TaxTMI Updates e-Newsletter
Mar 09,2026

Appealability of cancellation of GST registration - appealability of seizure and prohibition orders - seizure GST INS-02 and Order of prohibition GST INS-03 under Rule 139(4) of the Rules and initiated proceedings under Section 130 of the GST Act, 2017.

Appealability of cancellation of GST registration - HELD THAT:- The Court examined the impugned cancellation order and concluded that it falls within the class of orders against which statutory appeal remedies are available. Consequently, the petitioner has an adequate alternative remedy in the prescribed appellate forum and the writ remedy is not the sole recourse for challenging the cancellation. The observation identifies the specific appellate authority to which the remedy lies. [Paras 5]

Cancellation of registration is appealable to the Deputy Commissioner, State Tax, Circle Rewa.

Appealability of seizure and prohibition orders - HELD THAT: - The Court found that the orders of seizure and prohibition issued during the search proceedings are within the category of orders against which appeals are maintainable under the statutory scheme. This determination places those orders within the appellate mechanism provided under the GST law rather than as matters to be finally resolved in writ proceedings. [Paras 5]

Orders of seizure and prohibition are appealable.

The pending application for release of goods seized during search was directed to be decided by the competent authority within a specified short period. - Competent authority to decide the application for release of seized goods in accordance with law within thirty days from receipt of certified copy of this order.

Final Conclusion: The writ petition was disposed of with the Court observing that the cancellation, seizure and prohibition orders are appealable to the statutory appellate forum; a pending application for release of seized goods was directed to be decided by the competent authority within thirty days, and the petitioner was left to pursue remedies available under the law.

Validity of Rule 39(1)(a) of the Central Goods and Services Tax Rules, 2017 and Rule 39(1)(a) of the Tamil Nadu Goods and Services Tax Rules, 2017 in respect of two periods - expression “the input tax credit available for distribution in a month” -power to prescribe a time limit for distribution of ITC by an ISD unit - concept of Input Service Distributor (ISD) - legal requirement of distribution of credit by the distributor in the same month of receipt of invoice - manifestly arbitrary and violative of Article 14 of the Constitution of India - Validity of delegated legislation - entitlement to input tax credit - harmonious construction of Sections 16 and 20 - Whether the statutory mandate engrafted in Rule 39(1)(a) of the CGST Rules is ultra vires the enabling Act.

Validity of delegated legislation - entitlement to input tax credit - Whether Rule 39(1)(a) of the CGST Rules is ultra vires the CGST Act and/or manifestly arbitrary by requiring distribution in the same month as invoice receipt. - HELD THAT: - The Court examined Rule 39(1)(a) in the statutory context of Sections 16 and 20 of the CGST Act and applied purposive and harmonious construction. It held that Rule 39(1)(a) is not struck down as ultra vires so long as its phrase "input tax credit available for distribution in a month" is read to mean ITC that is actually available in law after fulfillment of the conditions in Section 16(2). The Court rejected the interpretation that Rule 39(1)(a) mandates distribution merely on the basis of invoice issuance without satisfying entitlement conditions under Section 16(2). It emphasized that Section 20 speaks of distribution of "credit" and must be read with Section 16 which prescribes when input tax converts into availabe credit. Consequently, Rule 39(1)(a) must be construed to require distribution in the month in which the registered person becomes entitled to ITC under Section 16(2), and not in every case in the month of invoice issuance; an interpretation to the contrary would create absurdity and conflict with the entitlement scheme and would be open to being struck down. The Court therefore upheld the Rule after reading it consistently with Sections 16 and 20 and the statutory scheme governing availment and distribution of ITC. [Paras 52, 59, 60, 61, 62]

Rule 39(1)(a) is not ultra vires when construed to mean distribution of ITC only when it is available in law upon fulfillment of Section 16(2) conditions; distribution is to occur in the month in which the registered person becomes entitled to ITC.

Harmonious construction of Sections 16 and 20 - Whether distribution by an ISD must await fulfilment of conditions in Section 16(2) or may be effected solely on invoice receipt. - HELD THAT: - Applying the principle that statutory provisions must be read together to effectuate legislative intent and avoid absurdity, the Court held that distribution under Section 20 and Rule 39 is triggered only when input tax has converted into input tax credit in accordance with Section 16(2). The Court catalogued the preconditions in Section 16(2) (tax invoice, supplier reporting, receipt of services, payment of tax, furnishing of return) and concluded that the phrase "available for distribution" in Rule 39(1)(a) refers to such credit that has become available after these conditions are satisfied. The Court reasoned that treating invoice receipt alone as sufficing would undermine the entitlement scheme, lead to incongruity with Section 21 (recovery for excess distribution) and render parts of the Act incoherent. [Paras 51, 52, 53, 58, 59]

Distribution must be of ITC that is available under Section 16(2); ISD cannot be required to distribute credit solely on invoice receipt without satisfaction of entitlement conditions.

Procedural remand for adjudication - What is the consequence for the pending show cause notices alleging delayed distribution contrary to Rule 39(1)(a)? - HELD THAT: - The Court directed that the show cause notices insofar as they allege contravention for delayed distribution be adjudicated afresh in the light of its interpretation of Sections 16 and 20 and Rule 39(1)(a). If petitioners have not filed replies they shall do so within two months; upon receipt, the authorities must decide the matters applying the construction laid down in the judgment and conclude the proceedings. The Court limited its interference to the aspect of alleged delayed distribution and did not decide other allegations in the notices. [Paras 62, 64, 65]

Show cause notices with allegations of delayed distribution are to be decided by the adjudicating authority afresh in accordance with the Court's interpretation; petitioners to file replies within two months if not already filed.

Final Conclusion: The writ petitions are allowed to the extent stated: Rule 39(1)(a) is sustained when read harmoniously with Sections 16 and 20 to require distribution only of ITC actually available under Section 16(2); the show cause notices alleging delayed distribution shall be reconsidered and concluded by the authority in light of this interpretation (petitioners to file replies within two months if not already filed). No order as to costs.

Constitution of appellate tribunal -Alternative efficacious remedy​​​​​​​ - Adequacy of remedy before Appellate Tribunal - jurisdiction to entertain writ petition when statutory remedy exists.

Adequacy of remedy before Appellate Tribunal - jurisdiction to entertain writ petition when statutory remedy exists - Whether the High Court should entertain a writ petition under Articles 226/227 when a statutory Appellate Tribunal is available and constituted. - HELD THAT: - The Court recorded that the Appellate Tribunal under the GST Act had been constituted and that this fact was not disputed by the petitioner. Given the existence of a specific statutory forum for redressal of the grievance, the petitioner has an alternative efficacious remedy by way of appeal before the Appellate Tribunal. In these circumstances the High Court refrained from exercising writ jurisdiction and directed that the petitioner should instead approach the Appellate Tribunal for adjudication of its grievance.

The petition is disposed of with the direction that the petitioner shall pursue its remedy before the Appellate Tribunal; the High Court will not entertain the writ petition in presence of the statutory appellate forum.

Final Conclusion: The High Court declined to exercise writ jurisdiction because the statutory Appellate Tribunal is available and constituted; the petitioner was directed to seek relief before that Tribunal.

Statutory appeal under Section 107 of the CGST Act - stay of impugned order - public auction of perishable goods - custody of sale proceeds in an interest-bearing account pending appeal - release of detained vehicle on payment and furnishing of bond.

Statutory appeal under Section 107 of the CGST Act - stay of impugned order - Right to prefer statutory appeal and interim suspension of the impugned order - HELD THAT: - The Court found that the petitioner is entitled to pursue the statutory remedy under Section 107 of the CGST Act and extended the period of limitation in the interest of justice. While the Court did not adjudicate the merits of the impugned detention and penalty order, it directed that the petitioner may prefer the statutory appeal within 30 days from the date of this order and granted a limited stay of the impugned order for the same 30 day period. If no appeal is filed within that period, the stay will automatically cease and the authorities may proceed in accordance with law. [Paras 17]

Petitioner permitted to file statutory appeal within 30 days; limitation extended for 30 days and the impugned order stayed for 30 days, after which the stay will lapse if no appeal is filed.

Public auction of perishable goods - participation of consignor in auction - Procedure for disposal of seized perishable goods pending appeal - HELD THAT: - Relying on earlier Division Bench directions in S.N. Trading Company & Anr. Vs Union of India & Ors.[2025 (7) TMI 618 - CALCUTTA HIGH COURT], the Court ordered that the seized perishable goods (dried areca nuts) shall be sold by the department through public auction at the earliest, preferably within 45 days. The consignor (appellant) is permitted to participate in the auction. This direction addresses the practical handling of perishable seized goods while appellate rights remain available and does not determine the underlying ownership or liability on the merits. [Paras 18, 21]

Respondents to call public auction for the perishable goods (consignor may participate); sale to be completed preferably within 45 days.

Custody of sale proceeds in an interest-bearing account pending appeal - HELD THAT: - The Court directed that amounts realised from the auction shall be retained by the department, preferably in an interest-bearing account, and shall abide by the ultimate orders that may be passed by the appellate authority. This preserves the monetary proceeds pending resolution of the statutory appeal without deciding entitlement to the funds on merits. [Paras 19]

Proceeds from sale to be retained by the department in an interest-bearing account and to abide by outcome of the appeal.

Release of detained vehicle on payment and furnishing of bond - HELD THAT: - The Court directed release of the detained vehicle on the terms specified: payment of a specified sum and furnishing a bond undertaking to produce the vehicle if required. The directions are provisional and expressly subject to the outcome of the statutory appeal, thereby balancing the interim relief to the petitioner with protection of revenue and the appellate process. [Paras 20, 21]

Vehicle to be released on payment of the specified sum and on furnishing the directed bond; such release is subject to the outcome of the appeal.

Final Conclusion: The writ petition was disposed by permitting the petitioner to file a statutory appeal within 30 days (limitation extended) and by staying the impugned order for 30 days; the Court directed sale of the perishable goods by public auction (allowing the consignor to participate), retention of sale proceeds in an interest-bearing account pending the appeal, and conditional release of the detained vehicle on payment and bond, with all interim measures subject to the appellate outcome.

Clubbing of period - Validity of issuing notice under Section 74 of the CGST Act -Consolidation of tax periods - allegation of fraudulent availment of input tax credit - clubbing of multiple financial years - time limits for demand and recovery under Sections 73(10) and 74(10) run separately for each financial year.

Consolidation of tax periods in show cause notice under Section 74 is impermissible -HELD THAT:- The Court applied the statutory scheme of the CGST Act and earlier Division Bench decisions in M/s. Milroc Good Earth Developers Vs. Union of India & Ors. [2025 (10) TMI 867 - BOMBAY HIGH COURT] holding that tax liability is tied to returns for each tax period (financial year where annual returns govern assessment). The statutory limitation for demand and recovery (separate five-year period under the Act) operates year by year; aggregating different tax periods with distinct due dates and limitation periods would collapse the year-wise structure the statute prescribes and impair the assessee's ability to respond period by period. The Court relied on the reasoning in the cited Division Bench in Rite Water Solutions (India) Ltd. Vs. Joint Commissioner, CGST & Central Excise, Nagpur and Ors. [2025 (11) TMI 1939 - BOMBAY HIGH COUR]] which held there is no scope in the Act for consolidating various financial years/tax periods when issuing a show cause notice under Section 74. [Paras 12, 17]

A consolidated show cause notice covering multiple financial years under Section 74 is impermissible; the impugned consolidated notice and related order are quashed.

Allegation of fraudulent availment of input tax credit does not permit clubbing of multiple financial years - fraud affects limitation but not the permissibility of consolidation - HELD THAT: - The Court considered the submission that fraud permits consolidation and rejected it. While fraudulent availment may affect the applicable limitation period (allowing a five-year window for issuance in fraud cases), the statutory framework does not create an exception enabling clubbing of separate tax periods into a single show cause notice. The respondents cannot invoke alleged fraud to bypass the year-wise assessment and recovery scheme prescribed by the Act. [Paras 8, 11, 17]

Allegations of fraudulent ITC availment do not permit clubbing of different financial years; consolidation on that ground is not allowed.

Final Conclusion: The impugned show cause notice and the connected order are quashed and set aside. Respondents are at liberty to issue fresh notices strictly in accordance with the provisions of Section 74 and the year-wise statutory scheme; the respondents are permitted to seek revival of proceedings if higher judicial authority overturns the controlling view relied upon by this Court.

Legal effect of the omission of Rule 96(10) - omitted without a saving clause - constitutional validity - refund recovery under tax law.

Omission of rule removes statutory basis for actions taken under it - Whether the impugned recovery orders, having been issued solely under Rule 96(10) of the CGST Rules, survive after the omission of that Rule - HELD THAT: - The Court found that the recovery proceedings and the orders in original were predicated exclusively on Rule 96(10) of the Central Goods and Services Tax Rules. As Rule 96(10) was omitted with effect from 08.10.2024 and no saving clause was provided, the statutory basis for the impugned orders ceased to exist. Reliance upon earlier decisions of this Court reaching a similar conclusion was noted. Consequently, the impugned orders cannot be sustained and must be set aside for lack of any continuing legal foundation. [Paras 9, 10, 11]

Impugned orders set aside as they were issued solely under the now-omitted Rule 96(10) which removed their statutory basis

Final Conclusion: The writ petitions are allowed; the impugned orders passed by the first respondent are set aside for want of statutory basis following omission of Rule 96(10) of the CGST Rules, and there shall be no order as to costs. Pending miscellaneous petitions, if any, stand closed.

