TaxTMI Updates e-Newsletter
Feb 27,2023

Intimation in Part A and response in Part B of FORM GST DRC-01A - right to prior intimation before issuance of notice under Section 73 - opportunity of being heard / principles of natural justice - quashing of ex-parte assessment cum demand order and remand for fresh consideration

Intimation in Part A and response in Part B of FORM GST DRC-01A - right to prior intimation before issuance of notice under Section 73 - opportunity of being heard / principles of natural justice - Whether the petitioner was entitled to receive and respond to the intimation in FORM GST DRC-01A before or so as to have an effective opportunity of being heard in proceedings under Section 73. - HELD THAT: - The Court examined sub rules (1A) and (2A) of Rule 142 and held that the scheme contemplates communication of details in Part A of FORM GST DRC-01A to the person chargeable with tax so that he may make submissions in Part B prior to the notice under Section 73. Where the intimation and the show cause notice are uploaded together, the taxpayer is deprived of the valuable right to file submissions in Part B within the time specified in the intimation, thereby impairing the opportunity of being heard. In the present case the intimation and the Section 73(1) notice were uploaded simultaneously; the intimation allowed filing of submissions by a specified earlier date while the notice prescribed a different timeline, resulting in denial of the intended procedural opportunity to the petitioner. The State conceded that a reasonable opportunity was not provided. [Paras 5, 6, 7]

Petitioner was denied the procedural right to file submissions under Part B of FORM GST DRC-01A and thereby deprived of an effective opportunity of being heard; the defect vitiated the impugned proceedings.

Quashing of ex-parte assessment cum demand order and remand for fresh consideration - What remedial relief should follow from the denial of opportunity and defective issuance of the notice and intimation. - HELD THAT: - Having found that the petitioner was not given reasonable opportunity as contemplated by the Rules and the principles of natural justice, the Court exercised its power to quash the impugned assessment cum demand order dated 28.06.2022. The matter was remanded to the Competent Authority for fresh consideration, subject to a direction allowing the petitioner to file his reply to the intimation in FORM GST DRC-01A within a stipulated time. The Competent Authority is required to consider any reply filed within that period within a fixed timeframe and is at liberty thereafter to issue a fresh show cause notice under Section 73(1) if necessary. If the petitioner fails to submit his reply within the stipulated time, the GST authorities may proceed as per law. [Paras 8, 9]

Impugned order quashed; matter remanded to Competent Authority with directions permitting petitioner to file reply to FORM GST DRC-01A within two weeks and for the Authority to consider it within two weeks thereafter, with liberty to issue fresh proceedings if justified.

Final Conclusion: Writ petition allowed; impugned assessment cum demand order quashed and matter remanded for fresh consideration with directions to afford the petitioner the opportunity to file submissions in FORM GST DRC-01A within the prescribed period and for the Competent Authority to decide expeditiously thereafter.

Implementation of appellate order - refund claim under Section 54(3)(ii) of the Central Goods and Services Tax Act, 2017 - effect of review under Section 112(3) of the Central Goods and Services Tax Act, 2017 - absence of stay on the order pending appeal - obligation to process refund pending constitution of appellate tribunal

Implementation of appellate order - refund claim under Section 54(3)(ii) of the Central Goods and Services Tax Act, 2017 - obligation to process refund pending constitution of appellate tribunal - Respondent's duty to process and implement the Appellate Authority's order allowing the refund claim notwithstanding the respondent's intention to file an appeal and the non-constitution of the appellate tribunal. - HELD THAT: - The Appellate Authority had allowed the petitioner's appeal by order dated 08.10.2020. The respondent thereafter did not process the petitioner's refund application filed pursuant to that order. The Court observed that no order had been passed which operated as a stay on the Appellate Authority's order and that mere intention to file an appeal, or a directive by a superior officer to file an appeal, does not permit the respondent to ignore or withhold compliance with the appellate order. The absence of a constituted tribunal does not absolve the respondent from its duty to implement the appellate order; where an appellate order stands un-stayed, the authority must forthwith process the refund. The Court accordingly directed immediate processing of the refund claim while preserving the respondent's right to pursue any appropriate remedy thereafter. [Paras 16, 17, 18]

The respondents are directed to forthwith process and implement the Appellate Authority's order and disburse the refund claimed by the petitioner, subject to any future lawful remedy available to the respondents.

Effect of review under Section 112(3) of the Central Goods and Services Tax Act, 2017 - absence of stay on the order pending appeal - Legal effect of the Principal Commissioner's review under Section 112(3) and whether such review operates as a stay of the Appellate Authority's order. - HELD THAT: - Section 112(3) permits the Commissioner to call for and examine the record of an order passed by an appellate or revisional authority and to direct subordinate officers to apply to the appellate tribunal. The Court interpreted the review order as being confined to directing the filing of an appeal and not as an order which stays or suspends the operative effect of the appellate order. Consequently, the review cannot be treated as substituting for a stay; in the absence of a formal stay, the appellate order remains binding on the respondents until set aside by a competent authority. [Paras 12, 13]

A review under Section 112(3) directing filing of an appeal does not operate as a stay of the Appellate Authority's order; the Appellate Authority's order remains operative unless and until stayed or set aside by a competent forum.

Final Conclusion: The writ petition is allowed: the respondents are directed to immediately process the petitioner's refund claim arising from the Appellate Authority's order dated 08.10.2020; this direction is without prejudice to the respondents' right to pursue appellate or other remedies in law and, if successful, to recover any amounts lawfully recoverable.

Classification under tariff heading 2106 - Interpretation of explanatory note 5(b) to heading 2106 - Applicability of GST at 18% under Schedule III, entry No. 23

Classification under tariff heading 2106 - Interpretation of explanatory note 5(b) to heading 2106 - Applicability of GST at 18% under Schedule III, entry No. 23 - Whether the frozen ready-to-eat, ready-to-cook, processed and semi-processed food products manufactured and supplied in bulk institutional packs by the applicant are classifiable under tariff heading 2106 and taxable at 18% under Schedule III entry No. 23. - HELD THAT: - The Authority examined the product descriptions against the rules of interpretation applicable to the First Schedule to the Customs Tariff Act and the Harmonised Commodity Description and Coding explanatory notes. Explanatory note 5(b) to heading 2106 covers "preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk or other liquids), for human consumption." The applicant's frozen RTE/RTC/processed/semi-processed products are pre-cleaned, precooked or prepared but require further processing such as thawing, heating, cooking, reportioning or repacking before human consumption. These characteristics bring the products within the scope of heading 2106 as preparations for use after processing. Consequently, the products fall under tariff heading 2106 and are exigible to GST as per the entry dealing with ready-to-eat packaged food in Schedule III of Notification No. 1/2017-Central Tax (Rate). [Paras 13, 14, 15]

The applicant's frozen RTE/RTC/processed and semi-processed food products are classifiable under tariff heading 2106 and are taxable at 18% (CGST 9% and SGST 9%) under Schedule III, entry No. 23 of Notification No. 1/2017-Central Tax (Rate).

Final Conclusion: Advance ruling: the frozen ready-to-eat, ready-to-cook, processed and semi-processed food products manufactured and supplied by the applicant are covered by heading 2106 and attract GST at 18% (CGST 9% + SGST 9%) under Schedule III, entry No. 23 of Notification No. 1/2017-Central Tax (Rate).

Penalty under Section 271AAB where search has been initiated - Definition of undisclosed income for specified previous year - Non-obstante clause excluding applicability of Section 271(1)(c) - Search under Section 132 initiating special penalty regime - Irrelevance of discovery of incriminating documents to applicability of Section 271AAB

Penalty under Section 271AAB where search has been initiated - Non-obstante clause excluding applicability of Section 271(1)(c) - Definition of undisclosed income for specified previous year - Penalty could not be validly imposed under Section 271(1)(c) where search under Section 132 was initiated after 01.07.2012 and the matter fell within the scope of Section 271AAB. - HELD THAT: - The Court held that Section 271AAB, commencing with a non-obstante clause, governs cases where search under Section 132(1) was initiated on or after 1 July 2012. The provision prescribes penalty calculated on the 'undisclosed income' of the specified previous year and expressly excludes imposition of penalty under clause (c) of Section 271(1) in respect of such undisclosed income. In the present case the search was on 03.09.2014 (after 01.07.2012), the return for the relevant year fell within the 'specified previous year' concept, and the respondent neither admitted income under Section 132(4) nor paid tax such that the matter fell within the residual limb of Section 271AAB(1)(c). Consequently the Assessing Officer should have invoked Section 271AAB(1)(c) rather than Section 271(1)(c). The presence or absence of incriminating documents found in the search was held immaterial to this conclusion because the statutory scheme mandates application of Section 271AAB once the search-trigger and temporal conditions are satisfied. [Paras 8]

The penalty levied under Section 271(1)(c) was unsustainable and proceedings/penalty should have been under Section 271AAB.

Search under Section 132 initiating special penalty regime - Irrelevance of discovery of incriminating documents to applicability of Section 271AAB - The Tribunal's and CIT(A)'s orders sustaining that Section 271AAB applies (and not Section 271(1)(c)) are legally correct and not liable to be set aside as perverse. - HELD THAT: - On review of the orders below, the High Court found that the CIT(A) had correctly examined initiation of penalty under Section 271AAB and that the ITAT rightly sustained that conclusion. The court rejected the Revenue's contention that absence of incriminating material precluded application of Section 271AAB, reiterating that once the statutory conditions for Section 271AAB are met (search date and specified previous year), the special penalty regime applies irrespective of whether books or documents revealing undisclosed income were found during search. Accordingly, the appellate orders upholding invocation of Section 271AAB were held to be lawful and not perverse. [Paras 9, 10]

The impugned orders of the CIT(A) and ITAT sustaining application of Section 271AAB are upheld; the Revenue's appeal is dismissed.

