TaxTMI Updates e-Newsletter
Feb 14,2024

Presumption of tax evasion on non-production of invoice and e-way bill - rebuttable presumption - penalty under Section 129(1)(b) of the Uttar Pradesh Goods and Services Tax Act, 2017 - appeal relief by reduction of penalty

Presumption of tax evasion on non-production of invoice and e-way bill - rebuttable presumption - penalty under Section 129(1)(b) of the Uttar Pradesh Goods and Services Tax Act, 2017 - Validity of imposing penalty for goods found without accompanying invoice or e-way bill - HELD THAT: - Both the detaining authority and the appellate authority found that a number of goods carried in the vehicle were not accompanied by any invoice or e-way bill. Where invoices and e-way bills are not produced, a presumption arises that there was an intention to evade tax; that presumption is rebuttable but requires cogent evidence. The petitioner failed to produce any evidence to rebut the presumption in respect of the goods other than 'sindoor'. In the absence of such rebuttal, the finding of intention to evade tax and the imposition of penalty under Section 129(1)(b) as sustained by the appellate authority cannot be faulted. [Paras 5]

Penalty in respect of the goods found without invoice or e-way bill is sustainable as the petitioner did not rebut the presumption of evasion.

Appeal relief by reduction of penalty - Whether appellate relief granted in respect of 'sindoor' required interference - HELD THAT: - The appellate authority granted certain relief to the petitioner in respect of 'sindoor' on the finding that although an invoice was produced, no such goods were found in the vehicle, and accordingly reduced the penalty relating to that item. The High Court, upon review of the appeal order, found no reason to interfere with the appellate authority's concession and reduction of penalty in respect of 'sindoor'. [Paras 2, 4, 6]

The reduction of penalty in appeal in respect of 'sindoor' is upheld and not disturbed.

Final Conclusion: The writ petition is dismissed: penalties imposed under Section 129(1)(b) in respect of goods found without invoice or e-way bill are sustained for want of rebuttal of the presumption of evasion, while the appellate reduction of penalty relating to 'sindoor' is upheld.

Interim relief - Stay on final adjudication - Connection of matters for common hearing - Show cause notice time-bar under Section 73(10) of the U.P. GST Act, 2020 - Validity of notification issued under Central GST Act without prior GST Council approval

Interim relief - Stay on final adjudication - Show cause notice time-bar under Section 73(10) of the U.P. GST Act, 2020 - Interim direction restraining respondents from passing any final order pursuant to the show-cause notice dated 21.12.2023 except with leave of the Court. - HELD THAT: - The Court, noting the challenge to the validity and temporal validity of notifications relied upon to issue the show-cause notice and having regard to the interim order in the lead matter, directed that while proceedings in pursuance of the impugned notice may continue, no final order shall be passed without leave of the Court. The order preserves the continuity of adjudicatory process but protects the petitioner from immediate final adjudication pending consideration of connected matters and filing of pleadings by the parties. [Paras 4, 8]

Proceedings may continue but no final order shall be passed except with leave of the Court.

Connection of matters for common hearing - Petition connected with Writ Tax No.1256 of 2023 for consideration together with the lead matter. - HELD THAT: - For reasons recorded in the order passed in the lead case and having regard to overlapping legal contentions (including challenges to the same notifications and the temporal validity of extension to issue show-cause notices), the Court ordered the present petition to be connected with the lead Writ Tax No.1256 of 2023 so that the common issues may be heard and decided together. [Paras 4, 5]

Present petition is connected with Writ Tax No.1256 of 2023.

Filing of counter and rejoinder affidavits - Timelines fixed for filing of respondents' counter affidavit and petitioner's rejoinder affidavit. - HELD THAT: - All respondents sought and were granted six weeks' time to file their counter affidavit; the petitioner was granted two weeks thereafter to file a rejoinder. The Court recorded representation for all respondents and fixed the timetable to enable adjudication of the connected matters on their merits. [Paras 6, 7]

Respondents to file counter affidavit within six weeks; petitioner to file rejoinder within two weeks thereafter.

Final Conclusion: The petition is ordered to be connected with Writ Tax No.1256 of 2023; respondents given time to file affidavits; proceedings in pursuance of the impugned show-cause notice may continue but no final order shall be passed except with leave of the Court.

Applicability of pre-amendment policy to applications submitted before amendment - non-retrospective application of amended concession policy - requirement of entitlement certificate introduced by amended policy not to be applied retrospectively - quashing administrative refusal to accept recommendation of statutory authority

Applicability of pre-amendment policy to applications submitted before amendment - non-retrospective application of amended concession policy - Application submitted on 17.08.2019, made before Notification dated 30.09.2019 and policy revision of 24.10.2019, was liable to be considered under the 2018 policy then in force. - HELD THAT: - The petitioner initially applied on 01.07.2019 under the 2018 policy and, after return of that application, submitted a fresh application on 17.08.2019. The amendment to the Schedule by the Ministry of Finance was notified only on 30.09.2019 and revised guidelines were issued on 24.10.2019. The court held that an application submitted prior to the notification and policy revision must be considered in terms of the policy in force on the date of submission. Consequently, the requirements and restrictions introduced by the 2019 policy (including mandatory pre-purchase entitlement certificate and other new limitations) could not be applied to an application pending before the amendment. The court observed that under the 2018 policy there was no restriction as to vehicle length or date of purchase and that refunds or concessions had been permitted in respect of applications made before the 2019 policy became effective. [Paras 10, 11, 13]

Application dated 17.08.2019 to be considered under the 2018 policy; amended 2019 policy not applicable to that application.

Quashing administrative refusal to accept recommendation of statutory authority - direction to issue concession certificate and refund if eligible - Order dated 05.06.2023 declining to accept the Chief Commissioner of Persons with Disabilities' recommendation and refusing applicability of the 2018 policy was quashed; respondents directed to reconsider the 17.08.2019 application under the 2018 policy and grant consequent relief if eligibility is established. - HELD THAT: - The Chief Commissioner had directed application of the 2018 policy by order dated 06.04.2023, but respondents, by their order dated 05.06.2023, held the 2018 policy not applicable. Given the court's conclusion that the petitioner's application fell to be decided under the 2018 policy, the respondents' refusal was held unsustainable and set aside. The court directed the respondents to consider the petitioner's 17.08.2019 application afresh in accordance with the 2018 policy and, if the petitioner is found eligible, to issue the appropriate concession certificate and refund excess GST collected. The reconsideration and disposal were to be completed within four weeks from the date of the order. [Paras 14, 15, 16]

Order dated 05.06.2023 quashed; respondents directed to consider the application dated 17.08.2019 under the 2018 policy and, if eligible, issue the concession certificate and refund excess GST within four weeks.

Final Conclusion: The petition is allowed: the respondents' order refusing to apply the 2018 policy is quashed and the respondents are directed to consider the petitioner's 17.08.2019 application in terms of the 2018 policy, issuing the concession certificate and refunding excess GST if eligibility is established, within four weeks.

Cancellation of GST registration - effective date of cancellation - suspension of registration - failure to furnish returns - obligation to furnish documents and reconciliation - show cause notice - recovery of tax, penalty and interest

Cancellation of GST registration - effective date of cancellation - suspension of registration - Modification of the date from which the order of cancellation of GST registration shall operate. - HELD THAT: - Records showed that the petitioner filed an application for cancellation of registration on 23.02.2023 and the registration was suspended thereafter. Although the respondent had issued a notice and subsequently rejected the application and issued a show cause notice on grounds of non-filing of returns, the Court found that both parties sought cancellation of registration. The Court therefore modified the order of cancellation so that it operates from 23.02.2023, the date of the petitioner's cancellation application and suspension of registration. [Paras 10]

Order of cancellation modified to operate with effect from 23.02.2023.

Obligation to furnish documents and reconciliation - failure to furnish returns - show cause notice - Requirement that the petitioner must furnish information and documents called for by the department to enable ascertainment of any liability. - HELD THAT: - Though cancellation is to operate from the date of the petitioner's application, the petitioner is directed to furnish all requisite details as required by the respondents in the communication dated 04.12.2023, including documents, reconciliation statements and identification proofs, so that the respondents can determine whether any demand is leviable. The direction follows from the respondent's earlier notice under the statute and the need for verification despite modification of the cancellation date. [Paras 11]

Petitioner to furnish the requisite details called for by letter dated 04.12.2023 to enable ascertainment of any demand.

Recovery of tax, penalty and interest - cancellation of GST registration - Clarification that the respondents remain entitled to recover any tax, penalty or interest due from the petitioner in accordance with law. - HELD THAT: - The Court clarified that modification of the cancellation date does not preclude the respondents from initiating or continuing steps for recovery of any tax, penalty or interest found to be due following verification and requisite proceedings, and that recovery must proceed in accordance with law. [Paras 12]

Respondents not precluded from taking steps for recovery of any tax, penalty or interest in accordance with law.

Final Conclusion: Petition allowed by modifying the order of cancellation to operate from 23.02.2023; petitioner directed to furnish documents called for by letter dated 04.12.2023; respondents permitted to pursue recovery of any tax, penalty or interest in accordance with law.

Penalty under Section 129(3) for non-filling of Part B of e-Way Bill - Intention to evade tax - Inter-branch transfer versus sale to third party - Technical defect in e-Way Bill compliance - Return of security

Penalty under Section 129(3) for non-filling of Part B of e-Way Bill - Intention to evade tax - Inter-branch transfer versus sale to third party - Technical defect in e-Way Bill compliance - Whether penalty imposed under Section 129(3) of the UPGST Act for non-filling of Part B of the e Way Bill is sustainable where there is no intention to evade tax and the movement was an inter branch transfer. - HELD THAT: - The Court found on the facts that the invoices contained the vehicle number, only Part B of the e Way Bill remained unfilled, and the department failed to demonstrate any intention on the part of the petitioner to evade tax. The movement of goods was between branches of the petitioner and not a sale to a third party. The petitioner relied on earlier decisions, including M/S Roli Enterprises Vs. State of U.P. and Others and the Allahabad High Court decisions in VSL Alloys (India) Pvt. Ltd v. State of U.P. and another and M/s Citykart Retail Private Limited through Authorized Representative vs. Commissioner Commercial Tax and Another , which the Court treated as directly on point. Applying those precedents, the Court held that non filling of Part B, absent any intention to evade tax, is a technical defect which does not justify imposition of penalty under Section 129(3). Consequently, the penalty and appellate order were set aside. [Paras 3, 5, 6, 7, 8]

Penalty imposed under Section 129(3) of the UPGST Act for non filling of Part B of the e Way Bill was unsustainable in the absence of any intention to evade tax; the impugned orders are quashed and set aside and consequential reliefs granted, including return of security.

Final Conclusion: Writ petition allowed; penalty order dated March 6, 2020 and appellate order dated September 16, 2023 quashed and set aside; respondents directed to return the security to the petitioner within six weeks.

Pre-deposit requirement under Section 51 of the TNVAT Act - limitation for filing statutory appeal under the TNVAT Act versus the TNGST Act - effect of confusion between TNVAT and TNGST proceedings on acceptance of statutory appeal - direction to receive and decide statutory appeal on merits - right to personal hearing in assessment proceedings

Pre-deposit requirement under Section 51 of the TNVAT Act - limitation for filing statutory appeal under the TNVAT Act versus the TNGST Act - effect of confusion between TNVAT and TNGST proceedings on acceptance of statutory appeal - direction to receive and decide statutory appeal on merits - Appellate authority's refusal to receive the statutory appeal on the ground of delay was quashed and the appellate authority was directed to receive and dispose of the appeal on merits. - HELD THAT: - The Court observed that the tax proceedings relate to the period 01.04.2017 to 30.06.2017 (pre GST period) and noted that the petitioner had made a pre deposit of approximately 25% of the disputed tax, which satisfies the pre deposit requirement under Section 51 of the TNVAT Act. The appellate authority had refused to receive the appeal on the ground that it was filed beyond the limitation period applicable under the TNVAT Act (60 days), as distinct from the 90 day limitation under the TNGST Act. Given there was a plausible confusion whether the proceedings were under the TNVAT Act or the TNGST Act (the origin being the GSTR 3B return) and that the requisite pre deposit under TNVAT was made, the Court found it appropriate in the circumstances to direct the appellate authority to receive and decide the statutory appeal on merits without going into the question of limitation at the threshold.

Order refusing to receive the appeal is quashed; appellate authority directed to receive the statutory appeal and dispose of it on merits after affording a reasonable opportunity to the petitioner.

Right to personal hearing in assessment proceedings - consideration of replies filed before assessment - Allegation that the assessment order was passed without personal hearing and without considering the petitioner's replies was not decided on merits and is left to be considered by the appellate authority in the course of disposal of the appeal. - HELD THAT: - The petitioner contended that the impugned assessment order was issued without personal hearing and without taking into account the submissions in the replies. The High Court did not adjudicate this contention on merits; instead, having directed reception and merits disposal of the statutory appeal, the Court required the appellate authority to provide a reasonable opportunity to the petitioner and to consider such contentions in the appeal proceedings.

The question of whether the assessment was passed without personal hearing or without considering the petitioner's replies is remitted to the appellate authority for fresh consideration during the adjudication of the received appeal.

Final Conclusion: The refusal of the appellate authority to receive the statutory appeal is quashed; the appellate authority is directed to receive and dispose of the statutory appeal on merits after affording a reasonable opportunity to the petitioner. The challenge to the assessment order is left to be considered in the appeal, and the writ petition attacking the assessment is closed accordingly.