Validity of impugned order in Form GST DRC-07 - reply in Form GST DRC-06 was not considered - adequacy of summary show cause notice - entertainment of statutory appeal without regard to limitation where appeal is filed within prescribed appellate period.

Consideration of replies in adjudicatory orders - adequacy of summary show cause notice - HELD THAT: - The Court examined the impugned order and found that the petitioner's detailed reply to the Show Cause Notice (submitted in Form GST DRC-06) had been considered and the order was based on merits. The judgment rejected reliance on the High Court of Gauhati in Shambu Prasad v. State of Assam and Ors. [2025 (1) TMI 725 - GAUHATI HIGH COURT] holding that a mere summary in Form GST DRC-01 cannot substitute a detailed show cause notice, finding that that principle did not apply on the facts because the proposal in Form GST DRC-01 was based on an intimation in Form GST DRC-01A and the petitioner had furnished a detailed reply which was considered before passing the order. Consequently, there was no merit in the writ challenge to the impugned order on the ground that only a summary notice had been issued. [Paras 7, 8]

Writ petition dismissed on merits insofar as challenge to the impugned order is concerned.

Entertainment of statutory appeal without regard to limitation where appeal is filed within prescribed appellate period - HELD THAT: - Although the writ petition was dismissed, the Court observed that the petitioner had approached the Court within the period ordinarily prescribed for filing an appeal under Section 107 of the relevant GST enactments. In view of that, the Court granted the petitioner leave to file an appeal within thirty days from receipt of the order and directed that the Appellate Authority entertain the appeal without reference to limitation and dispose of it on merits in accordance with law. The petitioner was permitted to raise all grounds before the Appellate Authority. [Paras 9, 10, 11, 12]

Liberty granted to file appeal within thirty days; Appellate Authority to entertain and decide the appeal on merits without reference to limitation.

Final Conclusion: The writ petition challenging the impugned order for tax period 2021-2022 was dismissed on merits after the Court found that the petitioner's detailed reply had been considered and the summary notice did not vitiate the proceedings; however, the petitioner was permitted to file an appeal within thirty days and the Appellate Authority was directed to entertain and decide the appeal on merits without reference to limitation.

Claim of exemption under Notification No. 12/2017-Central Tax (Rate) -Failure to consider material submissions - remand for fresh adjudication - opportunity of personal hearing before adjudicating authority.

Failure to consider material submissions - opportunity of personal hearing before adjudicating authority - remand for fresh adjudication - Whether the adjudication and summary orders should be set aside and the matter remitted for fresh consideration because the authority did not have the petitioner's complete case before it. - HELD THAT: - The Court noted the petitioner's contention that, although the petitioner participated, the petitioner's case was incompletely presented before the authority and material documents such as invoices were not placed at the appropriate time. The petitioner asserted that had those materials been considered, the services adjudicated as taxable might have been held exempt under the cited notification. The Court observed that substantial recovery of tax has already taken place and that the claimed mismatch in returns could be reconciled if the petitioner is afforded a proper opportunity to present its case. In these circumstances the Court held that it was appropriate to permit the petitioner to place its materials and for the authority to re-examine the matter on merits, keeping all contentions open. [Paras 2, 5, 6, 7, 8]

The adjudication order and the summary orders are set aside and the matter is remitted to respondent No.2 for fresh consideration; the petitioner is directed to appear before respondent No.2 on the specified date without fresh notice, and all contentions are left open.

Final Conclusion: The impugned adjudication and summary orders have been set aside and the matter remitted for fresh adjudication so that the petitioner may present its case and supporting documents; the petitioner must appear before the adjudicating authority on the date fixed and, if absent, the indulgence granted will be revoked.

Reliance on non-existent or irrelevant judicial precedents - issuance of defective and unreasonable show-cause notice - uploaded on GST Portal without annexing or supplying the Relied Upon Documents (RUDs) to the assessee -principles of natural justice - duty to verify authorities before reliance - procedural defect in reasoned order - need to prescribe parameters for judicial reliance on precedents - use of artificial intelligence in legal research.

Validity of the respondent authority's reliance on the cited judgments while rejecting the petitioner's defence submissions and whether that reliance rendered the impugned order defective. - HELD THAT: - The Court found that the Additional Commissioner placed reliance upon judgments which were either non existent, incorrectly cited, or not remotely applicable to the issues raised by the petitioner. The findings recorded by the respondent while dealing with the defence submissions (paras 19.1-19.4 of the impugned order) were held to be flawed and deceptive because the authority appears to have followed AI generated citations without reading or verifying the actual judgments. That conduct amounts to a failure to apply independent judicial mind and a procedural defect in the reasoned order. Given these defects, the Court considered it appropriate to prescribe directions and parameters to regulate how quasi judicial authorities rely upon judicial decisions of High Courts and the Supreme Court when adjudicating issues raised by an assessee, and to seek further assistance from the Senior Standing Counsel on that subject. [Paras 7, 8]

Findings of the respondent are flawed due to reliance on non existent/irrelevant citations; directions/parameters are to be considered for regulating such reliance and notice was issued with interim relief granted until final disposal.

Final Conclusion: The Court concluded that the impugned order suffers from a procedural defect because the respondent relied upon incorrect or inapplicable judicial citations (apparently AI generated) without proper verification; accordingly, the Court called for formulation of directions to regulate reliance on precedents by quasi judicial authorities, issued notice and granted interim relief until final disposal.

Failure to consider material documents - duty to pass a speaking order after affording opportunity of hearing - conditional refund pending final adjudication - opportunity of hearing.

Failure to consider material documents - HELD THAT: - The Court found that the adjudicating authority failed to assign any specific reason when it did not consider documents produced by the petitioners in reply to the assessment. For that procedural defect the impugned order could not stand: absence of reasoned consideration of material submissions vitiates the order. The writ court therefore interfered with the adjudication on this ground without entering into the merits of the underlying tax demand. [Paras 2, 9]

The adjudication order dated 8.11.2023 is quashed and set aside for failure to consider and record reasons for non consideration of documents.

Duty to pass a speaking order after affording opportunity of hearing - HELD THAT: - The Court directed respondent no. 3 to re visit the issue by considering paragraph 10 of its affidavit and the annexed bills of entry/documents and to pass a reasoned, speaking order in accordance with law. The authority must afford the petitioners an opportunity of hearing and communicate the decision. A specific time frame of three months from communication of the order was imposed for completion of reconsideration and the decision was to be communicated preferably a week thereafter. [Paras 5, 6, 7]

Respondent no. 3 is directed to reconsider the matter, taking into account paragraph 10 and annexures, and to pass a speaking order after hearing the petitioners within three months.

Conditional refund pending final adjudication - HELD THAT: - The Court recorded that an amount has been debited from the petitioners' electronic ledger pursuant to the impugned order. While directing reconsideration of the adjudication, the Court held that any element of refund in respect of the amounts debited shall be allowed only subject to the finality of the adjudication proceedings. The question of entitlement to refund was not decided on merits but made conditional on the outcome of the remand proceedings. [Paras 3, 8]

Refund of the amount debited shall be considered and, if appropriate, granted only subject to the final outcome of the adjudication proceedings.

Final Conclusion: For procedural infirmity in the adjudication (non consideration of material documents without reasons) the impugned order is quashed; the customs authority is directed to reconsider the matter on the basis of its affidavit (paragraph 10) and annexures, to pass a reasoned order after hearing within three months, and any refund claim arising from the amounts debited is to be dealt with subject to the finality of those reconsideration proceedings.

Ex parte adjudication - Failure to afford opportunity of hearing - non-service of show cause notice - breach of principles of natural justice - procedural irregularity.

Failure to afford opportunity of hearing - Whether the adjudication order passed ex-parte under Section 74 of the GST Act suffers from procedural infirmities and breach of natural justice warranting quashing and fresh consideration. - HELD THAT: - The Court found that no notices in Form GST ASMT-10 under Section 61 were issued prior to the show cause-cum-demand notice and that no adjournment had been granted, contrary to the statutory scheme, evidencing procedural irregularity. The adjudicating authority passed the order without giving an opportunity of hearing or serving any notice of hearing, and there is no documentary evidence on record to show effective service of the show cause notice; the notice was also allegedly uploaded in the portal's "Additional Notices and Orders" tab rather than in the proper view, which impeded communication. These failures amount to a breach of the principles of natural justice and render the assessment order a product of gross procedural lapse. In view of the prima facie case and the identified procedural defect, the Court directed that the petitioners be permitted to file a physical copy of their reply within a limited period, and required the respondent authority to afford an opportunity of hearing (virtual or physical), pass a speaking order considering the reply and material, and communicate the decision within specified time-frames. The Court therefore quashed the impugned order as vitiated by procedural irregularity and remitted the matter for fresh consideration in accordance with law. [Paras 12, 13, 14, 15, 16]

The impugned ex-parte adjudication is set aside for breach of natural justice and procedural irregularity; the petitioners may file a reply and the authority must afford hearing and pass a speaking order on reconsideration within the prescribed schedule.

Final Conclusion: The Court quashed the adjudication order dated 02.11.2023 for procedural irregularity and breach of natural justice in respect of the period "July 2017 to March 2018", directed fresh consideration after affording hearing and filing of reply, and disposed of the writ petition without addressing merits.

Obligation to upload summary of order in FORM GST DRC-07- statutory safeguard of taxpayer's appellate rights - Imposition ofpenalty in terms of Section 129(5) of the respective GST Enactments.

Obligation to upload summary of order in FORM GST DRC-07 - statutory safeguard of taxpayer's appellate rights - HELD THAT: - The Court applied the reasoning of the Hon'ble Supreme Court in ASP Traders [2025 (7) TMI 1525 - SUPREME COURT] and the statutory scheme under the CGST Rules to hold that uploading the summary of a final order in FORM GST DRC-07 is a mandatory procedural requirement which preserves the taxpayer's right to appeal. The upload in DRC-07 operates as the summary/notice of demand and is necessary for the appellant to exercise the statutory appellate remedy. Although delay in seeking relief was noted, the Court nonetheless directed issuance of Form GST DRC-07 to the petitioner so that the petitioner may file an appeal before the Appellate Authority. The direction is grounded on the mandatory character of Rule 142(5) (as construed by the Supreme Court) and the need to safeguard appellate rights and procedural transparency.

Respondent directed to issue/upload Form GST DRC-07 to enable the petitioner to file an appeal.

Preclusion to challenge penalty once amount is proved under Section 129(5) - HELD THAT:- The Court observed that once the amount has been proved/paid, the petitioner is precluded from challenging the penalty in terms of Section 129(5) of the relevant GST enactments. The observation formed part of the Court's assessment of the petitioner's conduct and the merits of delay in approaching the Court; it informed, but did not prevent, the limited relief granted of issuance of FORM GST DRC-07 for pursuing appellate remedies.

Petitioner noted to be precluded from challenging the penalty once the amount is proved under Section 129(5).

Final Conclusion: Writ petition disposed by directing the respondent to issue/upload Form GST DRC-07 to the petitioner to enable filing of an appeal before the Appellate Authority; petitioner observed to have delayed and to be precluded from challenging the penalty once the amount is proved.

Time limits for filing an appeal and the scope for condoning delay - rejecting the appeal as time-barred under Section 107(4) - sufficient explanation for delay.

Legality of rejecting the appeal as time barred and entitlement to condonation of delay - HELD THAT:- The Court accepted petitioners' explanation for delay and relied on earlier Division Bench reasoning that the timeline under Section 107(4) of the W.B.G.S.T. Act is directory rather than mandatory. On the material before it the Court found a prima facie case that the petitioners were not grossly negligent in delaying filing the appeal and that the reason for delay had been sufficiently explained. In consequence the Court quashed the order of rejection and directed that the appeal be treated as having been filed within time and be fixed for hearing and disposed of on merits. The Court also restrained respondent authorities from taking coercive steps pending disposal and admonished that petitioners should not seek adjournment on the date fixed.

Impugned order rejecting the appeal for delay quashed; respondent directed to hear and decide the appeal on merits treating it as filed within time preferably within three months, with restraint on coercive action pending disposal and a direction against adjournment by petitioners.

Final Conclusion: The order rejecting the appeal as time barred was set aside; the appeal is to be heard on merits by the authority treating it as filed within time, preferably within three months, with a prohibition on coercive action meanwhile and a direction that petitioners shall not seek adjournment on the hearing date.

Challenge to pre-adjudicatory notice - opportunity to be heard - extension of time to respond - Preliminary notice - assessment of tax liability - await final adjudication.