Final Conclusion: The appeals are dismissed. Where search under Section 132(1) took place after 1 July 2012 (as in A.Y. 2014-15), penalty proceedings must be under Section 271AAB and not under Section 271(1)(c); the orders of the CIT(A) and ITAT so holding are sustained.

Deemed service by appearance under Section 292BB - service of notice at last-known address - service of notice through Superintendent of jail - strict interpretation of taxing statutes - precedential applicability where assessee is in judicial custody

Deemed service by appearance under Section 292BB - service of notice at last-known address - service of notice through Superintendent of jail - strict interpretation of taxing statutes - Whether the mere appearance of a staff member of the assessee before the PCIT, after notice was sent to the last-known address by Speed Post and while the assessee was in judicial custody, can be treated as appearance of the assessee and thereby deem the notice to have been duly served under Section 292BB. - HELD THAT: - The provision now embodied in Section 292BB admits of strict construction in a taxing statute and speaks of appearance by the assessee himself; it does not, by its language, treat the appearance of an unauthorised person as equivalent to the appearance of the assessee. Factually, the person who appeared was a staff member and not an authorised representative; the authority had knowledge that the assessee was in judicial custody. Once informed of the assessee's judicial custody, the appropriate and bare minimum step required of the income-tax authority was to direct service of the notice upon the assessee through the Superintendent of the jail. The PCIT's failure to cause such service meant that the mere appearance of the staff member could not be equated with appearance of the assessee so as to invoke the deeming fiction of service under Section 292BB. Accordingly, in the factual matrix before the Court, service by Speed Post at the last-known address and the subsequent appearance of an employee did not amount to valid service on the assessee while he was in custody. [Paras 6, 7, 8, 9]

The appearance of the staff member did not amount to appearance of the assessee and did not cure want of service; where the assessee was in judicial custody, notice should have been served through the Superintendent of the jail.

Precedential applicability where assessee is in judicial custody - Whether the decisions relied upon by the Department (Madhsy Films and Privilege Investment) justify treating the notice as validly served in the present facts. - HELD THAT: - The cited decisions did not involve a situation where the assessee was in judicial custody and did not confront the question whether knowledge of custody imposes a duty to effect service through jail authorities. In Madhsy Films the question related to service by registered post at the address available with the Department and there was a presumption of proper posting; Privilege Investment likewise did not involve custody. Consequently, those decisions are factually distinguishable and do not support the Department's contention that service was proper in the present case. [Paras 10, 11]

The precedents relied upon are distinguishable and do not support the Revenue's plea that service was valid in the circumstances of this case.

Final Conclusion: The appeal is dismissed; the ITAT's order allowing the assessee's appeals in respect of the stated assessment years is upheld, since service was not duly effected while the assessee was in judicial custody and the deeming provision could not be invoked in the facts of this case, and no substantial question of law arises.

Principle of natural justice - opportunity of hearing - notice under Section 148A(b) - speaking order - remand for fresh consideration

Principle of natural justice - opportunity of hearing - notice under Section 148A(b) - speaking order - Whether the impugned order dated 29th July, 2022 and subsequent notices are vitiated for failure to consider the objection to the notice under Section 148A(b) and for denial of an opportunity of hearing in breach of the principle of natural justice. - HELD THAT: - The Court, without adjudicating the merits of the assessment, accepted the petitioner's allegation that the Assessing Officer passed the impugned order and issued subsequent notices without considering the petitioner's objection to the notice under Section 148A(b) and without affording the petitioner an opportunity of hearing. The respondent was unable to contradict these specific allegations. In these circumstances the Court found a procedural infirmity amounting to violation of the principle of natural justice which warranted setting aside the impugned order and subsequent notices and directing a fresh decision after hearing.

Impugned order dated 29th July, 2022 and all subsequent notices set aside; matter remanded to the Assessing Officer to pass a fresh speaking order in accordance with law after giving the petitioner or authorised representative an opportunity of hearing within eight weeks from communication of this order.

Final Conclusion: Writ petition disposed by setting aside the impugned order dated 29th July, 2022 and subsequent notices for breach of natural justice; direction issued for the Assessing Officer to pass a fresh speaking order after affording hearing within eight weeks.

Deduction under section 80-IA(4)(iii) - Industrial Park Scheme, 2002 compliance - Restriction on leasing more than 50 per cent of allocable area - Role of Central Board of Direct Taxes notification under rule 18C(4) - Effect of Ministry of Commerce approval vis-a -vis CBDT notification

Deduction under section 80-IA(4)(iii) - Industrial Park Scheme, 2002 compliance - Assessee entitled to deduction under section 80-IA(4)(iii) as held by the Tribunal - HELD THAT: - The Court accepted the Tribunal's conclusion permitting the assessee's claim for deduction. The Assessing Officer's disallowance was founded on an assertion of non-compliance with the Industrial Park Scheme, 2002 and the approval conditions, but the Tribunal (followed by this Court) relied upon earlier orders in the assessee's own case and the remand report which established that the conditions necessary for the claim were satisfied. The solitary factual ground urged by Revenue therefore failed and the Tribunal's order allowing the assessee's appeal was upheld. [Paras 3, 6, 7]

Tribunal's allowance of the deduction under section 80-IA(4)(iii) affirmed; appeal dismissed on this ground.

Restriction on leasing more than 50 per cent of allocable area - Industrial Park Scheme, 2002 compliance - Finding that the assessee had leased out more than 50 per cent of allocable area in favour of a single lessee was incorrect - HELD THAT: - Revenue's contention that more than 50% of the allocable area was leased to a single tax entity (M/s. IBM Daksh) was negatived on the basis of the remand report called for by the Tribunal and submitted by the Assessing Officer. The remand report recorded that the assessee had not leased out more than 50% of the total area to any one lessee; the Tribunal relied on that factual finding and allowed the appeals for the earlier assessment years, which this Court found to be cogently reasoned and followed in the present appeal. [Paras 5, 6]

The alleged violation of the 50% leasing limit was found to be factually incorrect and did not defeat the assessee's entitlement to deduction.

Role of Central Board of Direct Taxes notification under rule 18C(4) - Effect of Ministry of Commerce approval vis-a -vis CBDT notification - Imposition of additional terms by CBDT notification and the absence of the CBDT approval letter did not sustain the Revenue's challenge - HELD THAT: - Revenue argued that the CBDT notification issued on February 21, 2012 imposed additional conditions and could not be treated as a mere formality following Ministry of Commerce approval, and that the assessee's failure to produce the CBDT approval letter was fatal. The Court, however, rejected the Revenue's solitary contention as insufficient to overturn the Tribunal's factual findings and established orders in the assessee's favour. The Court did not disturb the Tribunal's approach that, on the material before it (including prior ITAT findings and the remand report), the notification and the alleged absence of a CBDT approval letter did not preclude allowance of the deduction. [Paras 1, 4, 6]

Revenue's contentions regarding the CBDT notification and absence of its approval letter were not accepted; they did not prevent allowance of the deduction.

Final Conclusion: The Revenue's appeal is dismissed. The questions of law framed are answered in favour of the assessee and against the Revenue, with the Tribunal's allowance of the deduction under section 80-IA(4)(iii) affirmed on the facts and findings recorded.

Accumulation under section 11(2) - furnishing of Form No.10 during reassessment proceedings - reopening of assessment under section 147/148 and treatment of return filed in response as return under section 139 - requirement of particulars for exclusion of income under section 11

Furnishing of Form No.10 during reassessment proceedings - accumulation under section 11(2) - requirement of particulars for exclusion of income under section 11 - Allowability of claim to accumulate income under section 11(2) where the income was offered and Form No.10 filed during reassessment proceedings initiated under section 148 - HELD THAT: - The Tribunal upheld the Commissioner (Appeals) finding that the amount of Rs.5,85,00,000/- was offered as income in the return filed in response to the notice under section 148 and that Form No.10 was furnished during the reassessment proceedings. Applying the reasoning in Nagpur Hotels Owners Association and the decision of the Hon'ble Delhi High Court in Association of Corporation and Apex Societies Handlooms v. ADIT, the Tribunal accepted that while an assessee cannot seek reopening for the purpose of filing Form No.10 after completion of original assessment, where the revenue itself reopens the assessment under section 147/148 the assessee is not remediless and may furnish Form No.10 during the reassessment. The Tribunal noted there was no finding by the Assessing Officer that the statutory conditions for accumulation under section 11(2) were not satisfied. Respectfully following the cited precedent, the Assessing Officer was directed to compute income after allowing accumulation under section 11(2). [Paras 8, 9]

Claim to accumulate the income under section 11(2) was allowed as Form No.10 was furnished during reassessment and there was no finding that conditions for accumulation were unmet; revenue appeal dismissed on this ground.

Final Conclusion: Revenue's appeal is dismissed; the assessment is to be recomputed by the Assessing Officer allowing accumulation under section 11(2) since the income was offered and Form No.10 was filed during reassessment and no adverse finding was recorded on satisfaction of statutory conditions.

Deduction under section 80P(2)(d) - Interest income from investments with co-operative banks - Definition of "co-operative society" under section 2(19) - Revisional jurisdiction under section 263 - Precedential effect of coordinate-bench and High Court decisions in case of conflicting non jurisdictional High Court precedents

Deduction under section 80P(2)(d) - Interest income from investments with co-operative banks - Definition of "co-operative society" under section 2(19) - Precedential effect of coordinate-bench and High Court decisions in case of conflicting non jurisdictional High Court precedents - Claim for deduction under section 80P(2)(d) in respect of interest earned by a co-operative housing society from deposits/investments with co-operative banks - HELD THAT: - The Tribunal held that interest earned by the assessee co-operative society on deposits with co-operative banks qualifies for deduction under section 80P(2)(d) because a co-operative bank remains a "co-operative society" within the meaning of section 2(19), and therefore interest derived from investments with such an entity falls within the scope of Sec.80P(2)(d). The Tribunal distinguished the reliance placed on the Supreme Court decision in Totgars (which dealt with a different sub clause) and followed coordinate bench and High Court decisions (including decisions of the Karnataka and Gujarat High Courts) holding that interest on investments with co operative banks is eligible for the deduction. The Tribunal noted that the Assessing Officer had taken a possible view in favour of the assessee at the time of assessment and that the revisional exercise under section 263 was not justified to dislodge that view; accordingly the conclusion of the lower authorities denying the deduction was erroneous and was set aside. The Tribunal therefore directed the Assessing Officer to allow the claimed deduction for the years in question. [Paras 6, 8, 9, 10, 11]

Deduction under section 80P(2)(d) allowed in respect of the interest income from deposits with co-operative banks for A.Y. 2014-15 and A.Y. 2015-16; the CIT(A)'s denial set aside and AO directed to allow the claim.