Show Cause Notice - Input Tax Credit - interim restraint on tax recovery - provisional injunction against enforcement of demand - Circular no. 183/15/2022 Clause 4.1.1 - further examination of impugned notice

Show Cause Notice - Input Tax Credit - interim restraint on tax recovery - Circular no. 183/15/2022 Clause 4.1.1 - Respondents shall not act upon the Show Cause Notice dated 11.01.2024 until the next date of listing. - HELD THAT: - The petitioner challenged the Show Cause Notice dated 11.01.2024 issued under Section 73 r/w Section 50 of the Assam GST Act, 2017, contending that the Input Tax Credit was availed on valid tax invoices and taxes were paid to the supplier, relying on relevant judicial decisions. The State relied on instructions in Circular no. 183/15/2022, particularly Clause 4.1.1. The court observed that the matter requires further examination and, having considered the submissions advanced by the parties, restrained the respondents from acting upon the impugned Show Cause Notice until the next date of hearing to enable fuller consideration of the contentions.

The respondents are restrained from taking any action pursuant to the Show Cause Notice dated 11.01.2024 till the next date of listing.

Final Conclusion: The writ petition was admitted for hearing, the matter listed on 22.02.2024, and an interim order was passed restraining the respondents from acting on the Show Cause Notice dated 11.01.2024 pending further consideration.

Availability of alternative remedy - writ jurisdiction under Article 226 - statutory appeal under Section 107 of the CGST/KSGST Act, 2017 - transitional credit under Section 140 read with Rule 117 - examination of evidence on appeal

Availability of alternative remedy - writ jurisdiction under Article 226 - statutory appeal under Section 107 of the CGST/KSGST Act, 2017 - Maintainability of the writ petition impugning the assessment order in view of the statutory appellate remedy - HELD THAT: - The Court held that the existence of a statutory appeal under Section 107 of the CGST/KSGST Act, 2017 precluded exercise of writ jurisdiction under Article 226 in the present matter. The learned counsel's contention that the appeal would be futile because the claim related to an excise duty component was rejected. The Court observed that the appellate authority is competent to examine all documents and evidence submitted by the assessee and, implicitly, to remit for further consideration if necessary. Consequently, the availability of an effective alternative statutory remedy required dismissal of the writ petition. [Paras 4, 5]

Writ petition dismissed on the ground of availability of alternative statutory remedy; petitioner directed to pursue the remedy of appeal which shall be decided on its merits.

Final Conclusion: The writ petition challenging the assessment order was dismissed because the petitioner has a statutory right of appeal under Section 107 of the CGST/KSGST Act, 2017; the appellate authority is to examine the submissions on merits and the appeal shall be decided accordingly.

Anticipatory bail - summons under Section 70 of the Odisha Goods and Services Tax Act, 2017 - power under Section 438 Cr.P.C. is not invokable where only a summon has been issued - prematurity of anticipatory bail application during ongoing investigation - obligation to comply with summons and cooperate with investigation

Anticipatory bail - power under Section 438 Cr.P.C. is not invokable where only a summon has been issued - summons under Section 70 of the Odisha Goods and Services Tax Act, 2017 - Maintainability of an application for anticipatory bail when the petitioner has only been served a summon under Section 70 of the O.G.S.T. Act. - HELD THAT: - The Court examined the summons issued to the petitioner under Section 70 of the Odisha GST Act and the position that investigation is in progress. Relying on the ratio of cited Supreme Court authority and the materials on record, the Court held that an application under Section 438 Cr.P.C. could not be entertained at a stage when only a summon has been issued under Section 70 of the O.G.S.T. Act, and that the anticipatory bail petition was premature. The Court found the petitioner's apprehension of being taken into custody on appearance to be not reasonable in the circumstances. [Paras 6]

Anticipatory bail application is premature and not maintainable at the stage when only a summon under Section 70 OGST Act has been issued.

Obligation to comply with summons and cooperate with investigation - prematurity of anticipatory bail application during ongoing investigation - Relief, if any, to be granted pending investigation and the immediate directions to the petitioner. - HELD THAT: - Having found the anticipatory bail application premature and the apprehension of custody unreasonable, the Court disposed of the application by directing the petitioner to abide by the summon and to render full cooperation in the ongoing investigation. No interim protection against appearance or custody was granted. [Paras 7]

Petitioner directed to comply with the summons and cooperate with the investigation; anticipatory bail refused (application disposed) as premature.

Final Conclusion: Anticipatory bail application was held premature where only a summon under Section 70 OGST Act had been issued; the petition is disposed of with a direction that the petitioner shall appear in response to the summons and cooperate with the ongoing investigation.

Pure services provided to Government - Exemption under Notification No. 12/2017 entry 3 - Services "in relation to" functions entrusted to a Municipality under Article 243W - Functions listed in the Twelfth Schedule - Interpretation of "relating to" / "in relation to"

Pure services provided to Government - Exemption under Notification No. 12/2017 entry 3 - Services "in relation to" functions entrusted to a Municipality under Article 243W - Functions listed in the Twelfth Schedule - Interpretation of "relating to" / "in relation to" - Whether rent received from the Government Social Welfare College Boys Hostel is exempt under entry 3 of Notification No. 12/2017 or taxable - HELD THAT: - The applicant supplies buildings on rent to the State (Government Social Welfare College Boys Hostel). Entry 3 of Notification No. 12/2017 exempts pure services provided to government by way of any activity in relation to functions entrusted to a Municipality under Article 243W. The exemption therefore requires a direct and immediate relation between the service and the municipal functions listed in the Twelfth Schedule. The Twelfth Schedule enumerates specified municipal functions (urban planning, regulation of land-use and construction of buildings, planning for economic and social development, public amenities, safeguarding interests of weaker sections, etc.). The authority applied the established meaning of "in relation to"/"relating to" as requiring a real connection with the enumerated municipal functions. The applicant's renting of buildings to GHMC / Government for use as a hostel does not have the required direct nexus with the functions in the Twelfth Schedule (and the Twelfth Schedule does not expressly include education). Accordingly the services do not fall within the exemption under entry 3 and are not eligible for exemption under Notification No. 12/2017. [Paras 7, 8]

Rent received from the Government SWCBH is taxable; exemption under Notification No. 12/2017 entry 3 does not apply.

Final Conclusion: The Advance Ruling holds that the rent received by the applicant from the Government Social Welfare College Boys Hostel is taxable because the rented-building services lack the direct and immediate connection with municipal functions enumerated in the Twelfth Schedule required for exemption under entry 3 of Notification No. 12/2017.

Exemption under Notification 12/2017 - governmental authority - Institute of National Importance - advance ruling under Section 97 - input tax credit reversal

Exemption under Notification 12/2017 - governmental authority - Institute of National Importance - All India Institute of Medical Sciences cannot claim GST exemption on pure services received from vendors. - HELD THAT: - The applicant, AIIMS Bibinagar, asserted entitlement to exemption for services received from vendors on the ground that it is created by an Act of Parliament, is financed by the Central Government, audited by the Comptroller and Auditor General and is an "Institute of National Importance". The Authority examined the statutory classification and observed that AIIMS is a "Governmental Authority" by virtue of being established by Parliament. However, entries 3 and 3A of Notification 12/2017, as amended with effect from 01.01.2022, have omitted the phrase "Governmental Authority" from the description of exempted services. Consequently, the applicant does not fall within the scope of those exemption entries and is not eligible for the claimed exemption. The Authority therefore confirmed that GST charged by vendors on the services supplied to AIIMS is not covered by the exemption relied upon by the applicant. [Paras 7, 8]

Claim for GST exemption on services received from vendors is rejected; AIIMS is not eligible under entries 3 and 3A of Notification 12/2017.

Final Conclusion: The Advance Ruling Authority clarified that AIIMS Bibinagar is not eligible for GST exemption on the vendor-supplied services relied upon, and the applicant's claim is denied.

Advance ruling - maintainability under Section 97(2) of the GST Act - reverse charge mechanism - state tax due and deposited (RIPS-2019) - aggregate turnover

Advance ruling - maintainability under Section 97(2) of the GST Act - Whether the applicant's question falls within the scope of matters on which an advance ruling may be given under Section 97(2) of the GST Act, 2017, and whether the application is maintainable. - HELD THAT: - The Authority examined the application and the statutory list in Section 97(2) and found that the clarification sought relates to the term "State Tax due and deposited" as defined in the Rajasthan Investment and Promotion Scheme, 2019 (RIPS-2019) and not to the ascertainment or determination of liability to pay tax on any specified goods or services under the GST Act. The applicant intermingled provisions of the RIPS Scheme with the GST Act but did not specify a particular supply or transaction falling under Section 97(2)'s heads. The Authority concluded that questions concerning the procedural and scheme-specific definition in RIPS-2019 are not matters falling within Section 97(2) and therefore the application does not qualify for advance ruling under the GST Act. [Paras 4, 5]

Application for advance ruling is not maintainable under Section 97(2) of the GST Act and is rejected under Section 98.

Reverse charge mechanism - state tax due and deposited (RIPS-2019) - aggregate turnover - Whether tax payable under reverse charge mechanism (RCM) in terms of notification issued under Section 9(3) of the GST Act is treated as "State Tax due and deposited" for the purposes of Para No. 2(lxxxiv) of RIPS-2019. - HELD THAT: - The Authority analysed Section 9(3) and observed that RCM shifts the liability from supplier to recipient; it is a statutory device whereby all provisions of the Act apply to the recipient as if he were the person liable to pay tax. The Authority also referred to the definition of "aggregate turnover" in Section 2(6) which excludes inward supplies on reverse charge basis from the recipient's aggregate turnover. The definition of "State Tax due and deposited" in Para No. 2(lxxxiv) of RIPS-2019, however, is a scheme-specific term relating to amounts paid through debit in the electronic cash ledger after utilisation of ITC and to VAT/CST, and is part of the RIPS Scheme. Since the matter concerns a scheme-specific definition and procedural eligibility under RIPS-2019 rather than a GST Act provision within Section 97(2), the Authority treated the question as outside the advance ruling jurisdiction and did not adjudicate it on merits. [Paras 3, 4]

Whether RCM-paid tax qualifies as "State Tax due and deposited" under RIPS-2019 is a scheme-specific query outside the advance ruling jurisdiction under Section 97(2) and was not finally adjudicated; the application on that question is not maintainable.

Final Conclusion: The Authority held that the application does not fall within the matters on which an advance ruling may be given under Section 97(2) of the GST Act, 2017, and accordingly rejected the application under Section 98; the characterisation of RCM as a shifted liability and the exclusion of inward RCM supplies from the recipient's aggregate turnover were noted, but the question whether RCM-paid tax constitutes "State Tax due and deposited" under RIPS-2019 is a scheme-specific issue outside the AAR's jurisdiction and was not finally decided.

Transfer of leasehold rights as supply of service - Schedule II paragraph 2 treatment of leases and rights in land - exemption under Entry No. 41 of Notification No. 12/2017 - one time upfront premium for long term lease by State industrial development undertakings - classification as other miscellaneous services (SAC 999792) - taxable at 18% under the rate notification

Transfer of leasehold rights as supply of service - Schedule II paragraph 2 treatment of leases and rights in land - Whether the activity of selling/transferring leasehold land and building (with transfer permission) amounts to a taxable supply under GST - HELD THAT: - The Authority held that transactions conferring benefits specified in paragraph 2 of Schedule II (lease, tenancy, licence to occupy, letting out of a building) are to be treated as supply of services for GST purposes. The applicant, being a lessee with no title to the demised premises, can only transfer its leasehold right for the unexpired period; such assignment is therefore not a transfer of immovable property within the meaning of the GST provisions but is a supply of service consisting of transfer of leasehold rights. Consequently, the activity of agreeing to transfer one's leasehold rights (and obtaining permission for such transfer) falls within the ambit of taxable services under the CGST/UPGST framework (determinative reasoning at paras. 13.2-13.5). [Paras 13]

The assignment/transfer of leasehold rights is a supply of service taxable under the GST law.

Exemption under Entry No. 41 of Notification No. 12/2017 - one time upfront premium for long term lease by State industrial development undertakings - Whether the exemption in Entry No. 41 of Notification No. 12/2017 applies to the applicant's transaction - HELD THAT: - Entry No. 41 grants exemption for a one time upfront amount leviable for granting long term (30 years or more) leases of industrial plots where the service is provided by State Government Industrial Development Corporations or Undertakings. The Authority found the exemption to be conditional on the service being rendered by the specified State entities at the time of original grant. The present activity is a subsequent transfer/assignment by a private lessee and not a grant by a State industrial development undertaking; hence the conditions of the notification are not satisfied. The Authority emphasised that where the language of the notification is clear and unambiguous, its plain meaning governs (determinative reasoning at para. 13.6). [Paras 13]

Entry No. 41 of Notification No. 12/2017 is not applicable to the applicant's transfer of leasehold rights.

Classification as other miscellaneous services (SAC 999792) - taxable at 18% under the rate notification - How the applicant's activity is to be classified and the applicable GST rate - HELD THAT: - The Authority concluded that the activity of agreeing to transfer leasehold rights constitutes a service akin to compensation for assigning the applicant's rights and does not create any fresh benefit from land. Such activity is classifiable as Other miscellaneous service (SAC 999792). Relying on the applicable rate notification, the Authority held that this service is taxable at the rate specified for miscellaneous services (18%), as set out in the rate notification (determinative reasoning at para. 13.7 and the ruling at para. 14). [Paras 13, 14]

The assignment/transfer is classifiable as Other miscellaneous service (SAC 999792) and is taxable at 18%.

Final Conclusion: The Authority ruled that the sale/transfer of the applicant's leasehold rights (including obtaining permission for transfer) is a taxable supply of service under Schedule II, the exemption in Entry No. 41 of Notification No.12/2017 does not apply to this subsequent transfer by a private lessee, and the activity is classifiable as Other miscellaneous service (SAC 999792) taxable at 18%; no comment was offered on input tax credit eligibility as that question pertains to the recipient.

