TaxTMI Updates e-Newsletter
Mar 11,2021

Confiscation of conveyance under Section 130 of the Central Goods and Services Tax Act, 2017 - release of seized conveyance on payment of fine in lieu of confiscation - appeal under Section 107 of the Act - ad-interim relief - nonspeaking order - refund of amount deposited upon successful appeal

Appeal under Section 107 of the Act - release of seized conveyance on payment of fine in lieu of confiscation - refund of amount deposited upon successful appeal - Permissibility and procedure for challenging the confiscation order and interim release of the conveyance - HELD THAT: - The Court noted that an ad-interim direction had earlier been granted for release of the truck on payment of a specified amount as fine in lieu of confiscation. Rather than adjudicating the merits of the challenge to the final confiscation order, the Court directed that the petitioner be permitted to prefer an appropriate appeal under Section 107 of the Act within four weeks. The appellate authority was directed to adjudicate the appeal on its own merits in accordance with law; the High Court expressly declined to express any opinion on the merits. The Court further recorded that if the petitioner ultimately succeeds in the appeal, he would be entitled to seek refund of the amount deposited towards fine in lieu of confiscation. [Paras 5, 6, 7]

Petitioner permitted to prefer an appeal within four weeks; appellate authority to decide the appeal on merits; entitlement to refund if appeal succeeds; writ disposed of.

Final Conclusion: The writ petition is disposed of by permitting the petitioner to file an appeal under Section 107 within four weeks; the appellate authority is directed to decide the appeal on its merits, and if the petitioner succeeds he may seek refund of the amount deposited as fine in lieu of confiscation. The Court expressed no opinion on the merits.

Availability of statutory remedy under Section 107 - Writ under Article 226-scope where statutory appeal available - Confiscation order in Form GST MOV-11 - Release of detained vehicle and goods subject to undertaking - Obligation to pay differential amount upon failure in appeal

Writ under Article 226-scope where statutory appeal available - Availability of statutory remedy under Section 107 - Whether the writ petition challenging the confiscation order in Form GST MOV-11 should be adjudicated when an appeal under Section 107 is available - HELD THAT: - The Court recorded that a final order of confiscation in Form GST MOV-11 had been passed and observed that a statutory remedy by way of appeal under Section 107 of the Act was available to the writ applicant. In view of the availability of that remedy, the Court declined to examine the legality and validity of the confiscation order in these writ proceedings and disposed of the petition by granting liberty to the petitioner to prefer the statutory appeal in accordance with law. The Court relied on the prior coordinate-bench direction (recorded in the order of 27th September 2019) which had ordered release of the truck and goods subject to an undertaking and payment of amounts, and clarified that the undertaking remains operative and that if the petitioner fails in the appeal, the differential amount must be paid. [Paras 3, 4]

Writ petition disposed of with liberty to prefer an appeal under Section 107 within thirty days; Court will not adjudicate the confiscation order in the writ petition where the statutory appeal is available, and the petitioner must pay the differential amount if he fails in the appeal.

Release of detained vehicle and goods subject to undertaking - Obligation to pay differential amount upon failure in appeal - Whether the earlier direction for release of the truck and goods subject to an undertaking continues and what the consequences are if the petitioner does not prefer an appeal or fails in appeal - HELD THAT: - The Court took notice of the coordinate-bench order directing immediate release of the truck and goods subject to the petitioner filing an undertaking to pay any differential amount in the event of unsuccessful proceedings. The Court clarified that the release ordered earlier shall be given effect to if the petitioner does not file an appeal within thirty days. It further clarified that the undertaking filed on oath remains on record and that, should the petitioner pursue an appeal and fail, the differential amount as observed by the coordinate bench must be paid by the petitioner. [Paras 2, 4]

The earlier direction for release subject to an undertaking remains effective; if no appeal is filed within thirty days the authority shall give effect to the earlier release order, and if the petitioner fails in appeal the differential amount must be paid.

Final Conclusion: The writ petition is disposed of: the Court will not decide the validity of the confiscation order where a statutory appeal under Section 107 is available; the petitioner is granted liberty to prefer an appeal within thirty days, the earlier release direction subject to the petitioner's undertaking remains effective, and failure in appeal will attract payment of the differential amount.

Release of seized goods pending adjudication - interim relief subject to undertaking - show cause notice for confiscation (Form GST MOV 10) - final confiscation order (Form GST MOV 11) - confiscation proceedings under the Central Goods and Services Tax Act, 2017 - appeal under Section 107

Release of seized goods pending adjudication - interim relief subject to undertaking - Whether any further writ relief was maintainable after interim release of the goods and while proceedings are at the stage of show cause notice for confiscation. - HELD THAT: - The Court recorded that, pursuant to its earlier interim order, the seized goods and conveyance had been released. The matter was at the stage of issuance of show cause notice for confiscation (MOV 10) and the learned counsel for the petitioner was unable to state whether a final confiscation order (MOV 11) had been passed. In these circumstances the Court found there was nothing further to be adjudicated in the writ petition and accordingly disposed of the petition. The Court thereby treated the interim release (given subject to the petitioner's undertaking) and the continuation of the statutory confiscation process as reasons precluding further writ intervention at that stage. [Paras 3, 4, 5]

Writ petition disposed as there was nothing further to be adjudicated after interim release while confiscation proceedings were at the MOV 10 stage.

Final confiscation order (Form GST MOV 11) - appeal under Section 107 - confiscation proceedings under the Central Goods and Services Tax Act, 2017 - Appropriate remedy against a final order of confiscation under the Act. - HELD THAT: - The Court observed that if a final order of confiscation has been passed in Form GST MOV 11, the statutory remedy is to challenge that order before the appellate authority by filing an appeal under Section 107 of the Central Goods and Services Tax Act, 2017. The Court therefore signalled that the aggrieved party should pursue the specific appellate remedy provided in the statute rather than seeking further relief in the present writ proceedings. [Paras 4]

A final confiscation order, if passed, is to be challenged by way of appeal under Section 107; the writ petition is not the appropriate forum to bypass this statutory remedy.

Final Conclusion: The writ petition is disposed of: the goods were released pursuant to the Court's interim order; there was nothing further for adjudication in the writ while confiscation proceedings stood at MOV 10; any final order of confiscation (MOV 11) is to be contested by filing an appeal under Section 107 of the Central Goods and Services Tax Act, 2017.

Confiscation under Section 130 of the Central Goods and Services Tax Act, 2017 - show cause proceedings in Form GST MOV 10 - final order in Form GST MOV 11 - interim release of seized goods subject to undertaking - appeal under Section 107 of the Act - court declines to express opinion on merits

Show cause proceedings in Form GST MOV 10 - interim release of seized goods subject to undertaking - Proceedings at the MOV 10 stage and the interim release ordered by the Coordinate Bench. - HELD THAT: - The Court noted the matter was at the stage of MOV 10 (show cause notice stage under the GST proceeding) and that the vehicle and goods had already been released pursuant to the ad-interim order of a Coordinate Bench. In view of the stage of proceedings and the interim release, the Court declined to enter into adjudication of the confiscation issue at this juncture and refrained from further consideration of the merits. [Paras 2, 4]

The Court declined to proceed further while the matter is at MOV 10 and observed the goods had been released subject to the earlier undertaking; the writ petition was not further adjudicated on merits.

Final order in Form GST MOV 11 - confiscation under Section 130 of the Central Goods and Services Tax Act, 2017 - appeal under Section 107 of the Act - court declines to express opinion on merits - Availability of remedy and treatment of any final confiscation order. - HELD THAT: - The Court clarified that if a final order of confiscation is ultimately passed in Form GST MOV 11 under Section 130 of the Act, the writ applicant remains free to challenge that final order by way of an appeal under Section 107 of the Act. The Court expressly disclaimed any expression of opinion on the merits of the underlying confiscation proceedings. [Paras 4, 5]

If a final confiscation order is passed, the applicant may challenge it by appeal under Section 107; the Court has not expressed any view on the merits.

