accordingly Section 50C was not applicable to sustain an addition in the hands of the purchaser under the facts of this case. Having rejected applicability of Section 50C to the assessee, the Tribunal concluded that Revenue could not maintain the assessment under Section 56(2)(vii)(b) on the basis of Section 50C valuation. [Paras 5, 20]

Section 50C held inapplicable to the purchaser; reliance on stamp valuation for taxing the HUF was rejected.

Final Conclusion: The addition of deemed income made on account of difference between agreement value and stamp duty value was deleted. The Tribunal held that the transfer was from a member to the HUF and therefore not taxable under Section 56(2)(vii)(b), and that Section 50C could not be invoked against the purchaser; appeal allowed.

Re-opening of assessment under section 147 - tangible material - change of opinion - merger of issues by virtue of proviso to section 147 - third proviso to section 147 (bar where matter is subject-matter of appeal) - provision for bad and doubtful debts under section 36(1)(viia)

Re-opening of assessment under section 147 - tangible material - change of opinion - Validity of initiation of reassessment proceedings where the Assessing Officer relied on material already in existence and on verifications made in a subsequent assessment year. - HELD THAT: - The Tribunal concluded that the reopening of assessment for AY 2008-09 was not supported by any fresh tangible material coming into the possession of the Assessing Officer after completion of the original assessment. The AO's reasons relied on verifications carried out during assessment proceedings for AY 2010-11 and on census data that were publicly available and accessible at the time of the original assessment and were, in any event, part of the return and queried during the original proceedings. Applying the principle that reopening cannot be based on mere change of opinion or re-examination of the same material (as explained with reference to Kelvinator and subsequent authority), the Tribunal held that an error or oversight in the original assessment does not confer jurisdiction to reopen absent new material indicating escapement of income. Consequently, initiation of proceedings under section 147 on the stated grounds was invalid. [Paras 16, 17, 18, 19]

Reopening was invalid as it was founded on existing material and amounted to impermissible change of opinion; therefore reassessment could not be initiated.

Merger of issues by virtue of proviso to section 147 - third proviso to section 147 (bar where matter is subject-matter of appeal) - provision for bad and doubtful debts under section 36(1)(viia) - Whether matters relating to classification and quantification of deduction under section 36(1)(viia), being the subject-matter of appeal before the appellate authorities, could be reopened under section 147. - HELD THAT: - The Tribunal found that the very issue of entitlement and quantum of deduction under section 36(1)(viia) for AY 2008-09 was pending before the appellate authorities (CIT(A) and ITAT) when the AO issued the notice under section 148. By operation of the third proviso to section 147, issues which have merged into appellate orders or are the subject-matter of appeal cannot be reopened in reassessment proceedings. Citing and applying the principle of merger as expounded in the Tribunal's earlier decisions, the court held that additions or recomputations concerning the same issue could not be the subject of reassessment once they were before the appellate forum, and therefore the reopening was barred by the proviso. [Paras 21, 22, 23]

Reassessment was barred by the third proviso to section 147 because the matters were the subject-matter of appeal and had merged into appellate proceedings.

Final Conclusion: The Tribunal allowed the assessee's appeal and annulled the reassessment proceedings for AY 2008-09, holding that initiation under section 147 was invalid both for lack of fresh tangible material (amounting to change of opinion) and because the disputed issues were barred from reassessment by the third proviso to section 147; the Revenue's appeal was dismissed.

Provisional attachment - prior approval requirement for provisional attachment - post facto approval - application of amended definition of benami transaction in section 2(9)(D) - retrospective application of statutory amendment - appeal remedy under the Act

Provisional attachment - prior approval requirement for provisional attachment - post facto approval - Whether a provisional attachment order passed without prior approval can be sustained where approval was granted subsequently. - HELD THAT: - The High Court identified this as a debatable question requiring further consideration. The Court noted that the initiating officer passed a provisional attachment order and obtained approval only thereafter. The adjudicating authority had affirmed the provisional attachment while treating procedural defects as immaterial at the adjudication stage. The Court did not resolve the legal controversy on the merits but found the question sufficiently substantial to warrant issuance of notice and further proceedings by the respondents to address the legality of a post facto approval to a provisional attachment order.

Remanded for further consideration; notice issued and interim status quo ordered.

Application of amended definition of benami transaction in section 2(9)(D) - retrospective application of statutory amendment - Whether the amended definition of 'benami transaction' (introduced by the 2016 Amendment) can be applied to a property purchased in 2010. - HELD THAT: - The Court recognised a substantive dispute as to whether the amendment to the definition of benami transaction has retrospective effect and observed that the petitioner contends the provision is prospective only. The High Court declined to decide the question on the merits at this stage, concluding that the point raises substantial legal questions that require fuller consideration by the respondents and cannot be summarily disposed of in the writ proceedings.

Remanded for fresh consideration; notice issued and interim status quo ordered.

Final Conclusion: The High Court issued notice, declined to decide the substantive questions on merits, and remanded for further consideration two substantial issues - legality of provisional attachment where approval was post facto and retrospective application of the amended definition of benami transaction - while directing maintenance of status quo and further affidavits with the matter listed on the next date.

Benami transactions - abuse of process - writ of mandamus - monitoring of investigation / continuous mandamus - parallel enquiry - no adverse inference against investigating officers - use of court as private investigator

Abuse of process - writ of mandamus - parallel enquiry - use of court as private investigator - Maintainability of a writ seeking directions to investigate, prosecute and monitor alleged benami transactions and related offences when a civil suit on the same subject-matter is pending and where disputed questions of fact exist. - HELD THAT: - The Court declined to entertain the petition at the admission stage on the ground that the matters raised by the petitioners largely concern disputed questions of fact which are the subject-matter of a pending civil suit and which should be resolved through the trial process. The petitioners sought to extract investigative action and information from executive authorities and to use the High Court forum to buttress their civil claims or coerce opponents into settlement by threatening criminal or administrative action. Relying on the principle that courts should not be used as instruments for private fact-finding or to commence a parallel enquiry to a civil trial, and having regard to the absence of defendants' pleas before the Court, the writ was held to be an abuse of process. Observations in Tehseen Poonawalla regarding frivolous or motivated petitions that seek to occupy judicial time were applied to underscore that public fora must not be used to pursue private or commercial agendas under guise of public interest. The Court expressly refused to conduct the investigatory or evidentiary functions that properly belong to the trial of the civil suit or to the executive within the statutory framework, and therefore declined to grant the mandamus sought against the executive respondents. [Paras 15, 17, 18, 20]

Writ petition dismissed at the admission stage as an abuse of process; the Court will not entertain a petition that seeks a parallel enquiry or to use the writ forum as a private investigative tool in aid of a pending civil suit.