Challenge to pre-adjudicatory notice - opportunity to be heard - Maintainability of writ petition challenging a notice issued prior to final adjudication and the relief to be afforded pending final decision. - HELD THAT: - The impugned communication is a notice inviting the petitioner to respond prior to any final adjudication of GST liability. The Court held that, where no final adjudication has been made, it is premature to adjudicate the substantive correctness of the assessment or liability alleged in the notice. The notice grants an opportunity to the petitioner to file a response within the time specified therein; the petitioners' remedy lies in first availing the procedural opportunity and obtaining final adjudication. In the circumstances, the Court exercised its supervisory jurisdiction to afford the petitioner an extension of time to submit their reply and directed the statutory authority to consider that reply and decide the matter in accordance with law following the necessary procedure.

Writ petition is premature; petitioner granted a further short extension to reply to the notice and the State authority to decide the matter in accordance with law after considering the petitioner's response.

Final Conclusion: The petition is disposed of as premature; the petitioner is granted a brief extension to file its response to the pre-adjudicatory notice and the concerned GST authority is directed to decide the matter in accordance with law after taking the reply on record.

Refusal by the trial Court to grant permission to the petitioner to travel abroad - availed ITC by issuing bogus invoices without actually supplying the goods or services entailing loss to the public exchequer - balancing of individual rights and public revenue - security deposit as conditional relief - Offences punishable under Section 132 (1)(b),(c) of the Central Goods and Services Tax Act, 2017 - expression “personal liberty” -Right to travel abroad as part of personal liberty - Whether this material is sufficient to deprive the petitioner of the right to travel abroad ?

Denial of travel cannot be predicated solely on penalties imposed on corporate entities - Whether the trial Court was justified in rejecting the petitioner's application to travel abroad on the basis that large penalties had been imposed on companies of which he is a director and that the alleged fraud entailed huge loss to the revenue. - HELD THAT:- The Court examined the material relied upon by the learned Magistrate and concluded that the mere fact that substantial penalties were imposed on corporate entities of which the petitioner is a Managing Director, and that the adjudication found alleged fraud causing large revenue loss, was insufficient, by itself, to justify depriving the petitioner of the right to travel abroad. The Court noted that the revenue has independent statutory remedies under the GST Act to recover penalties from the companies, and that those recovery mechanisms do not automatically justify curtailing an individual director's right to travel. Absent material showing that the petitioner personally posed a flight risk or had acted in a manner demonstrating an intent to evade the process of law, the apprehension relied upon by the Magistrate was not supported by the record. The Court therefore found that the learned Magistrate erred in treating the corporate penalties and the magnitude of alleged loss as a conclusive basis to refuse permission to travel. [Paras 16, 17, 18, 24]

The Magistrate's refusal to permit travel on the sole basis of penalties imposed on companies and the gravity of the alleged fraud was unsustainable.

Right to travel abroad as part of personal liberty - What legal principles govern an accused's request to travel abroad and what safeguards may the Court impose when granting such permission? - HELD THAT: - In the case of Smt. Maneka Gandhi [1978 (1) TMI 161 - SUPREME COURT], the Supreme Court emphasized that, “personal liberty” guaranteed under Article 21 is of the widest amplitude and includes the right to travel abroad. No person can be deprived of his right to travel abroad unless there is a law made by the State, prescribing the procedure for depriving a person of the said right. Moreover, the procedure by which such right is sought to be deprived must also be fair and reasonable and cannot be arbitrary, unfair and unreasonable.

When a trial Court considers an accused's application to travel, relevant factors include the nature and gravity of the offence, stage of proceedings, attendant circumstances, conduct of the accused and the purpose of travel. Restrictions are intended to secure the accused's presence for trial and to prevent evasion of process. Where permission is justified, the Court may attach reasonable conditions, including security, disclosure of itinerary and contact details, and furnishing passport copies to the Court and investigating agency, to safeguard the interests of justice and revenue. Applying these principles, and finding no material demonstrating flight risk, the Court exercised its discretion to permit travel subject to specified conditions including a security deposit and disclosure obligations. [Paras 20, 21, 22, 23, 24]

The petitioner is entitled to travel abroad subject to reasonable conditions and security to ensure his return and availability for trial.

Final Conclusion: The writ petition was allowed: the Court permitted the petitioner to travel abroad for limited business and family purposes, having held that denial solely on the basis of corporate penalties and alleged revenue loss was not justified; permission was granted subject to conditions including deposit of security, disclosure of itinerary and passport particulars to the trial Court and investigating officer.

Validity of order passed u/s 201(1) as barred by limitation - Limitation u/s 201(3) linked to date of filing of the TDS statement Whether limitation for issuing an order u/s 201(1) is to be computed quarter-wise from the end of the financial year in which each quarterly TDS statement is filed, or cumulatively/annually?-

HELD THAT: - The Court held that Section 201(3) commences limitation from the end of the financial year in which the TDS statement is filed; thus the filing date of each statement is the determinative starting point for limitation. Rule 31A mandates that TDS statements be filed on a quarterly basis, so each quarterly filing constitutes a separate compliance event and furnishes an independent starting point for the two-year period specified in Section 201(3).

The statutory language and the scheme of TDS compliance treat each quarter as a distinct period with its own due date and statement; nothing in the text or structure of the provisions supports an annual or cumulative computation of limitation. Limitation provisions in fiscal statutes must be strictly construed, and cannot be extended by implication to defeat the clear linkage between filing and commencement of limitation. [Paras 6, 7]

Limitation is to be computed quarter-wise from the end of the financial year in which each quarterly TDS statement is filed; annual/cumulative computation is not permissible.

Final Conclusion: The Tribunal correctly held that proceedings in respect of the first three quarters (filed in Financial Year 2008-09) were time-barred, and that proceedings in respect of the fourth quarter (filed in financial year 2009-10) were within limitation; the appeal is dismissed.

Denial of benefit of exemption u/s 11 -delay in filing Form 10B - reasonable cause for delay - Validity of the Commissioner's rejection of the application for condonation of delay in filing Form 10B and whether the petitioner established reasonable cause for the delay -

HELD THAT:- The Court examined the reasons advanced by the petitioner - that trustees were preoccupied with a visit of foreign donors and the managing trustee, who handles financial matters, was unavailable to coordinate the audit before the due date - and found those reasons to be reasonable in the context of a charitable trust running a children's home.

The impugned order applied CBDT Circular No.2/2020 and required proof of reasonable cause; the Court concluded that, on the facts before it, the Commissioner's rejection of the condonation application lacked justification. Consequentially, the Court quashed the impugned order and directed that the AO redo the exercise u/s 143 and consider granting the exemption u/s 11 if the petitioner is otherwise eligible. [Paras 8, 9]

Final Conclusion: The writ petition is allowed: the order rejecting condonation of delay in filing Form 10B for AY 2023-2024 is quashed and the AO is directed to re-examine the matter u/s 143 and grant exemption u/s 11 if the petitioner satisfies the statutory conditions.

Adjustment of refunds limited to 20% of disputed demand - stay of demand on payment of 20% pending first appeal - Whether refunds adjusted by the revenue against the assessed demands exceeded the permissible limit of 20% of the disputed demand and require refund - HELD THAT: - The Court examined the Office Memorandum F. No. 404/72/93-ITCC dated 29.02.2016 as amended by the Office Memorandum dated 31.07.2017 which standardized grant of stay of demand on payment of a lump sum of 20% of the disputed demand where the demand is disputed before the CIT(Appeals).

Since the AO had called for payment of 20% under that mandate, the proper construction is that when an application for stay is pending and refunds are available, adjustment of refunds against the disputed demand is permissible only to the extent of 20% falling under para 4(A) of the Office Memorandum. The petitioner's tabulation showed adjustments in excess of 20% for the assessment years in question. The Court concluded that those excess adjustments were contrary to the Office Memorandum and therefore unlawful, entitling the petitioner to refund of the excess amount adjusted.

Refund the amount adjusted in excess of 20% of the disputed demand for AYs 2017-18, 2018-19 and 2019-20.

Stay of demand on payment of 20% pending first appeal - In light of the pendency of the appeals and the restriction on adjustments to 20%, the respondents were restrained from effecting further recovery of the disputed demands for the specified assessment years until finalisation of the appeals. The Court also recorded that the assessing officer should record the stay on the portal so that the concession is reflected administratively.

Respondents restrained from recovering any portion of the demand pertaining to AYs 2017-18, 2018-19 and 2019-20 during pendency of the appeals, subject to adjustment/payment not exceeding 20% and with appropriate entries made on the portal.

Final Conclusion: The petition is allowed: the revenue shall refund amounts adjusted in excess of 20% of the disputed demand for AYs 2017-18, 2018-19 and 2019-20, and, having regard to pending appeals and the Office Memorandum, further recovery is restrained while the appeals remain pending; the assessing officer shall record the stay on the portal.

Tax withholding certificate at the rate of 10% u/s 197 - issuance of tax withholding certificate at a lower rate pending assessment - HELD THAT: - We find that the Competent Authority has not given any sustainable reason. He was required to dilate upon the nature of transaction and record his prima-facie opinion and also deal with petitioner’s contention and the judgments relied upon.

Since almost 85% of the period is already over and the payments made to the petitioner have been subjected to 10% tax, though the transactions prima-facie looks to be not exigible to tax, we are of the view that it would be just and proper if a certificate of deduction at 2% is issued to the petitioner so that the concern of the Revenue that the petitioner can be subjected to scrutiny assessment can be addressed and some respite can be given to the petitioner as a substantial amount is otherwise being withheld by the respondents.

Final Conclusion: The petition was partly allowed: the impugned certificate issued without recording reasons was found unsustainable and the respondent was directed to issue a tax withholding certificate requiring deduction at 2% for AY 2026-27 (FY 2025-26). The Competent Authority must consider future applications expeditiously and assessment proceedings remain the forum to determine ultimate tax liability.

Addition u/s 69A r/w section 115BBE - reliance on bank auto-sweep transactions as rotation of funds - Whether the addition made u/s 69A r/w section 115BBE was sustainable in view of the assessee's explanation and supporting material? - CIT(A) deleted addition - HELD THAT:- Tribunal examined the facts considered by the CIT(A) that the assessee is a housewife, that a fixed deposit was made in her name from her husband's retirement benefits, and that the large credits in the savings account were explained by the Auto Sweep/Auto Sweep FD facility which created and liquidated FDs automatically, producing rotating credits and debits.

CIT(A) analysed bank statements, retirement benefit documents and the joint nature of accounts and found the transactions to be explainable as rotation of the same funds rather than undisclosed income. Having considered the materials on record and the explanation offered, Tribunal found no infirmity in the CIT(A)'s reasoning or conclusion and agreed that the addition was not justified on the facts. [Paras 3, 7]

The deletion of the addition u/s 69A r/w section 115BBE is upheld.

Final Conclusion: Tribunal found the CIT(A)'s factual and evidential analysis sustainable: the addition u/s 69A r/w section 115BBE was correctly deleted on the explanation of rotation of funds through the bank's Auto Sweep facility and retirement-benefit/joint-account evidence, and the appellate authority's admission and reliance on those documents did not occasion reversible error - revenue's appeal is dismissed.

Relief u/s 89(1) - addition to benefits available in excess of the exemption limit provided u/s. 10(10C)

HELD THAT: - The assessees, having taken voluntary retirement, received payments such as gratuity, leave encashment, voluntary retirement compensation and arrears of salary, which attract exemption under section 10(10C) and may also attract relief under section 89(1). The assessee's representative pointed to apparent calculation errors in the computation of relief under section 89(1) and relied on judicial decisions holding that relief under section 89(1) is available in addition to the exemption under section 10(10C).

In the absence of objection from Revenue and having regard to the submissions and cited authorities, the Tribunal found it appropriate to remit the common issue to the file of the Jurisdictional Assessing Officer for a limited purpose: to verify and recalculate the relief claimed under section 89(1) in accordance with the law and the precedents referred of CIT Vs. Koodathil Kallyatan Ambujakshan [2008 (7) TMI 259 - BOMBAY HIGH COURT] and Surendra Prabhu P. [2005 (9) TMI 67 - KARNATAKA HIGH COURT] wherein it has been held that assessee is entitled to benefit u/s. 10(10C) of the Act to the extent provided in the said section and in addition assessee is also entitled to relief u/s. 89(1) of the Act [Paras 5, 6]

The matter is restored to the Jurisdictional Assessing Officer for verification and recalculation of relief under section 89(1) in light of the cited precedents, with opportunity to the assessee; effective grounds of appeal allowed for statistical purposes.

Final Conclusion: The Tribunal remanded the common issue to the Assessing Officer for a limited verification and recalculation of relief under section 89(1) (in addition to exemption under section 10(10C)), directed that the assessees be given a reasonable opportunity, and allowed the appeals for statistical purposes.

Applicability of Section 56(2)(x) to transactions concluded before the provision came into force - Whether the addition under Section 56(2)(x) could be sustained where the agreement for sale was executed in 2010, prior to the introduction of that provision, despite registration of the sale deed in 2018? - HELD THAT: - The Tribunal accepted the assessee's uncontested factual position that the agreement for sale was executed on 04/12/2010 between the assessee's husband and the builder and that substantial payments and possession occurred thereafter. The determinative legal reasoning is that Section 56(2)(x) cannot be applied retrospectively to a transaction which was concluded before the provision existed; a subsequent registration in 2018 did not convert the pre-existing transaction into one liable u/s 56(2)(x).