Transfer of leasehold rights - "supply" under section 7 - lease as supply of services under paragraph 2 of Schedule II - sale of land excluded from supply under Schedule III - benefits arising out of land / immovable property - assignment of leasehold rights taxable as other miscellaneous service (SAC 999792)

Transfer of leasehold rights - lease as supply of services under paragraph 2 of Schedule II - benefits arising out of land / immovable property - Transfer of leasehold rights from the applicant to M/s S.K. Food Equipments Pvt. Ltd. falls within the ambit of "supply" under the CGST Act. - HELD THAT: - The advance ruling recognises that the applicant's interest is limited to leasehold benefits under the lease deed with Noida Authority and the Deed does not confer proprietary title akin to sale. Paragraph 2 of Schedule II treats leases, tenancy, easement and licences to occupy land as supply of services; consequently benefits arising out of land in the form of leasehold rights are to be treated as supply of service for GST purposes. The assignment of the applicant's leasehold rights, effected with the lessor's approval, therefore constitutes a transfer of the right to receive the service of the lease and not a transfer of immovable property within the meaning relevant to the GST Act. The Authority distinguished precedents on joint development/sale of immovable property as not applicable where Schedule II expressly treats such benefits as services. The activity of assignment is characterised as agreeing to transfer leasehold rights and thus is a taxable service classified under the residual category of other miscellaneous services. [Paras 13]

Yes; the transfer of leasehold rights is a "supply" and is taxable as a service.

"supply" under section 7 - assignment of leasehold rights taxable as other miscellaneous service (SAC 999792) - sale of land excluded from supply under Schedule III - GST is payable on the consideration received for transfer of leasehold rights. - HELD THAT: - Having held the assignment to be a supply of service under paragraph 2 of Schedule II, the Authority examined the taxable classification and rate. The assignment is in the nature of consideration for agreeing to transfer leasehold rights and does not amount to sale of immovable property for purposes of Schedule III. The Authority therefore treats the activity as a taxable service falling under other miscellaneous services (SAC 999792) and applies the rate prescribed in Notification No. 11/2017-CT (Rate) (SI. No. 35), i.e., taxable at 18%. The ruling records that the applicant's action of transferring leasehold rights is covered by that service classification and is liable to GST. [Paras 13, 14]

Yes; GST is payable on the consideration for transfer of leasehold rights and the activity is taxable at the notified rate (classified as other miscellaneous service).

Final Conclusion: The Authority rules that the assignment of the applicant's leasehold rights in respect of the Noida Authority allotted land constitutes a supply of service under the CGST Act and that GST is payable on the consideration received; the assignment is treated as a taxable miscellaneous service (SAC 999792) chargeable at the notified rate.

Classification of goods under the Customs Tariff - Classification under Heading 30.05 - Classification under Heading 39.23 - Application of Section and Chapter Notes for tariff interpretation - Advance ruling under Section 97 of the CGST Act - GST rate applicable to tariff classification

Classification of goods under the Customs Tariff - Classification under Heading 30.05 - Application of Section and Chapter Notes for tariff interpretation - Whether the sterilization reels and pouches are classifiable under Heading 30.05 of the Customs Tariff (pharmaceutical articles put up for retail sale). - HELD THAT: - The Authority examined the product description and applied the rules for interpretation of the First Schedule to the Customs Tariff Act, including Section and Chapter Notes and WCO explanatory notes. Note 2 to Section VI makes clear that goods classifiable in heading 3005 by reason of being put up in measured doses or for retail sale are to be classified in that heading only if that primary condition is met. The product manufactured by the applicant is packing material (sterilization reels and pouches) used to retain sterility between sterilization and use and is not put up for retail sale; it is intended for institutional/end use packing rather than retail sale. The WCO explanatory notes confirm that heading 30.05 covers wadding, gauze, bandages and similar articles impregnated or put up for retail sale for medical purposes. On these grounds the Authority held that the product does not satisfy the essential condition for classification under heading 30.05 and accordingly heading 30.05 is excluded. [Paras 14]

Sterilization reels and pouches are not classifiable under Heading 30.05.

Classification under Heading 39.23 - Classification of articles for the conveyance or packing of goods, of plastics - GST rate applicable to tariff classification - Whether the sterilization reels and pouches are classifiable under Heading 39.23 (articles for the conveyance or packing of goods, of plastics) and the consequent GST rate. - HELD THAT: - The Authority found that the constituent materials (medical grade paper and plastic films such as CPP) and the functional character (packing articles that preserve sterility) bring the products within the scope of heading 39.23, which covers articles for the conveyance or packing of goods of plastics. The product is not excluded by the explanatory notes to heading 39.23 and is therefore covered by the subheading 3923.90, falling into the residual 'others' category (39239090) rather than the specific tariff item for aseptic bags. Having classified the goods under 39239090, the Authority applied the applicable rate entry in the GST rate schedule and ruled that the correct rate is 18% (CGST 9% and SGST 9%). [Paras 15, 16]

Sterilization reels and pouches are classifiable under HSN 39239090 and attract GST at the rate of 18% (CGST 9% and SGST 9%).

Final Conclusion: The Authority ruled that the sterilization reels and pouches manufactured by the applicant are not covered by Heading 30.05 but are classifiable as packing articles under HSN 39239090 and accordingly the applicable GST rate is 18% (CGST 9% and SGST 9%).

Registration under section 12AB - Registration under section 80G(5) - Genuineness of activities - Compliance of other laws as material for achieving objects - Power to call for audited accounts and related documents - Cancellation/rejection under section 12AB(1)(b)(ii)(B)

Genuineness of activities - Compliance of other laws as material for achieving objects - Cancellation/rejection under section 12AB(1)(b)(ii)(B) - Power to call for audited accounts and related documents - Validity of the Commissioner (Exemption)'s rejection/cancellation of the assessee's application for registration under section 12AB and 80G(5) based on deficiencies reported in the CAG audit for FY 2021-22. - HELD THAT: - The Tribunal examined the CIT(E)'s order rejecting the Form 10AB/10AC applications after considering CAG's special audit observations for FY 2021-22 (loans/advances, interest on corpus not offered, temporary use of corpus, GST default, and actuarial provisions). The Tribunal noted that section 12AB requires the Commissioner to call for documents and satisfy himself about the genuineness of activities and compliance with other laws; the CIT(E) properly exercised this power and relied on the CAG findings to record dissatisfaction. The Tribunal observed that the referenced Supreme Court authority permits calling audited accounts and related documents at the registration stage and that the recorded deficiencies indicated non-compliance which could adversely affect the achievement of the university's objects. However, the CIT(E)'s order did not specifically articulate how each deficiency materially affected the accomplishment of the assessee's objects. [Paras 11, 12]

The Tribunal held that the CIT(E) had valid reasons to be dissatisfied based on reported deficiencies and non-compliances, so the rejection was not shown to be wholly perverse or legally unsound on that basis.

Registration under section 12AB - Registration under section 80G(5) - Genuineness of activities - Appropriate remedy where the Commissioner records dissatisfaction but does not specify the material effect of deficiencies on the achievement of the assessee's objects. - HELD THAT: - Although the CIT(E) identified deficiencies and had grounds for dissatisfaction, the order did not sufficiently demonstrate how the noted non-compliances were material to the university achieving its charitable objects. In the interest of justice and for focused verification, the Tribunal considered it appropriate to restore the matter to the CIT(E) for fresh consideration limited to revisiting the registration applications, clarifying and verifying the material effect of the deficiencies on the objects, and affording the assessee a reasonable opportunity of being heard. [Paras 12, 13]

The Tribunal restored the applications to the CIT(E) for fresh disposal in accordance with law and directed that the assessee be given a reasonable opportunity of hearing; both appeals were partly allowed to that extent.

Final Conclusion: The Tribunal affirmed that the CIT(E) had prima facie valid reasons to be dissatisfied based on CAG-reported deficiencies but, because the CIT(E)'s order did not specify the material impact of those deficiencies on the university's objects, the matter is remitted to the CIT(E) for fresh consideration and disposal of the registration applications under section 12AB and 80G(5) after verification and affording the assessee a reasonable opportunity to be heard; both appeals are partly allowed.

Revision under section 263 - Explanation 2 to section 263 (order passed without making inquiries or verification which should have been made) - limited scrutiny under CASS/E-assessment scheme - application of mind / lack of inquiry - substitution of opinion

Revision under section 263 - Explanation 2 to section 263 (order passed without making inquiries or verification which should have been made) - limited scrutiny under CASS/E-assessment scheme - application of mind / lack of inquiry - substitution of opinion - Validity of the Principal Commissioner's exercise of revisional jurisdiction under section 263 in setting aside the assessment for AY 2018-19 on the ground that the Assessing Officer failed to verify sales incentive/sales promotion expenses. - HELD THAT: - The Tribunal examined whether the PCIT was justified in holding that the assessment order was erroneous and prejudicial to revenue because the AO allegedly did not verify sales incentive expenses of Rs. 80,46,456/-. The record showed that the case was selected for limited scrutiny under the E assessment/CASS scheme for business expenses and that the AO issued a detailed questionnaire raising nine specific queries about sales promotion, asking for breakup, nature, parties, ledger, TDS and supporting documents. The assessee furnished detailed replies and documentary material during assessment, the accounts were tax audited without qualification, and the faceless assessment (involving multiple units) was completed accepting the claim. The Tribunal applied settled principles that revisional power under section 263/invocation of Explanation 2 requires a foundation that the AO's view is wholly unsustainable or there was a total lack of inquiry; mere difference of opinion or an allegation of inadequate inquiry is insufficient. The PCIT's reasoning was found to rest on a confusion/clerical mismatch in columnar presentation rather than on any established absence of enquiry; the AO had in fact made enquiries and taken a plausible view after considering the material. Invoking section 263 to substitute the Commissioner's view for a plausible view taken by the AO would amount to impermissible substitution of opinion. The Tribunal therefore concluded that the prerequisites for exercise of revisional jurisdiction under section 263 (including under Explanation 2) were not satisfied and the PCIT's order setting aside the assessment was not sustainable.

The order passed by the Principal Commissioner under section 263 setting aside the assessment for AY 2018-19 is quashed; the assessment order of the AO is sustained and the assessee's appeal is allowed.

Final Conclusion: The Tribunal allowed the appeal, quashed the revisional order under section 263 (including reliance on Explanation 2) as the AO had made relevant enquiries in the limited scrutiny, the view taken by the AO was a plausible application of mind, and the revisional jurisdiction could not be exercised to substitute the Commissioner's opinion for that plausible view.

Dissolution of company and effect on legal existence - validity of reopening notice under Section 148 when assessee is non existent - jurisdictional defect vitiating assessment proceedings - restoration of company under Section 560(6) of the Companies Act and consequential rights

Dissolution of company and effect on legal existence - validity of reopening notice under Section 148 when assessee is non existent - jurisdictional defect vitiating assessment proceedings - Impugned notice under Section 148 and consequential assessment framed in the name of a company that had been dissolved are without jurisdiction and liable to be quashed. - HELD THAT: - The Court accepted the submission that once a company has been dissolved and struck off the register it ceases to exist in the eyes of law and therefore cannot be treated as a 'person' for the purposes of assessment under the Income tax Act. Applying the principle in the cited authorities, the notice issued under Section 148 in respect of the dissolved company was invalid for want of jurisdiction. Since the jurisdictional notice was void, the assessment order passed pursuant to that notice was also vitiated and had to be set aside. The Court noted the Registrar of Companies' affidavit concerning striking off under the Companies Act and found no basis to treat the dissolved entity as a valid subject of assessment proceedings for A. Y. 2008 09.

The notice dated 24th March 2015 under Section 148 and the assessment order dated 28th March 2016 in the name of the dissolved company are quashed.

Final Conclusion: The petition is allowed; the reopening notice and resultant assessment in respect of the dissolved company for A. Y. 2008 09 are quashed. The Revenue is at liberty to pursue any remedy available in law, including restoration proceedings under the Companies Act, subject to the petitioners' rights to resist such action.

Extension of time for compliance in assessment proceedings - assessment under Section 144 of the Income-tax Act - treatment of unexplained income under Section 69A - consequence of failure to comply with notices under Section 142(1) in assessment proceedings - judicial discretion to grant last chance in tax proceedings

Extension of time for compliance in assessment proceedings - judicial discretion to grant last chance in tax proceedings - Petitioner granted limited time to file return and produce requisite documents in response to notice dated 09.01.2024. - HELD THAT: - The High Court considered the petitioner's repeated requests for time, the asserted illness of the company's Managing Director which impeded production of documents, and the respondents' contention as to long-standing non-compliance. Exercising judicial discretion and treating the relief as a last opportunity, the Court permitted the petitioner to file the return and submit all requisite documents within six weeks from 16.02.2024. The Court balanced the need for compliance with notices against the petitioner's cited difficulty and granted a final, time bound extension.

Liberty granted to the petitioner to file the return and submit requisite documents within six weeks from 16.02.2024.

Assessment under Section 144 of the Income-tax Act - treatment of unexplained income under Section 69A - consequence of failure to comply with notices under Section 142(1) in assessment proceedings - If the petitioner fails to comply within the prescribed period, the revenue is permitted to finalize assessment under Section 144 treating the variation as unexplained income under Section 69A. - HELD THAT: - The Court recorded that a show cause notice under the assessment provisions had been issued alleging unexplained income. While granting a final opportunity to the petitioner, the Court explicitly authorised the revenue to proceed to finalize the assessment under Section 144 in the event of non compliance, thereby upholding the statutory consequence for failure to respond to notices and to file the return. The order preserves the revenue's power to treat the pointed-out variation as unexplained income under the relevant provision.

If the petitioner does not comply within six weeks, the revenue may finalize the assessment under Section 144 treating the variation as unexplained income under Section 69A.

Final Conclusion: Writ petition disposed of by granting the petitioner a final six week opportunity from 16.02.2024 to file the return and produce requisite documents; failing which the revenue is permitted to finalize assessment under Section 144 and treat the pointed variation as unexplained income under Section 69A.