No adverse inference against investigating officers - benami transactions - Whether any adverse inference of collusion could be drawn against the Income Tax investigating officers from the material placed by the petitioners. - HELD THAT: - On the material placed (complaints, plaint and sale-deeds), the Court found no basis to draw any adverse inference of collusion between the Income Tax officers and the alleged benamidar purchasers. The Court cautioned against tarnishing reputations of government officers based on mere suspicions or assumptions and observed that aspersions cannot be cast without supporting material. Consequently, the petitioners' allegations of collusion were rejected for the purposes of the writ petition. [Paras 16]

No adverse inference of collusion against respondent officers; allegations based on suspicion and assumptions are not accepted.

Dismissal at admission - costs - Relief consequential to dismissal: imposition of costs and disposal of connected petitions. - HELD THAT: - Having concluded that the writ petition constituted an abuse of process and was not maintainable, the Court dismissed the petition at the admission stage and directed the petitioners to pay costs to the High Court Legal Services Committee. The Court further ordered that miscellaneous petitions, if any, connected with the writ petition shall stand closed. [Paras 21, 22]

Writ petition dismissed at admission with costs of Rs. 5,000 payable to the High Court Legal Services Committee within four weeks; connected miscellaneous petitions closed.

Final Conclusion: The writ petition seeking investigatory directions, monitoring and prosecution in respect of alleged benami transactions was dismissed at the admission stage as an abuse of process; no adverse inference was drawn against the investigating officers on the material produced, costs were imposed on the petitioners and connected miscellaneous petitions were closed.

Abuse of process - maintainability of writ petition during pendency of civil suit - prohibition on roving enquiry and parallel adjudication - refusal to grant continuous mandamus for investigation without prima facie basis - public interest litigation safeguards against motivated petitions

Maintainability of writ petition during pendency of civil suit - prohibition on roving enquiry and parallel adjudication - refusal to grant continuous mandamus for investigation without prima facie basis - Whether the writ petition seeking directions for investigation, forensic testing of registration records and prosecution of respondents is maintainable and should be entertained while the civil suit is pending and on the factual matrix presented by the petitioner. - HELD THAT: - The Court found that the subject-matter of the dispute is sub judice in O.S.No.952 of 2014 and that there are several disputed questions of fact which require trial in the civil suit; the petitioner, who is a defendant in that suit, has not placed his written statement on record in the suit and has not explained this suppression. The pleading filed by the 18th respondent as annexure discloses a substantial defence. The writ forum cannot be used to conduct a parallel or roving inquiry into registration records or the business affairs of private entities so as to obtain material for use in the civil suit or to coerce settlement. Absent a clear, independent public interest or prima facie illegality warranting immediate investigatory interference, the Court declined to exercise extraordinary writ jurisdiction to direct investigations, forensic tests, seizure of original registries or to monitor criminal investigations. The Court relied on the need to protect judicial resources and guard against motivated litigation and observed that petitions ostensibly invoking public interest cannot be a device for private ends. The petition was therefore treated as an abuse of process and was not entertained. [Paras 26, 27, 28, 29, 31]

Writ petition dismissed at admission stage; directions sought for investigation, forensic testing and prosecution refused.

Abuse of process - public interest litigation safeguards against motivated petitions - Whether the filing of the writ petition amounted to an abuse of the process of the Court and what consequential order should follow. - HELD THAT: - The Court concluded that the writ petition was instituted to advance or protect private litigation interests in the pending civil suit and that the petitioner sought to use the writ jurisdiction as a means of obtaining investigatory leverage or to blackmail/coerce opposing parties. Citing the danger posed by frivolous or motivated petitions that consume judicial time and undermine public faith in institutions, the Court held the petition to be an abuse of process. Consequentially, the petition was dismissed at the admission stage and costs were imposed as a penal and deterrent measure. [Paras 26, 28, 30, 31, 32]

Petition held to be an abuse of process and dismissed; costs of Rs. 5,000 ordered to be paid to the High Court Legal Services Committee within four weeks.

Final Conclusion: The High Court dismissed the writ petition at the admission stage as an abuse of process, refused to direct investigations, forensic testing or prosecution sought by the petitioner in lieu of matters pending trial in the civil suit, and imposed costs payable to the High Court Legal Services Committee.

Provisional release of seized goods under section 110A of the Customs Act, 1962 - Right of owner to seek provisional release - Adjudicating authority's discretion to impose bond, security and conditions - Protection of revenue while allowing provisional release

Provisional release of seized goods under section 110A of the Customs Act, 1962 - Right of owner to seek provisional release - Adjudicating authority's discretion to impose bond, security and conditions - Commissioner of Customs may exercise power under section 110A to grant provisional release of goods seized pending adjudication and petitioners are entitled to apply for such release. - HELD THAT: - The Court examined section 110A which permits release of seized goods, documents or things pending adjudication on taking a bond with such security and conditions as the adjudicating authority may require. The Court relied on its prior analysis in Siddharth Vijay Shah which held that the statutory language is of general import and does not exclude goods categorised as prohibited from provisional release; section 110A therefore confers a right on the owner to seek provisional release while vesting a corresponding discretion in the adjudicating authority to impose bonds, security and conditions so as to protect the revenue. Applying that principle, the Court found no legal impediment to the exercise of power by the Commissioner under section 110A in the present petitions concerning seized exportable diamonds and directed the Commissioner to act in accordance with law. [Paras 5, 6, 7, 8]

Directed the Commissioner of Customs to pass orders for provisional release of the petitioners' exportable goods in accordance with law within seven days of receipt of the order.

Final Conclusion: Writ petitions allowed to the extent of directing the Commissioner of Customs to consider and, where appropriate under section 110A of the Customs Act, 1962, order provisional release of the seized exportable goods on such bond, security and conditions as permissible by law within seven days; matter stood over to 01.02.2021.

Liability for demurrage and detention on goods seized or detained - obligation of Customs Cargo Service Provider regarding waiver of rent and demurrage for seized or detained goods - effect of detention/ seizure period on recovery of steamer agent/container freight station charges - Court's power to direct issue of detention/demurrage waiver certificate

Obligation of Customs Cargo Service Provider regarding waiver of rent and demurrage for seized or detained goods - Whether demurrage and detention charges could be recovered from the petitioner for the period during which the goods were under Customs seizure and adjudication. - HELD THAT: - The Court examined Notification No.26/2009-Cus (NT), clause 6, which states that a Customs Cargo Service Provider shall not charge any rent or demurrage on goods seized or detained or confiscated. The Court rejected the submission that the regulation applies only when the importer is 'not at fault', finding the language plain and unqualified: where goods remain seized or detained by Customs and the importer is unable to clear them, the importer should not be charged rent or demurrage for that period. Applying that principle to the facts, seizure occurred on 24.09.2019 and the appellate order directing re-export was passed on 19.02.2020; the petitioner was therefore not liable to pay demurrage or detention charges for the period up to 19.02.2020. The Court noted that the steamer agent/terminal operator's insistence on payment for that period could not be sustained where detention arose from Customs action. [Paras 9, 10, 11]

Demurrage and detention charges are not recoverable from the petitioner for the period during which the goods were seized/detained by Customs up to 19.02.2020.