Final Conclusion: Writ petition disposed of without adjudication on merits because the matter was at the MOV 10 stage and the goods had been released pursuant to an earlier interim order; liberty granted to challenge any final confiscation order in Form GST MOV 11 by appeal under Section 107 of the Act.

Bond - bank guarantee - provisional release of goods pending confiscation proceedings - execution of bond as security in lieu of payment of fine - deposit towards tax and penalty as condition for release - distinction between bond and bank guarantee - bond in accordance with law

Bond - bank guarantee - distinction between bond and bank guarantee - bond in accordance with law - Whether the bond ordered by the Court requires to be accompanied by a bank guarantee or other security. - HELD THAT: - The Court clarified that the term "bond" as used in its earlier order dated 08.02.2021 was not intended to mean a bank guarantee or to require collateral. The bench explained the legal distinction between a bond and a bank guarantee: a bank guarantee ordinarily involves the bank's security interest and may require collateral to satisfy the bank, whereas a bond does not inherently require such collateral. The court reiterated that the bond must be executed "in accordance with law" to the satisfaction of respondent No.2, but this does not import a requirement of bank guarantee or security unless lawfully mandated. The Court directed that respondent No.2 must implement the earlier order without insisting on a bank guarantee, and emphasized that any proforma or insistence by the officer that equates the bond with a bank guarantee is misconceived. [Paras 4, 6]

Bond does not have to be accompanied by a bank guarantee or collateral; the bond must be executed in accordance with law and not be equated to a bank guarantee.

Provisional release of goods pending confiscation proceedings - deposit towards tax and penalty as condition for release - execution of bond as security in lieu of payment of fine - Implementation of the Court's earlier direction for provisional release of goods on specified financial conditions. - HELD THAT: - The Court reaffirmed its earlier order (08.02.2021) directing provisional release of the goods pending the confiscation proceedings on the condition that the writ applicant deposits the specified amount towards tax and penalty and executes a bond for the remaining fine. Observing that respondent No.2 had not given effect to the order due to a misconception equating the bond with a bank guarantee, the Court again directed release of the goods once the deposit is made and the bond executed to respondent No.2's satisfaction (subject to being a bond in accordance with law). The Court also directed the Advocate General to ensure respondent No.2 is made aware of these consequences and comply with the order. [Paras 2, 5, 6]

Respondent No.2 is directed to release the goods upon deposit of the specified amount towards tax and penalty and upon execution of the bond for the balance amount; insistence on a bank guarantee is unjustified.

Final Conclusion: The application is disposed of with clarification that the bond ordered by this Court does not require a bank guarantee or collateral and that respondent No.2 shall release the goods on deposit of the specified amount and on execution of a bond in accordance with law; respondent No.2 is to comply with the earlier order dated 08.02.2021 forthwith.

Stay of operation - impugned order - inconsistency between administrative decision and investigative finding - remand for further examination - service of notice and filing of counter affidavits

Stay of operation - impugned order - Interim stay on the operation of the impugned order dated 15.11.2019 passed by respondent no.2/NAPA in case no. 56/2019 - HELD THAT: - Having noted a material divergence between the view expressed by respondent no.2/NAPA in its order dated 19.08.2020 and the communication from respondent no.3/DGAP (dated 21.01.2021) which indicated that the petitioner had passed on the input tax credit, the Court directed that, in the meanwhile, the operation of the impugned NAPA order dated 15.11.2019 shall be stayed. The stay is an interim protective measure taken pending further pleadings and examination of the matters identified by the Court. [Paras 3, 4]

Operation of the impugned order dated 15.11.2019 is stayed until further orders.

Service of notice and filing of counter affidavits - Issuance of notice to respondent no.3/DGAP and timetable for filing of counter affidavits and rejoinders - HELD THAT: - The Court directed that notice be issued to respondent no.3/DGAP by all available means, including e mail. Respondent no.1/UOI and respondent no.2/NAPA were directed to file their counter affidavits within four weeks from the date of the order; respondent no.3/DGAP was granted liberty to file its counter affidavit within four weeks from the date of service of notice. Any rejoinder(s) may be filed before the next date of hearing. Service was accepted on behalf of respondent nos.1 and 2 by their counsel. [Paras 4]

Notice to respondent no.3/DGAP to be issued; respondent nos.1 and 2 to file counter affidavits within four weeks; respondent no.3 to file counter affidavit within four weeks from service; rejoinders allowed.

Inconsistency between administrative decision and investigative finding - remand for further examination - Requirement of further examination by respondent no.3/DGAP in light of apparent inconsistency concerning passing on of input tax credit - HELD THAT: - The Court observed that respondent no.2/NAPA's order concluding that no penalty was payable sits at odds with respondent no.3/DGAP's communication that the petitioner had passed on the input tax credit. Counsel for respondent no.2/NAPA indicated that the investigation with regard to the input tax credit may not have been carried out by respondent no.3/DGAP and that further examination is required. In view of this state of affairs the Court issued notice and directed further pleadings rather than deciding the substantive controversy at this stage. [Paras 2, 3]

The matter will require further examination by respondent no.3/DGAP; notice issued for that purpose and the adjudicatory process continued.

Final Conclusion: The High Court granted an interim stay on the operation of the NAPA order dated 15.11.2019, directed service of notice on DGAP and fixed a four week timetable for filing counter affidavits (with rejoinders before the next hearing), and recorded that further examination by DGAP is required due to inconsistency between DGAP's communication and NAPA's order.

Principles of natural justice - right to be heard - best judgment assessment - jurisdiction under Section 62(1) to make a best judgment assessment - remand for fresh consideration - deposit as interim measure

Principles of natural justice - right to be heard - best judgment assessment - jurisdiction under Section 62(1) to make a best judgment assessment - Impugned ex parte assessment order dated 14.09.2019 under Section 62(1) for the period June 2019 was vitiated for violation of principles of natural justice and was quashed. - HELD THAT: - The High Court found that the assessment order was passed without affording the petitioner adequate opportunity of hearing or assigning reasons. As the order fastened a financial liability and thus had civil consequences, the failure to follow the principles of natural justice caused serious prejudice to the petitioner. For these reasons the impugned order dated 14.09.2019, passed under Section 62(1) for June 2019, was set aside. The Court expressly refrained from expressing any opinion on the merits of the assessment.

Quashed the ex parte assessment order dated 14.09.2019 for June 2019 for breach of natural justice.

Remand for fresh consideration - deposit as interim measure - opportunity to place additional material - decision on merits within a time-bound period - The matter was remanded to the assessing authority for fresh consideration with specified interim directions, including an interim deposit by the petitioner and a time-bound hearing and decision. - HELD THAT: - Acting on the petitioner's offer, the Court accepted an interim deposit and remanded the matter for fresh consideration on limited and mutual terms. The directions required the petitioner to deposit the specified sum by a stated date, to appear before the authority on that date and place any additional material, and permitted parties to place further material. The authority was directed to decide the matter on merits in compliance with natural justice within two months (preferably within the current financial year). The deposit was to be without prejudice to rights of the parties and, if found excessive, to be refunded as per the statute. Liberty to pursue other remedies was preserved and proceedings could, if necessary, take place by digital mode in view of the pandemic. The Court made clear it had not decided the merits.

Matter remanded to the assessing authority for fresh adjudication in accordance with the directions (including interim deposit, opportunity of hearing and time-bound decision); liberty preserved; no expression on merits.

Final Conclusion: The High Court quashed the ex parte best-judgment assessment dated 14.09.2019 under Section 62(1) for June 2019 for breach of principles of natural justice, accepted an interim deposit offered by the petitioner, and remanded the matter to the assessing authority for fresh, time-bound consideration in compliance with natural justice, while reserving rights and expressing no view on the merits.