Reopening of assessment under section 147 - Notice under section 148 - Application of mind in recording reasons - Borrowed satisfaction - Standard procedure for recording satisfaction under section 147 - Quashing of reassessment proceedings for lack of jurisdiction - Deemed escapement under Explanation 2 to section 147 where return not processed or scrutinised

Reopening of assessment under section 147 - Application of mind in recording reasons - Borrowed satisfaction - Standard procedure for recording satisfaction under section 147 - Notice under section 148 - Quashing of reassessment proceedings for lack of jurisdiction - Validity of reopening assessment after four years and consequent notice under section 148 where reasons were recorded based on information from the investigation wing. - HELD THAT: - The Tribunal examined the reasons recorded by the Assessing Officer against the CBDT "Standard Procedure for recording satisfaction u/s 147" dated 10/01/2018 and the material on record. The reasons reproduced information from the Investigation Wing alleging accommodation entries and transfers and identified a figure described inconsistently as long term capital gain/short term capital loss and as sale consideration, whereas the return disclosed long term capital gain and the claimed exemption under section 10(38). The Assessing Officer did not show any independent analysis of the assessee's filed return or reconcile the information with the return, nor did he follow the steps envisaged in the SOP (analysis of return, enquiries with a live link to the information, summary of findings and basis of reason to believe). Those defects, including factual inaccuracies and lack of application of mind, demonstrate that the reopening rested on borrowed satisfaction from the Investigation Wing rather than the Assessing Officer's own reasoned belief that income had escaped assessment. The Tribunal followed its earlier reasoning in Jai Prakash Gupta (supra) that similar reliance without independent enquiry fails the legal requirement for reopening. Because the statutory test of forming a reason to believe on the Assessing Officer's own application of mind was not satisfied, the Assessing Officer lacked jurisdiction to reopen the assessment and issue the section 148 notice.

Reopening under section 147 and the notice under section 148 quashed for lack of independent application of mind; consequent reassessment proceedings set aside.

Final Conclusion: The appeal is allowed; the reassessment initiated by notice under section 148 (reopening under section 147) is quashed for being founded on borrowed satisfaction and for non compliance with the required procedure to record reasons, and all consequent proceedings are set aside.

Fees for Technical Services - Fee for Included Services - Royalty - Reimbursement of lease line charges - Reimbursement of Global Account Management charges - Article 12 of the India-USA DTAA - Section 9(1)(vii) of the Act - Explanation 2 to section 9(1)(vi) of the Act - Consistent precedent of Coordinate Bench

Fees for Technical Services - Fee for Included Services - Article 12 of the India-USA DTAA - Section 9(1)(vii) of the Act - Consistent precedent of Coordinate Bench - Sale of logistics/freight services received for services rendered outside India is not taxable as FTS/FIS under the Act or the India-USA DTAA - HELD THAT: - The Tribunal held that the question whether receipts from freight/logistic support services constitute FTS/FIS is a recurring issue already consistently decided in assessee's favour by co ordinate Benches for earlier assessment years. Finding no change in the factual or legal matrix for AY 2021-22 and with no binding contrary precedent brought to its notice by the Revenue, the Tribunal followed the co ordinate Bench decisions which held that such receipts cannot be treated as FTS/FIS either under the Act or under treaty provisions and therefore deleted the addition made by the Assessing Officer. [Paras 6, 7]

Addition treating sale of logistic services as FTS/FIS deleted; ground allowed.

Fees for Technical Services - Fee for Included Services - Reimbursement of Global Account Management charges - Article 12 of the India-USA DTAA - Section 9(1)(vii) of the Act - Consistent precedent of Coordinate Bench - Reimbursement described as Global Account Management charges is not in the nature of FTS/FIS under the Act or the India-USA DTAA - HELD THAT: - Relying on a series of prior co ordinate Bench decisions in the assessee's own case from AY 2010-11 onwards, the Tribunal observed that the issue has been consistently decided in favour of the assessee and the facts for AY 2021-22 are identical. In the absence of any change in facts or any binding contrary precedent, the Tribunal deleted the addition which characterised reimbursement of global account management charges as FTS/FIS. [Paras 6, 7]

Addition treating reimbursement of global account management charges as FTS/FIS deleted; ground allowed.

Royalty - Reimbursement of lease line charges - Explanation 2 to section 9(1)(vi) of the Act - Article 12 of the India-USA DTAA - Consistent precedent of Coordinate Bench - Reimbursement of lease line charges is not in the nature of royalty for the purposes of the Act or the India-USA DTAA - HELD THAT: - The Tribunal noted prior co ordinate Bench findings in the assessee's own case that lease line charges do not amount to royalty. It further observed that the payer's proceedings and higher court decisions supported that characterization. With facts unchanged and no opposing binding authority placed before it, the Tribunal followed the earlier decisions and deleted the addition made by the Assessing Officer. [Paras 6, 7]

Addition treating reimbursement of lease line charges as royalty deleted; ground allowed.

Final Conclusion: Following co ordinate Bench precedent and finding no change in facts or law for AY 2021-22, the Tribunal allowed grounds 2-4 and deleted the impugned additions; other grounds were either general, consequential or premature, and the appeal was allowed.

Reassessment jurisdiction under Section 147/148 - Reason to believe - Requirement of independent application of mind to information - Use of information from investigation wing / STR reports - Scope and limits of reasons recorded under Section 148(2) - Additions under Section 68 - Prohibition on making additions unrelated to reasons recorded - Double addition (taxation of same receipt as turnover and as unexplained credit)

Reassessment jurisdiction under Section 147/148 - Reason to believe - Use of information from investigation wing / STR reports - Requirement of independent application of mind to information - Scope and limits of reasons recorded under Section 148(2) - Validity of reopening the assessments by issuance of notices under Section 148/147 - HELD THAT: - The reasons recorded by the Assessing Officer were founded on advisory information received from the investigation wing (STR-related material) which directed the AO to examine the assessee's accounts; the AO, however, did not undertake interim inquiries or apply independent mind to the information before forming a belief that income had escaped assessment. The reasons reproduced claim escapement based on inferred accommodation entries, yet the factual matrix showed no transactions with one of the named entities and a materially different transaction-amount with the other. The AO made no linkage between the information forming the basis for reasons and the additions ultimately effected, and proceeded to reopen the assessments without the necessary intelligible and rational connection between material in possession and the subjective belief required by law. On these grounds the Tribunal held that the statutory 'reason to believe' was absent, the assumption of jurisdiction was vitiated, and the notices under Section 148/147 were unsustainable. [Paras 9, 10, 12, 13]

Reopening of assessments under Section 148/147 quashed for lack of valid reason to believe and for failure to apply independent mind to investigation material; jurisdictional assumption set aside.

Additions under Section 68 - Double addition (taxation of same receipt as turnover and as unexplained credit) - Prohibition on making additions unrelated to reasons recorded - Sustenance of additions made under Section 68 and consequential treatment of sales/turnover - HELD THAT: - On merits the Tribunal found that the amounts in question represented high-sea sales/turnover already recorded and offered to tax in the books; the AO nonetheless made additions under Section 68 without corresponding reduction of sales, resulting in impermissible double taxation of the same receipts. Further, the additions effected did not correspond to the specific transactions identified in the reasons recorded for reopening and were not linked to the advisory material relied upon. In these circumstances the addition under Section 68 was held to be without justification and could not be sustained. [Paras 7, 11, 12, 19]

Additions under Section 68 set aside as unsustainable (including because they produced double addition and were not linked to the reasons for reopening).

Final Conclusion: Both appeals (AY 2009-10 and AY 2010-11) allowed; orders of the CIT(A) set aside insofar as they upheld reopening and the additions; Assessing Officer's actions quashed for lack of jurisdiction and on merits, and the assessee's books/payments to be restored as recorded.

Unexplained investment under section 69C of the Income tax Act - deduction under section 80IB(10) and mandatory compliance with section 80AC - double disallowance by concurrent application of section 80IB and section 69C - disallowance under section 40(a)(ia) and remand for verification

Unexplained investment under section 69C of the Income tax Act - double disallowance by concurrent application of section 80IB and section 69C - Deletion of addition made by AO as unexplained investment under section 69C - HELD THAT: - The Assessing Officer treated the balancing figure arrived at by taking bookings as closing work in progress as unexplained investment under section 69C. The CIT(A) found that the same balancing figure had already been offered to tax as gross profit of the respective projects and therefore invocation of section 69C was not warranted. The Tribunal concurred with the CIT(A)'s conclusion that the amount was already offered to tax and that a fresh addition under section 69C would amount to double taxation; no interference with the CIT(A)'s deletion was required. [Paras 7]

Addition under section 69C deleted; Revenue's appeal dismissed on this issue.

Deduction under section 80IB(10) and mandatory compliance with section 80AC - Validity of rejection of deduction under section 80IB(10) on ground of belated filing contrary to section 80AC - HELD THAT: - The Tribunal examined whether the assessee could claim deduction under section 80IB(10) despite filing the return after the due date prescribed by section 139(1). Relying on the mandatory tenor of the provision and the reasoning in the Supreme Court authority cited by the Department, the Tribunal held that compliance with the filing time limit specified (as made mandatory by section 80AC in the context of such deductions) is obligatory. The assessee's explanation based on search/seizure and delayed availability of seized records was considered, but the Tribunal concluded that the statutory due date for filing the original return remained decisive and the late filing did not permit allowance of the deduction. Consequently, grounds challenging denial of the deduction and related contentions were dismissed as unacademic in light of that finding. [Paras 10, 11]

Claim for deduction under section 80IB(10) rejected for non compliance with the mandatory filing requirement; assessee's grounds dismissed.

Disallowance under section 40(a)(ia) and remand for verification - Whether the amount disallowed under section 40(a)(ia) in earlier year has been paid and can be claimed in the year under appeal - HELD THAT: - The Tribunal observed that the Assessing Officer had disallowed certain expenses under section 40(a)(ia) in the earlier assessment year and that the assessee claims the amount has since been paid and claimed in the year under appeal. The factual question whether the payment was made and the quantum/entitlement requires verification. The Tribunal directed the Assessing Officer to verify the factual position, afford the assessee opportunity of hearing in accordance with principles of natural justice, and grant credit if entitled under the Act. [Paras 13]

Matter remanded to the Assessing Officer for verification and quantification; ground partly allowed for statistical purposes.

Final Conclusion: The Tribunal dismissed the Revenue's appeal concerning the addition under section 69C and upheld the deletion by the CIT(A); the assessee's claim for deduction under section 80IB(10) was rejected for failure to comply with the mandatory filing requirement under section 80AC (grounds dismissed); the issue relating to the earlier disallowance under section 40(a)(ia) was remanded to the Assessing Officer for verification and appropriate relief if established.

Project Completion Method (AS-9) as a recognised method of accounting - Percentage of Completion Method (AS-7) and its non-applicability to a developer on the facts - method of accounting regularly employed by the assessee under section 145 - rejecting accounts under section 145(3) only when notified standards have not been regularly followed - Guidance Note on Accounting for Real Estate Transactions not binding for computation under section 145 - principle of consistency / res judicata in adoption of accounting method

Project Completion Method (AS-9) as a recognised method of accounting - Percentage of Completion Method (AS-7) and its non-applicability to a developer on the facts - method of accounting regularly employed by the assessee under section 145 - Guidance Note on Accounting for Real Estate Transactions not binding for computation under section 145 - principle of consistency / res judicata in adoption of accounting method - Addition of Rs. 24,32,00,000 made by applying Percentage Completion Method was not sustainable and was deleted. - HELD THAT: - The Tribunal held that the assessee is a real estate developer who has consistently followed the Project Completion Method (AS-9) for revenue recognition and capitalised construction costs as work in progress, showing receipts as income on execution of conveyance/possession. The Assessing Officer applied the Percentage Completion Method relying on the ICAI Guidance Note and treated the assessee as a contractor, but did not point to any defect in the assessee's regularly employed accounting method or demonstrate that notified accounting standards had not been followed. Section 145 requires income to be computed according to the system of accounting regularly employed by the assessee and permits rejection of accounts under section 145(3) only on specified grounds; AS-7 and the Guidance Note are not notified under section 145(2) and therefore cannot be imposed to discard a consistently followed, recognised method. The Tribunal relied on consistent judicial precedents holding that the completed/project completion method is an accepted method for developers, that selective application of percentage completion for one year distorts true profits and may lead to double assessment, and that res judicata/consistency in prior acceptances by the Department militates against the AO's unilateral change. Applying these principles to the facts, including the terms of the agreements which preserved ownership till registration/possession, the Tribunal found no justification to overturn the assessee's method and upheld the CIT(A)'s deletion of the addition. [Paras 5, 9, 10, 12, 13]

The addition computed by applying the Percentage Completion Method was deleted and the CIT(A) order was upheld.

Final Conclusion: The Tribunal dismissed the Revenue's appeal and upheld the deletion of the addition for AY 2014-15, concluding that the assessee, being a developer who had consistently followed the Project Completion Method, was not liable to have its accounts rejected or to be selectively assessed under the Percentage Completion Method on the facts and authorities relied upon.

Service tax/GST not includible in gross receipts for the purpose of section 44BB - presumptive taxation under section 44BB - statutory levy collected on behalf of the Government is not income of the assessee - reimbursement/collection of tax as distinct from consideration for services

Service tax/GST not includible in gross receipts for the purpose of section 44BB - statutory levy collected on behalf of the Government is not income of the assessee - presumptive taxation under section 44BB - Service tax/GST receipts are not includible in gross receipts for computing presumptive income under section 44BB of the Income Tax Act. - HELD THAT: - The Tribunal held that the question whether service tax/GST collected by the assessee forms part of gross receipts under section 44BB has been consistently decided in favour of the assessee by higher forums and Tribunals. The collected levy is a statutory tax which the assessee merely receives to pass on to the Government and does not constitute amounts paid to the assessee for services rendered. Reliance was placed on the reasoning in Mitchell Drilling International Pvt. Ltd. and the Full Bench decision in Schlumberger Asia Services Ltd., as well as subsequent Tribunal decisions (Transocean), which treat reimbursement/collection of tax as distinct from consideration forming part of business receipts. In view of these precedents and absence of any distinguishing factual or legal basis, the Tribunal declined to interfere with the order of the CIT(A) which deleted the addition made by the AO treating service tax/GST as part of gross receipts under section 44BB. [Paras 5, 8, 10]

Addition made by the AO treating service tax/GST as part of gross receipts under section 44BB is deleted and the Revenue's appeals are dismissed.