Court's power to direct issue of detention/demurrage waiver certificate - liability for demurrage and detention on goods seized or detained - Whether the Customs authority should be directed to issue a detention certificate recommending waiver of demurrage and detention charges. - HELD THAT: - Although the first respondent contended that the regulations do not expressly provide for issuance of a detention certificate, the Court observed that past practice has been to issue such certificates where circumstances warrant and where courts have so directed. Finding that the petitioner had made out a case for waiver for the seizure period and having accepted the petitioner's undertaking to pay specified sums towards charges (as a pragmatic concession), the Court exercised its supervisory jurisdiction to direct the Customs authority to issue the detention certificate. The Court directed issuance within twelve weeks from receipt of the order, subject to the petitioner honouring the undertaking to pay the sums offered. [Paras 12, 13]

The Customs authority is directed to issue a detention certificate recommending waiver of demurrage and detention charges; such certificate to be issued within twelve weeks, subject to the petitioner's undertaking to pay the sums it offered.

Final Conclusion: Writ petition allowed: petitioner held not liable to pay demurrage/detention charges for the period of Customs seizure (up to 19.02.2020), and the Customs authority directed to issue a detention certificate recommending waiver of such charges within twelve weeks, subject to the petitioner's undertaking to pay the sums offered.

Maintainability of application under Section 52A(2) of the NDPS Act - drawing of representative samples in the presence of a Magistrate - inventory, photographs and list of samples certified by Magistrate to be primary evidence - Magistrate's duty to allow application under Section 52A(3) - judicial supervision and certification of sampling process - expeditious disposal where commercial quantity is involved

Maintainability of application under Section 52A(2) of the NDPS Act - Magistrate's duty to allow application under Section 52A(3) - Whether an application under Section 52A(2) of the NDPS Act is maintainable before a Judicial Magistrate and whether the impugned order dismissing such application was correctly passed. - HELD THAT: - The Court held that applications under Section 52A(2) are properly maintainable before a Judicial Magistrate. The statutory scheme of Section 52A requires the officer in charge to prepare an inventory and make an application to a Magistrate for certification of the inventory, photographing and/or drawing representative samples, and Sub section (3) obliges the Magistrate to allow the application "as soon as may be". The Court relied on authoritative observations that the process of drawing samples must be in the presence and under the supervision of the Magistrate and that the inventory, photographs and lists of samples certified by the Magistrate constitute primary evidence. In those circumstances the learned Duty Metropolitan Magistrate's summary dismissal of the application as not maintainable was contrary to the statutory scheme and relevant judicial guidance, and therefore unsustainable.

Impugned order dated 01.06.2020 dismissing the Section 52A(2) application is set aside; the Court affirmed that such applications are maintainable before a Judicial Magistrate and that the Magistrate must allow and supervise the sampling application.

Drawing of representative samples in the presence of a Magistrate - judicial supervision and certification of sampling process - The procedural course to be followed for drawing representative samples in the present case and the forum and timeline for that exercise. - HELD THAT: - Having set aside the dismissal, the Court directed the learned Judicial Metropolitan Magistrate on duty to take up the Section 52A(2) application in the specified file and to draw representative samples in accordance with law. The samples are to be drawn in the presence of the Magistrate and certified by him, with learned counsel for the parties being permitted to attend via video conferencing. The order implements the statutory requirement that sampling be conducted under judicial supervision and that the Magistrate certify the correctness of the list of samples.

Directed that the Magistrate shall take up the application and draw and certify representative samples on 08.06.2020 at 3 p.m., with counsel allowed to attend by video conferencing.

Inventory, photographs and list of samples certified by Magistrate to be primary evidence - expeditious disposal where commercial quantity is involved - Whether the court seized of consequential proceedings must proceed expeditiously in view of the quantity of contraband being commercial. - HELD THAT: - The Court observed that where the seized quantity falls within the statutory definition of commercial quantity, the related application under Section 36A(4) (as framed in the record) must be taken up promptly. The statutory treatment under Section 52A(4) reinforces the importance of prompt and judicially supervised sampling and certification since the certified inventory and samples are primary evidence. In the facts of the case the alleged recovery is of commercial quantity, and therefore the competent Sessions Court was directed to consider and dispose of the application on the date fixed.

Directed that the learned Additional Sessions Judge seized of the application under Section 36A(4) shall take up and dispose of the application on the fixed date (10.06.2020) in light of the commercial quantity involved.

Final Conclusion: The High Court set aside the Metropolitan Magistrate's order dismissing the Section 52A(2) application, held such applications to be maintainable before a Judicial Magistrate, directed immediate judicial supervision and certification of the drawing of representative samples on 08.06.2020, and directed the Sessions Court to dispose the related application promptly in view of the commercial quantity determination.

Scheme of demerger and arrangement under section 230 of the Companies Act, 2013 - dispensation of meetings of shareholders and creditors - consent affidavits of all members/creditors - service of notices to regulatory authorities under section 230(5) - compliance with the Companies (Compromises, Arrangements and Amalgamation) Rules, 2016 (Rule 6 and Rule 8)

Dispensation of meetings of shareholders and creditors - consent affidavits of all members/creditors - Meeting of Equity Shareholders, Secured Creditors and Unsecured Creditors of the Demerged Company dispensed with. - HELD THAT: - The Tribunal recorded that the Demerged Company had three equity shareholders and all had filed affidavits consenting to the proposed Scheme. The Demerged Company also produced certificates from its chartered accountant evidencing the identities of its secured and unsecured creditors and produced NoCs/consents from the secured creditors and from all unsecured creditors. On the basis of unanimous consent affidavits and the filed certificates, the Tribunal found it appropriate to dispense with the convening of meetings of the equity shareholders, secured creditors and unsecured creditors of the Demerged Company for consideration of the Scheme. [Paras 8, 10, 14, 15, 16]

Meetings of equity shareholders, secured creditors and unsecured creditors of the Demerged Company are dispensed with.

Dispensation of meetings of shareholders - consent affidavits of all members - Meeting of Equity Shareholders of the Resulting Company dispensed with. - HELD THAT: - The Resulting Company filed a practising company secretary's certificate showing fifteen equity shareholders and produced affidavits from all fifteen consenting to the Scheme. Having received unanimous consent from all equity shareholders, the Tribunal concluded there was no need to convene a shareholders' meeting of the Resulting Company and accordingly dispensed with it. [Paras 11, 17]

Meeting of equity shareholders of the Resulting Company is dispensed with.