Bail under Section 439 CrPC - arrest and prosecution under Section 132 CGST Act - determination/adjudication of tax liability as precondition to prosecution - bailability threshold under Section 132(5) CGST Act - custodial necessity and risk of tampering with evidence - medical condition and custodial relief

Arrest and prosecution under Section 132 CGST Act - determination/adjudication of tax liability as precondition to prosecution - Whether continued custody/arrest could be sustained in absence of adjudication fixing the accused's tax liability under Section 132 CGST Act - HELD THAT: - The Court observed that adjudication to determine the exact liability had not been initiated by the department and that the prosecution had not specified the precise amount retained by the accused for his own use. Relying on precedents which hold that exercise of punitive power under Section 132 requires quantification/determination of demand (absent a finding of habitual offending or other exceptional circumstances), the Court found that the department had not adduced material showing assessment or determination of tax evaded or that the accused was a habitual offender. In these circumstances, the absence of adjudication and a calculable liability weighed against sustaining custody merely on the basis of aggregate figures attributed to the broader chain of transactions.

Arrest/continued custody could not be sustained in the absence of adjudication fixing the accused's liability; this ground supported grant of bail.

Bailability threshold under Section 132(5) CGST Act - bail under Section 439 CrPC - Whether the offence was bailable under Section 132(5) CGST Act given the alleged figures and deposits, and whether the accused was entitled to regular bail - HELD THAT: - The defence placed on record that the difference between availed and passed on ITC attributable to the accused was small and that the accused had made a reversal/deposit by way of GST reversal forms. The prosecution did not quantify the accused's exact personal liability and conceded that adjudication had not been done. Applying the statutory bailability threshold and the absence of an adjudicated liability, the Court treated the offence as falling within the bailable category under Section 132(5) and held that the accused had been wrongly kept in custody. On that basis the Court concluded that the accused was entitled to regular bail.

Offence held to be bailable in the factual matrix; accused entitled to bail on furnishing bonds.

Custodial necessity and risk of tampering with evidence - medical condition and custodial relief - Whether custodial detention was necessary for investigation or to prevent tampering, and whether personal circumstances justified bail - HELD THAT: - The Court noted there was no material placed on record showing reasonable apprehension of tampering with evidence or that custodial interrogation of the accused was required; adjudication had not begun and the investigation did not demonstrate a need for continued custody. The accused's age, medical ailments and responsibility for elderly parents, together with the fact of reversal/deposit not disputed by the prosecution, were relevant considerations favouring custodial relief. Weighing these factors, the Court found no purpose in further detention.

Custody was not necessary; bail granted subject to conditions to protect investigation and leave of court for travel abroad.

Final Conclusion: The application for regular bail is allowed: the accused is released on furnishing personal bond and surety, subject to conditions (cooperation with investigation, surrender of passport, no leaving the country without court permission, and non-tampering with evidence).

Loans between allied charitable trusts not treated as investments or deposits - investment or deposit in contravention of Section 13(1)(d) and Section 11(5) - entitlement to exemption under section 11 despite inter-society loans - application of precedent decisions on inter-society temporary loans

Loans between allied charitable trusts not treated as investments or deposits - investment or deposit in contravention of Section 13(1)(d) and Section 11(5) - entitlement to exemption under section 11 despite inter-society loans - Assessee's grant of interest-free loans to sister/group trusts does not amount to investment or deposit attracting Section 13(1)(d) read with Section 11(5), and therefore does not disentitle the assessee to exemption under Section 11 for the Assessment Year 2008-09. - HELD THAT: - The Assessing Officer treated interest-free advances to allied trusts as impermissible investments/deposits under Section 13(1)(d) read with Section 11(5). The Tribunal and the Commissioner (Appeals) found that the advances were loans to other educational/charitable societies having similar objects, interest-free and not investments or deposits within the meaning of Section 11(5)/13(1)(d). This Court noted that earlier decisions of the Delhi High Court and a Division Bench of this Court support the view that temporary, interest-free loans between societies with similar objects do not attract Section 13(1)(d)/11(5). The Court observed that the Kerala decision relied on by the Revenue was factually distinguishable and therefore inapplicable. Applying the precedents favorable to the assessee and on the facts before it, the Court held that the loans did not amount to prohibited investments or deposits and that the assessee remained entitled to exemption under Section 11 for the year in question. [Paras 4, 7, 8, 9]

Appeal dismissed; question of law answered against the Revenue and in favour of the assessee.

Final Conclusion: Following earlier decisions applied to the facts, the High Court held that interest-free loans by the assessee to group/sister trusts with similar objects were not investments or deposits proscribed by Section 13(1)(d) read with Section 11(5); the Revenue's appeal was dismissed and the assessee's entitlement to exemption under Section 11 for Assessment Year 2008-09 was upheld.

Deeming provision under Section 41(1)(a) of the Income Tax Act - cessation of liability and write back as income - amount obtained as the measure of recoupment - tax deducted at source and interest as notional elements - debatable issue and inadmissibility of summary adjustment under Section 143(1)(a) - limited scope of legal fiction

Deeming provision under Section 41(1)(a) of the Income Tax Act - amount obtained as the measure of recoupment - tax deducted at source and interest as notional elements - limited scope of legal fiction - Whether the amount chargeable as profits under Section 41(1)(a) is the gross sum earlier deducted or the actual amount obtained by the assessee exclusive of tax and interest paid but not refunded. - HELD THAT: - The Court held that Section 41(1)(a) creates a legal fiction to treat as income the amount actually obtained or the value of benefit accruing on cessation or remission of a previously deducted expenditure. A legal fiction must be confined to the purpose for which it is enacted and cannot be expanded to include sums not actually obtained. The words "amount obtained" denote the actual amount received or the value of benefit accrued in the year of recoupment; unrecovered or unrefunded elements (such as TDS and interest paid to the Revenue) are not "amount obtained" until they are actually refunded. To treat the gross amount inclusive of tax and interest as deemed profits in the year of write back would expand the fiction beyond its legitimate field and create accounting and tax anomalies (for example, making a future refund unaccountable). Accordingly, the correct measure of income under Section 41(1)(a) is the net amount actually obtained by the assessee in the year of cessation, exclusive of tax and interest paid which have not been refunded. [Paras 16, 17, 18, 19, 20]

Amount chargeable under Section 41(1)(a) is the actual amount obtained on cessation, exclusive of the tax and interest paid but not refunded.

Debatable issue and inadmissibility of summary adjustment under Section 143(1)(a) - cessation of liability and write back as income - Whether the question of gross versus net measure under Section 41(1)(a) was a debatable issue and therefore not amenable to summary adjustment under Section 143(1)(a). - HELD THAT: - The Court observed that interpretation of whether Section 41(1)(a) contemplates the gross amount or the net amount after deducting tax and interest required deeper analysis and admitted two possible views; hence it was a debatable question. A debatable issue cannot be the subject matter of summary adjustment under Section 143(1)(a). The First Appellate Authority's view that the matter was debatable was correct and the Tribunal erred in holding otherwise. Having determined the substantive legal position in favour of the assessee, the Court also noted that the contention on debatable character becomes academic but affirmed that the issue was indeed debatable for the purposes of summary assessment proceedings. [Paras 4, 21]

The question was a debatable issue and could not properly be dealt with by summary adjustment under Section 143(1)(a); the Tribunal erred in holding otherwise.

Final Conclusion: Reference answered in favour of the assessee: the amount taxable under Section 41(1)(a) for AY 1995-96 is the actual amount obtained on cessation exclusive of tax and interest paid but not refunded; the question was debatable and not amenable to summary adjustment under Section 143(1)(a). The Tribunal's contrary conclusion is set aside and the reference is ordered accordingly.

Deduction under Section 80IA - new industrial undertaking - manufacture or processing of goods - benami - compliance with sub-Section (7) of Section 80IA - KVSS Scheme

Deduction under Section 80IA - new industrial undertaking - manufacture or processing of goods - The correctness of the Tribunal's allowance of the assessee's claim for deduction under Section 80IA on the ground that film production qualifies under the statutory tests for a new industrial undertaking. - HELD THAT: - The Tribunal's conclusion that the assessee was entitled to claim deduction under Section 80IA was upheld. The Tribunal applied the principle that where the conditions of sub-Section (2) of Section 80IA are satisfied, the claim for deduction is maintainable; it relied on precedent treating film production as falling within the scope of 'manufacture or processing' as clarified by the relevant Board circular. The Revenue failed to demonstrate that machinery or plant used for production had been transferred from an earlier business to disqualify the claim. Having regard to the Tribunal's examination and the cited authority, the High Court found no error in holding that the assessee met the statutory test under sub-Section (2) and was therefore entitled to the deduction.