Final Conclusion: The Tribunal dismissed the Revenue's appeals for AY 2020-21 and AY 2021-22, upholding the deletion of additions that treated service tax/GST receipts as part of gross receipts for computation of presumptive income under section 44BB.

Fixed place Permanent Establishment - Dependent Agent Permanent Establishment - Business connection - Attribution of profits to a Permanent Establishment - Article 5(1) of the DTAA - Fixed place Permanent Establishment - Article 5(4)-(5) of the DTAA - Dependent/Independent agent - Burden of proof on the Revenue to establish existence of PE - Res judicata not applicable in assessment proceedings

Fixed place Permanent Establishment - Article 5(1) of the DTAA - Fixed place Permanent Establishment - use of Computer Reservation System (CRS) - Whether the assessee had a fixed place Permanent Establishment in India during the years under appeal - HELD THAT: - The Tribunal examined the post 2005 contractual and operational matrix and found that the factual basis which supported earlier findings of a fixed place PE (where computers, connectivity and configuration were provided, financed or controlled in India by an intermediary) no longer existed. After 2005 Sabre executed global subscriber agreements with unrelated global entities (e.g. American Express) which allowed their affiliates/agents to access Sabre's CRS hosted in the USA; Sabre did not provide or finance computers, printers or communication links at the Indian agents' premises, nor exercise the degree of control over installed equipment that existed under the prior NMD/SITAR model. The Tribunal held that the Revenue had not discharged its burden to demonstrate a fixed place of business at the disposal of Sabre in India and that the DRP/AO erred in mechanically relying on prior years' decisions rooted in a different factual matrix (Galileo). Consequently, the fixed place PE was not established for the years in question. [Paras 29, 30, 31]

No fixed place Permanent Establishment in India; finding for the assessee.

Dependent Agent Permanent Establishment - Article 5(4)-(5) of the DTAA - Dependent/Independent agent - exclusivity and habitual authority to conclude contracts - Whether the assessee had a dependent agent Permanent Establishment in India during the years under appeal - HELD THAT: - The Tribunal analysed the nature of intermediaries post 2005 and found no equivalent of the Interglobe/NMD model where an exclusive intermediary habitually exercised authority to conclude contracts on behalf of the enterprise. The global subscribers were unrelated, non exclusive parties acting in the ordinary course of their business; there was no agency arrangement whereby an entity in India habitually procured contracts or bound Sabre. The DRP itself had noted non exclusivity of travel agents, which militates against a dependent agent PE. On these facts the Revenue failed to establish that any person in India was a dependent agent within Article 5(4), (5). [Paras 31, 32]

No dependent agent Permanent Establishment in India; finding for the assessee.

Attribution of profits to a Permanent Establishment - Burden of proof on the Revenue to establish PE - Res judicata not applicable in assessment proceedings - Whether profits earned from bookings originating in India were taxable in India by way of attribution to a PE and related consequential claims (deductions, interest, penalty, TDS credit) - HELD THAT: - Because the Tribunal concluded that Sabre did not have either a fixed place PE or a dependent agent PE in India on the facts post 2005, the DRP/AO's attribution and consequential adjustments lacked foundation. The Tribunal observed that attribution directions based on prior years' decisions (15% attribution) flowed from a different factual matrix and therefore could not be applied; having decided the fundamental PE issue in favour of the assessee, the remaining grounds (attribution, deductions, interest, penalty, TDS credit) were rendered academic and were accordingly decided for statistical purposes in favour of the assessee. [Paras 33]

No attribution of profits to a PE and related adjustments do not survive; appeals of the assessee allowed and Revenue's appeals dismissed (remaining grounds academic).

Final Conclusion: The Tribunal held that, on the facts and agreements operative after March 2005, Sabre did not have a fixed place PE or a dependent agent PE in India; the Revenue failed to discharge the burden to establish a PE. Consequential attribution and related assessments were rendered unsustainable; all appeals of the assessee were allowed and Revenue's appeals dismissed for the assessed years listed above.

Depreciation under Explanation 3(b) to Section 32(1) - goodwill recognised on court sanctioned amalgamation as an acquired intangible asset - tax neutrality of amalgamation under section 2(1B) and related provisions - effect of non objection by Income Tax Department to scheme sanctioned by High Court - reliance on Smifs Securities Ltd. (ratio that goodwill is an intangible asset eligible for depreciation)

Depreciation under Explanation 3(b) to Section 32(1) - goodwill recognised on court sanctioned amalgamation as an acquired intangible asset - reliance on Smifs Securities Ltd. (ratio that goodwill is an intangible asset eligible for depreciation) - Depreciation on goodwill arising from the scheme of amalgamation is allowable to the transferee (and consequently to the appellant) under section 32 as the goodwill represents an acquired intangible asset. - HELD THAT: - The Tribunal applied the Supreme Court ratio in Smifs Securities Ltd. that goodwill falls within Explanation 3(b) to section 32(1) and is an intangible asset eligible for depreciation. The court approved scheme showed that the transferee paid consideration (by issue of shares) in excess of net assets; that excess, determined by an independent valuation, represents payment for a bundle of business and commercial rights (goodwill) acquired along with tangible and intangible assets. The Tribunal held that the AO was not justified in treating the goodwill as mere revaluation or as nil for tax purposes, and that the technical valuation by an expert valuer could not be displaced by the AO without referral to a technical expert. The Tribunal noted that amendments excluding goodwill from depreciation with effect from AY 2021 22 are not applicable to the years under consideration and therefore allowed the claim of depreciation for the relevant period. [Paras 15, 16, 19]

Allowed the claim of depreciation on the goodwill recognised pursuant to the court sanctioned amalgamation and directed the AO to give effect to the same.

Tax neutrality of amalgamation under section 2(1B) and related provisions - effect of non objection by Income Tax Department to scheme sanctioned by High Court - Revenue could not, in the assessment proceedings, reject the genuineness of the court sanctioned amalgamation or treat the scheme as a colourable device where the Regional Director/MCA had invited comments and the Income Tax Department raised no objection within the prescribed period; therefore the AO could not disregard the scheme's sanction to deny depreciation. - HELD THAT: - The Tribunal emphasised that the amalgamation was sanctioned by the Gujarat High Court after consideration of documents, official liquidator's report and statutory filings, and that the MCA/CBDT process (including the RD's invitation for comments and the CBDT circular) afforded the Revenue an opportunity to object which was not exercised. Given the statutory intent of tax neutrality in amalgamation provisions (including provisions preserving cost/WDV and apportionment of depreciation), and absent application of anti avoidance provisions for the years in issue, the AO's finding that the scheme was a colourable device to create goodwill for depreciation was reversed. The Tribunal also observed that common control or payment by issue of shares does not per se render the transaction a device and that factual disclosure in the scheme negated concealment. [Paras 14, 16]

Held that the Revenue was not entitled to challenge the genuineness of the sanctioned scheme at assessment stage in the circumstances and set aside the AO's denial; directed the AO to allow the depreciation claim.

Final Conclusion: The appeals are allowed; the Tribunal set aside the authorities' denial and directed the Assessing Officer to allow depreciation on the goodwill recognised pursuant to the High Court sanctioned amalgamation (applicable mutatis mutandis to the three appeals for AYs 2016 17 to 2018 19).

Assumption of jurisdiction by non jurisdictional Assessing Officer - Pecuniary/monetary jurisdiction prescribed by CBDT Instruction No.1/2011 read with CBDT Instruction No.6/2011 - Requirement of recording reasons and formal transfer under Section 127 for transfer of cases - Validity of reassessment under Section 147 where jurisdiction is wrongly assumed

Assumption of jurisdiction by non jurisdictional Assessing Officer - Pecuniary/monetary jurisdiction prescribed by CBDT Instruction No.1/2011 read with CBDT Instruction No.6/2011 - Requirement of recording reasons and formal transfer under Section 127 for transfer of cases - Validity of reassessment under Section 147 where jurisdiction is wrongly assumed - Assessment framed under Section 147 r.w.s. 143(3) for A.Y. 2009-10 by ACIT-3(1), Raipur is quashed for want of valid assumption of jurisdiction. - HELD THAT: - The Tribunal held that pecuniary jurisdiction fixed by CBDT Instruction No.1/2011 (read with Instruction No.6/2011) governed which category of Assessing Officer could validly frame assessment. The assessee had declared nil income and, on the application of the CBDT instructions applicable w.e.f. 01.04.2011, the assessment could not be validly framed by ACIT 3(1), Raipur who lacked the requisite pecuniary jurisdiction. The Tribunal followed its earlier decision in the assessee's own case for the immediately succeeding year (ITA No.214/RPR/2023 dated 16.10.2023) which addressed identical issues and concluded that an assessment framed by an officer not vested with pecuniary jurisdiction under the CBDT instruction is bad in law. The order further observed that transfers of cases between officers require compliance with the statutory requirement to record reasons and effect transfer under the provision governing transfers (Section 127); no valid transfer order was shown that would cure the jurisdictional defect. In view of these findings the reassessment proceedings under Section 147 could not be sustained against the assessee and were quashed. As the order was disposed on jurisdictional grounds, the Tribunal refrained from adjudicating the merits of the addition. [Paras 10, 11, 14]

Assessment under Section 147 r.w.s. 143(3) dated 28.10.2016 is quashed for want of valid assumption of jurisdiction.

Final Conclusion: Appeal allowed: the reassessment framed for A.Y. 2009-10 is quashed because the assessment was framed by an officer who, in light of CBDT Instruction No.1/2011 read with Instruction No.6/2011 and absent a valid transfer under the statutory provision, did not have pecuniary jurisdiction; other contentions left open.

Explanation 5A to section 271(1)(c) - penalty under section 271(1)(c) for furnishing inaccurate particulars - return filed in response to notice under section 153A - search and seizure under section 132

Explanation 5A to section 271(1)(c) - penalty under section 271(1)(c) for furnishing inaccurate particulars - return filed in response to notice under section 153A - Validity of levy of penalty under section 271(1)(c) where, after search, assessee filed return under section 153A declaring additional income which was accepted by the Assessing Officer - HELD THAT: - The Tribunal found that the assessee, following search and seizure, filed a return in response to notice under section 153A declaring additional income which was accepted by the Assessing Officer and formed the basis of assessment. The Assessing Officer initiated penalty proceedings under section 271(1)(c) and, relying on Explanation 5A to section 271(1)(c), held that notwithstanding the declaration of such income in a return furnished on or after the date of search, the assessee is deemed to have furnished inaccurate particulars for the purpose of imposition of penalty. The Tribunal, after considering rival decisions, concluded that Explanation 5A is squarely attracted to the facts of the case and authorises imposition of penalty even where the additional income is declared in a return filed in response to section 153A; earlier decisions relied upon by the assessee concern searches prior to 1.6.2007 and are not applicable. In absence of any contrary binding decision, the Tribunal found no infirmity in the CIT(A)'s confirmation of the penalty levied by the Assessing Officer under the deeming provision of Explanation 5A. [Paras 11, 12, 13]

Penalty under section 271(1)(c) sustained as correctly levied applying Explanation 5A to the return filed in response to notice under section 153A; appeal dismissed.

Final Conclusion: The Tribunal upheld the CIT(A)'s order confirming the penalty under section 271(1)(c) by applying Explanation 5A to the facts where the assessee declared additional income in the return filed in response to notice under section 153A; the appeal is dismissed.

Reopening of assessment and formation of reason to believe (not mere reason to suspect) - prima facie belief of Assessing Officer at stage of reopening - supply of material forming basis of reasons to believe and principle of natural justice - admission of additional evidence under Rule 46A - onus on Revenue to prove understatement of declared sale consideration - Section 50C legal fiction for determination of full value of sale consideration - discretion in treating unexplained credits under the provisions corresponding to section 69

Reopening of assessment and formation of reason to believe (not mere reason to suspect) - prima facie belief of Assessing Officer at stage of reopening - supply of material forming basis of reasons to believe and principle of natural justice - Validity of reopening the assessment under section 147/148 for A.Y.2012-13 - HELD THAT: - The Tribunal upheld the Assessing Officer's action in issuing notice under section 148. The AO had information and documents (including an agreement to sell and the registered sale deed showing a transaction involving the assessee and a registered sale on 22-03-2012) which constituted sufficient material for formation of a prima facie belief that income had escaped assessment. The Tribunal distinguished the authorities relied upon by the assessee as factually different and accepted the principle that at the stage of issuing a reopening notice the question is whether relevant material existed on which a reasonable officer could form the requisite belief; merits of the case are not to be considered at that stage. The assessee's contention that foundational documents were not supplied was negatived on the ground that the agreement was in the assessee's possession and annexed to the paper book. [Paras 2]

Reopening notice and reassessment sustained; grounds challenging validity of reopening dismissed.

Admission of additional evidence under Rule 46A - principle of natural justice - Admissibility of additional evidence filed under Rule 46A before the CIT(A) - HELD THAT: - The Tribunal found that the additional evidence (affidavits of persons who made payments and witnesses to the sale) went to the root of the controversy and were necessary for decision. Although the CIT(A) had formally rejected admission under Rule 46A, he nevertheless considered those affidavits on merits; the Tribunal held that denial of admission was not justified and treated the evidences as having been considered. Given that the AO had in some instances made additions without disclosing his mind and had not controverted the averments, the affidavits were material and admission was warranted. [Paras 3]

Denial of admission under Rule 46A set aside; additional evidence treated as admitted and considered.