CIT(A) dismissed the appeal on a technical ground relating to advance tax and belated return filing, but that dismissal did not address the substantive contention that the transaction fell outside Section 56(2)(x). Applying the legal principle that a provision cannot be applied to agreements concluded prior to its enactment, the Tribunal held the addition unsustainable and deleted it.

Addition u/s 56(2)(x) deleted and the assessee's appeal allowed.

Final Conclusion: The Tribunal found that the property transaction was concluded by agreement in 2010, before Section 56(2)(x) was part of the statute, and therefore the addition under that provision confirmed by the lower authorities was not sustainable; the appeal is allowed and the addition deleted for AY 2018-19.

Deduction u/s 80P - Registration under the Karnataka Souharda Sahakari Act, 1997 treated as a co-operative society or not- exemption from TDS under section 194A(3)(v) - disallowance under section 40(a)(ia) - treatment of provision for NPA as eligible for deduction under Chapter VIA after enhancement

Deduction u/s 80P(2)(a)(i) - Registration under the Karnataka Souharda Sahakari Act, 1997 treated as a co-operative society - HELD THAT: - This issue was already decided in the judgments reported in case of Swabhimani Souharda Credit Cooperative Ltd. [2020 (1) TMI 831 - KARNATAKA HIGH COURT], in the case of Shri Vitthalray Souharda Pattin Sahakari Niyamit [2020 (6) TMI 510 - KARNATAKA HIGH COURT] and in the case of Udaya Souhardha Credit Co-operative Society Ltd. [2025 (5) TMI 1331 - KARNATAKA HIGH COURT] wherein had held that the assessee’s registered under the Karnataka Souharda Sahakari Act, 1997 would also be treated as a cooperative society and therefore all the benefits granted u/s. 80P would also apply to them. [Paras 7]

Assessee is a co-operative society for tax purposes and entitled to deduction under section 80P(2); AO directed to allow the deduction for the stated net profit.

Exemption from TDS under section 194A(3)(v) - disallowance under section 40(a)(ia) - addition made under section 40(a)(ia) for failure to deduct TDS on interest payments to members where the assessee is a co-operative society - HELD THAT: - Having held that the assessee is a co-operative credit society, the Tribunal observed that section 194A(3)(v) exempts co-operative societies from TDS on interest paid to members. Relying on case of Udaya Souhardha Credit Co-operative Society Ltd. [2025 (5) TMI 1331 - KARNATAKA HIGH COURT] which reached the same conclusion, the Tribunal held that the provision of section 194A would not apply and therefore the disallowance under section 40(a)(ia) could not be sustained. The AO was directed to delete the addition made on this ground. [Paras 8]

Disallowance under section 40(a)(ia) in respect of interest paid to members is not correct; addition deleted and AO directed to withdraw the disallowance.

Treatment of provision for NPA - eligible for deduction under Chapter VIA after enhancement - deduction under section 80P(2)(a)(i) - Whether the addition of the provision for NPA as income is sustainable when the resultant enhanced profits are eligible for deduction under section 80P and in view of CBDT Circular No. 37/2016. - HELD THAT: - The Tribunal followed a Coordinate Bench decision and CBDT Circular No. 37/2016 which clarify that disallowances that enhance profits of an eligible business do not prevent subsequent deduction under Chapter VIA. Since the assessee is entitled to the section 80P deduction, the addition of the provision for NPA was held to be ultimately allowable by way of deduction, rendering the disallowance incorrect. Consequently the AO was directed to delete the addition relating to the provision for NPA. [Paras 9]

Addition of provision for NPA deleted as the enhanced profits are eligible for deduction under section 80P in terms of the circular and controlling authority.

Final Conclusion: The Tribunal allowed the appeal for A.Y. 2016-17, holding that the assessee registered under the Karnataka Souharda Sahakari Act, 1997 is a co-operative society entitled to deduction under section 80P(2); deletions ordered of the additions made under section 40(a)(ia) and in respect of the provision for NPA, and the AO directed to grant relief accordingly.

Reopening of assessment - Jurisdiction to reopen assessment where return not filed - pursuant to the notice issued under section 148, the assessee filed the return of income - HELD THAT: - The Tribunal found it was undisputed that the assessee had purchased immovable property and had not filed the original return for the year. AO acted on ITS information indicating purchase, transfer details and TDS entries and recorded reasons to believe income had escaped assessment. The Tribunal held the facts distinguish the decisions relied upon by the assessee where returns had been filed or prior scrutiny assessment existed (Manzil Dinesh Kumar Shah and HDFC Bank Ltd.) and that the AO was justified in assuming jurisdiction where no original return was filed and information from departmental sources indicated non-disclosure. The Tribunal, following the principle in Raymond Woollen Mills Ltd. as applied in the order, concluded the AO had reason to believe and therefore jurisdiction to issue notice under section 148 was rightly assumed. [Paras 7]

Grounds No. 1 and 2 dismissed; reopening under section 147/notice under section 148 held valid on the facts

Addition of the purchase consideration as unexplained investment under section 69A - whether evidence/supporting opportunity to be heard was afforded - HELD THAT: - Although the AO made an addition treating the purchase consideration as unexplained investment, the Tribunal found that at neither the assessment nor the appellate stage was the assessee effectively afforded adequate opportunity to substantiate the source of the investment. Given the absence of effective opportunity and the need for the AO to consider any evidence that may be furnished, the Tribunal directed that the matter be restored to the AO for fresh examination. The AO is to reexamine the issue, afford the assessee a reasonable opportunity of hearing and pass a speaking order after considering relevant evidence in accordance with law. [Paras 8]

Final Conclusion: Appeal partly allowed: reopening upheld; addition on account of unexplained investment remanded for fresh adjudication after affording the assessee a reasonable opportunity of hearing.

Disallowance u/s 40(a)(i) and section 40(a)(ia) -Failure to verify TDS deduction under Chapter XVII-B - inapplicability of section 206AA where payees were unidentified - failure to verify conditions for deduction under section 80G

Failure to verify TDS deduction under Chapter XVII-B - AO denied the deduction claimed by the assessee on the basis that the TDS at the prescribed rate, i.e., at 20% under section 206AA was not deducted by the assessee -applicability of section 206AA where payees were unidentified - Whether the deletion of disallowances under section 40(a)(i) and section 40(a)(ia) could be upheld without verification of TDS having been deducted and deposited in the year under consideration - HELD THAT: - The Tribunal found that the Assessing Officer's conclusion invoking section 206AA (prescribed higher rate for non-furnishing of PAN) was not sustainable on the record because section 206AA applies to payments where the payee has failed to furnish PAN, whereas the assessee's consistent case was that the provisions were created when payees were unidentified; therefore, the AO's finding of mandatory application of section 206AA lacked merit.

We find that in the present case, the consistent plea of the assessee is that the provisions were made as the payees were not identified. Accordingly, we do not find any merit in the findings of the AO that the assessee failed to deduct TDS @20% under section 206AA of the Act.

Whether tax was in fact deducted and deposited by the assessee in the year under consideration under Chapter XVII-B? - We find that the details of tax deducted at source by the assessee in the year under consideration have not been examined by any of the lower authorities, which is paramount for deleting any disallowance made under section 40(a)(ia) and section 40(a)(i) of the Act. Therefore, we deem it appropriate to restore this issue to the file of jurisdictional AO for de novo adjudication after necessary verification/examination of the details regarding the deduction of tax by the assessee under Chapter XVII-B of the Act in the year under consideration, while making payments to the parties. Since this issue is restored to the file of the AO for consideration afresh, the assessee shall be at liberty to furnish all the details in support of its claim. We order accordingly. [Paras 8, 9]

Issue remitted to the AO for fresh adjudication and verification of tax deducted under Chapter XVII-B; AO's reliance on section 206AA was rejected on the record before the Tribunal.

Deduction claimed u/s 80G on Corporate Social Responsibility (“CSR”) expenses -HELD THAT: - The Tribunal followed coordinate-bench decisions holding that Explanation 2 to section 37(1) (disallowing CSR as business expenditure) does not ipso facto oust eligibility under Chapter VIA and that only specific exclusions in section 80G(2) (iiihk) and (iiihl) bar certain CSR-related funds. The Tribunal observed that the lower authorities had not verified the nature of payments or the assessee's compliance with the conditions of section 80G. Accordingly, the Tribunal set aside the impugned denial and remitted the matter to the AO to verify whether the statutory conditions for section 80G are satisfied, directing the assessee to furnish requisite details [Paras 14, 17]

Issue remitted to the AO for verification of eligibility under section 80G; if conditions are satisfied, deduction to be allowed.

Final Conclusion: The Tribunal allowed the Revenue's appeal for statistical purposes by setting aside the impugned conclusions on the two substantive heads and remitting both issues to the jurisdictional Assessing Officer for fresh, de novo verification (with opportunity of hearing and production of documents) - first to verify deduction/deposit of TDS under Chapter XVII-B (and rejecting the AO's unexamined reliance on section 206AA), and second to verify compliance with conditions for claiming deduction under section 80G.

Exemption u/s 10(38) - long-term capital gains on sale of listed shares with STT- bogus LTCG -onus of revenue to prove bogus or accommodation entries - suspicion as substitute for evidence

Whether the denial of exemption u/s 10(38) by treating the assessee's LTCG from sale of shares as bogus was sustainable? -

HELD THAT: - The Tribunal found as an undisputed fact that the assessee purchased 15,000 shares through banking channels, held the amalgamated listed shares for over 22 months, sold them on the BSE platform and paid STT. The assessee produced primary documentary evidence - purchase bills, share certificates, demat statements, contract notes, broker confirmations and bank statements - which were not found to be false or fabricated by the Revenue. The addition was founded primarily on general investigation reports and suspicion concerning the scrip, without any cogent material establishing the assessee's involvement in price rigging, transacting through exit providers, or routing back unaccounted funds. In these circumstances, and following binding and persuasive precedent emphasising that suspicion cannot replace evidence and that transactions effected through recognised stock exchanges with documentary proof and STT paid cannot be treated as bogus without specific proof of complicity, the Tribunal held that the Revenue failed to discharge the onus to prove the transactions were accommodation entries. Therefore the denial of exemption under section 10(38) was unsustainable and the addition must be deleted. [Paras 7, 8]

Final Conclusion: Tribunal held that the Revenue did not produce cogent evidence to treat the assessee's LTCG as bogus; exemption under section 10(38) is upheld and the addition deleted, and the appeal is allowed.

Deduction u/s 80-IC - producing items listed in the Fourteenth Schedule - Assessee was not entitled to claim deduction on the articles such as "chewing gum", "candy" and "bubble gum" as the said products were not listed in the Fourteenth Schedule - unit is in a notified area or not? - HELD THAT:- No force in the contention of DR that as assessee is manufacturing any of the items mentioned in the 14th Schedule and has no item in the 13th Schedule, therefore, provision of Section 80-IC(2)(b) pertaining to 14th Schedule shall prevail.

As a unit of assessee is located in notified area for the purpose of claiming deduction u/s 80IC then the relevant factors was to consider if assessee at all was manufacturing any of the item which fall under the 13th Schedule of the Act, which admittedly assessee is not manufacturing.

Only because assessee is manufacturing certain items which fall in 14th Schedule of the Act would not make provision of Section 80IC(2)(b)(ii) of the Act applicable and it is not out of choice assessee is entitled to benefit of Section 80IC (2)(a)(ii) but the fulfillment of eligibility arising out of location of the factory in notified eligible area and the production as commenced between the period 07.1.2003 & 01.04.2012, assessee is entitled to benefit of 80IC (2)(a)(ii) of the Act.

Final Conclusion: Appeal of assessee allowed - Assessee is entitled to benefit of 80IC (2)(a)(ii) on fulfillment of eligibility arising out of location of the factory in notified eligible area and the production as commenced between the period 07.1.2003 & 01.04.2012 and not only because assessee is manufacturing certain items which fall in 14th Schedule of the Act.

Rejection of application in Form 10AB seeking final approval u/s 80G(5) - CIT(Exemption) rejected the application on the ground that the Trust’s objects are not purely charitable in nature - CIT(E) relied on object no.8 of the trust deed, thereby treating it as a composite trust i.e Religious-cum-Charitable trust and holding that it violates Section 80G(5) - if religious expenditure exceeded the statutory 5% threshold

HELD THAT: - CIT(Exemption) treated the trust as a composite (religious-cum-charitable) trust by relying on object no. 8 of the trust deed and rejected the application. The CIT did not record any specific finding on whether the assessee's actual expenditure on religious activities exceeded the statutory limit. Section 80G(5B) permits a trust to incur religious expenditure up to 5% of its total income while remaining eligible under Section 80G.