Absence of creditors - dispensation of creditors' meetings - No meetings of Secured Creditors and Unsecured Creditors of the Resulting Company required. - HELD THAT: - The Tribunal noted the certificate indicating that as on the relevant date the Resulting Company had no secured creditors and no unsecured creditors. In view of that absence, there was nothing to convene and the Tribunal held that meetings of secured and unsecured creditors of the Resulting Company were not required. [Paras 12, 18]

No need to conduct meetings of secured creditors and unsecured creditors of the Resulting Company.

Service of notices to regulatory authorities under section 230(5) - compliance with Rule 6 and Rule 8 of the Companies (CAA) Rules, 2016 - Directions issued for statutory service and publication in compliance with section 230(5) and the Rules. - HELD THAT: - Although meetings were dispensed with or not required, the Tribunal directed compliance with the statutory notice and publication requirements. The Applicant Companies were ordered to serve notice with a copy of the Scheme, explanatory statement and required disclosures on the Central Government (through the Regional Director, South Eastern Region), the Registrar of Companies, Telangana, the Income Tax Authorities and the Official Liquidator by registered post, speed post or hand delivery as prescribed. The authorities were given thirty days from receipt to make any representation. The Tribunal also directed publication of an advertisement about dispensation of the meetings in Business Standard (English) and Nava Telangana (Telugu). These directions were given to ensure statutory stakeholders have the opportunity to represent within the prescribed period. [Paras 19, 20]

Applicant Companies directed to serve statutory notices to specified authorities and to publish the prescribed advertisement; authorities given thirty days to make representations.

Final Conclusion: The Company Application is disposed of: meetings of shareholders and creditors were dispensed with or held unnecessary as recorded, statutory notices and publications were ordered to be effected in compliance with the Companies Act and the Companies (CAA) Rules, 2016, and the specified authorities were given thirty days to file any representation.

Status quo - prohibition on forced subscription to rights issue - participation rights of a director-shareholder - entitlement to director perks - ex parte interim order - notice before removal of director - Companies Act, 2013 - rights of director and shareholder participation

Prohibition on forced subscription to rights issue - status quo - Respondents were directed not to force the Applicant to accept the Rights Issue offered vide letter dated 07th July, 2020 until further orders. - HELD THAT: - The Tribunal, after perusing the pleadings and hearing the Applicant's counsel and noting non-appearance of Respondents, concluded that in the interim and in the interest of justice the 3rd Respondent shall not compel the Applicant to subscribe to the Rights Issue communicated on 07th July, 2020. The order preserves the existing position of the Applicant with respect to the offer pending further orders and prevents unilateral alteration of her shareholding status by forcible subscription demands. [Paras 5, 6]

Application disposed by directing Respondents not to force the Applicant to accept the Rights Issue until further orders.

Participation rights of a director-shareholder - entitlement to director perks - Companies Act, 2013 - rights of director and shareholder participation - The Applicant, holding 38% shares and being a Director, is entitled to participate in the affairs of the Company and to receive director perks on par with other directors. - HELD THAT: - The Tribunal recorded that the Applicant, as a significant shareholder and Director, has the right to participate in company affairs and to claim parity in director-related benefits. This finding was reached on the material before the Tribunal and informed the interim protective direction regarding the Rights Issue and the need to maintain the Applicant's present position pending further consideration. [Paras 5]

Applicant entitled to participate in company affairs and to receive perks pari passu with other directors.

Ex parte interim order - notice before removal of director - Earlier ex parte interim directions requiring prior notice before any proposal to remove the Applicant as Director remain in force; however, the Tribunal declined to make any further ex parte interim orders in the absence of Respondents' appearance. - HELD THAT: - The Tribunal noted that it had already passed ex parte interim orders in I.A. Nos.197 & 200/2020 directing Respondents to issue prior notice if any proposal to remove the Applicant as Directress is proposed and to follow statutory provisions. Given continued non-appearance of Respondents, the Tribunal stated it was not in a position to pass additional ex parte interim directions at this stage, while preserving the prior direction on notice. [Paras 5]

Previous ex parte directions on notice before removal are recorded; no further ex parte interim orders were passed for the present absent respondents' participation.

Final Conclusion: Interim relief granted: respondents restrained from forcing the applicant to subscribe to the Rights Issue until further orders; applicant's right to participate as a director-shareholder and to receive director perks recognised; earlier interim directions on giving notice before any proposal to remove the applicant remain recorded, while the Tribunal refrained from granting additional ex parte relief in view of respondents' non-appearance.

Limitation - mixed question of law and fact - maintainability - Corporate Insolvency Resolution Process - application under Section 7(2) of the Insolvency and Bankruptcy Rules, 2019 - moratorium on account of COVID-19 pandemic

Limitation - mixed question of law and fact - The High Court declined to adjudicate the plea of limitation at the admission stage and refrained from deciding the limitation point itself. - HELD THAT: - The Court observed that the question of limitation as raised in respect of the application filed under the Insolvency and Bankruptcy Code involves a mixed question of law and fact, particularly having regard to the specific averments in Para No.27 of the creditor's Form-C and the factual matrix pleaded. In view of that characterisation and the pendency of the application before the Tribunal, the Court was not inclined to entertain or decide the limitation plea at the writ admission stage. [Paras 8]

The High Court refused to adjudicate the limitation plea and declined to decide the question itself.

Maintainability - Corporate Insolvency Resolution Process - application under Section 7(2) of the Insolvency and Bankruptcy Rules, 2019 - moratorium on account of COVID-19 pandemic - The application is remitted to the National Company Law Tribunal for consideration of maintainability, including the limitation plea and Covid-related moratorium contentions, on the basis of the materials on record. - HELD THAT: - The Court permitted the petitioner (cited as Corporate Debtor in the creditor's application) to raise the plea of limitation before the Tribunal and directed that the 2nd respondent Tribunal decide the maintainability of the Section 7 application on the materials placed before it. The Tribunal was requested to examine the averments in the creditor's application (including the asserted OTS letter and the submission as to exclusion of the COVID period) and determine the admissibility and timeliness of the application in accordance with law. The High Court retained no adjudication of the merits of limitation, leaving the factual and legal resolution to the Tribunal. [Paras 9]

The matter is remitted to the National Company Law Tribunal to decide maintainability, including the limitation and COVID-moratorium contentions, on the basis of materials placed before it.

Final Conclusion: Writ petitions disposed by consenting order: High Court declined to decide the limitation plea and directed the National Company Law Tribunal to determine the maintainability of the creditor's Section 7 application (including the limitation and COVID-related contentions) on the materials, permitting the petitioner to raise the limitation defence before the Tribunal; no costs.