Onus on Revenue to prove understatement of declared sale consideration - Section 50C legal fiction for determination of full value of sale consideration - Validity of addition of Rs. 35,36,100/- made on account of alleged undisclosed sale consideration, unexplained declared consideration of Rs.12,00,000/-, and stamp/registration expenses - HELD THAT: - The Tribunal deleted the total addition of Rs. 35,36,100/-. It found valid reasons to disbelieve the unregistered agreement showing a higher consideration, noting that the registered sale deed, seller's statements/affidavit, witness affidavit, DLC rates and subsequent confirmations supported the declared consideration of Rs.12,00,000/-. The AO failed to discharge the burden of proving understatement of consideration. Further, the Tribunal accepted that payments referred to in the sale deed were supported by cheques and affidavits which reconciled with cheque numbers in the deed, and that the small amounts for stamp and registration could be met from past savings. In these circumstances the addition was held unsustainable. [Paras 4]

Addition of Rs. 35,36,100/- deleted in full.

Discretion in treating unexplained credits under the provisions corresponding to section 69 - Addition of Rs. 5,00,000/- as unexplained cash deposit in bank account - HELD THAT: - The Tribunal examined the explanation that the deposit arose from joint past and present savings of the assessee's family (assessee, husband and son) and related pleaded facts, including past returns and household savings. Considering the totality of facts, the Tribunal held that a portion of the deposit could reasonably be explained by available savings and contribution already found in the record but that a residual portion remained unexplained. The Tribunal therefore reduced the addition: it accepted the source explanation up to a specified amount and sustained an addition for the unexplained balance. [Paras 5]

Addition of Rs. 5,00,000/- partly deleted; relief granted to the extent indicated and balance sustained.

Final Conclusion: The appeal is partly allowed. The reopening under section 148/147 was upheld. The CIT(A)'s denial to admit additional evidence under Rule 46A was set aside and the affidavits were considered. The addition of Rs. 35,36,100/- was deleted in full. The addition of Rs. 5,00,000/- for unexplained bank deposit was partly deleted, with a portion sustained as unexplained. Overall the assessee succeeds on key substantive points and obtains partial relief.

Limitation period for adjudication under Section 28(9) of the Customs Act - stay on adjudication pending disposal of an appeal - right to personal hearing and opportunity to file final reply - exclusion of time spent in appellate proceedings from statutory limitation

Stay on adjudication pending disposal of an appeal - right to personal hearing and opportunity to file final reply - Hearing on the Show Cause Notice was directed to be deferred until the CESTAT pronounces its order, and the petitioner was granted a fresh two week period to file a final reply thereafter with a personal hearing. - HELD THAT: - The Court observed that the petitioner had already filed an appeal before the CESTAT and that arguments were concluded with judgment reserved. In view of the appellate proceedings having been heard and to avoid prejudice to the petitioner, the Court directed that the Adjudicating Authority defer concluding the Show Cause Notice until the CESTAT pronounces its order. The Court further provided that, subject to the appellate order, the petitioner shall be granted two weeks to file a final reply and that the Adjudicating Authority shall thereafter afford an opportunity of personal hearing before concluding the matter. This direction was issued as an equitable procedural measure to preserve the petitioner's right to be heard and to prevent irreparable prejudice from parallel finalisation of adjudication while the appeal remained pending determination. [Paras 6]

Hearing deferred until CESTAT pronouncement; two weeks granted to file final reply thereafter and personal hearing to be given before adjudication proceeds.

Limitation period for adjudication under Section 28(9) of the Customs Act - exclusion of time spent in appellate proceedings from statutory limitation - Time consumed in disposal of the appeal before the CESTAT shall not be counted towards the period prescribed under Section 28(9) of the Customs Act for adjudication of the Show Cause Notice. - HELD THAT: - Respondent relied on the statutory one year period under Section 28(9) and the proviso allowing an additional year. The Court clarified that, given the direction to defer adjudication pending the appellate outcome, the period during which the appeal is pending before the CESTAT (from filing to final order) will be excluded from reckoning under Section 28(9). This ensures that the statutory time-limit does not operate to compel adjudication while the appellate process, which may affect the merits, is sub judice. [Paras 6]

Period spent in disposal of the appeal before the CESTAT shall not be counted for the purpose of Section 28(9) limitation.

Final Conclusion: Petition disposed by directing the Adjudicating Authority to defer finalisation of the Show Cause Notice until the CESTAT pronounces its order, granting the petitioner two weeks thereafter to file a final reply with a personal hearing, and excluding the time of appellate proceedings from computation under Section 28(9) of the Customs Act.

Provisional release of seized goods - compliance with weight and purity conditions for preferential import - margin of error in scientific testing - retesting of seized goods - restricted or prohibited goods and provisional release - no substantial question of law where issue is purely factual

Provisional release of seized goods - compliance with weight and purity conditions for preferential import - margin of error in scientific testing - retesting of seized goods - Provisional release of 26 gold dore bars weighing 5 kgs. plus was permissible on the facts after retesting and having regard to the margin of error in test results. - HELD THAT: - The Tribunal directed provisional release subject to conditions. This Court directed re-testing of the 26 bars. The re-test reports recorded that 25 bars tested with purity less than 95% and one bar tested at 95.05%, which falls within the CRCL's stated margin of error of +/- 0.25%. On these factual findings the Tribunal's direction for provisional release of the 26 gold dore bars weighing more than 5 kgs. was sustained. The Court treated the scientific margin of error and the re-test results as determinative of the factual compliance with the weight and purity conditions applicable under the preferential tariff scheme and affirmed provisional release under the conditions previously imposed by the Tribunal. [Paras 10, 11, 12, 13, 17]

Provisional release directed by the Tribunal is to be implemented in accordance with its order; re-test results support release of the 26 bars.

Restricted or prohibited goods and provisional release - The Tribunal's observation that goods found to be restricted or prohibited at import may nonetheless be subject to provisional release does not constitute a general legal pronouncement and is confined to the facts of this case. - HELD THAT: - The Court held that the Tribunal's comment on provisional release of goods even if found restricted or prohibited should not be read as an expression of broad legal principle. That observation was confined to the peculiar facts and conditions of the present matter and does not amount to a binding general proposition of law permitting provisional release in all such cases. [Paras 15]

Observation of the Tribunal is restricted to the facts of this case and is not a general legal pronouncement.

No substantial question of law where issue is purely factual - No substantial question of law arises warranting interference with the Tribunal's order because the controversy was factual. - HELD THAT: - Having examined the test reports, margin of error and the factual matrix, the Court concluded that the core controversy was one of fact-whether the bars met the prescribed weight and purity thresholds-and not a question of law of sufficient substance to call for appellate interference. Consequently, the appeal was dismissed. [Paras 16, 17]

Appeal dismissed for lack of any substantial question of law; Tribunal's order to be complied with within one week.

Final Conclusion: On the facts recorded (including re-test results and the stated margin of error), the Tribunal's conditional order permitting provisional release of the 26 gold dore bars is upheld; the Tribunal's remark on release of restricted/prohibited goods is confined to these facts; no substantial question of law arises and the appeal is dismissed with direction to comply with the Tribunal's order within one week.

Quashing of show cause notice - Provisional release on execution of bond and bank guarantee - Predetermination / pre conceived mind - Opportunity of hearing - Adjudication expeditiously within a specified time frame

Quashing of show cause notice - Opportunity of hearing - Adjudication expeditiously within a specified time frame - Show cause notice dated March 3, 2020 to be adjudicated afresh after opportunity to reply and hearing; petition not accepted for quashing of the notice. - HELD THAT: - The petitioner submitted jurisdictional and predetermination objections to the show cause notice but had not filed any reply. Rather than quash the show cause notice, the Court directed the petitioner to file its reply within four weeks. The Designated Officer was directed to follow statutory/normal procedure, grant the petitioner an opportunity of hearing, and thereafter pass appropriate orders on the show cause notice in accordance with law. In the interest of expedition, the Court mandated that the matter be adjudicated as expeditiously as possible and, in any event, within two months from the filing of the reply. All substantive contentions of the parties, including those challenging jurisdiction and alleged predetermination, were expressly kept open for determination by the adjudicating authority. [Paras 5, 6]

Petition disposed with direction that petitioner file reply within four weeks and the Designated Officer decide the show cause notice after hearing, expeditiously and within two months of the reply; substantive contentions kept open.

Final Conclusion: Writ petition disposed directing the petitioner to file reply to the show cause notice within four weeks and directing the Designated Officer to grant hearing and decide the notice in accordance with law, expeditiously and in any event within two months of the reply; no costs.

Mandatory 90-day time limit for submission of inquiry report under Regulation 17(5) of the Customs Broker Licensing Regulations, 2018 - extension of statutory timelines under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and the CBIC notification G.S.R. 601(E) dated 30.09.2020 - communication/receipt of inquiry report as constituting compliance with the statutory time-limit - abating of proceedings for failure to comply with mandatory procedural time-limits

Mandatory 90-day time limit for submission of inquiry report under Regulation 17(5) of the Customs Broker Licensing Regulations, 2018 - extension of statutory timelines under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and the CBIC notification G.S.R. 601(E) dated 30.09.2020 - communication/receipt of inquiry report as constituting compliance with the statutory time-limit - abating of proceedings for failure to comply with mandatory procedural time-limits - Whether the inquiry report dated 30.12.2020 was submitted/communicated within the 90-day period prescribed by Regulation 17(5) read with the extension notification, and whether failure to do so vitiates the proceedings. - HELD THAT: - Regulation 17(5) requires the Inquiry Officer to prepare and submit the inquiry report within 90 days of issuance of the show cause notice. The show cause notice was issued on 21.06.2020; ordinarily the 90-day limit would expire in September 2020. The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and CBIC Notification G.S.R. 601(E) dated 30.09.2020 extended relevant time-limits to 30/31.12.2020. The file material, however, shows the inquiry report dated 30.12.2020 was not received in the Customs Broker Section until 07.01.2021 and the Principal Commissioner approved transmission only on 02.02.2021, after which the report was dispatched to the petitioner. On this basis the Court found that the inquiry report was not communicated to the adjudicating authority within the extended period and that no subsequent notification further extended the time. The Court held that the failure to comply with the mandatory period in Regulation 17(5), viewed with the scope of the statutory extension, is fatal to the proceedings and requires abatement of the disciplinary process under the Regulations. [Paras 39, 41, 42, 43, 44]

The writ petition challenging the communication of the inquiry report (W.P.No.5787 of 2021) is allowed; the inquiry proceedings under the Customs Broker Licensing Regulations, 2018 abate for failure to comply with Regulation 17(5).

Final Conclusion: W.P.No.5787 of 2021 is allowed and the inquiry proceedings under the Customs Broker Licensing Regulations, 2018 abate for failure to submit/communicate the inquiry report within the prescribed/extended period. W.P.No.9145 of 2020 and W.P.No.5782 of 2021 are closed in view of that result; no costs.

Condonation of delay - benefit under section 79(2) of the Income Tax Act - carry forward of accumulated losses - extinguishment of unpaid liabilities on approval of resolution plan - conversion to capital reserve - direction to approach statutory authorities for concessions - appellate interference with Adjudicating Authority's directions

Condonation of delay - Application for condonation of 14 days' delay in filing the appeal - HELD THAT: - The affidavit explained the delay as caused by the marriage of the drafting counsel in the first week of December 2023. The Tribunal found the cause shown to be sufficient and allowed the interlocutory application for condonation, thereby permitting the appeal to be taken up on merits. [Paras 1]

Delay of 14 days condoned; I.A. No. 5814 of 2023 disposed of.

Benefit under section 79(2) of the Income Tax Act - carry forward of accumulated losses - direction to approach statutory authorities for concessions - Whether the Adjudicating Authority erred in directing the successful resolution applicant to approach the Income Tax Authority to claim carry forward of accumulated losses under section 79(2) - HELD THAT: - The Adjudicating Authority's order (Para 14) recorded that accumulated losses should first be set off against the capital reserve created by extinguished liabilities and that any remaining losses could be considered under section 79(2). The Tribunal held that if the appellant is entitled to the benefit of section 79(2), it is open to the appellant to file an appropriate application before the competent jurisdictional Income Tax Authority. The Tribunal found no error in the Adjudicating Authority directing the resolution applicant to approach the concerned statutory authority for the statutory concession. [Paras 5, 7]

No fault found with the Adjudicating Authority's direction; appellant may seek the carry forward relief from the competent Income Tax Authority.

Extinguishment of unpaid liabilities on approval of resolution plan - conversion to capital reserve - appellate interference with Adjudicating Authority's directions - Whether the Tribunal should interfere with the Adjudicating Authority's directions in Para 14 regarding extinguishment of unpaid liabilities, conversion to capital reserve and other concessions - HELD THAT: - The Tribunal noted that the Adjudicating Authority had effectively allowed the application and issued directions in Paras 13 and 14 concerning the resolution plan, including that unpaid liabilities not filed or included in the plan stand extinguished and converted to capital reserve with accumulated losses to be set off accordingly. The Tribunal observed that those directions were part of the approved resolution plan and were intended to enable the corporate debtor to carry on business in accordance with law. Finding no error in the impugned order or reason to interfere, the Tribunal declined to disturb those directions. [Paras 5, 8, 10]

No interference with the Adjudicating Authority's directions in Para 14; appeal dismissed.

Final Conclusion: Condonation of delay granted; the Adjudicating Authority's directions in Para 14 concerning extinguishment of unpaid liabilities, conversion to capital reserve, and the procedure to seek carry forward of losses under section 79(2) were upheld; appellant permitted to approach the competent Income Tax Authority for relief; appeal dismissed.