Because the determinative inquiry is whether the trust's religious expenditure during the relevant previous year exceeded that permissible limit, the Tribunal found that the matter must be examined on that limited question. Matter remanded the case to the CIT(Exemption) to verify the expenditure pattern, determine whether religious expenditure exceeds the prescribed 5% threshold [Paras 6, 7]

Final Conclusion: The Tribunal found the rejection unsustainable insofar as it was based solely on the stated object without any finding on actual religious expenditure; the appeal is allowed for statistical purposes and the matter is remitted to the CIT(Exemption) for limited verification and fresh decision on the 5% statutory limit.

Addition u/s 69 - Reliance on entries in an unsigned Excel sheet recovered from a third party - allegation of denial of natural justice - as submitted statements recorded during search, which are sought to be relied upon, were not furnished in full to the assessee and no opportunity of cross-examination - presumption u/s 132(4A) and 292C

HELD THAT: - The Tribunal held that the entire addition u/s 69 was founded solely on an Excel sheet seized from a third party and on admissions of the developer group, without any independent, cogent or corroborative material linking the assessee to payment of on money in cash. The seized Excel sheet did not bear the assessee's name or signature, did not record any direct acknowledgement of cash payment by the assessee, and the AO did not produce evidence such as cash withdrawals, bank statements, confirmations of receipt, or any other document establishing that the assessee paid cash.

An admission by the developer group before the Settlement Commission could not, by itself, fasten liability on the assessee unless positive evidence established the assessee's participation in the undisclosed transaction.

Statements recorded during the search were not furnished in full to the assessee and no opportunity for cross examination was granted; reliance on such material in the absence of confrontation with the assessee was held to violate principles of natural justice.

As decided in Divyesh Bhupendra Desai [2024 (10) TMI 77 - ITAT AHMEDABAD] and Kaushik Nanubhai Majithia [2024 (3) TMI 1339 - GUJARAT HIGH COURT] that mere entries in an unsigned Excel sheet recovered from a third party, without corroborative evidence and without establishing actual payment by the assessee, cannot be the sole basis for additions. In view of the lack of independent and reliable evidence and the procedural infirmity in using third party statements, the addition was unsustainable in law. [Paras 12, 13, 14, 15, 16]

Final Conclusion: The Tribunal deleted the addition made under section 69 holding that unsigned third party digital records and admissions of the developer, unsupported by independent corroborative evidence and used without full disclosure and opportunity for cross examination, could not sustain an addition - Assessee appeal allowed.

Validity of notice u/s 143(2) as time barred - non-receipt of notice u/s. 143(2) -date of filling return for the purpose of computing period of limitation u/s 143(2) - revised return relates back to original return - assessment void for want of service of notice under section 143(2) of the Act

HELD THAT: - Tribunal held that the original return for AY 2017-18 was filed in October 2017 and that the rectified/revised return filed in June 2018 was filed only to remove defects pointed out by CPC; following binding precedents the revised return steps into the shoes of the original filing date.

Accordingly the limitation for issuing a notice under section 143(2) ran from the original filing and expired six months from the end of that financial year. The notice dated 22.09.2019 was thus issued well beyond the permissible period and is time-barred.

Non-receipt of notice u/s. 143(2) - As per provisions of section 143(3), for making assessment u/s 143(3), AO is required to serve on to the assessee a notice u/s 143(2) within 6 months from the end of the financial year in which ITR is furnished. In this case no notice was ever served on to the assessee within 6 months even by 30.09.2019. It is noted that assessee company had shifted its registered office to new place and the same was clearly stated in the ITR filed for AY 2019-20. Moreover the name of the company was changed and due to such name change email ID of the company was also changed. The updated email ID of the company was mentioned in the latest return and in the profile section of the portal. Due to which neither notice was received over email nor physically by the assessee.

It is settled law that it is mandatory to serve notice u/s 143(2) on the assessee before making any assessment, otherwise assessment order so passed without serving notice u/s. 143(2) is invalid.

The Hon’ble Apex Court in the case of ACIT vs. Hotel Blue Moon [2010 (2) TMI 1 - SUPREME COURT] has held that in the absence of the notice u/s. 143(2) of the Act the assessment framed by the AO is liable to be quashed. In view of above, it is abundantly clear that the notice u/s. 143(2) has not been served on the assessee, which is mandatory and thus, the consequent assessment order is void ab inito and deserve to be quashed. We hold and direct accordingly. [Paras 9, 13, 14]

Final Conclusion: The Tribunal condoned the delay in filing the appeal, held that the revised/rectified return relates back to the original return so that the notice under section 143(2) issued on 22.09.2019 was time-barred and, since no valid notice had been served within the statutory period, quashed the assessment for AY 2017-18.

Benami Property Transactions - definition of ‘benami transaction’ under section 2(9)(A) - immovable properties and bank accounts - transaction took place prior to the amendment in the Act of 1988 vide amending Act of 2016 - sale proceeds upon sale of a portion of the land - failed to established the financial trail and identify the true recipient of the payments -fiduciary exception under section 2(9)(A)(ii) attracted where claimed fiduciary exercised dominion and derived benefit.

Definition of benami transaction includes holding - amending Act 2016 applies where property is held after the amendment - Whether the Amending Act, 2016 applies to the transactions or holdings in question - HELD THAT: - The Tribunal held that the amended definition of 'benami transaction' covers not only transfer but also the holding of property. Where property is held by a person subsequent to the 2016 amendment, the Amending Act applies provided the other conditions of the definition are satisfied. The earlier contrary view in M/s Ganpati Dealcom Pvt. Ltd [2024 (10) TMI 1120 - SC ORDER (LB)] was noted to have been recalled by the Supreme Court, and the Tribunal relied on its prior reasoning to conclude that holdings continuing after amendment fall within the sweep of the Amending Act. [Paras 16]

The Amending Act, 2016 applies because the properties were held subsequent to the amendment and therefore the amended definition governs the case.

Proceeds of benami property constitute benami property - Whether amounts received on sale of a portion of the land held benami become benami property (including bank receipts) - HELD THAT: - The Tribunal found that since the immovable property was adjudicated to be benami, the sale proceeds received on disposal of part of that benami land also became benami property. The bank receipts representing the sale consideration were connected to the benami land and, therefore, the attachment of those movable assets was sustainable. The Initiating Officer's show cause and provisional attachment steps were held to have complied with statutory requirements. [Paras 17]

Sale proceeds of benami immovable property are benami property and may be subject to attachment.

Fiduciary exception under section 2(9)(A)(ii) not attracted where claimed fiduciary exercised dominion and derived benefit - Whether the appellants fall within the fiduciary exception under section 2(9)(A)(ii) - HELD THAT: - The Tribunal analysed the claimed fiduciary relationship arising from the General Power of Attorney and observed that fiduciary capacity requires acting solely for the principal's benefit without deriving personal advantage. The material showed that the alleged fiduciary exercised complete dominion and control over the properties, retained original title deeds, executed agreements to sell and ultimately received sale proceeds, which is inconsistent with a purely fiduciary role. The appellant's conduct and the absence of evidence showing payment of consideration by the benamidar led to rejection of the claimed exception. [Paras 18, 19, 20, 21]

The claimed fiduciary exception is not attracted on the facts; the relationship did not qualify as a fiduciary capacity exempting the transaction from being benami.

Definition of benami transaction includes holding - Whether the Initiating Officer discharged the burden of proof to establish a benami transaction - HELD THAT: - On the record, the Initiating Officer produced documentary and testimonial evidence including statements, bank records showing negligible balances, absence of evidence of payment of consideration by the benamidar, retention of title documents by the alleged beneficial owner and receipt of sale proceeds by him. The Tribunal found these materials sufficient to establish that the properties were acquired and held for the benefit of the beneficial owner and that the IO had met the onus required to sustain the reference and provisional attachment. [Paras 20, 23]

The IO discharged the onus to show a benami transaction; the Adjudicating Authority's findings are sustained.

Final Conclusion: The Tribunal upheld the Adjudicating Authority's finding that the immovable properties and the proceeds derived therefrom were benami, rejected the claimed fiduciary exception, found the Amending Act, 2016 applicable to holdings continuing after the amendment, and dismissed the appeals.

Denial of hearing due to failure of service - principles of natural justice -deemed service under Section 153(3) subject to contrary proof - duty to effect alternative modes of service including electronic communication when postal service returns undelivered.

Denial of hearing due to failure of service-deemed service under Section 153(3) subject to contrary proof - HELD THAT:- The Court examined the record which showed notices for the appellate hearing were issued by post but were returned with endorsements indicating non-delivery. The deeming provision for service in Section 153(3) operates only in the absence of proof to the contrary; where returned postal articles demonstrate non-service, the contrary is proved. If the appellate authority either noticed the returned articles and failed to take further steps to effect service by alternative modes, or proceeded on the erroneous view that service was satisfactorily effected without noticing the returned articles, the consequence is denial of opportunity of hearing. The customs authorities had the petitioner's e-mail address and the appellate authority ought to have resorted to other modes of communication available under the statute. The Court therefore found a breach of the principles of natural justice warranting interference with the impugned order. The Court expressly did not decide the merits of the underlying customs demand, leaving all substantive points open for fresh consideration by the appellate authority. [Paras 11, 13, 15, 16, 17]

Impugned order set aside and matter remanded to the appellate authority to afford the petitioner a personal hearing and pass a fresh order; appellate authority to consider alternative modes of service including electronic communication and decide the matter expeditiously.

Final Conclusion: The writ petition succeeds on the ground of breach of natural justice arising from failure to effect service of notices; the appellate order is set aside and the matter remanded for fresh hearing, with merits left open to the appellate authority.

Mandatory issuance of show cause notice prior to confiscation - principles of natural justice - Validity of seizure u/s 110 of the Customs Act - seizure and detention - detention due to non-declaration versus detention for non-payment of duty - confiscation and penalty - burden of proof on passenger -requirement of a final speaking order after personal hearings.

Mandatory issuance of show cause notice prior to confiscation - Failure to issue a show cause notice before passing a confiscation order rendered the impugned order illegal. - HELD THAT:- The Court applied settled law (including the Court's recent decision in M/s.Hiseins Exim [2026 (3) TMI 215 - MADRAS HIGH COURT] and held that issuance of a show cause notice under the Customs Act is mandatory prior to any confiscation, even where the party is alleged to have waived such notice. As no show cause notice was issued to the petitioner before the confiscation order, the impugned order was passed in breach of the principles of natural justice and had to be quashed. The Court therefore required fresh consideration consistent with the mandatory requirement of a show cause notice and fair opportunity to be heard. [Paras 19, 21, 22]

Impugned confiscation order quashed for failure to issue a mandatory show cause notice; matter remitted for fresh consideration.

Validity of seizure under Section 110 of the Customs Act - detention due to non-declaration versus detention for non-payment of duty - HELD THAT: - The Court recognised factual disputes about the character and validity of the detention/seizure and the reasons recorded in the detention order. Because these questions of fact require elaborate consideration, the Court declined to decide them on the writ and remitted those issues to the respondents for fresh examination and determination in accordance with law. [Paras 20]

Questions as to whether a proper seizure under Section 110 was made and whether detention was for non-declaration or non-payment are remitted to the respondents for fresh consideration.

Personal hearing - speaking order - HELD THAT: - The Court directed that the petitioner may treat the impugned order as a show cause notice and submit a reply within two weeks; on receipt, the respondents must afford three personal hearings with adequate intervals and consider the petitioner's submissions and supporting documents before passing a final speaking order on merits within 12 weeks. The Court further ordered that the seized goods shall not be disposed of until the final order is passed. [Paras 23, 24]

Petitioner to file reply within two weeks; respondents to grant three personal hearings and pass a final speaking order within 12 weeks; seized goods to remain undisturbed until final decision.

Final Conclusion: The confiscation order was quashed for failure to issue the mandatory show cause notice; factual issues regarding seizure and grounds of detention are remitted to the respondents for fresh consideration. The petitioner is permitted to file a reply and must be afforded personal hearings; the respondents shall pass a final speaking order within the directed timeframe and shall not dispose of the goods in the interim.

Appealability of order under Section 128 of the Customs Act, 1962 - availability of alternative remedy by appeal - claim for interest on delayed payment.

Appealability of order under Section 128 of the Customs Act, 1962 - Whether the Assistant Commissioner's order dated 9th February, 2026 permitting payment of the tariff value to the petitioner is appealable under Section 128 of the Customs Act, 1962 and whether the petitioner has an alternative remedy by way of appeal. - HELD THAT: - The Division Bench judgment dated 14th March, 2023 modified the Tribunal's order by granting the petitioner liberty to apply to the concerned Customs authority for payment of the value of seized perishable goods, leaving the exercise of authority to the Customs administration. Pursuant to that liberty the petitioner filed an application which was decided by the Assistant Commissioner by order dated 9th February, 2026 permitting payment of the tariff value. The Court held that the Assistant Commissioner's order is an order passed by the Customs authority in the exercise of statutory power and is therefore an appealable order under Section 128 of the Customs Act, 1962. Because an alternate statutory remedy in the form of an appeal is available, the writ petition was not entertained on the merits; the petitioner was directed to prefer an appeal under Section 128 and may raise claim for interest before the appellate authority. The Court thus treated the availability of the appeal as the appropriate forum for contesting the terms of the Assistant Commissioner's order, including interest. [Paras 8, 9, 10, 11]

Assistant Commissioner's order dated 9th February, 2026 is appealable under Section 128 of the Customs Act, 1962; the petitioner may prefer an appeal claiming interest and the writ petition is disposed of accordingly.