Final Conclusion: Both appeals are allowed; the Tribunal directs that the deductions under section 80P(2)(d) claimed by the assessee in A.Y. 2014-15 and A.Y. 2015-16 in respect of interest from co-operative banks be allowed by the Assessing Officer.

Deduction under section 80P(2)(d) for interest earned by a co-operative society on deposits with a co-operative bank - Scope and meaning of "co-operative society" for section 80P(2)(d) - Effect of insertion of sub section (4) to section 80P (Finance Act, 2006) on claims under section 80P(2)(d) - Exercise of revisional jurisdiction under section 263 where the Assessing Officer had taken a possible view - Rule for resolving conflicting High Court decisions in favour of the assessee within the jurisdiction

Deduction under section 80P(2)(d) for interest earned by a co-operative society on deposits with a co-operative bank - Scope and meaning of "co-operative society" for section 80P(2)(d) - Effect of insertion of sub section (4) to section 80P (Finance Act, 2006) on claims under section 80P(2)(d) - Assessee entitled to deduction under section 80P(2)(d) in respect of interest income earned from investments/deposits with a co operative bank. - HELD THAT: - The Tribunal held that the statutory requirement for deduction under section 80P(2)(d) is that the interest be derived by a co operative society from investments with any other co operative society. A co operative bank, being a co operative society registered under the relevant Co operative Societies enactment, falls within that description. Although sub section (4) was inserted by the Finance Act, 2006 excluding certain co operative banks from section 80P generally, that amendment does not deprive an assessee co operative society of the benefit of section 80P(2)(d) where the interest is derived from investments with a co operative bank which is a co operative society. The Tribunal relied on precedent of coordinate benches and on decisions of the High Courts of Karnataka and Gujarat holding in favour of such deduction, distinguished the Supreme Court decision in Totgars (which dealt with a different clause), and applied the principle that where non jurisdictional High Court decisions conflict, the view favourable to the assessee is to be preferred. On these bases the denial of the deduction was held to be unsustainable and the deduction ordered to be allowed. [Paras 6, 7, 8, 9, 10]

Deduction under section 80P(2)(d) allowed in respect of interest income from deposits with the co operative bank.

Exercise of revisional jurisdiction under section 263 where the Assessing Officer had taken a possible view - Pr. CIT's exercise of revisional jurisdiction under section 263 to dislodge the Assessing Officer's view was unjustified and was set aside. - HELD THAT: - The Tribunal observed that the Assessing Officer had taken a possible view in framing the assessment-namely, allowing the claim under section 80P(2)(d)-which was supported by orders of the jurisdictional Tribunal. In those circumstances the Pr. CIT was not justified in invoking section 263 to revise the assessment as being erroneous and prejudicial to the revenue. The revisional order was therefore quashed and the AO's order restored. [Paras 9]

Order passed by the Pr. CIT under section 263 set aside; order of the AO restored.

Final Conclusion: Appeal allowed: the assessee's deduction under section 80P(2)(d) in respect of interest from deposits with a co operative bank is upheld for AY 2020 21, and the revisional order under section 263 dislodging the Assessing Officer's view is set aside.

Admission of additional ground of appeal - Application of section 50C to transfer of leasehold/tenancy rights vis-a -vis ownership of land - Reopening of assessment under section 147 justified where income has escaped assessment - Remand for fresh adjudication after failure to comply with notices and in interest of natural justice - Imposition of costs for non-compliance/non-appearance

Admission of additional ground of appeal - Additional ground raising inapplicability of section 50C was admitted for adjudication by the Tribunal. - HELD THAT: - The Tribunal examined whether the plea that section 50C was wrongly applied by the AO and confirmed by the CIT(A) constituted a fresh ground. Noting that the contention arose from the impugned orders of the AO and the CIT(A) and was not newly fabricated at the Tribunal stage, the Tribunal found it to be an existing issue in the proceedings. Reliance on NTPC v. CIT was noted in support of admission where a ground arises from the orders under challenge. Having considered the parties' submissions, the Tribunal exercised its discretion to admit the additional ground for determination on merits. [Paras 2, 3, 4]

The additional ground seeking to challenge application of section 50C is admitted for adjudication.

Application of section 50C to transfer of leasehold/tenancy rights vis-a -vis ownership of land - Reopening of assessment under section 147 justified where income has escaped assessment - Remand for fresh adjudication after failure to comply with notices and in interest of natural justice - Imposition of costs for non-compliance/non-appearance - Whether the addition under section 50C was correctly made and whether the assessment and appeals should be reconsidered in view of the assessee's non-compliance. - HELD THAT: - The Tribunal observed that the CIT(A) had dismissed the assessee's appeal on the basis of repeated non-compliance with notices and failure to furnish submissions, and that the AO had applied section 50C in computing capital gains. While noting the assessee's contention that section 50C applies only to transfer of ownership of land/building and not to transfer of mere rights (leasehold/tenancy), the Tribunal refrained from deciding the substantive dispute on merits. Considering the appellant's persistent non-appearance and the principles of natural justice, the Tribunal nevertheless restored the file to the CIT(A) for fresh adjudication after affording the assessee an opportunity to be heard. As a consequence of the assessee's negligent conduct, the Tribunal directed payment of a cost of Rs. 2,000 to the Prime Minister's Care Fund, to be evidenced before reconsideration. [Paras 5, 7]

Matter is restored to the CIT(A) for fresh adjudication on merits (including the question of applicability of section 50C), after giving the assessee opportunity to be heard; cost of Rs. 2,000 to be deposited and proof produced.

Remand for fresh adjudication after failure to comply with notices and in interest of natural justice - Effect of restoration on other grounds of appeal. - HELD THAT: - Having remanded the matter to the CIT(A) for fresh consideration, the Tribunal observed that the other grounds raised by the assessee no longer required separate adjudication by the Tribunal at this stage because the primary issues would be reconsidered afresh by the CIT(A). Accordingly, those grounds were treated as infructuous pending the outcome of the remand proceedings. [Paras 8]

Other grounds are rendered infructuous for the present and need not be adjudicated by the Tribunal.

Final Conclusion: The Tribunal admitted the additional ground challenging application of section 50C, restored the issue to the CIT(A) for fresh adjudication after affording the assessee an opportunity to be heard, imposed a cost of Rs. 2,000 payable to the Prime Minister's Care Fund for non-compliance, and held the remaining grounds infructuous pending the remand; appeal is partly allowed for statistical purposes.

Right to depreciation - condonation of delay - intimation under section 143(1) - restoration to appellate authority for reconsideration - principles of natural justice

Condonation of delay - intimation under section 143(1) - principles of natural justice - Whether the orders of Ld. CIT(A) dismissing the appeals for delay were to be sustained or required reconsideration - HELD THAT: - The Tribunal found that the Assessing Officer's intimation under section 143(1) had been the subject of repeated correspondence from the assessee seeking rectification, which precludes a clear inference that the intimation was never received. Notwithstanding that factual thread, and having regard to the totality of facts and the requirements of natural justice, the Tribunal set aside the impugned orders which had dismissed the appeals for delay and restored the matter to the file of Ld. CIT(A) for fresh consideration of the question of delay/condonation. The assessee was granted liberty to file a proper application seeking condonation of delay and Ld. CIT(A) was directed to decide the issue in accordance with law. [Paras 9]

Impugned orders dismissed for delay set aside and matter restored to Ld. CIT(A) to reconsider delay/condonation in accordance with law; assessee permitted to file condonation application.

Right to depreciation - restoration to appellate authority for reconsideration - Whether the substantive claim for depreciation was to be adjudicated by the Tribunal or re-examined by the lower authority - HELD THAT: - The Tribunal did not decide the substantive entitlement to depreciation on merits. Instead, because the procedural question of delay and receipt of intimation required fresh consideration and in view of the assessee's ongoing rectification efforts under section 154, the Tribunal restored the matter to Ld. CIT(A) to re-consider the appeals. The Tribunal's order leaves open adjudication of the depreciation claim by the appellate authority after appropriate procedural determination (including any condonation application) in accordance with law. [Paras 9, 10, 20]

Substantive issue of depreciation not adjudicated; appeals restored to Ld. CIT(A) for fresh consideration after procedural issues are resolved.

Final Conclusion: The Tribunal set aside the CIT(A)'s orders dismissing the appeals for delay and restored the matters to the CIT(A) for reconsideration of delay/condonation (assessee permitted to file condonation application); the substantive claim for depreciation was not decided and remains to be considered by the lower authority in accordance with law. All four appeals are allowed for statistical purposes.

Principles of natural justice - Faceless appeal proceedings and opportunity to be heard - Rectification under Section 154 - Deduction under Sections 11 to 13 for application of income and filing of Form 10B - Condonation of delay in filing Form 10B

Principles of natural justice - Faceless appeal proceedings and opportunity to be heard - Whether the CIT(A) erred in deciding the appeal ex parte without giving the assessee an opportunity of being heard. - HELD THAT: - The Tribunal observed from the appellate record and the appellant's grounds that the CIT(A) determined the appeal under the faceless scheme without affording the assessee an opportunity to explain its case. Adherence to Principles of natural justice requires that even under faceless procedures the assessee must be given a proper opportunity to present submissions and have those submissions evaluated on merits. The Tribunal found that no such opportunity was provided before dismissing the appeal, resulting in the assessee being condemned unheard. Given this breach, the appellate order could not stand and required setting aside to enable fresh adjudication after hearing the assessee in accordance with law and faceless scheme guidelines. [Paras 6]

Appellate order of the CIT(A) set aside for breach of natural justice; matter restored to the file of the CIT(A) for fresh adjudication after giving the assessee an opportunity to be heard.