Tribunal correctly allowed the deduction under Section 80IA; that conclusion is sustained and the Revenue's challenge on this point is rejected.

Benami - compliance with sub-Section (7) of Section 80IA - KVSS Scheme - The contention that the assessee failed to fulfil the conditions of sub-Section (7) of Section 80IA and related factual objections arising from benami findings and KVSS filings. - HELD THAT: - The High Court noted that the specific point under sub-Section (7) was not advanced by the Revenue earlier in proceedings. The record before the Court, including the Settlement Commission's findings identifying benamidars and subsequent correspondence and proceedings relating to the KVSS declaration and adjustment, did not establish reversible error in the Tribunal's decision. The Court observed that the benamidar had availed KVSS benefits and that adjustments and notices recorded that position; on these facts the Revenue's late-raised objection under sub-Section (7) could not be sustained. The High Court therefore declined to overturn the Tribunal on this ground.

The Revenue's contention regarding non-compliance with sub-Section (7) and the implications of benami/KVSS matters is rejected; no error is found in the Tribunal's order on this point.

Final Conclusion: The appeal is dismissed; the Tribunal's allowance of the assessee's deduction under Section 80IA is upheld and the substantial questions of law are answered against the Revenue.

Condonation of delay in filing appeal - e-filing requirement for appeals and Rule 45 of the IT Rules - operation and effect of CBDT Circular No.20/2016 as one time relief - relation-back of belated e-appeal to date of manual filing - remittance to Commissioner (Appeals) for disposal on merits

Condonation of delay in filing appeal - remittance to Commissioner (Appeals) for disposal on merits - Whether the Tribunal was correct in condoning the delay and remitting the matter to the Commissioner of Income Tax (Appeals) to be decided on merits. - HELD THAT: - The High Court, following the reasoning in The Commissioner of Income Tax vs A.A.Antony, held that the Tribunal did not err in exercising its discretion to condone delay and to remit the appeals to the Commissioner (Appeals) for adjudication on merits. The court noted that the CBDT Circular operated as a one time measure and that directing parties to seek fresh condonation before the CIT(A) would cause undue hardship and prolong litigation on limitation grounds. In these circumstances the Tribunal's exercise of discretion in favour of the assessee was appropriate and not susceptible to interference. [Paras 5]

Tribunal's condonation of delay and remittance to CIT(A) sustained; appeal dismissed.

E-filing requirement for appeals and Rule 45 of the IT Rules - operation and effect of CBDT Circular No.20/2016 as one time relief - relation-back of belated e-appeal to date of manual filing - Whether the Tribunal was right in treating the e-filing requirement and related Board circular as permitting acceptance of belated e-appeals (and their relation back) so as to avoid rejection for non e-filing within the period of limitation. - HELD THAT: - Applying the A.A.Antony decision, the court accepted that the CBDT Circular No.20/2016 provided a one time administrative relief in the factual matrix of 2016 and that the Tribunal rightly refused to deprive assessees of their substantive right of appeal on a technicality. The High Court observed that, given the transitional difficulties in 2016 and the circular's purpose, the Tribunal's approach to treat the appeals as not barred by limitation and to allow adjudication on merits was justified. The court therefore did not require strict application of Rule 45 or the Board circular timing to produce a forfeiture of the right to appeal in the circumstances before it. [Paras 5]

Tribunal's treatment of e-filing requirement and application of the CBDT Circular upheld; appeals to be decided on merits.

Final Conclusion: Revenue's appeal is dismissed; substantial questions of law answered against the Revenue and the matters are remitted to the Commissioner of Income Tax (Appeals) for decision on merits in accordance with law.

Unexplained cash credits under section 69A - peak credit theory - cash book withdrawals as source for bank deposits - admission of additional evidence - remand for fresh consideration

Admission of additional evidence - Rule 29 - Admission of the daily cash summary as additional evidence - HELD THAT: - The Tribunal found that the daily cash summary, which was not furnished before the authorities below, was necessary for proper adjudication of the controversy regarding cash deposits. The assessee explained that omission to produce the document earlier was not wilful or deliberate and that the material was essential to establish the source of bank deposits. The Revenue's objection was considered but the Tribunal exercised its discretion to admit the additional evidence to enable a fair and complete determination of the matter. [Paras 6]

The additional evidence (daily cash summary) is admitted for adjudication.

Unexplained cash credits under section 69A - peak credit theory - cash book withdrawals as source for bank deposits - remand for fresh consideration - Whether the addition on account of unexplained cash deposits should be sustained or requires fresh consideration applying the peak credit theory and the admitted cash-book information - HELD THAT: - The Tribunal accepted the principle that where cash withdrawals recorded in the cash book can legitimately explain subsequent cash deposits in the bank, only the peak credit in the cash account requires treatment as unexplained. Because the daily cash summary showing withdrawals and deposits (and peak credits) was admitted only before the Tribunal and has not been examined by the AO, the Tribunal held that the matter cannot be finally decided by the Tribunal on the record then before the AO. The appropriate course is to remit the issue to the AO so that the AO may consider the newly admitted evidence, examine the claimed correlation between cash withdrawals and bank deposits, apply the peak credit theory where appropriate, and afford the assessee an opportunity of being heard. [Paras 7, 8]

The issue is remanded to the Assessing Officer for fresh consideration after affording the assessee an opportunity of being heard; appeal allowed for statistical purposes.

Final Conclusion: The Tribunal admitted the additional daily cash summary and, applying the principle that only peak credits may be taxable where cash-book withdrawals explain bank deposits, remanded the matter to the Assessing Officer for fresh consideration with opportunity to the assessee to be heard; the appeal is allowed for statistical purposes.

Revision under section 263 - assessment under section 143(3) - erroneous and prejudicial to the interests of revenue - de novo assessment - verification/enquiry by the Assessing Officer - application of earlier Tribunal decision mutatis mutandis - claim of exemption under section 11 - attraction of provisions of section 13

Revision under section 263 - assessment under section 143(3) - verification/enquiry by the Assessing Officer - application of earlier Tribunal decision mutatis mutandis - Validity of the Commissioner (Exemptions)'s revision under section 263 setting aside the assessment framed under section 143(3) for A.Y.2015-16. - HELD THAT: - The Tribunal held that the revision order under section 263 for A.Y.2015-16 was passed on identical facts and circumstances as those in respect of A.Y.2014-15. Having previously quashed the revision proceedings for A.Y.2014-15 in three companion appeals, the Tribunal applied that decision mutatis mutandis to A.Y.2015-16. The Tribunal accepted that the Assessing Officer had carried out necessary verification and enquiry in the course of the assessment and that the assessment order was not shown to be erroneous or prejudicial to the interests of the revenue. On that basis, the revision order directing a de novo assessment was found to be unsustainable and was quashed by applying the earlier reasoning to the present assessment year.

Revision order under section 263 quashed; assessment upheld and grounds of the assessee allowed.

Final Conclusion: The Tribunal allowed the appeals and quashed the Commissioner (Exemptions)'s revision order under section 263 for A.Y.2015-16, applying the Tribunal's earlier decisions for A.Y.2014-15 mutatis mutandis and holding that the assessment was not erroneous or prejudicial to the revenue.