Final Conclusion: The writ petition is disposed of on the ground that the Assistant Commissioner's order permitting payment is appealable under Section 128 of the Customs Act, 1962; the petitioner is at liberty to prefer an appeal before the appellate authority and may claim interest therein.

Shifting of registered office - Legality of the Regional Director's order permitting shifting of the corporate debtor's registered office from West Bengal to Maharashtra in the face of pending appeals against the approved resolution plan - interplay between Rule 30(9)'s second proviso (which permits shifting where a resolution plan has been approved and no appeal against the plan is pending) -application of second proviso of sub rule (9) of Rule 30.

Shifting of registered office - HELD THAT:- As per the case made out by the petitioner had pre-CIRP dues against the Corporate Debtor to the tune of Rs. 4,14,97,803/- and during the CIRP period, the petitioners have raised invoices aggregating to Rs. 13,45,13,193/-. The application of the petitioners was disposed of by the Tribunal on 14th August, 2025 for payment of Rs. 74,01,353/-. Interest under Section 16 of the MSMED Act, 2006, was not granted to the petitioners and the petitioners have preferred an appeal against the said order. In the appeal, the petitioners have prayed for setting aside the order dated 14th August, 2025, only to the limited extent that no amounts towards interest has been directed to be paid by the Adjudicating Authority.

As per the relief in the appeal against the order dated 14th August, 2025, is only for grant of interest. The petitioners have not made out any case how the petitioners would be prejudiced if shifting of the address of the company is allowed.

It is settled law that mere filing of an appeal does not result in staying the impugned order or the proceeding. A specific order of stay is required to be obtained from the Appellate Court but in the present case though the petitioners have preferred an appeal but no order of stay is obtained. On the other hand, the Appellate Tribunal by an order dated 2nd September, 2025, clarified that by issuance of notice, the Appellate Tribunal has not directed for stay of the impugned order dated 14th August, 2025. Further by an order dated 26th November, 2025, clarified that pendency of the appeal shall be no ground for noncompliance of any statutory requirements of the company.

Applying these determinative facts, the court concluded that the Regional Director's action was within the scope of Rule 30(9) as interpreted and directed by the Appellate Tribunal and was not barred merely by the pendency of appeals. [Paras 31, 32, 33, 34, 35]

Final Conclusion: The High Court dismissed the petition, holding that the Regional Director lawfully considered and allowed the application for shifting the registered office in accordance with the Appellate Tribunal's direction and that mere pendency of appeals did not, without a stay, bar such consideration.

Application seeking interim protection has been moved after the issuance of non-bailable warrants (NBWs) - Power to stay investigation under inherent jurisdiction limited to rare cases of miscarriage of justice - abuse of process - filing of subsequent FIR permissible where allegations and scope differ - Misappropriation and siphoning off funds belonging to Exclusive Capital Limited (ECL) - claim to possess Compulsory Convertible Preference Shares (CCPS).

Power to stay investigation under inherent jurisdiction limited to rare cases of miscarriage of justice - HELD THAT: - The Court applied the principle in Neeharika Infrastructure [2021 (4) TMI 1244 - SUPREME COURT] and its reiteration in Siddharth Mukesh Bhandari [2022 (8) TMI 1422 - SUPREME COURT] that interference with an ongoing investigation by exercise of inherent powers is permissible only in the rarest of rare cases, such as where non-interference would result in a miscarriage of justice or where the FIR discloses no cognizable offence. The Court undertook a surface-level evaluation of the FIR and concluded that prima facie cognizable offences were disclosed and that there was no exceptional circumstance to justify staying the investigation or granting relief in the nature of no coercive action. The Court emphasised that detailed adjudication is inappropriate at the investigation stage and that ordinarily the accused should pursue remedies such as anticipatory bail. [Paras 35, 37, 39, 41, 48]

No stay of investigation or interim protection; applications seeking stay/interim protection dismissed.

Filing of subsequent FIR permissible where allegations and scope differ - Whether the second FIR was barred by reason of an earlier FIR on related facts - HELD THAT: - The Court compared the subject-matter and scope of the two FIRs and found them materially different: the earlier FIR concerned a specific entrustment for purchase of a property, whereas the later FIR alleged multiple instances of misappropriation and diversion by the company's directors. The Court distinguished Amitbhai Anilchandra Shah [2013 (4) TMI 903 - SUPREME COURT] on its facts, noting that in that case the second FIR related to the same incident where cognizance had been taken; no such position obtained here. Consequently, mere existence of an earlier FIR did not render the subsequent registration impermissible. [Paras 45, 46, 48]

Second FIR not barred by the prior FIR; objection on that ground rejected.

Issuance of non-bailable warrants sustainable where accused evades lawful process - HELD THAT: - The Court noted the prosecution's case that the petitioner repeatedly failed to comply with notices and did not join investigation despite undertakings, prompting the issuance of non-bailable warrants. The Court held that where the investigating agency produces material showing the accused has evaded lawful process, issuance of warrants cannot be faulted. Reliance on authorities recalling warrants was considered distinguishable on facts where accused had participated in investigation or joined custody; those factual bases were absent here. [Paras 31, 32, 33, 50, 51]

Non-bailable warrants not recalled; the application for recall dismissed.

Criminal proceedings permissible even where parallel civil remedies exist if cognizable offence is prima facie disclosed - HELD THAT: - The Court observed that locus standi in criminal matters is not confined to particular classes of complainants and that shareholders with a stake in the company may initiate criminal proceedings. It found that the NCLT had already recorded findings indicative of oppression and mismanagement and that the FIR's averments, examined at a surface level, disclosed prima facie criminality distinct from civil-company proceedings. Therefore, the mere existence of parallel company or civil proceedings did not render the criminal complaint an abuse of process. [Paras 42, 43, 44, 49]

The complaint cannot be treated as a colourable device to convert civil dispute into crime merely because civil remedies exist; the contention that the FIR is purely civil is rejected.

Final Conclusion: The applications for stay of investigation, interim protection from arrest and for recall of non-bailable warrants were dismissed after the Court held that the FIR prima facie disclosed cognizable offences, the second FIR was not barred by an earlier FIR, the warrants were issued lawfully in view of the petitioner's non-cooperation, and parallel civil proceedings did not preclude criminal investigation. Crl.M.C. No. 321/2026 listed for further hearing.

Validation of dispositions during winding up - bona fide transaction - court's discretion to save bona fide transactions during interregnum - word “void” -impact of the legislative direction in Section 536(2) of the Companies Act, 1956 - distinction between inadmissibility for want of stamp duty and voidness - insufficiency of stamp duty and lack of departmental approval - external departmental correspondence.

Validation of dispositions under Section 536(2) of the Companies Act, 1956 - court's discretion to save bona fide transactions during interregnum - HELD THAT:- The Court in the case of Helbon Engineers Pvt. Ltd. vs. Ferral Anant Machinery Manufacturers Pvt. Ltd. [2024 (7) TMI 119 - BOMBAY HIGH COURT] relying upon the decision of the Hon’ble Supreme Court in the case of Pankaj Mehra and another vs. State of Maharashtra and others [2000 (2) TMI 718 - SUPREME COURT] applied settled principles that the word 'void' in Section 536(2) is subject to the qualifying words 'unless the court otherwise orders' and that the court has discretion to validate dispositions made during the interregnum if they are bona fide, fair, just and expedient in the interest of the company, its creditors and public interest. Having considered the factual matrix - the company's inability to fund and execute its share, the Board resolution and letter of 8th April 2019, the transfer of liabilities to the Applicant, the opening and operation of the escrow account, the advance and bank guarantee contingent on performance, and the Division Bench and Supreme Court treatment of the 2019 Agreements - the Court concluded that the 2019 Agreements were necessary and expedient, bona fide and for the overall benefit of the Company and the Joint Venture. Exercising the discretionary power to 'order otherwise', the Court validated the transactions consummated by the 2019 Agreements and rejected contrary contentions that the transactions ought to be treated as void under Section 536(2). [Paras 75, 76, 78, 87, 93]

The 2019 Agreements are validated under the court's discretion and are not void under Section 536(2).

Distinction between inadmissibility for want of stamp duty and voidness - Whether alleged insufficient stamping of the 2019 Agreements renders them void and incapable of being acted upon - HELD THAT: - Relying on the jurisprudence distinguishing admissibility from validity, the Court held that non-payment or insufficient payment of stamp duty renders an instrument inadmissible in evidence under the Stamp Act but does not ipso facto render it void. The defect is curable under the Stamp Act procedures; and because the Court was not being asked to impound or refuse admission of the agreements as evidence (the agreements had already been acted upon), the objection of insufficient stamping did not impugn the validity of the transactions being validated under Section 536(2). Accordingly the contention that the 2019 Agreements are void for insufficient stamping was rejected. [Paras 99, 100, 101, 102, 103]

Insufficient stamping renders the instruments inadmissible (a curable defect) but does not make them void; the stamping objection is rejected for purposes of the validation.

Irrevocable power of attorney irrevocable when creating an interest and cannot be unilaterally revoked during liquidation - HELD THAT: - The Court noted settled law that an irrevocable power of attorney which creates an interest in favour of the donee cannot be unilaterally revoked. Further, at the time of the purported revocation the Company was in liquidation and lacked the authority to revoke. The ex-director's newspaper notice purporting to cancel the irrevocable POA was therefore ineffective to defeat the rights created by the 2019 Agreements. [Paras 79, 80, 81, 83]

The purported unilateral revocation of the Irrevocable Power of Attorney is ineffective; the POA remains valid as executed in 2019.

External departmental correspondence does not vitiate internal JV arrangements acted upon - HELD THAT: - The Court accepted the Division Bench's treatment that correspondence from the government department is of little consequence to internal arrangements between JV constituents. It observed there were later letters acknowledging and acting upon the 2019 Agreements and, in any event, the government department lacked locus to disapprove internal JV arrangements. Neither the ex-director nor the department had brought effective proceedings to set aside or vary the Division Bench's findings. Accordingly the objections based on lack of VIDC approval or departmental rejections were rejected. [Paras 63, 64, 104, 105, 106]

Departmental correspondence rejecting the 2019 Agreements does not vitiate the internal JV arrangements which were accepted, acted upon and subsequently upheld by higher courts; the objection is rejected.

Final Conclusion: The Interim Application seeking declaration of validity of the 2019 Agreements is allowed under the court's discretionary power to validate bona fide transactions made during the interregnum; the Official Liquidator's Report insofar as it sought declarations against those transactions is rejected, and the request for a stay of the order is refused.

Jurisdiction of the Appellate Tribunal/NCLTto extend the Personal Insolvency Resolution Process (PIRP) period beyond the moratorium/outer limit prescribed under Section 101 - extension of resolution period - directory character of procedural timelines in regulation 19.

Extension of Personal Insolvency Resolution Process (PIRP) period - HELD THAT: - The Tribunal held that the statutory scheme does not confine the PIRP to a rigid outer time limit equivalent to the moratorium; while Section 101 prescribes the outer limit of the moratorium (180 days), the Code and the 2019 Regulations do not mandate automatic termination of the PIRP merely because a procedural timeline has lapsed. The Tribunal examined its earlier decisions which had allowed extensions of PIRP/PPIRP in appropriate cases [Anil Kumar [2025 (1) TMI 1099 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI - LB] and [Shiv Kumar Goel [2025 (7) TMI 1715 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI], and considered the Supreme Court reasoning in Committee of Creditors of Essar Steel India Ltd. [2019 (11) TMI 731 - SUPREME COURT] (striking down the word "mandatorily" in a time limit provision and permitting limited extensions in appropriate cases). Applying those principles, the Tribunal concluded that the adjudicating authority retains jurisdiction to extend the PIRP period where sufficient reasons are shown and stakeholders (creditors) have authorised the RP to seek extension; such extension, however, does not and cannot extend the moratorium whose outer limit is fixed by Section 101(1). [Paras 11, 17, 21]

Tribunal allowed extension of the PIRP period in the present case and held that the adjudicating authority has jurisdiction to extend PIRP in appropriate cases, subject to the non extendability of the moratorium beyond 180 days.

Directory character of procedural timelines in regulation 19 - Whether the 120 day filing requirement in Regulation 19(1) of the IBBI (IRP for Personal Guarantors) Regulations, 2019 leads to automatic abatement or termination of the PIRP on expiry. - HELD THAT: - The Tribunal concluded that Regulation 19(1)'s requirement to file the repayment plan within 120 days is procedural and directory in nature and does not, by itself, prescribe a mandatory consequence of abatement or nullification of the PIRP. The court noted that Regulation 19 prescribes timelines for filing but the Code provides for adjudication on the repayment plan under Sections 112-115, and therefore the absence of a consequence clause in the Regulation means the timeline cannot be read to automatically terminate the process; this conclusion accords with earlier decisions recognising the Court/Tribunal's discretion to manage timelines in appropriate cases [Vikas Gautamchand Jain [2024 (8) TMI 1152 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI]. [Paras 8, 17, 29]

Regulation 19(1)'s 120 day filing requirement is directory and does not automatically terminate the PIRP; the adjudicating authority may, in appropriate circumstances, permit extension of the resolution process.