Deduction under Sections 11 to 13 for application of income and filing of Form 10B - Rectification under Section 154 - Condonation of delay in filing Form 10B - Whether the denial of deduction under Sections 11 to 13 by the AO/CPC on the ground that the audit report (Form 10B) was not e filed along with or before the return was sustainable (and related relief by way of condonation). - HELD THAT: - The order below disallowed the claim of exemption under Sections 11 to 13 on the basis that Form 10B was not e filed along with or before filing of the return as required by Section 12A(1)(b) read with the proviso to Rule 12(2), and the rectification under Section 154 upheld that position. The CIT(A) also noted Board circulars delegating condonation powers for delayed filing of Form 10B for AY 2018-19 and indicated that the assessee may approach the appropriate authority for condonation where applicable. The Tribunal, however, did not express any opinion on the merits of the disallowance or on whether condonation should be granted; those factual and legal questions remain open for fresh consideration by the CIT(A) after affording the assessee an opportunity to be heard. [Paras 5, 6, 7]

The substantive question of entitlement to deduction under Sections 11 to 13 and any claim for condonation of delayed filing of Form 10B is remanded to the CIT(A) for fresh adjudication on merits after giving the assessee an opportunity to present its case; no decision on merits was recorded by the Tribunal.

Final Conclusion: The Tribunal allowed the appeal for statistical purposes, set aside the ex parte appellate order of the CIT(A) for breach of natural justice, and restored the matter to the CIT(A) for fresh adjudication on merits (including the question of disallowance under Sections 11-13 and any condonation request for delayed Form 10B) after giving the assessee an opportunity to be heard.

Force of attraction rule - taxability of business profits under Article 7 of the DTAA - apportionment in composite/turnkey contracts - distinction between business connection and permanent establishment - attribution of profits to a permanent establishment - taxability of interest income where Form 26AS records receipt

Force of attraction rule - apportionment in composite/turnkey contracts - taxability of business profits under Article 7 of the DTAA - distinction between business connection and permanent establishment - attribution of profits to a permanent establishment - Taxability in India of profits from offshore supply of equipment and whether profit could be attributed to the assessee's PE in India - HELD THAT: - The Tribunal held that the Force of Attraction rule does not automatically render offshore supplies taxable in India where the permanent establishment in India was not involved in the activity giving rise to the profits. Applying the decisions of the Hon'ble Supreme Court in Hyundai Heavy Industries and Ishikawajima Harima, the Bench observed that where a composite/turnkey contract comprises severable parts and the offshore supply and onshore installation/maintenance are distinct, the principle of apportionment governs territorial taxing rights. Facts showed the turnkey contract was bifurcated and separate payments were made for offshore supply and for installation/commissioning/AMC, and the offshore transfer of title and contractual conclusion took place outside India. Accordingly, only such part of income attributable to operations carried out in India can be taxed in India and profits from the offshore supply, not attributable to activities of the PE, could not be taxed. On these grounds the Tribunal set aside the attribution/addition made by the Assessing Officer in respect of offshore supply of equipment and directed deletion of the impugned addition. [Paras 19, 21, 22, 23, 24]

Addition attributing profit to the PE in respect of offshore supply of equipment deleted; grievance allowed.

Taxability of interest income where Form 26AS records receipt - Validity of addition of interest income on fixed deposits shown in Form 26AS but not fully declared by the assessee - HELD THAT: - The Tribunal rejected the assessee's contention that misplaced fixed deposit receipts meant no interest was earned. The presence of entries in Form 26AS and credit of interest by the bank, with TDS, established receipt of interest. The Tribunal held that even if fixed deposits were misplaced, the assessee could obtain duplicate certificates from the bank; the Assessing Officer's addition was therefore justified and correctly made. [Paras 10, 25, 26, 27]

Addition of interest income upheld.

Final Conclusion: The appeal is partly allowed: the Tribunal deleted the addition attributing profit to the PE in respect of offshore supply of equipment (in favour of the assessee) but upheld the addition of interest income shown in Form 26AS; appeal partly allowed.

No deduction under Chapter VI-A unless return furnished on or before the due date specified under section 139(1) (effect of section 80AC) - prima facie adjustment under section 143(1)(a)(v) for denial of Chapter VI-A deduction where return furnished beyond due date - incorrect claim apparent from the return for the purposes of section 143(1)(a)(ii) - belated return filed under section 139(4)

Prima facie adjustment under section 143(1)(a)(v) for denial of Chapter VI-A deduction where return furnished beyond due date - no deduction under Chapter VI-A unless return furnished on or before the due date specified under section 139(1) (effect of section 80AC) - belated return filed under section 139(4) - Denial of deduction under section 80P by adjustment in intimation under section 143(1) where return was filed belatedly for assessment year 2019-20. - HELD THAT: - The Tribunal noted that section 80AC provides that Chapter VI-A deductions (including section 80P) shall not be allowed unless the return is furnished on or before the due date under section 139(1) w.e.f. AY 2018-19. However, the provision empowering prima facie disallowance by way of section 143(1)(a)(v) in respect of late-filed returns was introduced with effect from 01-04-2021 and therefore did not apply to assessment year 2019-20. In the absence of section 143(1)(a)(v) being in force for the year under appeal, denial of deduction claimed in a belated return could not be effected by a prima facie adjustment under section 143(1)(a)(v). Having recorded that the return was filed belatedly under section 139(4) but within the period allowed by law for belated returns, the Tribunal held that the CPC's adjustment denying section 80P benefit on the ground of late filing could not be sustained under section 143(1)(a)(v) for AY 2019-20. [Paras 7]

Denial of deduction under section 80P by relying on section 143(1)(a)(v) was not permissible for assessment year 2019-20 and the adjustment could not be sustained on that ground.

Incorrect claim apparent from the return for the purposes of section 143(1)(a)(ii) - Whether the denial of section 80P deduction could be made as a prima facie adjustment under section 143(1)(a)(ii) on the ground of an 'incorrect claim apparent from the return'. - HELD THAT: - The Tribunal examined the Explanation to section 143(1) which defines circumstances in which a claim in the return is to be treated as 'incorrect' for the purposes of section 143(1)(a)(ii), including inconsistencies between entries, lack of information required to substantiate an entry, or deduction exceeding specified statutory limits. The Explanation does not treat late filing of the return (i.e., filing after the due date under section 139(1)) as rendering a claim 'incorrect' for the purposes of section 143(1)(a)(ii). Consequently, denial of the section 80P claim could not be sustained as a prima facie adjustment under section 143(1)(a)(ii). [Paras 7]

The denial of the section 80P deduction could not be upheld under section 143(1)(a)(ii) because late filing of the return does not make the claim 'incorrect' as defined in the Explanation to that subsection.

Final Conclusion: The appeal is allowed: the section 80P deduction claimed in the belated return for AY 2019-20 cannot be denied by prima facie adjustments under sections 143(1)(a)(v) (not yet in force for that year) or 143(1)(a)(ii) (late filing not covered by the Explanation), and the CPC's disallowance is set aside.

Unexplained cash credit under section 68 - allowability of agricultural income and related expenses - share premium and taxation under section 56(2)(viib) - valuation report under Rule 11UA - capital nature of share capital and share premium - creditworthiness, identity and genuineness for receipts/loans

Unexplained cash credit under section 68 - allowability of agricultural income and related expenses - Validity of addition of gross receipts from sale of agricultural produce as unexplained cash credit and allowability of agricultural expenses - HELD THAT: - The Tribunal found that the assessee's audited books showed agricultural revenue of Rs.3,65,09,908 and corresponding cultivation expenses and closing stock; the assessee produced agreements with landowners, land identity details (survey/Hissa/taluk/district), 7/12 extracts, ledger accounts, sale bills and supporting vouchers, details of acreage under cultivation (642 acres) and ancillary evidence including tractor purchase and payments of land revenue. Information obtained from agricultural authorities (under section 133(6)) and the Tahsildar's report supported the possibility of cultivation in the relevant area and rebutted the AO's drought/productivity objections. The AO's contemporaneous objections-anonymous/self-made bills, lack of purchaser details, cash transactions and non-registration of agreements-were held not to render the transactions bogus where the assessee furnished documentary and third party confirmations (including farmers' letters received after assessment completion) and where the books were not rejected. The Tribunal observed that subsequent acceptance of similar transactions in scrutiny assessments for succeeding years and the existence of leasehold agricultural land in the assessee's fixed assets also supported genuineness. Applying these facts to the legal test under section 68, the Tribunal held that the receipts were genuine agricultural receipts and the related expenses were allowable; the AO's addition as unexplained cash credit was therefore incorrect and rightly deleted by the CIT(A).

Addition of Rs.3,65,09,908 as unexplained cash credit was deleted; agricultural receipts and corresponding expenses accepted as genuine.

Share premium and taxation under section 56(2)(viib) - valuation report under Rule 11UA - capital nature of share capital and share premium - Validity of addition treating share premium as income under section 56(2)(viib) - HELD THAT: - Assessee allotted shares to its holding company at a premium and filed an independent valuation report under Rule 11UA (DCF method), valuing shares above the issue price. The Tribunal noted the valuation used a recognized method (Discounted Cash Flow), assumed conservative growth, and produced projected profits that closely matched subsequent audited figures. The Tribunal rejected the AO's reliance on alleged misuse of share premium under company law (section 78 of the Companies Act, 1956) as irrelevant to taxation of share premium and accepted that share capital and share premium are capital in nature. Having been furnished with an acceptable valuation report supporting the premium, the premium component was not taxable under section 56(2)(viib) for the year under consideration. The CIT(A)'s deletion of the addition was upheld following the jurisdictional precedent relied upon and the Board instruction acknowledging that precedent.