Insolvency resolution process costs - expense incurred by the resolution professional in running the corporate debtor as a going concern - advance payments for supply of goods during CIRP - duty of the liquidator to admit or reject claims within time - communication of admission or rejection under Section 40 - management of operations of corporate debtor as a going concern under Section 20 - verification and adjudication of claims under Regulation 30 - IBBI guidance on disclosure and ratification of CIRP costs

Insolvency resolution process costs - expense incurred by the resolution professional in running the corporate debtor as a going concern - advance payments for supply of goods during CIRP - management of operations of corporate debtor as a going concern under Section 20 - Whether an advance paid to the corporate debtor during CIRP for supply of goods, which remained unpaid on part delivery, can be treated as insolvency resolution process cost. - HELD THAT: - The Tribunal held that advances received by the corporate debtor during the CIRP for supply of goods may, in appropriate circumstances, fall within the ambit of insolvency resolution process costs because Section 20 and Section 5(13)(c) treat costs incurred by the resolution professional in running the corporate debtor as a going concern as CIRP costs. The court rejected the absolute proposition that a purchaser's advance can never be treated as an expense incurred by the resolution professional. Where the RP/IRP, in managing the corporate debtor as a going concern, receives advances for goods and the goods are not supplied, the balance amount retained by the corporate debtor can amount to monies connected with running the business as a going concern and thus be susceptible to classification as CIRP cost. The Tribunal relied on documentary indicia on record (proforma invoice, transfer memo, part supply) showing the advance was received during CIRP and that the corporate debtor supplied only part of the goods, to hold that such advances cannot be ignored as mere unsecured loans in all cases. The court also noted relevant IBBI regulations and circulars which require reasonable, necessary and disclosed CIRP-related expenses, and that CoC ratification is required only where statute/regulation so provides; absence of express ratification does not automatically render a transaction incapable of being a CIRP cost. [Paras 28, 29, 31, 36, 38]

An advance paid during CIRP for supply of goods, where the transaction is shown to relate to keeping the corporate debtor as a going concern and part performance has occurred, can be treated as an insolvency resolution process cost and is not, as a matter of law, incapable of such classification.

Duty of the liquidator to admit or reject claims within time - communication of admission or rejection under Section 40 - verification and adjudication of claims under Regulation 30 - IBBI guidance on disclosure and ratification of CIRP costs - Whether the liquidator acted properly in delaying decision on the appellants' Form G claims and what directions were required to be given. - HELD THAT: - The Tribunal held that the Liquidator is bound by Regulation 30 to verify claims within the prescribed period and by Section 40(2) to communicate admission or rejection within seven days of such decision. The Liquidator cannot indefinitely sit on claims on the ground that records are sought from the IRP/RP; the IRP/RP has a duty to furnish information to the Liquidator and, if it fails, appropriate steps (report to Adjudicating Authority / IBBI) are available. Given that the claims had been lodged and documentary material showed part supply and an advance during CIRP, the Liquidator's inaction was impermissible. The Tribunal therefore directed an orderly course: the RP/IRP to supply all necessary information to the Liquidator within 15 days; the Liquidator to consider and admit or reject the claims recording reasons under Section 40 within 30 days; and, if rejection is communicated, to await the 14-day period under Section 42 to enable the appellants to challenge the rejection before the Adjudicating Authority. [Paras 43, 44]

The Liquidator's delay in deciding the claims was not permissible; the RP must provide outstanding information within 15 days and the Liquidator must admit or reject the claims with reasons within 30 days, with rejections subject to the Section 42 challenge period.

Final Conclusion: The Tribunal held that advances paid to a corporate debtor during CIRP for supply of goods may, depending on circumstances and documentary record, be treated as insolvency resolution process costs; the Liquidator was directed to obtain required information from the IRP/RP within 15 days and to verify and admit or reject the appellants' claims with reasons under Section 40 within 30 days, with rejected claims remaining subject to challenge under Section 42.

Operational creditor - Operational debt - Initiation of corporate insolvency resolution process under Section 9 of the Insolvency & Bankruptcy Code, 2016 - Moratorium under Section 14 of the Insolvency & Bankruptcy Code, 2016 - Binding term sheet as contract for provision of services - Termination of agreement triggering refund liability - Extension by conduct not constituting written mutual extension

Operational creditor - Operational debt - Binding term sheet as contract for provision of services - Whether the petitioner is an operational creditor and the claimed amount under the Term Sheet constitutes an operational debt. - HELD THAT: - The Tribunal found that the Term Sheet dated 02.08.2018 appointed the petitioner as Project Manager to perform defined services for the corporate debtor and that the scope of services and fee structure were set out in the Term Sheet (Clauses 5, 6, 7, 8, 12 and 13). The Bench construed the token payment of Rs. 2.51 crores paid by the petitioner as part of the service arrangement under the Term Sheet and held that such obligation falls within the definition of operational debt (provision of services). On that basis the petitioner qualifies as an operational creditor under the Code and the claimed refund obligation on termination is an operational debt recoverable under the Code. [Paras 15, 16]

The petitioner is an operational creditor and the claimed amount under the Term Sheet is an operational debt.

Extension by conduct not constituting written mutual extension - Termination of agreement triggering refund liability - Whether the Term Sheet was extended by the parties' conduct or email correspondence, and whether its automatic termination occurred thereby giving rise to refund liability under Clause 13. - HELD THAT: - The Tribunal concluded that Clause 17 of the Term Sheet provided for automatic termination if the Development Management Agreement was not executed within 60 days unless a written mutual extension was made. The exchanged emails and correspondence between the parties and their counsels did not amount to a written mutual extension; there was no consensus ad-idem on critical terms of the Development Management Agreement and therefore the Term Sheet terminated automatically at the end of the stipulated period. The Bench relied also on the draft Deed of Cancellation emailed by the corporate debtor's representative, which confirmed cancellation and admission to refund the advance, and held that upon termination the token amount became repayable under Clause 13 as part of the refund liability. [Paras 15, 16, 17]

The Term Sheet was not extended by conduct; it stood automatically terminated and the corporate debtor became liable to refund the token amount as stipulated in Clause 13.

Initiation of corporate insolvency resolution process under Section 9 of the Insolvency & Bankruptcy Code, 2016 - Moratorium under Section 14 of the Insolvency & Bankruptcy Code, 2016 - Whether the petition under Section 9 is complete, default is established and the corporate insolvency resolution process should be admitted with consequential moratorium and appointment of an interim resolution professional. - HELD THAT: - Applying the foregoing conclusions that the petitioner is an operational creditor and that an operational debt and default exist (refund liability on termination), the Tribunal held the petition in prescribed Form 5 to be complete and that the threshold for initiation under Section 9 was met. The Bench admitted the Section 9 petition, declared moratorium under Section 14 with the usual prohibitions and directions, directed public announcement, and appointed an Interim Resolution Professional to carry out responsibilities under the Code, with the IRP required to report compliance within 30 days. [Paras 19, 20, 21]

The Section 9 petition is admitted; CIRP is initiated, moratorium declared and an Interim Resolution Professional is appointed.

Final Conclusion: The Tribunal held that the Term Sheet constituted a binding service arrangement rendering the petitioner an operational creditor; the Term Sheet was not extended by conduct and terminated as per its terms, giving rise to a repayable token amount which qualified as operational debt; accordingly the Section 9 petition was admitted, moratorium declared and an IRP appointed to carry out the corporate insolvency resolution process.