Final Conclusion: The appeals were allowed: the impugned order rejecting the RP's applications for extension of the PIRP was set aside; the Tribunal held that while the moratorium under Section 101 cannot be extended beyond 180 days, the PIRP period itself may be extended in appropriate cases and Regulation 19(1) is directory. In the facts of this case the Tribunal extended the PIRP period (consequentially permitting the RP to submit the report and obtain adjudication on the repayment plan).

Interim Resolution Professional (IRP)/Resolution Professional (RP) -Updation of claim under Regulation 12A - withdrawal of claim as a form of updation - duty to update claim when satisfied - verification of claims -administrative role of IRP and absence of adjudicatory power.

Updation of claim under Regulation 12A - withdrawal of claim as a form of updation - Whether a creditor who has its claim satisfied partly or fully can 'update' and thereby withdraw its claim during CIRP under Regulation 12A of the CIRP Regulations, 2016. - HELD THAT: - The Tribunal held that Regulation 12A expressly requires a creditor to update its claim as and when the claim is satisfied, partly or fully, after the insolvency commencement date. The literal meaning of Regulation 12A - that a creditor shall update its claim when it is satisfied partly or fully - encompasses a situation where the claim is fully satisfied leaving no claim to continue; consequently 'updation' in such circumstances would include withdrawal of the claim. The Tribunal observed that a creditor whose claim is fully satisfied would have no remaining voting interest and thus there is no principle requiring such creditor to continue as a member of the CoC. The Court also noted the IRP/RP's ongoing obligation under the Code and Regulations to verify, collate and update claims, but recognised that the IRP/RP do not possess adjudicatory power to finally allow or disallow withdrawal; that function lies with the Adjudicating Authority. [Paras 39, 40, 41, 42]

Regulation 12A permits updation of claims when satisfied and such updation includes withdrawal of the claim; the NCLT's conclusion that no provision permits withdrawal was incorrect.

Administrative role of IRP and absence of adjudicatory power - need for adjudicatory decision by Adjudicating Authority - HELD THAT: - The Tribunal accepted that the IRP/RP is an administrative facilitator and lacks adjudicatory powers to decide on withdrawal of an admitted claim. Given that limitation, the IRP was justified in approaching the Adjudicating Authority for directions. The Tribunal set aside the impugned NCLT order which had dismissed the IRP's application as not maintainable, and observed that the Adjudicating Authority alone is competent to adjudicate on the withdrawal/updation of the claim and related consequences. The Tribunal expressly did not decide the applicability of Section 14 or the question of CIRP costs, leaving those issues open for the Adjudicating Authority to consider afresh. [Paras 42, 43, 44]

The IRP was justified in approaching the Adjudicating Authority; the matter is to be adjudicated afresh by the Adjudicating Authority which alone can decide on the request to withdraw/update the claim and attendant issues.

Final Conclusion: The impugned order dismissing the IRP's application was set aside: Regulation 12A permits updation of claims when satisfied and such updation includes withdrawal; the IRP was justified in seeking directions from the Adjudicating Authority. IA No. 3965 of 2023 is revived and remitted to the Adjudicating Authority for fresh disposal after hearing the parties; issues relating to Section 14 and CIRP costs were left open for determination by that Authority.

Invocation of guarantee and maintainability of section 95 petition - unaware of the proceedings before the adjudicating authority because he was not served any of the notices - duty to update registered office details - service by substituted means (email, speed post, publication and electronic messaging) - publication in newspapers as substituted service - assignee steps into shoes of assignor on assignment of debt - deliberate non-participation and abuse of process as ground for costs.

Valid invocation of guarantee and maintainability of section 95 petition - Whether the petition under Section 95 was maintainable on the ground that the guarantee had been invoked and demand made and was not barred by limitation - HELD THAT: - The Tribunal found that the financial creditor had produced a Recovery Certificate dated 23.01.2019 and subsequent demand notices (including notices dated 28.07.2021 and 29.03.2022) which together constituted valid demand and invocation of the guarantee. On this basis the petition under Section 95 was held maintainable. The plea of limitation was rejected since the Recovery Certificate and subsequent demand notices established a live cause of action and the guarantee invocation precondition was satisfied. [Paras 7, 30, 46, 47, 63]

The guarantee was validly invoked by demand and recovery certificate and the Section 95 petition was maintainable; the plea of limitation is untenable.

Service by substituted means (email, speed post, publication and electronic messaging) - Whether service on the personal guarantor was effected by permissible modes and whether non appearance justified ex parte admission - HELD THAT: - The Tribunal examined the steps taken by the Resolution Professional: emails sent to the address in the petition/MCA records, speed post (which returned), substituted service by publication in two newspapers, and direct electronic contact including WhatsApp and telephone calls. The RP also filed an affidavit of service which was taken on record. The record included an acknowledged WhatsApp message from the appellant. On cumulative appraisal the Tribunal concluded that service had been effected by multiple permissible modes and that the appellant, despite being aware, deliberately abstained from participation; the Adjudicating Authority therefore rightly proceeded ex parte and admitted the petition. [Paras 51, 52, 54, 63]

Service was duly affected through available modes and the appellant, being aware, chose not to participate; ex parte proceedings and admission were justified.

Assignee steps into shoes of assignor on assignment of debt - Whether assignment of the debt to Omkara ARC during pendency vitiated the proceedings or deprived the creditor of locus - HELD THAT: - The Tribunal noted that the assignment occurred after the matter had been reserved by the Adjudicating Authority. Relying on the principle that an assignee under SARFAESI steps into the shoes of the assignor, the Tribunal held that the assignment did not vitiate the proceedings and did not oust the maintainability of the petition. The appellant's contention that SASF lacked locus was therefore rejected. [Paras 13, 26, 35, 55, 63]

The assignment did not vitiate the Section 95 proceedings; rights pass to the assignee and the assignment after reservation did not affect maintainability.

Deliberate non-participation and abuse of process as ground for costs - Whether the appellant's conduct in not participating and pursuing parallel remedies warranted denial of relief and imposition of costs - HELD THAT: - The Tribunal found overwhelming material that the appellant knew of the proceedings (including acknowledged WhatsApp communication and later cooperation after the admission order) yet deliberately refrained from participating and pursued parallel remedies (recall before NCLT and the present appeal). The conduct was characterised as deliberate avoidance and forum shopping intended to delay the insolvency process. Having regard to these findings, the Tribunal concluded that the appellant was not entitled to relief and that exemplary costs were warranted. [Paras 54, 58, 61, 62, 63]

The appellant's deliberate non-participation and forum shopping disentitle him to relief and justify imposition of exemplary costs.

Final Conclusion: On cumulative appraisal the appeal is dismissed: the guarantee was validly invoked and the Section 95 petition was maintainable; service was effected by multiple permissible modes and the appellant knowingly abstained from participation; the post reservation assignment did not vitiate the proceedings; the appellant's conduct warranted dismissal and imposition of exemplary costs.

Entitlement to bail in proceedings under Sections 3 and 4 - Section 45 PMLA twin conditions - Bail is the rule and jail is the exception - Right to speedy trial under Article 21 - violation of fundamental rights - Prolonged pre-trial detention converts into punishment - possibility of tampering with evidence.

Section 45 PMLA twin conditions - Bail is the rule and jail is the exception - HELD THAT:- The Hon’ble Supreme Court has held in the case of Prem Prakash [2024 (8) TMI 1412 - SUPREME COURT] that Section 45 of the PMLA by imposing twin conditions does not re-write these principles to mean that deprivation is the norm and liberty is the exception.

In the case of Manish Sisodia [2024 (8) TMI 614 - SUPREME COURT] the Hon’ble Apex Court has also dealt with prolonged incarceration of an accused vis-à-vis the constitutional mandate of liberty guaranteed under Article-21 of the Constitution of India.

The case of V. Senthil Balaji [2024 (9) TMI 1497 - SUPREME COURT] is extremely significant as it has expressly held that the Constitutional Courts cannot allow provisions like Section 45(i)(ii) to become instruments in the hands of the ED to continue prolonged incarceration with no possibility of trial concluding within a reasonable time.

The Court recognised that Section 45 imposes twin conditions which restrict the right to bail but are not an absolute bar; judicial discretion must be fair and guided by law. Relying on binding principles that 'bail is the rule and jail is the exception' and on authorities emphasising the constitutional right to speedy trial, the Court held that where trial is not likely to conclude within a reasonable time and the accused have been subjected to prolonged pre-trial incarceration, statutory restrictions cannot be rendered a vehicle for indefinite detention.

Given the facts that investigation has concluded, the prosecution relies largely on documentary evidence, there are numerous witnesses and voluminous documents yet to be exhibited, and the trial had not commenced with no realistic prospect of early conclusion, continued detention would convert pre-trial custody into punishment. Applying these principles, the Court concluded that no fruitful purpose would be served by keeping the petitioners in custody and that bail could be granted subject to conditions to secure attendance and prevent interference with the process of trial. [Paras 18, 19, 21, 25, 26]

Petitioners entitled to bail under PMLA in the circumstances; bail granted subject to conditions to ensure attendance and fair trial.

Cooperation with investigation does not require self-incrimination - evasive replies do not amount to non-cooperation - Whether alleged non-cooperation by the petitioners justified denial of bail. - HELD THAT: - The Court examined the prosecution's plea of non-cooperation and held that mere evasive replies or failure to provide the responses desired by investigating agency do not equate to non-cooperation, particularly where compulsion to self-incriminate is impermissible. The Court observed that allegations of non-cooperation were not established in the record and therefore could not be the basis for denying bail in the present circumstances; safeguards were nevertheless imposed in bail conditions prohibiting influence of witnesses and requiring attendance. [Paras 15, 23, 27]

Non-cooperation not made out; cannot be relied upon to refuse bail, subject to conditions preventing witness tampering and ensuring attendance.

Final Conclusion: Applying established precedents on PMLA bail jurisprudence and the constitutional right to speedy trial, the High Court granted bail to the petitioners on furnishing bonds and sureties and on specified conditions; no opinion was expressed on merits of the case.

Provisional attachment under the PMLA - well-organized racket for laundering unaccounted demonetized currency - converting the old currency notes to gold/bullion - “process and activity connected with the proceeds of crime” within the meaning of Section 3 of the PMLA​​​​​​​ -reason to believe test for provisional attachment - proceeds of crime - non-mention of the Appellant’s name in the FIR or ECIR - ​​​​​​​independence of PMLA proceedings from FIR/ECIR.

Independence of PMLA proceedings from FIR/ECIR - HELD THAT: - The Tribunal held that mere absence of the appellant's name in the FIR or ECIR is not determinative of non-involvement when subsequent investigation under the PMLA produces material indicating active participation in money laundering. Proceedings under the Act depend upon the material gathered during investigation under the PMLA and may justify attachment even if the accused was not originally named in the FIR/ECIR. The conclusion follows from the material on record, including statements under Section 50 and corroborative evidence, which permit forming a prima facie view of involvement. [Paras 9]

Non-mention in the FIR/ECIR does not preclude initiation of PMLA attachment proceedings; the distinct investigative material suffices for provisional attachment.

Proceeds of crime - provisional attachment under the PMLA - reason to believe test for provisional attachment - HELD THAT: - On the evidence summarized by the Tribunal - including the appellant's statement under Section 50 describing collection and conversion of demonetized currency, corroborative bank/CCTV material, the flow of funds through fictitious firms, commissions charged, and use of RTGS to place funds - there is a proximate link between the seized demonetized currency and its conversion into gold. Such layering and integration, especially during the demonetisation period and involving premium sales of gold, prima facie amount to generation and use of proceeds of crime. For the purposes of provisional attachment the Respondent need only demonstrate a reason to believe, a threshold met by the investigation material. [Paras 10, 11]

The Respondent has prima facie established that the appellant's activities amounted to processes connected with proceeds of crime, meeting the reason to believe standard for provisional attachment.

Provisional attachment under the PMLA - proceeds of crime - HELD THAT: - The Tribunal applied the principle that attachment under the PMLA is not confined solely to properties directly acquired from proceeds of crime but extends to equivalent value thereof. At the provisional-attachment stage the Respondent must show a reason to believe, which can be formed from investigative material. Reliance on precedent in the matter of Shri Sadananda Nayak vs. Deputy Director [2024 (10) TMI 1619 - APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI] and the statutory scheme supports treating property acquired earlier as susceptible to attachment when there is a prima facie case that its value is linked to proceeds of crime or their equivalents. [Paras 12]

The fact that the immovable property was purchased prior to the scheduled offence does not invalidate provisional attachment where the Respondent has a reason to believe it represents equivalent value of proceeds of crime.