Addition on account of share premium under section 56(2)(viib) deleted; premium accepted as genuine capital receipt backed by Rule 11UA valuation.

Unexplained cash credit under section 68 - creditworthiness, identity and genuineness for receipts/loans - Whether unsecured loan from the holding company is an unexplained cash credit under section 68 - HELD THAT: - The assessee received an unsecured loan from its holding company. The assessee furnished bank statements showing receipt through banking channels, audit financial statements and tax assessment particulars of the lender, confirmations for the loan and the lender's own funds and reserves. The Tribunal found that the lender's creditworthiness, the identity of the lender and the genuineness of the transactions were satisfactorily established from the documentary record; monies were from accounted sources of the holding company. Accordingly, the Tribunal upheld the CIT(A)'s deletion of the addition under section 68 on substantive grounds. Separately, the Tribunal noted an incorrect statement in the CIT(A)'s order concerning having obtained a remand report on this issue; the Tribunal held that part to be imprecise and allowed the Revenue's challenge to that particular factual assertion.

Substantive addition on account of loan treated as unexplained cash credit deleted; however, the Tribunal allowed Revenue's challenge to an incorrect statement by the CIT(A) regarding obtaining a remand report on this issue.

Final Conclusion: The Tribunal dismissed the Revenue's challenges to the deletions made by the CIT(A) in respect of (i) agricultural receipts and related expenses and (ii) share premium taxed under section 56(2)(viib), and upheld deletion of the addition in respect of the inter company loan on substantive grounds; one limited factual inaccuracy in the CIT(A)'s order regarding a remand report was, however, sustained in favour of the Revenue. The appeal is therefore partly allowed.

Retrospective amendment of section 112(1)(c)(iii) and its applicability - taxation of long-term capital gains on sale of unlisted shares - entertainment of claims not made in original or revised return - duty of income-tax authorities to assist taxpayer in claiming reliefs

Retrospective amendment of section 112(1)(c)(iii) and its applicability - taxation of long-term capital gains on sale of unlisted shares - Assessee entitled to tax long-term capital gains at 10% for the assessment proceedings in question in view of the retrospective clarification to section 112(1)(c)(iii). - HELD THAT: - The Tribunal found that neither the Assessing Officer nor the CIT(A) disputed the assessee's substantive entitlement to the reduced rate of 10% once the Finance Act 2017 clarified that the amendment to section 112(1)(c)(iii) applied retrospectively from assessment year 2013-14. The assessee had conservatively offered tax at the higher rate in the original return because of uncertainty whether shares of a private limited company fell within the 'unlisted' description; when the retrospective clarification became available during assessment proceedings the assessee sought re computation of tax at 10%. The Tribunal accepted that the legal position as clarified entitled the assessee to the lower rate and allowed the claim on merits, observing that the authorities had not denied eligibility under the Act but had declined relief on procedural grounds. [Paras 7, 8]

Allow claim for taxation of the specified long-term capital gains at the rate of 10% in the assessment.

Entertainment of claims not made in original or revised return - duty of income-tax authorities to assist taxpayer in claiming reliefs - A fresh claim for relief arising from a retrospective statutory clarification can be entertained during assessment/appellate proceedings even if it was not made in the original or a revised return. - HELD THAT: - The Tribunal reviewed the position that the assessee had not filed a revised return and that no specific CBDT instruction under section 119 was issued for implementation. It held that procedural non mention in the return does not defeat an otherwise available substantive right, relying on the principle that authorities must not take advantage of an assessee's ignorance and should assist taxpayers in securing reliefs. The Tribunal noted precedents where courts entertained claims not made in the original or revised return where requisite material was on record, and applied that reasoning to permit the assessee's claim despite its absence from the original return and lack of a CBDT instruction. [Paras 7]

Entitlement to the reduced rate is actionable during assessment/appellate proceedings and need not be confined to a claim made in the original or revised return.

Final Conclusion: Appeal allowed: the assessee's long-term capital gains arising from sale of the specified unlisted shares are to be taxed at 10% pursuant to the retrospective clarification of section 112(1)(c)(iii), and the claim could be entertained despite not being made in the original or a revised return.

Revision under section 263 - erroneous and prejudicial to the interests of revenue - deduction under section 54F - stock-in-trade versus capital asset - scope of inquiry by the Assessing Officer - limits of revisional jurisdiction - quashing of section 263 order where Assessing Officer has applied his mind

Revision under section 263 - erroneous and prejudicial to the interests of revenue - scope of inquiry by the Assessing Officer - quashing of section 263 order where Assessing Officer has applied his mind - Validity of the Principal Commissioner's exercise of revisionary jurisdiction under section 263 in setting aside the assessment framed under section 143(3) for allowing deduction under section 54F. - HELD THAT: - The Tribunal held that the Principal Commissioner erred in invoking section 263 because the Assessing Officer had raised the query during assessment, received the assessee's explanation and documents, and had applied his mind before passing the assessment order. The record contains the show cause notice issued by the Assessing Officer and the assessee's response; the Assessing Officer considered the relevant material and allowed the claim. Where the Assessing Officer has examined the issue and reached a plausible conclusion after applying his quasi judicial functions, the remedy of the revenue does not lie in reopening the matter under section 263 merely to have the Assessing Officer re examine the same documents and evidence. The Tribunal relied on the settled principle that revisional jurisdiction under section 263 cannot be exercised to supplant an opinion honestly formed by the Assessing Officer and cited earlier authorities to the same effect (Ranka Jewellers vs. Addl. CIT and the decisions referred to therein). Consequently, the Principal Commissioner's conclusion that the assessment was "erroneous and prejudicial to the interests of revenue" was found to be unwarranted because it rested on a request for re examination rather than on any demonstrable absence of inquiry or lack of application of mind by the Assessing Officer. [Paras 14, 15, 16]

The section 263 order setting aside the assessment was quashed: the revisional jurisdiction was improperly invoked as the Assessing Officer had in fact considered the claim and applied his mind.

Final Conclusion: The appeal is allowed; the order passed by the Principal Commissioner under section 263 quashing the assessment is set aside and the assessment framed under section 143(3) is restored.

Over-valuation to avail duty drawback - penalty for mis-declaration under the Customs Act - mens rea in imposing customs penalty - relevance of withdrawal request/letter in mitigation of penalty - appellate scope on findings of fact

Relevance of withdrawal request/letter in mitigation of penalty - appellate scope on findings of fact - Whether the letter dated 31.01.2017 requesting withdrawal of the export shipments was sent/received and, if so, what legal consequence attaches to that letter in mitigation of the penalties imposed. - HELD THAT: - The court recorded that the existence, delivery and receipt of the letter is a question of fact. The Commissioner (Appeals) had rejected the appellant's reliance on the letter because it was not produced before the adjudicating authority, there was no acknowledgement of receipt by the department, and the contents of the letter did not corroborate the explanation given by the appellants for withdrawal. Those findings relate to evaluation of evidence and credibility of the asserted withdrawal request. As such, the issue turns on fact-finding and assessment of documentary proof rather than on a point of law; the appellate court declined to reappraise these factual findings. The court therefore treated the claimed withdrawal request as not establishing a legal bar to the penalties where delivery and corroboration were doubtful and explanations inconsistent. [Paras 17, 18, 19, 20, 21]

The question whether the letter was received and its effect is a factual one; the findings of the respondent on non-delivery, non-production and non-corroboration stand and do not raise any substantial question of law.

Over-valuation to avail duty drawback - penalty for mis-declaration under the Customs Act - mens rea in imposing customs penalty - Whether the admitted over-valuation and related facts justify the denial of duty drawback and imposition of penalties, and whether the appellants' assertion of lack of mens rea entitles them to relief. - HELD THAT: - The court observed there was no real dispute that the goods were over-valued; the adjudicating authority and subsequent forums found the declared unit prices to be significantly higher than the determined values and recorded admissions to that effect. The appellants' defence that a withdrawal request negated mens rea was considered but found unpersuasive on the facts because the purported withdrawal was not satisfactorily established and the reasons in the withdrawal letter were inconsistent with contemporaneous explanations. Given these factual findings and the admitted over-valuation, the imposition of penalties and denial of drawback were sustained. The court treated the question as resolved on facts and evidence rather than as a novel legal issue requiring interference. [Paras 10, 11, 12, 13, 14]

Adjudicatory findings that the goods were over valued and the consequent denial of drawback and penalties were upheld; the appellants' contention of absence of mens rea failed on the facts and did not give rise to a substantial question of law.

Final Conclusion: The appeals are dismissed; the impugned findings of over valuation, denial of duty drawback and penalties were sustained on factual grounds and no substantial question of law warranted interference.

Refund of amounts recovered without adjudication - preservation of revenue and right of recovery - adjudication pursuant to show cause notice - provision of legible relied-upon documents - consent disposal with directions

Refund of amounts recovered without adjudication - consent disposal with directions - Respondents directed to refund the amounts collected from the petitioner by remitting the same into the petitioner's personal savings bank account. - HELD THAT: - The Court, by consent, ordered immediate restitution of the aggregate sum collected from the petitioner, directing the respondent to remit the amount into the personal savings bank account from which the demand drafts were drawn. The order for refund was made while disposing of the petition and is operative forthwith; it was recorded as a consensual resolution of the present petition and not as a final determination on the underlying liability. [Paras 12, 13, 16]

The amounts collected shall be refunded immediately to the petitioner's personal savings bank account.