Invalid satisfaction for initiation of penalty - vague and ambiguous show-cause notice - penalty under section 271(1)(c) for concealment or furnishing of inaccurate particulars - pre-commencement conditions for levy of penalty

Invalid satisfaction for initiation of penalty - penalty under section 271(1)(c) for concealment or furnishing of inaccurate particulars - Penalty levied could not be sustained because the Assessing Officer's recorded satisfaction related to a different limb of section 271(1)(c) than the basis on which penalty was imposed. - HELD THAT: - The assessment order contained an explicit satisfaction that penalty proceedings were to be initiated for furnishing inaccurate particulars by not offering receipts as fee for technical services (FTS). The penalty order, however, proceeded to levy penalty for concealing particulars by not offering interest income to tax despite no corresponding satisfaction being recorded in the assessment order. The Tribunal held that initiation of penalty proceedings requires a valid recorded satisfaction concerning the specific limb of section 271(1)(c) relied upon; proceeding on a different or unrecorded satisfaction renders the penalty unsustainable. This inconsistency between the satisfaction recorded and the ground on which penalty was levied vitiates the penalty proceedings and mandates deletion of the penalty. [Paras 9, 10, 16]

Penalty deleted as initiated on an invalid or mismatched satisfaction and therefore unsustainable.

Vague and ambiguous show-cause notice - penalty under section 271(1)(c) for concealment or furnishing of inaccurate particulars - pre-commencement conditions for levy of penalty - Penalty proceedings were liable to be quashed because the notice under section 274 read with section 271(1)(c) was vague and ambiguous, failing to specify whether proceedings were for concealment of particulars or for furnishing inaccurate particulars of income. - HELD THAT: - The show-cause notice incorporated both limbs of section 271(1)(c) without specifying which limb was being invoked, rendering the charge vague. The Tribunal relied on precedent that a notice which does not specify the particular limb under section 271(1)(c) is bad in law. Given that the assessee had, before issuance of the scrutiny notice, informed the AO about the inadvertent omission of interest income and adjusted its refund claim, and that the initiating notice was ambiguous, the penalty proceedings could not be sustained. Following higher court decisions on the requirement of specificity in notice framing, the Tribunal held the vague notice vitiated the penalty action. [Paras 11, 12, 13, 16]

Penalty deleted as it was founded on a vague and ambiguous notice which failed to specify the limb of section 271(1)(c) invoked.

Final Conclusion: The Tribunal allowed the appeal, deleting the penalty imposed under section 271(1)(c) for Assessment Year 2009-10 because (a) the Assessing Officer's recorded satisfaction did not correspond to the ground on which penalty was levied, and (b) the notice under section 274 read with section 271(1)(c) was vague and ambiguous as to which limb of the provision was invoked.

Reopening of assessment - reason to believe - independent application of mind - information from AIR - quash reassessment

Reopening of assessment - reason to believe - independent application of mind - information from AIR - quash reassessment - Whether reassessment proceedings under section 147/148 were valid where the AO reopened the assessment on the basis of AIR information without independent application of mind and on incorrect factual basis. - HELD THAT: - The Tribunal found that the AO recorded reasons for reopening solely on AIR information stating a cash deposit figure which, on obtaining the bank statement, proved to be factually incorrect. The AO did not make any independent inquiry to verify the AIR material before forming the requisite prima facie belief; there was no demonstration of a link between tangible material and the formation of belief that income had escaped assessment. The Tribunal noted that reassessment initiated on wrong facts and without application of mind is not in accordance with law, relied on precedents cited in the record (including PCIT vs. Meenakshi Overseas and a coordinate bench decision), and held that the reassessment proceedings must be quashed. Because the appeal succeeded on this legal ground, the Tribunal did not adjudicate the merits of the additions. [Paras 7, 8, 9, 10]

Reopening of assessment quashed as invalid for being based on incorrect AIR information and lacking independent application of mind; appeal allowed.

Final Conclusion: Reassessment under section 147/148 for assessment year 2009-10 set aside because the AO acted on incorrect AIR information without independent application of mind, rendering the reopening invalid; merits not decided as they became academic.

Allowability of premium paid to LIC as deduction - Approved gratuity fund requirement under Section 36(1)(v) - Disallowance under provisions-versus-actual-payment distinction - Deduction under Section 37 for actual expenses - Computation of disallowance limited to provisions

Allowability of premium paid to LIC as deduction - Deduction under Section 37 for actual expenses - Whether the premium actually paid by the assessee to LIC for covering gratuity liability is allowable as a deduction. - HELD THAT: - The Tribunal examined the facts that the assessee paid Rs.1,00,000 as premium to LIC under a master policy to cover gratuity liability and that the balance amount shown during the year was a mere provision. It disagreed with the assessing officer and the CIT(A) to the extent they treated the entire payment as disallowable on the ground that no approved gratuity fund or trust was created. Having regard to payments actually made to LIC during the year and precedents of coordinate benches and the subsequent favourable order of the CIT(A) for a later year, the Tribunal held that the actual payment made to LIC during the year is to be allowed as an expenditure. The Tribunal therefore granted relief to the assessee for the amount actually paid to LIC. [Paras 10, 11]

Deduction allowed in respect of the actual premium of Rs.1,00,000 paid to LIC; the ground stands partly allowed.

Approved gratuity fund requirement under Section 36(1)(v) - Disallowance under provisions-versus-actual-payment distinction - Computation of disallowance limited to provisions - Whether the provision shown (Rs.16,585) for gratuity during the year is allowable or liable to be disallowed. - HELD THAT: - The Tribunal noted the distinction drawn by the assessing authority and the CIT(A) between contributions to an approved gratuity fund and actual payments. While accepting that contributions to an unapproved fund may be disallowable, the Tribunal observed that the disallowance in the present year could be restricted to the amount represented by a provision (Rs.16,585) and that the actual premium payment already made to LIC should be allowed. Thus the disallowance was confined to the provision shown for the year rather than the sum actually paid to LIC. [Paras 10]

Disallowance limited to the provision of Rs.16,585; remainder (actual premium paid) allowed.

Final Conclusion: Appeal partly allowed: deduction is permitted for the actual premium paid to LIC during the year, while the disallowance is restricted to the provision shown for gratuity during the year.

Allowability of business expenditure - expenses incurred on factory premises - capitalization versus revenue treatment of expenses - timing of sale and incidence of expenditure

Allowability of business expenditure - expenses incurred on factory premises - timing of sale and incidence of expenditure - capitalization versus revenue treatment of expenses - Security and electricity expenses incurred on the factory premises in Financial Year 2011-12 were allowable as business expenditure for Assessment Year 2012-13. - HELD THAT: - The Assessing Officer and the first appellate authority disallowed the claimed security and electricity expenses on the ground that the assessee had decided to sell the factory and had received advances before the financial year-end, contending that the factory was no longer used for business. The Tribunal noted, however, that the sale deed was executed only in the next financial year (2012-13) and that the contested expenditures were incurred and booked in Financial Year 2011-12. The factory premises remained under the control of the assessee during that year and stock was stored there. The expenses were supported by bills and vouchers. On these facts the Tribunal held that the expenditures related to the assessee's business activity (protection and utility of stocks and premises) during the year and were not non-business or otherwise non-allowable. Consequently the claimed security and electricity expenditures were treated as allowable revenue expenses rather than requiring capitalization or being disallowed due to the subsequent sale. [Paras 6, 7]

Claimed security expenditure of Rs. 3,86,549/- and electricity expenditure of Rs. 6,13,715/-, supported by bills, are allowed as business expenses for the relevant year.

Final Conclusion: The appeal is allowed: the Tribunal restored the claim for security and electricity expenses incurred in Financial Year 2011-12 in relation to the factory premises and held them allowable as business expenditure for Assessment Year 2012-13.