Admission under Section 7 of the Insolvency and Bankruptcy Code, 2016 - existence of debt and default - effect of a settlement agreement on initiation of CIRP - release of security / issuance of No Objection Certificate prior to payment - principles of natural justice - opportunity to be heard - concurrent recovery proceedings under SARFAESI do not bar filing under IBC - Innoventive principles for Section 7 admission

Admission under Section 7 of the Insolvency and Bankruptcy Code, 2016 - existence of debt and default - Innoventive principles for Section 7 admission - Adjudicating Authority correctly admitted the Section 7 application and initiated CIRP. - HELD THAT: - The Tribunal held that the corporate debtor had unconditionally acknowledged the outstanding debt in the Settlement Agreement and had defaulted in paying the agreed settlement amount within the stipulated 90 days. The Adjudicating Authority correctly confined itself to ascertaining existence of debt and default as mandated by the law and the Innoventive line of authority. Given the admitted debt and the material placed before the Adjudicating Authority demonstrating default above the statutory threshold, the Tribunal found no infirmity in admitting the Section 7 petition and initiating CIRP. [Paras 13, 14, 19, 22, 23]

Section 7 application was rightly admitted and the impugned order is upheld.

Effect of a settlement agreement on initiation of CIRP - release of security / issuance of No Objection Certificate prior to payment - Settlement Agreement did not entitle the corporate debtor to a provisional NoC or release of security prior to payment; failure to pay entitled financial creditor to reinstate proceedings. - HELD THAT: - A plain reading of the Settlement Agreement shows that issuance of a no dues certificate and release of contractual comforts and charges were to occur only after receipt of the settlement amount. Clause 3(ii)(a)-(b) and Clause 5 make release of security conditional on payment and provide for reinstatement of earlier proceedings upon default. The Tribunal therefore rejected the contention that the financial creditor was obliged to issue conditional NoCs prior to payment; earlier ad hoc relaxations (if any) could not be converted into a contractual right inconsistent with the Settlement Agreement. [Paras 13, 15, 16, 17, 18]

The financial creditor was not obliged to issue provisional NoCs before receipt of the settlement amount; reinstatement of proceedings on default was permissible.

Principles of natural justice - opportunity to be heard - No violation of natural justice occurred in restoration of the main company petition or in subsequent admission proceedings. - HELD THAT: - The Tribunal noted that the restoration order of 02.08.2023, which was not challenged, recorded that the corporate debtor was represented and sought time to place further documents; the matter was thereafter reserved for orders after being heard on 25.09.2023. On the material and orders on record, the Tribunal found the appellant's claim of denial of opportunity to be unfounded and held that once settlement efforts failed the Adjudicating Authority was obliged to decide the petition on merits. [Paras 20]

Principles of natural justice were not violated; the corporate debtor had adequate opportunity.

Concurrent recovery proceedings under SARFAESI do not bar filing under IBC - Pendency of SARFAESI or other recovery proceedings did not preclude the financial creditor from filing the Section 7 application. - HELD THAT: - The Tribunal recorded that the financial creditor had noted the pendency of SARFAESI proceedings when entering into the Settlement Agreement and that the Code permits initiation of CIRP notwithstanding parallel recovery actions. The existence of concurrent remedies under other laws does not erode the statutory right of a financial creditor to seek admission under Section 7 when debt and default are established. [Paras 6, 22]

SARFAESI proceedings pending before other fora did not bar admission under Section 7.

Final Conclusion: The appeal is dismissed. The Settlement Agreement constituted an admission of debt and conditioned release of securities on payment; failure to pay permitted reinstatement of proceedings and admission under Section 7. No error or breach of natural justice was found and concurrent SARFAESI proceedings did not preclude the financial creditor from seeking CIRP.

Pre-existing dispute - application under Section 9 of the Insolvency and Bankruptcy Code, 2016 - demand notice under Section 8 of the Insolvency and Bankruptcy Code, 2016 - pre-institution mediation under Section 12A of the Commercial Courts Act, 2015 - Mobilox test for pre-existing dispute - indemnity notice - bar under Section 10A of the Insolvency and Bankruptcy Code, 2016

Pre-existing dispute - Mobilox test for pre-existing dispute - indemnity notice - pre-institution mediation under Section 12A of the Commercial Courts Act, 2015 - Existence of a pre-existing dispute prior to issuance of the Section 8 demand notice and its effect on maintainability of Section 9 proceedings - HELD THAT: - The Tribunal examined contemporaneous communications and events predating the Section 8 notice - including multiple emails and a code review raising concerns about delay and poor quality, complaints by the end client on 15.06.2021, 04.07.2021 and 05.07.2021, a WhatsApp-shared code review on 21.06.2021, and an indemnity notice dated 29.10.2021 indicating initiation of pre-institution mediation under Section 12A. Applying the Mobilox test as applied by the Adjudicating Authority, these materials constitute sufficient evidence of a dispute concerning delivery and quality that existed prior to the demand notice. The Tribunal held that the Adjudicating Authority was entitled to identify a pre-existing dispute on the basis of such evidence and that the parties' participation in mediation proceedings reinforced the existence of a dispute. The contractual clause prescribing an internal dispute-raising mechanism did not preclude the Adjudicating Authority from treating the earlier communications and steps as indicia of a pre-existing dispute. [Paras 27, 30, 31, 33, 34]

There was a pre-existing dispute regarding delivery and quality prior to the Section 8 demand notice; the Section 9 application was therefore liable to be dismissed under the IBC.

Bar under Section 10A of the Insolvency and Bankruptcy Code, 2016 - application under Section 9 of the Insolvency and Bankruptcy Code, 2016 - Applicability of statutory bar to one of the invoices relied upon by the Operational Creditor - HELD THAT: - The Tribunal noted that the Operational Creditor claimed two invoices but found that the earlier invoice fell within the prohibition created by Section 10A and could not be relied upon in proceedings under Section 9. Consequently, only the later consolidated invoice dated 21.07.2021 remained subject to adjudication; however, the existence of the pre-existing dispute with respect to the services and that consolidated invoice led to dismissal of the Section 9 petition. The Adjudicating Authority's approach in restricting consideration to the invoice not barred by Section 10A was upheld. [Paras 25]

The earlier invoice is barred by Section 10A and cannot sustain the Section 9 petition; only the later invoice was examined but the petition was dismissed on account of the pre-existing dispute.

Final Conclusion: The Tribunal affirmed the Adjudicating Authority's conclusion that (a) one claimed invoice was barred by the statutory prohibition and (b) there existed a pre-existing dispute about delivery and quality prior to the Section 8 notice; accordingly the Section 9 petition was rightly dismissed and the appeal is dismissed.

Cancellation of bail - misuse of liberty on bail - non-entertainment of petition seeking cancellation of bail - non-precedential character of order

Cancellation of bail - misuse of liberty on bail - Petition seeking cancellation of bail granted by the High Court dismissed in absence of any allegation that the respondent misused the liberty granted on bail. - HELD THAT: - The petitioner sought cancellation of bail which had been granted by the High Court on 28th October, 2021. The Court noted there was no allegation that the respondent had misused the liberty granted on bail. In view of the absence of any such allegation or material showing misuse, the Court was not inclined to entertain the petition and dismissed the special leave petition. The determinative reasoning is that cancellation proceedings will not be entertained where no misuse of the liberty on bail is alleged or shown. [Paras 1]

Special leave petition dismissed.

Non-precedential character of order - The impugned order is clarified to have no precedential effect in other matters. - HELD THAT: - The Court expressly clarified that the order under challenge shall not be treated as a precedent in any other matter. This clarification is an independent direction accompanying the dismissal and limits the order's authoritative effect beyond the parties before the Court. [Paras 2]

Impugned order shall not be treated as precedent.

Final Conclusion: The Special Leave Petition seeking cancellation of bail was dismissed for want of any allegation or material showing misuse of liberty granted on bail; the Court further directed that the order shall not be treated as a precedent in other matters and disposed of pending applications.

Statutory time limit for refund under Section 102 of the Finance Act, 2016 - applicability of Section 11B of the Central Excise Act to refund claims arising under the Finance Act - retrospective exemption subject to statutory refund period - no authority of revenue or tribunal to extend statutory limitation for refund claims

Statutory time limit for refund under Section 102 of the Finance Act, 2016 - retrospective exemption subject to statutory refund period - no authority of revenue or tribunal to extend statutory limitation for refund claims - Whether the refund claim filed on 23.01.2017 was barred by the six month time limit prescribed under Section 102(3) of the Finance Act, 2016. - HELD THAT: - The Tribunal found that the refund obligation arose pursuant to Section 102 of the Finance Act, 2016 and that the statute prescribes a specific six month period from the date of assent of the Finance Bill (14.05.2016) for filing refund claims. Accordingly the refund should have been filed on or before 14.11.2016. The appellant filed the claim on 23.01.2017, beyond the statutorily prescribed period, and the Tribunal upheld the rejection of the refund on the ground of limitation. The Tribunal relied on the reasoning of the Madras High Court (as affirmed by the Supreme Court) that where the legislature prescribes a time limit for refund of taxes consequent to retrospective exemption, departmental authorities and the Tribunal have no power to enlarge or bypass that statutory limitation; general equitable or judicial limitation doctrines cannot be invoked to override the statutory prescription. Applying these principles, the appeal was rejected as the claim was time barred. [Paras 4, 6, 7]

Refund claim rejected as barred by limitation; impugned order upheld.

Applicability of Section 11B of the Central Excise Act to refund claims arising under the Finance Act - retrospective exemption subject to statutory refund period - Whether the time limit under Section 11B of the Central Excise Act applied so as to render the refund filed on 23.01.2017 maintainable. - HELD THAT: - The appellant contended that Section 11B of the Central Excise Act governed the limitation for refund and thus the claim was not time barred. The Tribunal rejected this contention, holding that the refund claim arose under Section 102 of the Finance Act, 2016 which contains its own specific six month limitation. The existence of a statutory provision in the Finance Act governing refund procedure and period displaces reliance on Section 11B for this claim; the prescribed timeline under the Finance Act is determinative. Consequently, Section 11B was not applicable to extend or alter the limitation applicable to this refund claim. [Paras 3, 4]

Submission that Section 11B applies is rejected; Section 102(3) Finance Act, 2016 governs limitation.

Final Conclusion: The Tribunal upheld the rejection of the refund claim as time barred under Section 102(3) of the Finance Act, 2016 and dismissed the appeal.

Hire Purchase versus Hire Purchase Finance distinction - taxability of financing transactions as Banking and Other Financial Services - characterisation of transaction as loan/finance vis-a -vis hire-purchase - control and ownership test for levy of service tax on hire-purchase

Hire Purchase versus Hire Purchase Finance distinction - taxability of financing transactions as Banking and Other Financial Services - Whether the appellant's transactions are taxable as hire-purchase (liable to service tax) or are hire-purchase finance (not liable to service tax). - HELD THAT: - The Tribunal examined the contractual scheme and held that the customers purchased the goods in their own names and the financier merely provided finance; the agreements do not confer on the customer an option to purchase upon payment of instalments nor impose an obligation to purchase. Relying on the Supreme Court's distinction in Sundaram Finance between hire-purchase (where the hirer has an option to purchase on payment of instalments and the hirer is not obliged to buy) and transactions evidencing a loan with a licence to seize goods, and on this Tribunal's decision in Bajaj Finance which applied that ratio, the Tribunal concluded that the appellant's arrangements are hire-purchase finance (a loan transaction) and not hire-purchase agreements. Consequently, such transactions do not fall within the taxable hire-purchase ambit and are not taxable under the head of Banking and Other Financial Services; the demand, interest and penalty confirmed by the adjudicating authority were therefore unsustainable and set aside. [Paras 9, 10]

The demands of service tax, interest and penalty confirmed in the impugned order are set aside and the appeal is allowed.

Final Conclusion: Applying the Sundaram Finance ratio as followed in Bajaj Finance, the Tribunal held the appellant's financing transactions to be hire-purchase finance (loan transactions) and not taxable hire-purchase services; the impugned demand, interest and penalty were set aside and the appeal allowed.

Limitation under Section 85(3A) of the Finance Act, 1994 - service and dispatch of order - evidence of receipt for computing limitation - condonation of delay in filing appeal - remand for fresh adjudication on merits

Limitation under Section 85(3A) of the Finance Act, 1994 - service and dispatch of order - evidence of receipt for computing limitation - Whether the appeal was filed within the prescribed 60 days period under Section 85(3A) of the Finance Act, 1994. - HELD THAT: - The Tribunal examined the impugned order which upheld rejection of refund claims only on the ground that the appeal was time-barred. The original Order-in-Original bears the signature date of 28.02.2018 but contains no entry against "date of order" or "date of issue" and the departmental records do not show dispatch or postal evidence. The department could not produce any material proving service on a specific earlier date. In those circumstances, and having regard to the appellant's pleaded date of receipt (26.11.2018) together with the principle that limitation is computed from the date of receipt, the Tribunal accepted the appellant's claim of receipt on 26.11.2018. Applying Section 85(3A), the appeal filed on 23.01.2019 fell within 57 days of receipt and thus within the 60-day period. The Tribunal relied on the absence of dispatch/receipt evidence for the department and on the precedent cited by the appellant to accept the claim of delayed receipt. [Paras 1, 4, 6]

The appeal was held to have been filed within the 60-day limitation under Section 85(3A) and therefore not barred by time.

Remand for fresh adjudication on merits - condonation of delay in filing appeal - Whether the matter should be remitted for fresh decision on merits. - HELD THAT: - Having set aside the impugned order insofar as it rejected the appeal as time-barred, the Tribunal observed that the Commissioner (Appeals) had not examined the merits of the refund claims. The Tribunal therefore refrained from deciding merits and directed that the appeal be considered afresh on merits by the Commissioner (Appeals). [Paras 7]

The matter was remitted to the Commissioner (Appeals) for fresh adjudication on the merits of the refund claims.

Final Conclusion: Impugned order set aside insofar as it found the appeal time barred; appeal held within time under Section 85(3A) and the matter remitted to the Commissioner (Appeals) for fresh decision on merits.