Preservation of revenue and right of recovery - Respondents are not precluded from taking further action for preservation of revenue or for recovery of any amount found due. - HELD THAT: - While directing refund, the Court expressly preserved the respondents' statutory rights to pursue any lawful measures for protection of revenue or recovery of amounts that may ultimately be adjudged due. The refund order does not operate as a bar to subsequent adjudicatory or recovery proceedings if liability is established in accordance with law. [Paras 8, 14]

Respondents' rights to take further action in accordance with law, including recovery, are expressly reserved.

Provision of legible relied-upon documents - Legible copies of the documents relied upon by the respondents shall be provided to the petitioner within one week and a mechanism for obtaining such copies was directed. - HELD THAT: - The Court recorded the undertaking of the respondents to supply legible copies of the relied-upon documents within one week. The petitioner was given the liberty to raise specific grievances about any document with the designated counsel for the respondents, who was directed to ensure provision of legible copies. This direction was given to enable the petitioner to meaningfully respond to the show cause notice. [Paras 10]

Respondents to provide legible copies of relied-upon documents within one week and facilitate the petitioner's access to them.

Adjudication pursuant to show cause notice - The question of any liability arising from the matter is to be determined through adjudicatory proceedings initiated by the show cause notice; timelines for response and adjudication were fixed. - HELD THAT: - The Court left the substantive determination of any liability to the normal adjudicatory process under the show cause notice. The petitioner was directed to file responses to the show cause notices within three weeks, and the concerned authority was directed to adjudicate the show cause notices expeditiously and, preferably, within four weeks thereafter. The order therefore requires fresh consideration and decision on the merits by the adjudicating authority rather than resolving liability in the petition. [Paras 7, 15]

Liability to be adjudicated in proceedings pursuant to the show cause notice; petitioner to respond in three weeks and authority to adjudicate preferably within four weeks thereafter.

Final Conclusion: By consent the petition was disposed of by directing immediate refund of the amounts collected into the petitioner's personal savings account, while preserving the respondents' rights to pursue revenue protection or recovery and directing production of relied-upon documents and expeditious adjudication of the show cause notices.

Right to disclosure of comparative import data - application of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - remand for fresh consideration by adjudicating authority - obligation to pass a reasoned order

Right to disclosure of comparative import data - application of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - remand for fresh consideration by adjudicating authority - obligation to pass a reasoned order - Whether the Petitioner is entitled, at the preliminary stage, to an order directing production of comparative import documents and whether the court should rule on that entitlement instead of leaving the matter to the adjudicating authority under the Rules of 2007. - HELD THAT: - The Court refused to adjudicate the merits of the Petitioner's claim for disclosure at this preliminary stage because the Petitioner has not yet filed a reply to the show cause notice and the proceedings before the authority are ongoing. The Court noted the Tribunal's decision in Seagram Manufacturing Ltd. where intervention was warranted because the Commissioner had not taken into account the entire import data while applying the valuation rules; however, that case was fact-specific and arose after adjudication under the then-applicable rules. The present matter is governed by the Customs Valuation Rules, 2007, which prescribe a detailed methodology; the Court directed that if the Petitioner files a reply including the submissions now pressed, the authorities must proceed in accordance with the mandate of those Rules. If the authority deviates from the Rules to the Petitioner's prejudice, the Petitioner's remedy lies in appellate proceedings. The Court left all contentions open for adjudication by the authority, permitted the Petitioner to request filing a common reply, and recorded the expectation that the adjudicating authority will pass a reasoned order. [Paras 6, 7, 8, 9, 10]

Writ petition disposed by declining to decide entitlement to disclosure at the preliminary stage; petitioner to file reply and the adjudicating authority to consider the claim afresh under the Rules, with liberty to seek a common reply and an expectation of a reasoned order.

Final Conclusion: The petition is disposed of by leaving the rival contentions open for adjudication by the authority under the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007; the petitioner may file a reply (including a request for a common reply) and, if prejudiced by any deviation from the Rules, may pursue statutory remedies; the authority is expected to pass a reasoned order.

Compliance with origin criteria under Rule 3 - wholly produced or obtained under Rule 4 - direct consignment under Rule 8 - Certificate of Origin - requirement of invoice number in Certificate of Origin - inadvertent omission in Certificate of Origin not fatal - benefit of Notification No. 46/2011-Cus - strict compliance doctrine

Certificate of Origin - requirement of invoice number in Certificate of Origin - inadvertent omission in Certificate of Origin not fatal - benefit of Notification No. 46/2011-Cus - compliance with origin criteria under Rule 3 - wholly produced or obtained under Rule 4 - direct consignment under Rule 8 - strict compliance doctrine - Whether non-mention of the invoice number in the Certificate of Origin justifies rejection of the certificate and denial of benefit under Notification No. 46/2011-Cus dated 01.06.2011. - HELD THAT: - The Tribunal found that the consignment details in the Certificate of Origin - including name of ship, date of sailing and quantity - corresponded with the imported cargo and that column 8 of the certificate affirmatively stated that the goods were wholly obtained in Indonesia, satisfying the origin requirement under Rule 3(a) read with Rule 4 (minerals/naturally occurring substances). It was also accepted that the goods were consigned directly from Indonesia to India, satisfying Rule 8. Although the performa annexed to the Rules contains a space for invoice number (column 10), neither the Rules nor the Notification expressly make the presence of an invoice number in the Certificate of Origin a condition precedent to confer preferential treatment. Reliance on the strict compliance principle (as cited in Mahaan Dairies) was considered, but the Tribunal concluded that where the substantive origin and direct consignment requirements are met and the omission is apparently inadvertent, mere non-mention of the invoice number is not a sufficient ground to reject the Certificate of Origin and deny the exemption. On these determinative findings the impugned order was set aside and the appeal allowed. [Paras 5, 6, 7]

Mere omission of the invoice number in the Certificate of Origin, when the origin and direct consignment conditions under the Rules are otherwise established and the omission appears inadvertent, does not justify rejection of the certificate or denial of benefit under Notification No. 46/2011-Cus; appeal allowed.

Final Conclusion: The impugned denial of exemption under Notification No. 46/2011-Cus dated 01.06.2011 was set aside and the appeal allowed, the Tribunal holding that the inadvertent non-mention of the invoice number in the Certificate of Origin was not a fatal defect where the origin and direct consignment requirements were otherwise satisfied.

Maintainability of winding up petition for inability to pay debts - admitted debt versus bona fide dispute - sham or moonshine defence - just and equitable ground for winding up - effect of deposit of disputed amount in court on winding up

Maintainability of winding up petition for inability to pay debts - admitted debt versus bona fide dispute - Whether the petition for winding up under Section 433(e) was maintainable on the ground that the appellant was unable to pay its debts. - HELD THAT: - The Court held that the sum claimed by the respondent was not an admitted debt. The communications between the parties, including the July 2013 letter addressed to PCI Middle East FZE and subsequent correspondence, showed contentious issues as to whether any refundable amount was owed by the appellant. In particular, the down payment was described in the communication as non refundable and much of the payments were made to PCI Middle East FZE, a separate entity though a subsidiary. Where a bona fide dispute exists as to liability or refundability, winding up proceedings under Section 433(e) are not maintainable as a substitute for recovery. The Court therefore concluded that the petition could not be sustained on the ground of inability to pay an admitted debt. [Paras 16, 17, 18, 19, 20]

The petition under Section 433(e) was not maintainable because the debt was not admitted and there existed a bona fide dispute.

Sham or moonshine defence - Whether the defence raised by the appellant was a sham or moonshine defence warranting winding up despite the dispute. - HELD THAT: - The Court examined the Single Judge's conclusion that the appellant's defence was a sham. It reiterated the established principle that only where the defence is clearly a pretence, raised solely to avoid repayment of an admitted debt, may a winding up petition be sustained. On the facts before it, including communications showing disputed obligations and the separate role of PCI Middle East FZE, the Court found that the appellant's defence could not be characterised as sham or moonshine. [Paras 21]

The defence was not a sham; therefore winding up could not be ordered on that basis.

Effect of deposit of disputed amount in court on winding up - just and equitable ground for winding up - Whether winding up was justified on the just and equitable ground under Section 433(f), and what should be the procedural consequence of the appellant having deposited the claimed amount in court. - HELD THAT: - The Court found no material to conclude that the substratum of the appellant company had been eroded and therefore no basis to wind up the company on just and equitable grounds under Section 433(f). Noting that the appellant had deposited the entire amount claimed by the respondent with the Registry, the Court observed that the question of inability to pay did not arise. In the exercise of its discretion and having regard to the pendency of the appeal and the respondent's failure to pursue other remedies for an extended period, the Court directed that the deposited amount not be released to the appellant for six weeks and that its release should abide any orders that may be passed in other proceedings; absent any order interdicting release, the Registry was to refund the amount with interest to the appellant after six weeks. [Paras 22, 23, 24, 25, 26]

Winding up under Section 433(f) was not justified; the deposited amount is to be held for six weeks and its release regulated as directed.

Final Conclusion: The appeal was allowed; the impugned order directing winding up was set aside because the debt was not admitted and a bona fide dispute existed, the defence was not a sham, and there was no just and equitable ground to wind up. The amount deposited by the appellant is to be retained by the Court for six weeks and released thereafter subject to any intervening orders, and otherwise refunded with interest.