Disallowance under Section 40A(3) of the Income tax Act, 1961 - Exemption under Rule 6DD of the Income Tax Rules, 1962 for payments on non banking days - Classification of land as non current investment vis a vis revenue expenditure - Remand for fresh verification and opportunity of hearing

Disallowance under Section 40A(3) of the Income tax Act, 1961 - Exemption under Rule 6DD of the Income Tax Rules, 1962 for payments on non banking days - Classification of land as non current investment vis a vis revenue expenditure - Remand for fresh verification and opportunity of hearing - Whether the disallowance of cash payments aggregating Rs.20,00,000 made towards purchase of land should be sustained or requires fresh adjudication by the Assessing Officer in light of the assessee's contention that payments were on Sundays (non banking days) and that the land is shown as non current investment. - HELD THAT: - Both the Assessing Officer and the Commissioner (Appeals) recorded disallowance under Section 40A(3) but did not articulate reasons why that provision would apply notwithstanding the assessee's reliance on Rule 6DD (payments on non banking days) or on the accounting classification of the land as non current investment not charged to the Profit & Loss account. The Revenue did not dispute the identity of sellers or the existence of sale deeds, and neither authority examined or recorded the necessity or bona fides of making cash payments on Sundays. Given these lacunae in reasoning and the absence of a determination on whether the payments were bonafide business transactions or excluded by Rule 6DD, the appropriate course is to remit the matter to the Assessing Officer for fresh consideration. On remand the Assessing Officer shall permit the assessee to explain the necessity for weekend cash payments, examine the nature and classification of the land in the audited financial statements, apply the provisions of Section 40A(3) and Rule 6DD with reasons, and decide after affording the assessee an opportunity of hearing in accordance with principles of natural justice. [Paras 7]

Matter remitted to the file of the Assessing Officer for fresh adjudication on the applicability of Section 40A(3) read with Rule 6DD, with opportunity to the assessee to be heard; appeal partly allowed for statistical purposes.

Final Conclusion: The Tribunal has remitted the question of disallowance of cash payments for purchase of land to the Assessing Officer for fresh consideration and quantification, directing that the assessee be afforded an opportunity of hearing; appeal is partly allowed for statistical purposes.

Benami transaction - Prohibition of the right to recover property held benami (Section 4 of the Benami Property Transactions Act, 1988) - Rejection of plaint under Order VII Rule 11(d) CPC - Fiduciary/trustee exception to benami prohibition

Benami transaction - Rejection of plaint under Order VII Rule 11(d) CPC - Prohibition of the right to recover property held benami (Section 4 of the Benami Property Transactions Act, 1988) - Whether the plaint discloses on its face a benami transaction such that it is barred by Section 4 of the Benami Property Transactions Act, 1988 and is liable to be rejected under Order VII Rule 11(d) CPC. - HELD THAT: - The Court examined the averments in the plaint as a whole and found that the plaintiff pleaded that the suit properties were purchased in the names of the defendants though asserted to belong to the plaintiff; critically, the plaint did not allege that the properties were purchased out of joint family funds or otherwise bring the transaction within the statutory exceptions. Applying the established test that Order VII Rule 11(d) permits rejection only where the plaint, without doubt, shows the suit is barred by law, the Court concluded that the plaint, on its face, disclosed a claim barred by Section 4 of the Benami Act. The plaintiff's alternative contentions - that the first defendant held as trustee or in fiduciary capacity or that rights arise under other law - were inconsistent with the pleadings and could not be accepted at the rejection stage absent appropriate averments and proof. Reliance on the principle in Popat and Kotecha Property (and its application in subsequent decisions) was noted to uphold summary rejection where the plaint itself demonstrates the bar.

The plaint was rightly rejected under Order VII Rule 11(d) CPC as barred by Section 4 of the Benami Property Transactions Act, 1988.

Final Conclusion: The impugned judgment of the High Court affirming the trial court's rejection of the plaint as ex facie barred by the Benami Act is upheld; Special Leave Petition dismissed.

Benami transaction - presumption of purchase for benefit of wife or unmarried daughter - fiduciary capacity - exception for spouse/child under the Prohibition of Benami Property Transactions Act, 2016 - retrospective operation of specified provisions of the 2016 Amendment - substantive right of a de facto owner

Benami transaction - presumption of purchase for benefit of wife or unmarried daughter - Whether the courts below correctly treated the sale deed executed in joint names as giving the plaintiff any substantive right under the Benami Transactions (Prohibition) Act, 1988 - HELD THAT: - The trial and first appellate courts had drawn the statutory presumption in favour of a wife under Section-3(2)(a) of the old Act. Upon scrutiny the High Court found that the plaintiff never pleaded that the property was purchased for her benefit and that evidence shows the entire consideration was paid by the husband from his known sources. The Court held that the statutory presumption is rebuttable and, on the facts of this case, the presumption was successfully rebutted by the husband's evidence that he paid the entire consideration and included his wife's name for reasons of trust arising from the marital relation. Having applied established indicia for benami determination (notably source of consideration and motive), the Court concluded the wife did not acquire any substantive right as co-owner under the old Act where consideration was supplied by the husband. [Paras 19, 23, 24, 33, 37]

The plaintiff-wife did not acquire any substantive right in the suit property under the old Act; the presumption under Section-3(2)(a) was rebutted on the evidence.

Fiduciary capacity - Benami transaction - Whether the plaintiff stood in a fiduciary capacity such that the transaction was saved from being treated as benami - HELD THAT: - The Court examined the meaning of 'fiduciary capacity' as explained in precedents and authoritative definitions, noting it denotes a relationship analogous to trustee-beneficiary founded on special confidence and duty to act for another's benefit. Applying the factual matrix, the Court found no material to treat the wife as occupying a position of peculiar confidence vis-a -vis the husband in the sense of a fiduciary relation that would bring the transaction within the fiduciary exception. The Court also held that whether a fiduciary relationship exists in this context is a substantial legal question and need not be pleaded as a preliminary matter; it can be decided on the merits of evidence. [Paras 20, 22, 23, 26, 44]

No fiduciary capacity was established that would exclude the transaction from being treated as an ordinary (non-benami) transfer; the fiduciary question is a substantial legal question and not defeated by lack of pleading.

Exception for spouse/child under the Prohibition of Benami Property Transactions Act, 2016 - retrospective operation of specified provisions of the 2016 Amendment - Whether the 2016 Amendment (the New Act) and its exceptions apply to the 2007 sale deed and save the transaction from being treated as benami - HELD THAT: - The Court contrasted the old Act and the New Act (Benami Transactions (Prohibition) Amendment Act, 2016), observing that the New Act employs broader language (spouse/child) and omits the irrebuttable presumption present in the old Act. The Court held that Section-2(9)(a) of the New Act and its Exception (iii) exclude transactions where consideration is provided from known sources by an individual in the name of his spouse or child. Relying on Section-1(3) of the New Act and the legislative scheme, the Court concluded that, except for specified penal and confiscation provisions which operate prospectively, the definitional provisions (including the exceptions) have retrospective operation and thus apply to transactions entered into earlier. Applying that exception to the facts (husband paid consideration from known sources and included spouse's name), the Court held the transaction falls within the New Act's exception and is not rendered benami by the amendment. [Paras 28, 29, 30, 38, 39]

The New Act's exception for transactions in the name of a spouse applies to the 2007 sale deed; the definitional provisions of the 2016 Amendment operate retrospectively so the transaction is saved from benami character under the New Act.

Substantive right of a de facto owner - Benami transaction - Whether the plaintiff, as de facto owner whose name appears in the sale deed, acquired enforceable proprietary rights against the husband - HELD THAT: - The Court reiterated that mere inclusion of a name in a transfer document does not, by itself, establish entitlement to substantive proprietary rights where other indicia (notably source of consideration) point to the husband as the real purchaser. Considering the totality of facts and the absence of proof that the plaintiff supplied consideration or that the transaction was intended for her benefit, the Court found no basis to treat her as a proprietary co-owner. The Court applied authorities emphasizing intention and source of funds as determinative factors. [Paras 31, 32, 34, 36, 40]

The plaintiff, though a de facto owner on the document, did not acquire substantive proprietary rights against the title of the husband/de jure owner.

Final Conclusion: The second appeal is allowed: the concurrent decrees in favour of the plaintiff are set aside. On the facts the husband supplied the consideration, the presumption in favour of the wife was rebutted, no fiduciary exception was made out, and the transaction is saved under the New Act's spouse exception; the plaintiff has not acquired substantive rights in the suit property. Decree set aside and LCRs to be returned.