Refund not maintainable where duty paid pursuant to self-assessment - Refund of accumulated CENVAT credit not permissible except under the specific CENVAT rule - Re-credit of Input Tax Credit in GST ledger - Doctrine of unjust enrichment - Appealability of self-assessment and its effect on refund

Refund not maintainable where duty paid pursuant to self-assessment - Appealability of self-assessment and its effect on refund - Doctrine of unjust enrichment - Maintainability of the refund claims filed by the service recipient for service tax paid to service providers who had self-assessed and deposited the tax. - HELD THAT: - The Tribunal held that the appellants are service recipients who paid service tax to their service providers and had taken CENVAT credit; the service providers self-assessed and deposited the tax and no appeal was filed against those self-assessments. Relying on the Supreme Court principle that refund proceedings cannot be used to reopen or correct an assessment or self-assessment, the Tribunal held that claims for refund are not maintainable where the duty was paid pursuant to an assessment/self-assessment which has not been modified or set aside in appropriate proceedings. The Tribunal also observed that refund of accumulated credit cannot be allowed merely because the claimant asserts erroneous payment; the conditions and route for refund are governed by the relevant CENVAT/GST provisions and cannot be circumvented through refund processing when assessment stands unmodified. The Tribunal therefore rejected the contention that Section 11B (Central Excise Act) procedure should override the bar reflected in the statutory and judicial scheme regarding self-assessment and refunds. [Paras 4]

Refund claims were held not maintainable and accordingly dismissed.

Refund of accumulated CENVAT credit not permissible except under the specific CENVAT rule - Re-credit of Input Tax Credit in GST ledger - Whether accumulated CENVAT credit debited from the appellant's ITC ledger for processing refund claims is eligible for cash refund or re-credit under GST law. - HELD THAT: - The Tribunal found that refund of accumulated CENVAT credit is permissible only under the specific provisions of the CENVAT Credit Rules (notably Rule 5) and that the present case did not fall within those circumstances. The appellants had carried forward CENVAT credit into the GST regime via Trans 1 and had subsequently debited amounts from their GST Input Tax Credit ledger while processing refund applications; the Tribunal noted authorities where different factual matrices produced different outcomes but distinguished them on the ground that those refund/rebate claims were filed and determined prior to the changeover to GST. Given that the refund claims were held not maintainable, the Tribunal directed that the question of restoring (re-crediting) the ITC amounts debited by the appellants be considered by the original authority under the GST law. [Paras 4]

Cash refund was not warranted; matter remanded to the original authority to consider re-credit of the ITC amounts debited by the appellant if permissible under the GST law.

Final Conclusion: The appeals were disposed of by holding the refund claims not maintainable; the matter is remitted to the original authority to consider re-crediting the ITC amounts debited by the appellants in their GST ledger, if permissible under the GST law.

Maintainability of refund under Section 11B of the Central Excise Act - treatment of countervailing duty as additional duty equivalent to excise duty under Section 3 of the Customs Tariff Act - eligibility for CENVAT credit of additional duty under Rule 3(vii) of the CENVAT Credit Rules, 2004 - application of Rule 16 of the Central Excise Rules, 2002 for goods brought to factory as inputs - requirement that goods be inputs or brought for re-making, refining or re-conditioning

Maintainability of refund under Section 11B of the Central Excise Act - application of Rule 16 of the Central Excise Rules, 2002 - eligibility for CENVAT credit under Rule 3(vii) of the CENVAT Credit Rules, 2004 - Application for refund of countervailing duty under Section 11B is maintainable only if conditions of the CENVAT Credit Rules and Rule 16 of the Central Excise Rules, 2002 are satisfied. - HELD THAT: - The Court examined Section 11B and the provisos setting out when a refund may be paid by Central Excise authorities and observed the non obstante protection in sub-section (3). It noted that additional duty under Section 3 of the Customs Tariff Act is the countervailing duty and that Rule 3(vii) of the CENVAT Credit Rules, 2004 permits CENVAT credit of that additional duty. However, Rule 16 of the Central Excise Rules, 2002 entitles CENVAT credit only where goods on which duty had been paid at the time of removal are brought to a factory as inputs for being re-made, refined, re-conditioned or for some other reason and are treated as inputs under the CENVAT Rules. Thus, refund under Section 11B by Central Excise authorities of CVD paid on re-imported goods is permissible only if the re-imported goods qualify as inputs under the CENVAT rules and the conditions of Rule 16 are satisfied; otherwise the statutory scheme does not permit a Central Excise refund of CVD. [Paras 16, 17]

Refund claim under Section 11B was maintainable in principle only if the CVD qualified as CENVAT credit and the returned goods met Rule 16/ CENVAT input conditions; absent those conditions the refund was not maintainable.

Requirement that goods be inputs or brought for re-making, refining or re-conditioning - distinction between finished goods and inputs for CENVAT purposes - On the facts, the re-imported finished goods did not qualify as inputs nor were they shown to have been brought for re-making, re-conditioning or similar processes; therefore the appellant could not claim CENVAT credit or refund under Section 11B. - HELD THAT: - Applying the statutory tests, the Court found that wholly finished goods returned on re-importation were not 'inputs' as defined in the CENVAT Credit Rules and were not brought to the factory for re-making, refining or re-conditioning within the meaning of Rule 16. The appellant also failed to produce the documentary evidence required by Section 11B to show that the incidence of duty had not been passed on to any other person. Consequently the Commissioner (Appeals) and the Tribunal were correct in holding the refund claim unsustainable before Central Excise authorities. [Paras 13, 14, 16]

In the present facts, the claim was rightly held not maintainable because the returned finished goods did not meet the requirements of Rule 16/CENVAT input treatment and the requisite evidence under Section 11B was not furnished.

Validity of CESTAT order - Whether the order of the CESTAT was bad in law and on facts. - HELD THAT: - Having concluded that refund under Section 11B requires the goods to qualify as inputs under the CENVAT regime and that on the material the returned goods did not so qualify nor were the required proofs placed on record, the Court held that the Commissioner (Appeals) correctly set aside the Assistant Commissioner's refund order and the Tribunal correctly affirmed that conclusion. There was no error of law or fact in the appellate and tribunal decisions. [Paras 18]

The CESTAT's affirmation of the Commissioner (Appeals) was proper; the CESTAT order is not bad in law or on facts.

Final Conclusion: The appeal is dismissed. The Court held that refund of countervailing duty to a manufacturer under Section 11B is possible only where the additional duty qualifies as CENVAT credit and the re-imported goods satisfy the conditions of Rule 16 and the CENVAT rules as inputs; on the facts the returned finished goods did not meet those requirements and the Tribunal's order affirming the denial of refund was upheld.

Moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 - Corporate Insolvency Resolution Process - prohibition on institution or continuation of proceedings during moratorium - maintainability of writ petition during insolvency moratorium

Moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 - prohibition on institution or continuation of proceedings during moratorium - maintainability of writ petition during insolvency moratorium - Writ petition seeking quashing of show cause notices and setting aside adjudication order could not be entertained while moratorium under the IBC subsisted. - HELD THAT: - The court recorded that the Corporate Insolvency Resolution Process had been admitted by the National Company Law Tribunal and an Interim Resolution Professional appointed, with a moratorium declared under Section 14 of the Insolvency and Bankruptcy Code, 2016. The moratorium expressly prohibits institution or continuation of suits or proceedings against the corporate debtor during the CIRP. The petitioner conceded that the writ petition could not be pursued while the moratorium subsisted; the revenue has also presented its claim before the IRP. In view of the statutory moratorium, the High Court held that the present writ petition is not maintainable at this stage and the appropriate course is to await the termination of the CIRP (by approval of a resolution plan or liquidation), whereupon the moratorium will cease and the petitioner may pursue remedies, if any, thereafter. [Paras 4, 6]

The writ petition is not entertainable during the moratorium declared under Section 14 IBC and is disposed of accordingly.

Final Conclusion: Petition disposed of as not maintainable while the moratorium under the Insolvency and Bankruptcy Code, 2016 is in force; parties may pursue claims after the CIRP concludes and the moratorium ceases.

Condonation of delay - non-speaking order - substantial question of law - consistency in adjudication - remand for consideration on merits

Condonation of delay - consistency in adjudication - non-speaking order - Dismissal of the condonation application by the Appellate Tribunal without reasons and in disparity with an identical earlier condonation granted to another party. - HELD THAT: - The Court examined the condonation applications filed before the Appellate Tribunal by the present appellant and by M/s. Sarvopari Impex Pvt. Ltd., noting that substantially similar grounds were urged in both applications. While delay was condoned in the fellow-application, the Tribunal rejected the present appellant's application. The Tribunal's order dismissing the application was cryptic and unsupported by reasons. The High Court found that such a non-speaking and inconsistent disposal, given materially similar circumstances, raises a substantial question of law. In consequence, the Tribunal ought to have condoned the delay and proceeded to decide the appeal on its merits rather than rejecting the condonation application without reasoned analysis. [Paras 5, 6, 7]

The Tribunal's dismissal of the condonation application is set aside as a non-speaking and inconsistent order, and the matter is remitted for reconsideration.

Remand for consideration on merits - substantial question of law - Appropriate remedy and direction following setting aside of the impugned order. - HELD THAT: - Having concluded that the impugned order dated 22.03.2018 suffers from want of reasons and inconsistency with a prior condonation granted in materially identical circumstances, the High Court directed that the impugned order be set aside and the appeal remitted to the Appellate Tribunal. The Tribunal is to consider the application and the appeal on merits, affording the appellant an opportunity for adjudication of the substantive controversy rather than permitting a dismissal based on unexplained delay. [Paras 8]

The appeal is allowed; the impugned Tribunal order is set aside and the matter remanded to the Tribunal to consider the appeal on merits.

Final Conclusion: The High Court allowed the appeal, set aside the Appellate Tribunal's cryptic order dismissing the condonation application, and remanded the matter to the Tribunal to reconsider the condonation request and to decide the appeal on merits.

Right to purchase goods at concessional rate under declaration in 'C' Form - inclusion of commodity in registration certificate - quashing of departmental circular restricting issuance of 'C' Forms - uniformity of concessionary treatment and protection against invidious classification under Article 14

Inclusion of commodity in registration certificate - right to purchase goods at concessional rate under declaration in 'C' Form - The petitioner is entitled to inclusion of 'High Speed Diesel Oil' as a commodity in its registration certificate and, consequently, to the issuance of 'C' Forms for inter state purchases at concessional rate. - HELD THAT: - The Court held that reliance on the departmental circular restricting use of 'C' Forms was misplaced in view of the Division Bench decision in The Commissioner of Commercial Taxes v. The Ramco Cements Ltd., which recognised that a dealer's right to purchase specified goods at concessional rates cannot be taken away merely because the dealer does not sell those goods. The Division Bench reasoning - that allowing concessional purchase for user industries where resale is not involved demonstrates the right to purchase and that denial would create an invidious classification violative of Article 14 - was applied. Accordingly, the petitioner must be permitted to have 'High Speed Diesel Oil' included in its registration certificate and to obtain 'C' Forms for such inter state purchases; the administrative restriction effected by the circular cannot prevent that entitlement. The Court directed that the inclusion and related exercise be completed within four weeks from uploading of the order. [Paras 3, 4]

Allowed; registration certificate to include 'High Speed Diesel Oil' and 'C' Forms to be issued; exercise to be completed within four weeks.

Quashing of departmental circular restricting issuance of 'C' Forms - uniformity of concessionary treatment and protection against invidious classification under Article 14 - The departmental circular restricting the use of 'C' Forms for purchases of the specified six commodities cannot be sustained and must yield to the judicial view recognising dealers' entitlement to concessional purchases. - HELD THAT: - The Court endorsed the Division Bench conclusion that the circular (and similar administrative directions) which sought to restrict the use of 'C' Forms stood contrary to the legal position clarified by higher judicial authority. The Division Bench had set aside the earlier circular, directed that the State not restrict use of 'C' Forms for the six commodities and permitted online downloading of such declarations; applying that precedent, the present circular-based restriction was held to be unsustainable. Consequently, the petitioner's request flowing from that principle was allowed and the administrative restriction could not be enforced against the petitioner. [Paras 3, 4]

The circular's restrictive effect is displaced by the judicial precedent; the petitioner cannot be denied 'C' Forms on that basis.

Final Conclusion: Writ petition allowed: petitioner entitled to inclusion of 'High Speed Diesel Oil' in its registration certificate and to issuance of 'C' Forms for concessional inter state purchase; administrative restrictions premised on the impugned circular cannot be enforced; compliance directed within four weeks.

Coercive recovery pending appeal and stay - prohibition on initiation of recovery during pendency of stay application - appeal pending before the Tribunal - exercise of power under Section 152 of the Bombay Land Revenue Code, 1879 - statutory power under Section 46 of the Gujarat VAT Act, 2003 - jurisdiction of Tribunal to adjudicate appeal and stay application

Coercive recovery pending appeal and stay - prohibition on initiation of recovery during pendency of stay application - exercise of power under Section 152 of the Bombay Land Revenue Code, 1879 - appeal pending before the Tribunal - Validity of the notice issued under Section 152 of the Bombay Land Revenue Code, 1879 for recovery of tax demand while an appeal and stay application were pending before the Gujarat VAT Tribunal. - HELD THAT: - The Court found that although an earlier appeal had been withdrawn and thereafter a fresh appeal and stay application were filed, the fresh appeal and stay application remained pending before the Tribunal. Applying the settled principle that authorities should not initiate coercive recovery while an appeal together with a stay application is undetermined by the appellate forum, the Court held that no notice under Section 152 could properly have been issued for recovery of the tax demand in such circumstances. The Court therefore concluded that the impugned action amounted to coercive recovery contrary to the protective effect afforded by the pendency of the stay application and appeal, and observed that the Tribunal should take up and adjudicate the appeal and stay application in accordance with law. [Paras 8, 9]

Impugned notice dated 18.07.2019 issued under Section 152 of the Land Revenue Code quashed; Tribunal requested to take up the appeal and stay application for hearing in accordance with law.