Power to recall/review orders - finality of orders upheld by the Supreme Court - inherent jurisdiction of a statutory tribunal to set aside orders obtained by fraud - fraud vitiating judicial or quasi-judicial proceedings - appeal under Section 421 of the Companies Act, 2013

Power to recall/review orders - finality of orders upheld by the Supreme Court - inherent jurisdiction of a statutory tribunal to set aside orders obtained by fraud - fraud vitiating judicial or quasi-judicial proceedings - Maintainability of the application seeking recall of the NCLT order dated 23.11.2017 (and related reliefs) after that order had been affirmed on appeal and the Special Leave Petition dismissed by the Supreme Court, and whether the Appellate Tribunal ought to set aside or recall the earlier orders on the grounds of alleged fraud and suppression of facts. - HELD THAT: - The Tribunal found that the NCLT order dated 23.11.2017 had attained finality by virtue of this Appellate Tribunal's order dated 23.05.2018 and the dismissal of the Special Leave Petition by the Supreme Court on 10.08.2018. In those circumstances the recall application (I.A. No. 608 of 2019) seeking to revisit the NCLT order was not tenable and amounted to an attempt to re-agitate the matter. Although acknowledged authorities recognise that fraud may vitiate proceedings and that tribunals possessing certain civil-court-like powers can, in principle, set aside orders obtained by fraud, the Appellants failed to establish that the present recourse was maintainable after the order had become final. The Tribunal, after hearing submissions on both sides and considering the pleadings and records, concluded there was no merit in interfering with the impugned order and that the recall application filed before the NCLT was rightly rejected. [Paras 12]

The NCLT's order rejecting the recall application is affirmed and the appeal is dismissed.

Final Conclusion: The National Company Law Appellate Tribunal affirms the NCLT, Ahmedabad Bench order dated 26.04.2021 dismissing the recall application, holding that the earlier NCLT order had attained finality after appellate and Supreme Court disposal and that the attempt to revisit it was not maintainable; the appeal is dismissed and the impugned order is affirmed.

Grant of bail under PMLA with reference to Section 45 - test of broad probabilities at the bail stage - mens rea for money laundering offences - twin conditions of Section 45 of the PMLA - effect of return/recovery of alleged proceeds on bail - non inclusion of intermediary companies/absence of arrest of co accused - conditions incident to grant of bail in PMLA matters

Grant of bail under PMLA with reference to Section 45 - test of broad probabilities at the bail stage - Admission of the petitioner to bail under the PMLA notwithstanding the restrictive twin conditions of Section 45. - HELD THAT: - The Court applied the established principle of evaluating bail applications in PMLA matters on the basis of broad probabilities and mens rea without conducting a minutiae level appraisal of evidence. Having regard to (a) the petitioner not being named in the ECIR or in the CBI/ED chargesheets, (b) his cooperation with investigation since 2016, (c) several co accused in the same ECIR having been granted bail, and (d) documentary nature of the material in custody of the respondent, the Court found that the twin conditions of Section 45 do not impose an absolute bar to grant of bail and that the petitioner had satisfied the test of broad probabilities that he was not guilty and was not likely to commit an offence while on bail. The Court noted that the ultimate weight of statements under Section 50 of the PMLA and other materials cannot be tested at the bail stage. [Paras 34]

Petitioner admitted to bail on the basis of broad probabilities despite the restrictions of Section 45 of the PMLA.

Non inclusion of intermediary companies/absence of arrest of co accused - effect of return/recovery of alleged proceeds on bail - Relevance of non inclusion of intermediary companies and repayment/recovery of funds in assessing bail. - HELD THAT: - The Court took into account that several intermediary companies and direct recipients of PACL funds were not made accused, and that substantial sums alleged to have flowed into companies in which the petitioner was a downstream investor had been returned as per directions of the Lodha Committee and SEBI. The Court observed that these facts, together with the absence of arrest of other principal persons implicated in the ECIR and orders granting bail to co accused, strengthened the petitioner's case on broad probabilities. The court emphasized that the ultimate effect of non inclusion of intermediary entities and the evidentiary weight of repayments would be determined at trial. [Paras 16, 25, 34]

Non inclusion of intermediary companies and the return/recovery of funds were relevant factors supporting grant of bail but do not constitute final adjudication on guilt.

Mens rea for money laundering offences - test of broad probabilities at the bail stage - Whether the petitioner had the requisite mens rea for money laundering so as to deny bail at the interlocutory stage. - HELD THAT: - Relying on precedents that require consideration of mens rea at the bail stage, the Court noted that the evidence on record did not permit a conclusive finding of requisite mens rea against the petitioner. Given his short period as nominee non executive director relative to the transactions alleged, his non inclusion in the predicated complaint and chargesheets, the documentary custody of material by the respondent, and the return of substantial sums, the Court found that a positive finding on mens rea could not be recorded at this stage. Therefore, the requirement under Section 45(1)(ii) was treated as satisfied on the basis of broad probabilities. [Paras 23, 34]

No positive finding of mens rea recorded; petitioner met the bail stage threshold on broad probabilities.

Conditions incident to grant of bail in PMLA matters - Imposition of protective and supervisory conditions upon grant of bail in a PMLA prosecution. - HELD THAT: - The Court conditioned bail on execution of a personal bond with surety, surrender of passport, prohibition on leaving the country without trial court permission, residence and contact requirements, cooperation with investigation, and restraint from contacting or influencing witnesses or tampering with evidence. These conditions were framed to address the statutory concerns reflected in Section 45 and to mitigate risks perceived by the prosecution while allowing the petitioner liberty pending trial. [Paras 35]

Bail granted subject to specified conditions including bond, surrender of passport, residence, cooperation, and non tampering/non contact obligations.

Final Conclusion: Petition allowed: the petitioner, detained for about eight months and not named in the predicated ECIR/chargesheets, was admitted to bail under PMLA after application of the test of broad probabilities and imposition of supervisory conditions; the Court reserved determination of guilt to trial.

Maintainability of writ petition in presence of alternate statutory remedy of appeal to the Appellate Tribunal - Appealability of final order under Section 8(3) of PMLA to the Appellate Tribunal - Effect of earlier judicial order granting liberty to approach appellate forum on subsequent writ proceedings

Maintainability of writ petition in presence of alternate statutory remedy of appeal to the Appellate Tribunal - Effect of earlier judicial order granting liberty to approach appellate forum on subsequent writ proceedings - Maintainability of the present writ petition challenging the Adjudicating Authority's orders of 22nd August, 2022 and 22nd September, 2022 in view of an earlier order which dealt with the same orders and granted liberty to approach the Appellate Tribunal. - HELD THAT: - The Court recorded that the impugned orders (the retention order dated 22nd August, 2022 and the final order dated 22nd September, 2022 under Section 8(3) PMLA) had already been dealt with in the earlier order dated 8th December, 2022 in Writ Petition (Civil) 15347/2022 (Atlas 1), wherein the petition was dismissed as withdrawn with liberty to approach the Appellate Tribunal. The earlier order expressly left the petitioner free to pursue remedies before the Appellate Tribunal and declined to consider merits. In these circumstances the High Court held that the present writ petition was not maintainable because the statutory appellate remedy to the Appellate Tribunal was the appropriate forum to agitate grievances against an order under Section 8(3) PMLA, and the previous judicial direction granting liberty to approach that forum covered the same impugned orders now sought to be re-agitated before this Court. The petitioner's contention that a jurisdictional issue prevented approaching the Appellate Tribunal was noted but did not obviate the effect of the prior order and the availability of the statutory remedy. [Paras 6, 7]

The writ petition is not maintainable in view of the earlier order which dealt with the same impugned orders and granted liberty to approach the Appellate Tribunal; the petition is dismissed.

Final Conclusion: The petition challenging the Adjudicating Authority's orders of 22nd August, 2022 and 22nd September, 2022 is dismissed as not maintainable because the same orders were earlier the subject of a judicial order which granted liberty to pursue the statutory appellate remedy before the Appellate Tribunal.

Definition of taxable services - amendment with effect from 1.7.2010 - precedent of Velgi P. And Sons (Agencies) Pvt. Ltd. relied upon - low tax effect dismissal

Definition of taxable services - amendment with effect from 1.7.2010 - precedent of Velgi P. And Sons (Agencies) Pvt. Ltd. relied upon - Whether services rendered in the periods prior to 1.7.2010 fell within the expanded definition of taxable services - HELD THAT: - The CESTAT allowed the assessee's appeals on the ground that the statutory definition of taxable services was expanded only with effect from 1.7.2010, and therefore the demands for periods prior to that amendment could not be sustained. This Court noted that the Revenue did not dispute that the CESTAT had relied on the Tribunal's earlier ruling in Velgi P. And Sons (Agencies) Pvt. Ltd. which was carried in appeal and, by order dated 24.03.2008 in CA Nos. 2429-30/2008, this Court dismissed the Revenue's appeal and confirmed the CESTAT's view. Applying the same reasoning to the present matters (which concern periods prior to the 2010 amendment), the Court held that the appeals must fail and dismissed them accordingly.

Appeals dismissed following the precedent that the expanded definition of taxable services operates from 1.7.2010 and does not cover the earlier tax periods in dispute.

Low tax effect dismissal - Whether certain appeals should be dismissed on account of low tax effect - HELD THAT: - The Court recorded the Revenue's statement that several appeals involved low tax effect and accordingly dismissed those named matters for that reason. The Court separated those matters from others that exceed the tax threshold and survive for consideration.

Specified appeals dismissed for low tax effect; remaining appeals above the tax limit proceeded for consideration.

Final Conclusion: Appeals concerning periods prior to the amendment effective 1.7.2010 were dismissed following the earlier decision in Velgi P. And Sons (Agencies) Pvt. Ltd., and several listed appeals were dismissed separately on the ground of low tax effect; the matters identified as above the tax limit survive for consideration.

Service tax on incentives/discount reimbursements - consideration for service - sales incentives as trade discounts forming part of sale price - principal-to-principal dealership - negative list of services - trading of goods excluded - transaction-specific consideration

Service tax on incentives/discount reimbursements - consideration for service - sales incentives as trade discounts forming part of sale price - principal-to-principal dealership - negative list of services - trading of goods excluded - transaction-specific consideration - Whether incentives/discount reimbursements paid by the manufacturer to the dealer are exigible to service tax as consideration for any service - HELD THAT: - The Tribunal held that the incentives paid by the manufacturer to the dealer are trade discounts forming part of the sale price of vehicles and are not consideration for any service. On examination of the dealership agreement the dealer purchases and resells vehicles on a principal-to-principal basis and promotional activities undertaken by the dealer relate to vehicles owned by the dealer and the mutual commercial relationship, not to a specific supply of service to the manufacturer. Reliance on binding precedents (including decisions treating target-based incentives as not attributable to a particular supply) supported the view that incentives are general performance-based payments and not transaction-specific consideration taxable under the Finance Act. Since the onward sale involves only transfer of property in goods, such activity falls within the negative list exclusion for trading of goods and is not a taxable service. Having decided the matter on merits, the Tribunal did not consider it necessary to adjudicate the limitation contention. [Paras 12, 13, 14, 15]

Incentives and discounts payable by the manufacturer to the dealer are not consideration for any service and are not exigible to service tax; the impugned orders confirming demand are set aside and the appeal is allowed.