Proper officer - power of reassessment/recovery under Section 28(4) - entrustment of functions under Section 6 - limitation and extended period for collusion, wilful mis-statement or suppression of facts

Proper officer - power of reassessment/recovery under Section 28(4) - entrustment of functions under Section 6 - Validity of show cause notices issued by the Additional Director General, DRI under Section 28(4) after clearance by the Deputy Commissioner (Appraisal) - whether the DRI officer was the 'proper officer' authorised to initiate recovery proceedings. - HELD THAT: - Section 28(4) empowers 'the proper officer' to issue notice for recovery where duty has not been levied or has been short levied by reason of collusion or wilful mis statement or suppression of facts. The use of the definite article 'the' indicates that the power to re open assessment and recover duty is to be exercised by the officer who assessed and cleared the goods (or his successor or an officer specifically assigned that function). An officer of another department, even of equivalent rank, cannot exercise that power in the same case. Entrustment of functions to officers who are not customs officers must be made by the Central Government under Section 6; the Board's notification purporting to assign functions under Section 2(34) is invalid as Section 2(34) is a definition and does not confer power to entrust functions. Consequently, an Additional Director General of DRI who is not shown to have been validly entrusted with the functions of a 'proper officer' under Section 6 cannot issue a notice under Section 28(4). Applying these principles, the Court held that the Additional Director General, DRI, was not the 'proper officer' to reopen the assessments in these matters and that the proceedings initiated by him were without jurisdiction. [Paras 15, 21, 23]

Proceedings and show cause notices issued by the Additional Director General, DRI under Section 28(4) were without jurisdiction and are set aside.

Limitation and extended period for collusion, wilful mis-statement or suppression of facts - power of reassessment/recovery under Section 28(4) - Whether the extended five year limitation under Section 28(4) could be invoked given the facts disclosed to the assessing officer at the time of clearance - specifically, whether there was wilful mis statement or suppression of facts by the importer. - HELD THAT: - Section 28(4) permits issuance of notice within five years where duty was not levied by reason of collusion or wilful mis statement or suppression of facts. The consignments were manifested and presented with the bill of entry and literature disclosing model specifications and stating that the single maximum recording time for a single movie is 29 minutes. The importer requested first check, the goods were physically examined, and the Deputy Commissioner cleared the goods on the basis of the materials before him. Given that the specifications were available and the cameras could have been operated at the time, there was no basis to infer a wilful mis statement or suppression that would sustain invocation of the extended limitation period. In these circumstances the extended five year period under Section 28(4) was not available to reopen the assessment, and it was unnecessary to decide the substantive question whether the goods in fact met the exemption criteria. [Paras 24, 28, 29]

No wilful mis statement or suppression of facts was shown; the extended five year limitation under Section 28(4) did not apply and the goods are to be treated as validly cleared.

Final Conclusion: The CESTAT order is set aside; the recovery proceedings and demands initiated by the Additional Director General, DRI under Section 28(4) are invalid for lack of jurisdiction and, on the facts, the extended limitation was not attracted - the goods are treated as validly cleared and the impugned demands are quashed.

Requirement to file separate appeals where affected persons suffer different consequences - Form No.CA-1 particulars under the Customs (Appeals) Rules, 1982 - compatibility of joint appeal with prescribed appeal form - appellate procedure under the Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982

Requirement to file separate appeals where affected persons suffer different consequences - Form No.CA-1 particulars under the Customs (Appeals) Rules, 1982 - compatibility of joint appeal with prescribed appeal form - Validity of the communication directing petitioners who suffered a common adjudication order to file separate appeals instead of a joint appeal. - HELD THAT: - The adjudicating authority passed a common order imposing distinct penalties and confiscation findings against the two petitioners with separate findings as to liability. Rule 3(1) of the Customs (Appeals) Rules, 1982 requires appeals under Section 128 to be filed in Form No.CA-1 which contains particulars (including date of communication, deposit of duty or penalty, and particulars of relief claimed) that may differ for each aggrieved person. Because the consequences, factual statements and reliefs claimed can vary between persons affected by a common order, a joint appeal is not appropriate where the prescribed form anticipates separate particulars for each appellant. The respondent's reliance on the procedural provisions applicable to appeals to the Customs, Excise and Service Tax Appellate Tribunal reinforces that separate filings facilitate convenient and proper adjudication by the appellate forum. On this basis the impugned communication directing separate appeals cannot be characterised as illegal and does not warrant interference by this Court. [Paras 6, 7]

The communication directing the petitioners to file separate appeals is lawful; the writ petition is dismissed.

Final Conclusion: The High Court dismissed the writ petition, holding that where a common order produces different consequences for different persons and the prescribed appeal form requires distinct particulars, the appellants must file separate appeals; the communication directing separate files was not illegal.

Remand for verification of export claim under DEEC Scheme - confiscation under Customs Act - redemption fine and interest - penalty and interest on managing director - misuse of DEEC Scheme - absence of material to rebut assessee's claim - no substantial question of law

Remand for verification of export claim under DEEC Scheme - absence of material to rebut assessee's claim - Validity of the Tribunal's order remanding the matter to the Assessing Officer to verify the assessee's claim of export of goods to justify duty-free clearance under the DEEC Scheme. - HELD THAT: - The Tribunal found that the Department did not possess material at the relevant time to rebut the assessee's assertion that imported aluminium ingots were utilised in export production exceeding 14 tonnes and thus remitted the matter to the Assessing Officer for fresh verification. The High Court held that where the Tribunal exercises its power to remand for verification in light of absence of rebuttal material, such remand is appropriate and the Tribunal necessarily interferes with the Assessing Officer's order by directing reconsideration. The Court found no error in the Tribunal's decision to remit the issue for fresh consideration. [Paras 4, 5, 7]

Tribunal's remand to the Assessing Officer for verification of the DEEC export claim sustained; remand held appropriate.

Confiscation under Customs Act - redemption fine and interest - penalty and interest on managing director - misuse of DEEC Scheme - no substantial question of law - Whether the Tribunal erred in setting aside confiscation and in interfering with imposition of redemption fine, interest and penalty on the Managing Director such that substantial questions of law arise warranting interference by the High Court. - HELD THAT: - The Department argued that confiscation, redemption fine, interest and penalty should have been upheld given misuse of the DEEC Scheme. The Tribunal, having remanded the factual issue of export utilisation to the Assessing Officer due to lack of rebuttal material, necessarily traversed consequential reliefs that depended on that factual determination. The High Court observed that because the Tribunal's direction was to remand for factual verification, there remains no substantial question of law arising for the Court to decide at this stage. Consequently the departmental appeal seeking to challenge the Tribunal's interference and to raise substantial questions of law was without merit. [Paras 6, 8]

No substantial question of law arises; appeal dismissed and the Tribunal's order (including its interference pending remand) not upset.

Final Conclusion: The Civil Miscellaneous Petition filed by the Department is dismissed for lack of any substantial question of law; the Tribunal's remand for verification of the assessee's DEEC export claim is sustained. No costs; connected miscellaneous petition dismissed.

Condonation of delay - power to condone delay under the proviso to Section 128(1) of the Customs Act, 1962 - decide appeals on merits - interest on delayed refund under Section 27A of the Customs Act, 1962 - not an inordinate delay

Condonation of delay - power to condone delay under the proviso to Section 128(1) of the Customs Act, 1962 - not an inordinate delay - decide appeals on merits - Whether the Commissioner (Appeals) erred in refusing to condone a delay of 21 days in filing the appeals and in dismissing the appeals as time-barred instead of admitting them for decision on merits. - HELD THAT: - The Tribunal found that the appeals arose from the claim of interest on delayed refunds under Section 27A and that the appellant had followed earlier Tribunal directions which resulted in grant of refunds by the Original Authority, though interest was not granted. The Commissioner (Appeals) refused condonation of a 21-day delay in filing the appeal. The Tribunal held that the reason advanced for the delay-initial decision not to prefer appeal because amount appeared small, followed by later apprehension of wider consequences-was convincing, the delay was neither inordinate nor intentional, and no advantage accrued to the appellant by the delay. A 21-day delay fell within the discretionary condonable power exercisable by the Commissioner (Appeals) under the proviso to Section 128(1), and established judicial approach favours liberal condonation so matters are decided on merits. Accordingly, declining to condone the delay was not justified; the impugned orders were set aside and the matters remitted for adjudication on merits after observing principles of natural justice.