Final Conclusion: The Tribunal found that the investigation produced sufficient prima facie material to satisfy the reason to believe test under the PMLA, including that the appellant participated in converting demonetized currency into gold/bullion and that attachment may extend to equivalent value of proceeds; accordingly the appeal was dismissed and the provisional attachment sustained.

Provisional Attachment Order (PAO) - proceeds of crime - collected/generated huge amount of proceeds of crime from the schedule offence involving illegal coal mining / trading operations with the help of his associates -Reliance on statements recorded under a different statute as corroborative evidence - lifting of corporate veil - compliance with language requirement under Regulation 3 of the Adjudicating Authority (Procedure) Regulations, 2013 - scope of provisional attachment under Section 8(3)(a) of the PMLA - attachment during investigation or pendency of related proceedings - attachment of property of individuals or corporates where persons are recipients of proceeds of crime

Reliance on statements recorded under a different statute as corroborative evidence - Whether the Adjudicating Authority acted improperly by relying on a statement recorded under the Income Tax Act, 1961 to confirm the Provisional Attachment Order. - HELD THAT: - The Tribunal found that the PAO and its confirmation were not drawn solely on the statement of Shri Niraj Singh recorded under the Income Tax Act but on a body of evidence including multiple statements recorded under section 50(2) of the PMLA, material recovered during searches, and a disclosed modus operandi. Summons were issued to Shri Niraj Singh and a complaint under section 174 CrPC was filed for non-compliance; thus reliance on the statement was only corroborative. Given the cumulative evidence linking the appellants to receipt and layering of proceeds, the challenge that statements recorded under a different statute were impermissibly relied upon was rejected. [Paras 17, 18, 32, 33]

The challenge to the Adjudicating Authority's reliance on the statement recorded under the Income Tax Act was dismissed; the statement was treated as corroborative within a broader evidentiary matrix.

Compliance with language requirement under Regulation 3 of the Adjudicating Authority (Procedure) Regulations, 2013 - Whether the proceedings before the Adjudicating Authority were vitiated for want of compliance with Regulation 3 requiring documents to be in Hindi or English. - HELD THAT: - The Tribunal accepted the Adjudicating Authority's finding that English translations of statements recorded in Bengali were furnished on 07.12.2021 and that the complaint contained an English gist of the statements and sale deeds. The Authority also noted that the persons had given statements in Bengali and were familiar with that language. The objection was therefore treated as factually incorrect and merely a hypothetical technicality. On these factual findings the Tribunal refused to accept the challenge based on alleged non-compliance of Regulation 3. [Paras 35, 36, 37]

The objection under Regulation 3 was rejected and did not vitiate the Adjudicating Authority's order.

Scope of provisional attachment under Section 8(3)(a) of the PMLA - attachment during investigation or pendency of related proceedings - Whether provisional attachment could continue only in respect of properties that are the subject matter of proceedings before the Special Court, as contended by appellants relying on a High Court single-judge decision. - HELD THAT: - The Tribunal construed Section 8(3)(a) in light of the Apex Court's decision cited (Vijay Madanlal Choudhary [2022 (7) TMI 1316 - SUPREME COURT (LB)] and held that provisional attachment under the PMLA is not confined to properties that are already subject matter of a complaint before the Special Court; attachment can be made where material indicates a person is in possession of proceeds of crime, whether as an accused or as a recipient. The Tribunal observed that the High Court single-judge ratio relied upon by appellants conflicted with the Apex Court and was stayed by a Division Bench; therefore that ratio could not be applied to defeat the statutory scheme under Article 141. [Paras 38, 39, 40, 41]

Section 8(3)(a) permits continuance of attachment during investigation or pendency of related proceedings against persons shown by material to be involved or to be recipients of proceeds; the appellants' contention based on the High Court single-judge decision was rejected.

Attachment of property of individuals or corporates where persons are recipients of proceeds of crime - Whether properties of individuals or of corporate entities could be provisionally attached where evidence shows receipt or layering of proceeds through shell companies and transfers to relatives/associates. - HELD THAT: - The Tribunal examined the material: statements under section 50(2) of the PMLA attributing use of dummy directors and routing of funds through 'jamakharchi' companies, admissions by the main accused about acquisition and use of shell companies, and detailed bank-transfer and property-purchase linkages set out in the impugned order. Given the disclosed modus operandi, unexplained credits, and transfers from shell/company accounts into personal accounts used to purchase properties, the Tribunal found a direct correlation between the criminal activity and acquisition of the attached properties. The principle in Bacha F. Guzdar regarding corporates and shareholders was held distinguishable on facts and statutory scheme; lifting the corporate veil was not required where material showed recipients of proceeds were beneficiaries of laundering through corporate entities. [Paras 10, 42, 43]

The provisional attachment of properties in the names of the individuals and corporate entities was upheld as justified on the material showing receipt and layering of proceeds of crime.

Final Conclusion: On consideration of the material and rival submissions the Tribunal found no infirmity in the Adjudicating Authority's confirmation of the Provisional Attachment Order; challenges on reliance of statements recorded under another statute, on language non-compliance, on the scope of Section 8(3)(a), and on separation of corporate and individual assets were rejected, and the appeals were dismissed.

Taxability of services by a protection and indemnity (P&I) club to its members under service tax post-2012 - definition of “club or association” - expression “body of persons” - supply of tangible goods service -application of Explanation 3 to Section 65B(44) to incorporated or statutory bodies - doctrine of mutuality - Whether the demand confirmed on the protection and indemnity extended to the appellant by Steamship Mutual Underwriting Association (Bermuda) Limited, London, denying the appellant’s protestations that it was not leviable on the principle of mutuality, is tenable.

Taxability of services by a P&I club to its members under service tax post-2012 - application of Explanation 3 to Section 65B(44) to incorporated or statutory bodies - doctrine of mutuality - HELD THAT: - The Tribunal found that the Appellate Authority relied on Explanation 3 to Section 65B(44) although that reliance was not pleaded in the show cause notice nor adopted by the adjudicating authority; such departure from the notice renders the demand unsustainable on procedural grounds. Independently on merits, the appellant produced uncontroverted documents showing SMUABL was established by an Act of the Bermudian Legislature, that the payments were described as "Mutual Premium" and that the protection was provided on the basis of mutuality - facts admitted in the SCN. Following the reasoning of the Supreme Court in State of West Bengal v. Calcutta Club Ltd. [2019 (10) TMI 160 - SUPREME COURT (LB)] Explanation 3(a) does not apply to members' clubs which are incorporated or bodies constituted by or under law, and the doctrine of mutuality operates to exclude transactions among members from being services for consideration. Applying those principles, the Tribunal held that SMUABL's relationship with the appellant falls within mutual insurance arrangements and, in any event, Explanation 3(a) cannot be invoked to treat an incorporated or statutorily established body as a "body of persons" for taxing members' transactions; consequently the confirmed demand, interest, appropriation and penalty could not be sustained. [Paras 12, 13, 14, 15, 16]

The demand of service tax (including interest and appropriation) and penalty under Section 76 confirmed by the impugned order is untenable and is set aside; the appeal is allowed in favour of the appellant.

Final Conclusion: On the combined procedural and substantive grounds that the Appellate Authority travelled beyond the show cause notice and, on the merits, that the services were governed by mutuality and SMUABL is an entity excluded from Explanation 3(a), the Tribunal allowed the appeal and set aside the confirmation of the service tax demand, related interest and appropriation and the penalty imposed under the Act.

Power of High Court to condone delay in filing appeals before quasi-judicial authorities - limitation period - applicability of the provisions of the Limitation Act - Disallow Cenvat credit of service tax on the strength of invalid documents and recovery thereof along with interest in terms of Rule 14 of the Cenvat Credit Rules, 2004, read with Section 11A & Section 11AB of the Central Excise Act, 1944 - condonation of delay by quasi-judicial authorities.

Power of High Court to condone delay in filing appeals before quasi-judicial authorities - condonation of delay by quasi-judicial authorities - Whether the delay in filing the appeal against the Order in Original could be condoned by the Appellate Authority or by the High Court under Article 226. - HELD THAT: - The court found that the Appellate Authority lacked power to condone delay beyond the statutory period and examined whether the High Court could exercise its constitutional jurisdiction to condone such delay. Relying on the reasoning in Commissioner of Customs and Central Excise v. Hongo India Pvt. Ltd. [2009 (3) TMI 31 - SUPREME COURT], the court observed that where a statute excludes the applicability of the Limitation Act or prescribes a specific period for filing, the High Court does not possess power to condone delay in filing applications or references before quasi judicial forums beyond the prescribed period. The court further noted the principle affirmed by the Apex Court that the Limitation Act applies to proceedings before courts and that quasi judicial bodies or tribunals can condone delay only insofar as they are specifically empowered to do so. Applying these authorities, the court concluded that delay beyond the prescribed period could not be condoned in the present proceedings. [Paras 12, 13, 14, 15]

The delay in filing the appeal could not be condoned; the appeal was time barred and the writ petitions are dismissed.

Final Conclusion: The Court dismissed the writ petitions on the ground that the appeal was filed beyond the prescribed period and that neither the Appellate Authority nor the High Court could lawfully condone the delay in the present statutory scheme.

Validity of the Deputy Commissioner's order purporting to review and cancel the registration certificate - Jurisdiction of Registrar of Firms Or the Deputy Commissioner under the Indian Partnership Act, 1932 Or under Section 21 of the General Clauses Act, 1897 to cancel or set aside the registration certificate of a partnership firm - rectification of mistakes u/s 64 - complaint regarding forgery - non-est - Power to review or cancel the registration certificate of partnership firm - Statutory scheme of the Indian Partnership Act, 1932 - available to convert an acknowledgement of registration into an amendable order.

Absence of power to review or cancel by the Deputy Commissioner - Validity of the Deputy Commissioner's order purporting to review and cancel the registration certificate - HELD THAT:- The impugned cancellation was passed by the Deputy Commissioner (not the designated Registrar). The statutory scheme and the notification under Section 57 designate the SDM (Headquarter) as Registrar and do not confer any power on the Deputy Commissioner to exercise review or cancellation functions vested in the Registrar. Administrative supervision of Registrars by the Deputy Commissioner does not equate to delegation or conferment of the Registrar's statutory powers on the Deputy Commissioner. Therefore the Deputy Commissioner could not validly usurp a power of review/cancellation which is not provided by the Act or Rules. [Paras 27, 30, 31, 32, 33]

The Deputy Commissioner had no power to pass the order of cancellation; that exercise of jurisdiction was unauthorized.

Rectification under Section 64 confined to correcting mistakes, not cancellation - HELD THAT:- Section 64 empowers the Registrar to rectify mistakes to bring register entries into conformity with documents filed; it is not a vehicle for adjudicating rival claims or for cancelling registration. The certificate of registration under the Partnership Act is an acknowledgment of the filed statement under Section 58/59 and not an 'order' in the sense that would permit unfettered rescission under Section 21 of the GCA. Although Rules (including Rule 9) permit inquiries by the Registrar when disputes arise, the Act and Rules contain no express power to cancel registration; consequently recourse to Section 21 of GCA to effect cancellation is inappropriate in the statutory scheme of the Indian Partnership Act. [Paras 33, 34, 40, 41]

Registrar lacked statutory power to cancel the registration under Section 64, and Section 21 of the GCA could not be invoked to supply a power of cancellation in the circumstances of this Act and Rules.

Resignation effective only when tendered and accepted - fraud not established to vitiate the registration - Whether the registration was obtained by fraud such as to justify cancellation on merits - HELD THAT:- The resignation dated 31.03.2006, though existing, was not acted upon and therefore could not be given retrospective effect so as to render the original registration procured by misrepresentation. A resignation must be unconditional and intended to operate as such to constitute effective resignation. Given that the resignation was not operative at the time of registration and that the Form V filed in 2010 disclosed the subsequent change, the Court found that the record did not establish fraud or misrepresentation sufficient to vitiate the original registration. The defects in the later filings could have been examined under the Registrar's document-examination powers, but do not conclusively demonstrate fraud on the statute that would justify cancellation. [Paras 42, 43, 44, 45, 46]

No sufficient fraud was established to justify cancellation; the resignation was not effective to nullify the initial registration.

Final Conclusion: In the considered opinion of this Court, after analyzing the provisions of the Act and the Rules made thereunder, the act of cancellation of registration would be quasi-judicial in nature and in absence of any express power provided in the Act or the Rules made thereunder, the Registrar of Firms would not have a power to cancel the registration. The power which has been conferred upon the Registrar by Rule 6 of the Delhi Partnership (Registration of Firms), Rules, 1972, enacted in exercise of the power under Section 71(2) of the IPA, is with respect to the noting of protest and making of reference in the manner as provided in the said Rule. Even otherwise, Deputy Commissioner, Firms, would not have a power to pass an order of the nature as has been done in the present case. Finally, as already noted hereinbefore, it is not a case of fraud as has been noted in the impugned order. Consequently, impugned orders dated 17.02.2014 and 05.01.2015 passed by Deputy Commissioner, Firms, and Registrar of Firms, respectively, are set aside. Registration Certificate dated 08.05.2006 of petitioner No. 1-firm is restored.

The present petition is allowed and disposed of accordingly.