Final Conclusion: The Tribunal allowed the appeal, holding that manufacturer-paid incentives/discounts to the authorised dealer are trade discounts forming part of the sale price and not taxable as service; the demand for service tax was set aside.

Movable property versus immovable property - permanency test - attachment to the earth - CENVAT credit eligibility - inputs under Rule 2(k) of the Cenvat Credit Rules, 2004 - capital goods under Rule 2(a) of the Cenvat Credit Rules, 2004 - functional utility test

Movable property versus immovable property - permanency test - attachment to the earth - Towers and shelters used in provision of passive telecom infrastructure are not immovable property. - HELD THAT: - The Tribunal applied the permanency test and precedents of the Supreme Court to determine whether towers and shelters are "attached to the earth" within statutory meaning. The Court accepted that towers and shelters are fabricated and supplied in CKD condition, fastened to foundation by nuts and bolts only to ensure stability and wobble-free operation, and can be unbolted, transported and reassembled elsewhere. Reliance on decisions such as Solid & Correct Engineering, Triveni Engineering, Sirpur Paper Mills and Mallur Siddeswara demonstrates that mere bolting for operational stability, without assimilation or intention of permanent annexation for beneficial enjoyment of land, does not convert movable goods into immovable property. Applying these principles and the Delhi High Court's analysis in Vodafone Mobile Services, the Tribunal's view treating such plants as immovable was rejected and the towers and shelters were held to be movable property. [Paras 18, 19, 20, 21, 22]

Towers and shelters are not immovable property and therefore are not excluded from excisable/movable character on that ground.

Inputs under Rule 2(k) of the Cenvat Credit Rules, 2004 - functional utility test - CENVAT credit eligibility - Towers and shelters qualify as 'inputs' under Rule 2(k) and are used for providing the output service. - HELD THAT: - The Court adopted the Delhi High Court's reasoning that the term "all goods" in Rule 2(k) is wide enough to cover goods used for providing output services unless specifically excluded. Applying the functional utility test, the Court found that towers and prefabricated shelters form an integral part of the BTS system and are used, in conjunction with antennas and BTS equipment, to provide telecommunication services (including Business Support Services). Given the actual use of towers and shelters in supplying the output service and their passive as well as active use, they satisfy the functional utility test and qualify as 'inputs' for CENVAT credit purposes. [Paras 23]

Towers and shelters qualify as inputs under Rule 2(k) and thus attract CENVAT credit entitlement.

Capital goods under Rule 2(a) of the Cenvat Credit Rules, 2004 - accessories - functional utility test - Towers and shelters qualify as 'capital goods' (including as components/accessories) within the meaning of Rule 2(a). - HELD THAT: - Applying the definition of 'capital goods', the Court accepted that components, spares and accessories that fall within the specified chapters and are used for providing the output service qualify as capital goods. The Court relied on the analysis that towers support antennas and BTS equipment, enhancing their effectiveness and enabling proper transmission; thus they are components or accessories of the capital goods (BTS/antenna system). The Delhi High Court's interpretation that towers and shelters act as essential components/accessories of the BTS system and therefore meet the definition of capital goods was followed, leading to the conclusion that credit as 'capital goods' was properly taken. [Paras 24, 25, 26]

Towers and shelters are capital goods (including as accessories/parts) and CENVAT credit as capital goods is admissible.

CENVAT credit eligibility - normal period of limitation - extended period of limitation - The demand for denial of CENVAT credit for the normal period of limitation is set aside; the Department's appeal against dropping demand for extended period is dismissed. - HELD THAT: - Because the Court held on merits that the goods and services in question were eligible for CENVAT credit (being movable, qualifying as inputs and/or capital goods), the impugned order confirming demand for the normal limitation period was set aside. Consequentially, as the demand was negatived on merits, the Department's challenge to the Tribunal's dropping of demand under the extended period had no merit and was dismissed. [Paras 27, 29]

Appellant's appeal allowed insofar as demand for the normal period is confirmed; Department's appeal on extended period dismissed.

Final Conclusion: On application of the permanency test and the functional utility analysis, towers and shelters were held to be movable, to qualify as 'inputs' and as 'capital goods'; accordingly the impugned demand for CENVAT credit for the normal period of limitation was set aside and the departmental appeal against dropping the extended period demand was dismissed.

Reversal of CENVAT credit under Rule 6 of the CENVAT Credit Rules, 2004 - treatment of non-excisable waste (dross and skimmings) as exempted goods for purpose of credit reversal - binding effect of CBIC/Board circulars on Revenue functionaries - administrative interpretation of statutory rule in light of judicial decisions - applicability of Rule 6 where exempted or non-excisable by products are cleared for consideration

Treatment of non-excisable waste (dross and skimmings) as exempted goods for purpose of credit reversal - reversal of CENVAT credit under Rule 6 of the CENVAT Credit Rules, 2004 - Whether the respondent was liable to reverse an amount equal to 6% of the value of aluminium dross and skimmings cleared from the factory under Rule 6 of the CENVAT Credit Rules, 2004 - HELD THAT: - The Tribunal accepted the assessee's contention that aluminium dross and skimmings arise as waste in the course of manufacture of aluminium ingots and are non-excisable goods cleared by the factory for consideration. The CBIC Circular No. 1084/05/2022-CX dated 7.7.2022, rescinding the earlier circular which had directed treatment of dross and skimmings like exempted goods, squarely covers aluminium dross and skimmings. Having regard to the Circular and the legal position reflected therein (including earlier judicial conclusions that such by products are not 'manufacture' so as to attract excise), the Tribunal held that the demand under Rule 6 for reversal of 6% could not be sustained in the facts of this case.

Demand for payment equal to 6% of the value of dross and skimmings under Rule 6 of the CCR is not sustainable in the circumstances and is set aside.

Binding effect of CBIC/Board circulars on Revenue functionaries - administrative interpretation of statutory rule in light of judicial decisions - Whether the Revenue's authorised representative could take a position contrary to the CBIC circular in defending the demand - HELD THAT: - The Tribunal held that the CBIC circular represents the Board's uniform administrative interpretation of the Rule and is intended to ensure consistent application of the law by Revenue officers. A departmental representative cannot adopt a contrary stand in a specific case when the Board has directed a particular interpretation and application of the Rule. Consequently, the departmental contention that Rule 6 must be applied notwithstanding the Circular was rejected.

Revenue cannot ignore or take a different position from the CBIC circular; the departmental challenge based on a contrary interpretation was not accepted.

Final Conclusion: Impugned order of the Commissioner (Appeals) setting aside the demand was upheld; Revenue's appeal dismissed.

Principles of natural justice - rectification under Section 84 of the TNVAT Act - acceptance of C and F declaration forms after completion of assessment - power to reopen or revise assessment on sufficient cause / implied ancillary powers - functus officio doctrine and its exception for corrective action

Principles of natural justice - Validity of the impugned assessment orders on the ground of violation of principles of natural justice - HELD THAT: - The Court found no breach of the principles of natural justice in the impugned assessment orders. The petitioner contended that the respondent failed to consider C and F declaration forms allegedly sent earlier and that notice of personal hearing dated 02.12.2022 was received only on that date, preventing attendance. The Court observed that the earlier postal acknowledgement was by an assistant without the respondent's office seal and that the respondent denied receipt of the earlier enclosures. The petitioner did not communicate immediately after 02.12.2022 that non-attendance was due to late receipt of notice and, given this was the second round of litigation, should have promptly informed the respondent in writing. For these reasons the contention that the principles of natural justice were violated was rejected and the Court declined to interfere with the assessment orders on that ground. [Paras 6, 7, 13]

The impugned assessment orders are not set aside for violation of principles of natural justice.

Acceptance of C and F declaration forms after completion of assessment - rectification under Section 84 of the TNVAT Act - power to reopen or revise assessment on sufficient cause / implied ancillary powers - functus officio doctrine and its exception for corrective action - Whether the petitioner may have the C and F declaration forms considered post-assessment and the appropriate remedial course - HELD THAT: - Relying on the jurisprudence of the Full Bench and the Supreme Court (as applied in the cited Single Judge decision), the Court held that assessing authorities cannot refuse to accept C and F declaration forms solely because they are produced after completion of assessments, and may revise/rectify assessments on sufficient cause, invoking rectification powers analogous to Section 84 of the TNVAT Act. The Court noted that the petitioner submitted C and F forms on 20.01.2023 and that the respondent's office has an acknowledgement by the Deputy State Tax Officer, indicating receipt. To avoid doubt the Court directed the petitioner to re-submit the C and F forms and file a fresh application under Section 84. The respondent was directed to afford personal hearing on the specified date and thereafter decide the rectification application on merits and in accordance with law within a limited timeframe; coercive action is restrained till final orders are passed. [Paras 8, 10, 11, 12, 13]

Petitioner to file a fresh Section 84 rectification application enclosing C and F forms; respondent to afford personal hearing and decide the application on merits within the directed time, with no coercive action meanwhile.

Final Conclusion: Writ petitions dismissed insofar as interference with the impugned assessments for alleged violation of principles of natural justice is declined; however, petitioner permitted to seek rectification under Section 84 by re-submitting C and F declaration forms and respondent directed to hear and decide the rectification application on merits within the stipulated timelines, with coercive measures restrained until final orders.