Commercial Coaching or Training Services - education as part of a curriculum for obtaining a qualification recognised by law - educational institution exemption - authorised learning centre / study centre in collaboration with a recognised University - MoU-based academic collaboration - res judicata - extended period of limitation not attracted

Commercial Coaching or Training Services - education as part of a curriculum for obtaining a qualification recognised by law - authorised learning centre / study centre in collaboration with a recognised University - MoU-based academic collaboration - res judicata - Appellant's liability to pay Service Tax in respect of courses/training imparted during April 2015 to June 2017 - HELD THAT: - The Tribunal held that the Appellant imparted education/vocational training as part of a predefined curriculum in collaboration with recognised Universities and that the students received degrees/diplomas issued by those Universities. The MoUs and agreements demonstrated academic collaboration, curriculum approval, conduct of examinations by the Universities and issuance of qualifications recognised by law. The facts of the present appeal were found to be squarely covered by this Tribunal's earlier Final Order No.70251-70252/2021 dated 11.11.2021 concerning the Appellant, which had held identical activities to be exempt from service tax. Reliance was also placed on coordinate decisions which treat authorised study/extension centres that impart University-prescribed curriculum and where the University issues the degree as outside the ambit of commercial training or coaching levy. Applying that reasoning, the Tribunal concluded that the Appellant's activities did not fall within the taxable category of Commercial Coaching or Training Services and were therefore not liable to service tax for the period in question. [Paras 15, 16, 17]

Appellant is not liable to service tax for April 2015 to June 2017; the impugned demand is set aside.

Extended period of limitation not attracted - limitation - invocation of extended period - Whether extended period of limitation for service tax demands could be invoked against the Appellant - HELD THAT: - The Tribunal accepted that the Appellant acted under a bona fide belief that its activity was not liable to service tax, maintained proper records, and operated as a charitable organisation with audited accounts and statutory compliances. The demand arose from information supplied by the Appellant and involved interpretation of law rather than mala fide concealment. Applying these considerations and the reasoning in the earlier Tribunal order relied upon, the Tribunal found that the extended period of limitation could not be invoked and the show cause notices invoking extended limitation were invalid. [Paras 16]

Extended period of limitation is not attracted; invocation of extended limitation is improper.

Final Conclusion: The appeal is allowed; the impugned adjudication confirming service tax demand for April 2015 to June 2017 and invocation of extended limitation are set aside, and consequential relief shall follow in accordance with law.

Goods Transport Agency (GTA) service - consignment note - definition of goods transport agency under Section 65(50b) of the Finance Act, 1994 - prospective operation of legislative amendment

Goods Transport Agency (GTA) service - consignment note - definition of goods transport agency under Section 65(50b) of the Finance Act, 1994 - prospective operation of legislative amendment - Liability to pay service tax on GTA services for the period 1.1.2005 to 31.3.2007 where hired transporters did not issue consignment notes. - HELD THAT: - The statutory definition of "goods transport agency" during the relevant period required a person to provide transport-of-goods services and to issue a consignment note. A person who merely arranged or paid for transport by hiring individual vehicles which did not issue consignment notes did not fall within the definition of a goods transport agency for that period. The amendment to the definition cited by the Revenue enlarged the scope of "consignment note" and took effect prospectively (after the relevant period); therefore the amended interpretation cannot be applied retrospectively to attract service tax for the period 1.1.2005 to 31.3.2007. Applying the definition as it stood during the relevant period, tax liability was sustained only in respect of consignments for which consignment notes were issued (which the appellant conceded); the remainder of the demand, based on transport without consignment notes, could not be sustained. [Paras 7, 8]

Demand and penalties sustained only insofar as consignors were issued consignment notes; demand confirmed for those consignments and set aside for transport where no consignment note was issued.

Final Conclusion: Appeal partially allowed: the adjudication is modified to uphold the tax, interest and penalty only in respect of consignments supported by consignment notes; the balance of the demand confirmed against the appellant for transport without consignment notes is set aside.

Classification of goods - excisability - manufacture and marketability - waste, residues and by-products vs. manufactured starch - evidentiary value of laboratory test report - exemption of waste/scrap arising during manufacture of exempted goods - penalty and interest consequences upon setting aside demand

Classification of goods - waste, residues and by-products vs. manufactured starch - Scrap-veg-refuse is not classifiable as potato starch under Chapter Heading 1108 and is to be regarded as vegetable waste under Chapter Heading 2308. - HELD THAT: - The Tribunal found that the determinative question was whether the material cleared as 'scrap-veg-refuse' met the characteristics of potato starch as contemplated by the HSN explanatory notes. The HSN notes describe potato starch as physically in a white powdered form; the material in this case was a wet paste/slurry. The mere presence of starch constituents in a residue does not convert waste into a manufactured excisable product; the Department bears the burden to demonstrate that the material is not residue or waste. The appellant produced literature and an affidavit explaining the distinct process of producing potato starch and showing that no starch-extraction manufacture occurred here. On these facts and legal tests, the Tribunal held that the material retained the character of vegetable waste and was not potato starch. [Paras 6, 7, 11]

Demand upheld by the authorities for classification as potato starch was set aside; the goods are vegetable waste under Chapter 2308.

Excisability - manufacture and marketability - The scrap-veg-refuse is not a manufactured product within the meaning of Section 3(1) of the Central Excise Act, 1944 and thus not exigible to central excise as manufactured goods. - HELD THAT: - Section 3(1) requires that excisable goods must come into existence as a result of a manufacturing process. The Tribunal observed that the material arose from a water-recycling centrifuge used to segregate vegetative residue from wash water for reuse; no process of manufacture to produce starch was undertaken. The residue resulted from reutilisation of water and not from a process intended to manufacture a new excisable product. Applying the statutory test, the Tribunal concluded the residue did not attain the status of a manufactured excisable article. [Paras 8]

The impugned goods are not manufactured goods under Section 3(1) and therefore not excisable on that basis.

Evidentiary value of laboratory test report - The Central Revenue Control Laboratory test report declaring the sample 'positive for starch' is not conclusive to establish that the material is potato starch. - HELD THAT: - The Tribunal noted that the laboratory report only recorded presence of starch but did not analyse or demonstrate the composition or that the material possessed the physical and commercial characteristics of potato starch as required by classification. Given the appellants' explanatory evidence and the limited nature of the test report, the report was insufficient to discharge the burden on the Department to prove that the residue was not waste. [Paras 9]

Laboratory test report was held not to be conclusive evidence to classify the material as potato starch.

Exemption of waste/scrap arising during manufacture of exempted goods - The scrap-veg-refuse falls within the scope of notifications exempting waste/scrap arising during manufacture of exempted goods and therefore is exempt from excise duty for the relevant periods. - HELD THAT: - The Tribunal observed that notifications in force during the relevant periods exempted waste, pairing and scrap arising in the manufacture of exempted final products. Having found that the material was residue arising in the process connected with manufacture of the appellants' exempted products and not a separate manufactured excisable product, the appellants' case falls squarely within the scope of those exemptions and relied precedent. [Paras 10]

Material is covered by the exemption notifications and not liable to excise duty for the relevant periods.

Penalty and interest consequences upon setting aside demand - Once the excise demand is set aside, interest and penalties imposed on the appellants do not survive. - HELD THAT: - The Tribunal held that penalties and interest attached to the demand cannot stand independently when the primary demand is quashed. Accordingly, having set aside the impugned duty demands for all the appeals, the Tribunal found that interest and penalties and extended period invocation no longer subsisted. [Paras 11, 12]

Penalties, interest and consequential consequences were held not to arise and were set aside along with the duty demand.

Final Conclusion: All six appeals were allowed: the material cleared as 'scrap-veg-refuse' was held to be vegetable waste and not potato starch, not a manufactured excisable product, covered by applicable exemption notifications, laboratory evidence held insufficient to establish otherwise, and consequential demands, interest and penalties were set aside.

CENVAT credit on the basis of supplementary invoice - bar to credit where duty was short-paid by reason of fraud, collusion, wilful misstatement or suppression of facts - effect of setting aside supplier's order on liability of recipient

CENVAT credit on the basis of supplementary invoice - bar to credit where duty was short-paid by reason of fraud, collusion, wilful misstatement or suppression of facts - effect of setting aside supplier's order on liability of recipient - Entitlement of the appellant to CENVAT credit taken on the strength of supplementary invoices issued by its supplier NEI, when the supplier's liability for short-paid duty was alleged to arise from fraud, collusion, wilful misstatement or suppression of facts. - HELD THAT: - The appellant availed CENVAT credit on supplementary invoices issued by NEI in terms of Rule 9(1)(b) of the CENVAT Credit Rules, 2004. The departmental case against the appellant rested solely on the contention that NEI had short-paid duty by reason of fraud, collusion, wilful misstatement or suppression of facts, and consequent issuance of supplementary invoices to recover differential duty. The SCN and adverse orders against the appellant were premised on the supplier's alleged misconduct. Subsequently, this Tribunal allowed NEI's appeal and set aside the order and penalty imposed on NEI, thereby negating the finding of short payment on account of fraud, collusion or similar misconduct. Once the foundational finding against the supplier was set aside, the factual and legal basis for denying the appellant's CENVAT credit no longer existed. In these circumstances the impugned order denying credit and imposing penalty on the appellant could not be sustained.

Impugned order set aside; appellant entitled to CENVAT credit on the strength of the supplementary invoices and appeal allowed with consequential benefits.

Final Conclusion: The appeal is allowed and the impugned order denying CENVAT credit and imposing penalty is set aside, since the Tribunal's favourable decision in respect of the supplier removed the basis for the allegations against the appellant.

Interest on delayed refunds under Section 11BB - Relevant date under Section 11B - effect of insertion of clause (ec) - Deeming fiction in the Explanation to Section 11BB and its effect on commencement of interest - Extension of limitation for filing refund claims versus postponement of interest liability

Interest on delayed refunds under Section 11BB - Deeming fiction in the Explanation to Section 11BB and its effect on commencement of interest - Entitlement to interest on delayed refund and the date from which interest is payable under Section 11BB. - HELD THAT: - The Tribunal held that Section 11BB operates to pay interest where a duty ordered to be refunded under Section 11B is not refunded within three months from the date of receipt of the application under Section 11B(1). The Explanation to Section 11BB, which deems an appellate or judicial order to be an order under Section 11B(2), does not postpone or alter the date from which interest becomes payable. The judgment of the Supreme Court in Ranbaxy (and subsequent consistent decisions) was followed to conclude that interest accrues automatically upon expiry of three months from receipt of the refund application; administrative circulars of the Board confirm that Section 11BB applies automatically to refunds sanctioned beyond three months. Applying these principles, the Tribunal found that the appellant was entitled to interest commencing three months after their refund applications. [Paras 8, 9, 11, 12, 13]

Appellant entitled to interest under Section 11BB from three months after the date of receipt of the refund applications.

Relevant date under Section 11B - effect of insertion of clause (ec) - Extension of limitation for filing refund claims versus postponement of interest liability - Effect of Explanation (ec) to Section 11B on the calculation of interest under Section 11BB. - HELD THAT: - The Tribunal rejected the lower authority's view that insertion of clause (ec) (which makes the 'relevant date' the date of a judgment, decree, order or direction where refund becomes payable as a consequence of such decision) alters the date from which interest under Section 11BB is to be calculated. Clause (ec) was held to operate only for extending the limitation period for filing refund claims and not to change the statutory mandate in Section 11BB that interest runs from the expiry of three months from the date of receipt of the application. A harmonious reading of Sections 11B and 11BB shows clause (ec) affects the 'relevant date' for limitation, not the commencement date for interest liability. [Paras 5, 6, 7, 8]

Clause (ec) to the Explanation of Section 11B extends the period for filing refund claims but does not postpone or affect the commencement of interest under Section 11BB.

Final Conclusion: The Tribunal set aside the impugned order, allowed the appeal and directed payment of interest to the appellant from three months after the dates of their refund applications at the rates prescribed by the government, with consequential relief as per law.

Maintainability of single complaint for multiple cheques - Single consolidated demand notice under Section 138 - Common transaction / same cause of action - Joint trial under Section 219 Cr.P.C. - Preventing vexatious multiple complaints (Damodar S. Prabhu principle) - Cognizance and restoration of complaint

Maintainability of single complaint for multiple cheques - Single consolidated demand notice under Section 138 - Common transaction / same cause of action - Joint trial under Section 219 Cr.P.C. - Preventing vexatious multiple complaints (Damodar S. Prabhu principle) - Single complaint is maintainable where multiple cheques arise out of the same cause of action and a common demand notice has been issued. - HELD THAT: - The court considered authorities including Damodar S. Prabhu v. Syed Babalal and several High Court decisions and concluded that where multiple cheques are issued in respect of the same transaction (here cheques issued by husband and wife to discharge the same legally enforceable liability) and a common demand notice has been given, the offences arise from a single criminal act of omission after expiry of the notice period and may be the subject of a single complaint. The court accepted that the disciplinary principle in Damodar S. Prabhu - requiring disclosure to prevent filing of multiple complaints in different forums - supports allowing a consolidated complaint in such circumstances and that Section 219 Cr.P.C. permits joint trial when offences are of the same kind arising from the same cause. Having regard to these principles and the factual finding that the cheques related to the same cause of action and common notice was issued, the dismissal of the consolidated complaint as not maintainable was erroneous. The court therefore set aside the trial court's order and directed restoration of the complaint for cognizance and proceedings in accordance with law. [Paras 6, 13]

The trial court's order dismissing the complaint as not maintainable is set aside; the consolidated complaint is restored and the Magistrate is directed to take cognizance and proceed in accordance with law.

Final Conclusion: Criminal petition allowed; impugned order dated 20.04.2023 dismissing the complaint is set aside and the complaint is restored for cognizance and further proceeding.