Final Conclusion: Writ petition allowed to the extent of quashing the impugned notice under Section 152 dated 18.07.2019; appellate forum directed to proceed with the pending appeal and stay application. Writ disposed of.

Additional sales tax - computation of taxable turnover for the financial year by bifurcating period pre- and post-amendment - applicability of Section 55 rectification provisions of the Tamil Nadu General Sales Tax Act to additional sales tax - reading down of discriminatory amendment and application of unamended and amended provisions for respective periods - obligation to follow binding precedents (Siemens Ltd., Philips India Ltd., National Time Co.)

Applicability of Section 55 rectification provisions of the Tamil Nadu General Sales Tax Act to additional sales tax - additional sales tax - Whether the Tribunal was correct in rejecting the petitioner's application under Section 55 of the TNGST Act seeking revision/rectification of assessment and refund of additional sales tax. - HELD THAT: - The Court held that Section 55 of the Tamil Nadu General Sales Tax Act and the corresponding rules are applicable for effecting rectification of assessments involving additional sales tax because the Additional Sales Tax Act supplements and must be read with the TNGST Act; the levy of additional sales tax under Section 2(1)(aa) is collection of sales tax at higher rates and the procedural machinery of the TNGST Act (including Section 55) applies. In view of the settled decisions relied upon, the Tribunal ought to have exercised its jurisdiction under Section 55 instead of rejecting the petitioner's application and therefore its order was in error. [Paras 9, 10, 11]

The Tribunal's rejection under Section 55 was wrongful and its order is set aside; the Tribunal should have directed the Assessing Officer to consider rectification.

Computation of taxable turnover for the financial year by bifurcating period pre- and post-amendment - reading down of discriminatory amendment and application of unamended and amended provisions for respective periods - additional sales tax - How the additional sales tax liability for assessment year 1996-97 is to be computed in view of the amendment effective 01.08.1996 and the decisions in Siemens Ltd., Philips India Ltd. and National Time Co. - HELD THAT: - The Court applied the principles in Siemens Ltd., as explained and applied in Philips India Ltd. and National Time Co., holding that where a statutory amendment within a financial year prescribes different qualifying limits/rates, the financial year must be bifurcated for the limited purpose of ascertaining the period for which each provision operates. The unamended provision governs liability up to 31.07.1996 and the amended provision governs liability on and after 01.08.1996; the taxable turnover relevant to the unamended provision is the turnover upto 31.07.1996 and the unamended graded rates (and the proviso exempting the first threshold) apply for that period, while the amended threshold/rate applies to turnover generated on and after 01.08.1996 subject to the read-down effect recognized by the Tribunal and subsequent Division Bench decisions. Consequently, the Assessing Officer's calculation could not treat the whole financial year as governed only by the amended provision or ignore the period-specific computation required by binding precedents. [Paras 14, 15, 16, 17, 18]

The liability must be recomputed by bifurcating the 1996-97 financial year (upto 31.07.1996 and from 01.08.1996) and applying the respective provisions and rates as explained in the cited authorities.

Obligation to follow binding precedents (Siemens Ltd., Philips India Ltd., National Time Co.) - Whether the assessment on the petitioner requires fresh consideration in conformity with the cited authorities. - HELD THAT: - Having found that the Tribunal erred and that the correct legal approach is as expounded in Siemens Ltd. and followed in Philips India Limited and National Time Co., the Court remanded the matter to the Assessing Officer with directions to apply those decisions, afford the petitioner personal hearing and pass fresh orders recalculating the additional sales tax liability for assessment year 1996-97 in accordance with law. [Paras 9, 10]

The assessment is to be revised by the Assessing Officer in conformity with the stated precedents following a personal hearing; the matter is remanded for fresh orders.

Final Conclusion: Writ petition allowed; the Tribunal's order is set aside and the matter is remanded to the Assessing Officer to revise the assessment for AY 1996-97 and recompute additional sales tax by applying the authorities cited (bifurcating the financial year for period-specific computation), after affording personal hearing, within eight weeks.

Refund of excess tax paid - condonation of delay / sufficient cause for delayed refund claim - discretion of prescribed authority under Rule 29 to admit delayed refund applications - obligation to record reasons when rejecting refund claim - prohibition on supplementing or validating quasi judicial orders by subsequent affidavits - remand for fresh consideration

Refund of excess tax paid - condonation of delay / sufficient cause for delayed refund claim - discretion of prescribed authority under Rule 29 to admit delayed refund applications - obligation to record reasons when rejecting refund claim - prohibition on supplementing or validating quasi judicial orders by subsequent affidavits - remand for fresh consideration - Validity of the order rejecting the petitioner's refund claims for assessment years 2006-07 to 2010-11 on the ground of delay and whether the matter required fresh consideration by the prescribed authority. - HELD THAT: - Section 50 read with Rule 29 permits refund of excess tax if claim is made within the prescribed time, and Rule 29(1)(a) authorises the prescribed authority to admit a belated refund application if satisfied that the dealer had sufficient cause for delay. What constitutes sufficient cause is not defined and lies within the authority's discretion. Where a prescribed authority rejects a delayed refund claim, the order must reflect consideration of the cause(s) shown and disclose reasons for rejecting the claim. The impugned order merely records that the dealer failed to furnish proof and rejects the claim for delay without referring to enquiries, the refund applications, or assessment orders showing entitlement. The department's attempt to supply further justification by affidavit after the order was passed impermissibly seeks to validate a quasi judicial order by fresh reasons; orders must stand or fall by the reasons recorded when made. Given the absence of articulated reasons in the order and the reliance on subsequent affidavit material, the Court concluded the rejection could not be sustained and the matter must be remitted for fresh decision in accordance with the statutory scheme and settled principles governing condonation and articulation of reasons. [Paras 21, 22, 23, 24, 25]

Impugned rejection order set aside; matter remanded to respondent authorities to re decide the refund claims for assessment years 2006-07 to 2010-11 afresh, applying Rule 29 and recording reasons in the decision.

Final Conclusion: Writ petition allowed in part: the order dated 09-12-2016 and related communication are quashed and the matter is remitted to the prescribed authority for fresh adjudication of the refund claims for AYs 2006-07 to 2010-11, with reasons to be recorded and without reliance on post hoc affidavits.