Impugned orders set aside; delay of 21 days condoned and appeals remanded to the Commissioner (Appeals) to be decided on merits after following principles of natural justice.

Final Conclusion: The Tribunal set aside the Commissioner (Appeals) orders refusing condonation, condoned the 21-day delay in filing the appeals, and remitted the matters to the Commissioner (Appeals) with a direction to decide the appeals on merits within one month from receipt of this order after observing the principles of natural justice.

Refund under Notification No.102/2007-Cus - sale of imported goods prior to issuance of out of charge order - rejection of refund on the sole ground of pre-release sale - reconciliation certificate and supporting commercial documents

Refund under Notification No.102/2007-Cus - sale of imported goods prior to issuance of out of charge order - rejection of refund on the sole ground of pre-release sale - Whether a refund claim under Notification No.102/2007-Cus can be rejected merely because the imported goods were sold prior to issuance of the out of charge order by Customs. - HELD THAT: - The Tribunal held that the mere fact that sale invoices pre-date the Customs out of charge order does not, by itself, justify rejection of a refund claim under Notification No.102/2007-Cus. The decision relies on the Tribunal's earlier reasoning in Ashwin Corporation, which followed Radius Infotech, where rejection was found unsustainable when the lower authority rejected refund only on the ground that sale invoices preceded release and expressed doubt whether the sold goods were the imported goods. In that precedent the appellant had furnished delivery challans, reconciliation certificate, calculation sheet certified by a Chartered Accountant showing Bills of Entry matched with sale invoices and tax payments, and it was held that such documentary explanation negated the presumption that pre-release invoicing proved actual prior delivery. Applying that ratio, the Tribunal finds that rejection of the appellant's refund claim solely because the goods were sold prior to issuance of the out of charge order is not sustainable and requires modification of the impugned order. [Paras 5, 6, 7]

The refund cannot be rejected merely because the goods were sold prior to issuance of the out of charge order; the impugned order is set aside and the appeal is allowed with consequential relief.

Final Conclusion: The appeal is allowed; the impugned rejection of the refund claim is set aside and the refund claim is to be dealt with in accordance with the Tribunal's findings, granting consequential relief to the appellant.

Virtual hearings - open court - regulation of virtual hearing links - fair, transparent and non-arbitrary procedure - discipline in virtual hearings - right to witness proceedings

Virtual hearings - regulation of virtual hearing links - fair, transparent and non-arbitrary procedure - discipline in virtual hearings - right to witness proceedings - Whether the NCLT and NCLAT are required to provide open or public virtual links to allow third parties to witness hearings and what procedural standards must govern provision of such links. - HELD THAT: - The Court held that tribunals such as the NCLT and NCLAT, which conduct a high volume of work on virtual platforms, may regulate their own procedure for virtual hearings so long as the regulation is not arbitrary. The possibility of disturbance and disruption in unregulated open access to virtual hearings-compounded by practical measures (such as separate 'active' and 'viewing' links) and bandwidth considerations-justifies regulated entry to maintain orderly proceedings. Reliance on the Supreme Court's circular regarding counsel links supports adopting a controlled procedure. Where a party requests access to view a proceeding, the tribunals must consider such requests in a fair, transparent and non-arbitrary manner, and, to the extent possible, permit viewing while expecting those who join to maintain discipline and not cause disruption. The Court recorded that the tribunals use technical measures (including bandwidth allocation) and may transition to physical hearings; it directed that a request to join be made by e-mail at least 24 hours in advance to the Deputy Registrar and be considered under the tribunals' procedure consistent with the standards above. [Paras 7, 8, 9, 10, 11]

NCLT and NCLAT may regulate provision of virtual links but must consider requests to view hearings in a fair, transparent and non-arbitrary manner; parties seeking access should email at least 24 hours in advance and, if permitted, must maintain discipline during the hearing.

Final Conclusion: Writ petition disposed of by directing that NCLT and NCLAT may regulate virtual hearing links subject to non-arbitrariness; requests to view hearings shall be considered fairly and transparently (email at least 24 hours in advance) and viewers must not disrupt proceedings; all pending applications disposed of.

Scheme of Arrangement - sanction under sections 230-232 of the Companies Act, 2013 - transfer and vesting of assets and liabilities - continuity of employment on demerger/merger - compliance with notice and statutory reporting requirements - role of Regional Director, Official Liquidator and Income Tax Department reports - filing of certified copy with Registrar of Companies and dissolution without winding up

Scheme of Arrangement - sanction under sections 230-232 of the Companies Act, 2013 - Sanction of the Composite Scheme of Arrangement between the petitioner companies. - HELD THAT: - The Tribunal examined compliance with statutory procedure, the affidavits, auditors' certificate on accounting treatment, valuation report, and reports filed by the Regional Director, Official Liquidator and Income Tax Department. The Registry reported no objections. Having considered the materials and assurances placed on record and subject to taxation and other statutory liabilities being dealt with in accordance with law, the Tribunal concluded that there was no impediment to sanctioning the Scheme and accordingly approved the Scheme (Annexure 4). The order expressly clarifies that sanction does not exempt payment of any stamp duty, taxes or other charges, and does not preclude action for any statutory violation. [Paras 11, 12, 13, 21, 28]

The Composite Scheme of Arrangement is sanctioned and approved.

Transfer and vesting of assets and liabilities - continuity of employment on demerger/merger - proceedings to continue against/transferred to successor companies - Consequences of sanction: transfer and vesting of properties, rights, liabilities and employees pursuant to the Scheme. - HELD THAT: - Upon sanction, the Tribunal ordered that (i) all properties, rights and powers of the Transferor Company stand transferred to and vested in the Transferee Company, subject to existing charges; (ii) all liabilities and duties of the Transferor Company shall stand transferred to the Transferee Company; (iii) all pending proceedings by or against the Transferor Company shall continue by or against the Transferee Company; and (iv) all employees of the Transferor Company and employees relating to the Demerged Undertakings shall be deemed transferred to the Transferee/Resulting Company with continuity of service and not on less favourable terms than before, as provided in the Scheme. Parallel orders are made for demerged undertakings being vested in the Resulting Company and for continuation of related proceedings and liabilities. [Paras 24, 25, 28]

Assets, liabilities, proceedings and employees shall stand transferred and vested in the designated Transferee/Resulting Companies in accordance with the sanctioned Scheme.

Compliance with notice and statutory reporting requirements - role of Regional Director, Official Liquidator and Income Tax Department reports - Sufficiency of statutory notices, publication and statutory reports for purposes of sanction. - HELD THAT: - The Tribunal noted filing of the compliance affidavit, newspaper publications and service on statutory authorities. It considered and took on record the reports of the Regional Director (reporting no objections and noting filing of split balance sheets), the Official Liquidator (reporting no litigation affecting financial position) and the Income Tax Department (setting out outstanding demands and tax positions for the petitioner companies). The petitioners furnished affidavits and undertakings in response to the Income Tax reports, production of proof of partial payments and appeals where relevant, and confirmations as to treatment of taxes and carry forward of losses in accordance with the Income Tax Act. The Registry reported no objections received to the Scheme under Section 230(4). On this foundation the Tribunal proceeded to sanction the Scheme subject to statutory rights of the tax authorities and other regulators. [Paras 17, 18, 19, 20, 21]

Notices, publications and statutory reports are found to be in order and no objections remain; the Scheme is sanctioned subject to liabilities and rights of tax and regulatory authorities being preserved.

Filing of certified copy with Registrar of Companies and dissolution without winding up - directions for compliance, deposits and filing of schedules - Post sanction directions concerning registration, dissolution, deposits and ancillary filings. - HELD THAT: - The Tribunal directed that certified copy of the order be delivered to the Registrar of Companies within 30 days for registration, upon which the Transferor Company shall be dissolved without undergoing winding up and the ROC files consolidated. The Transferor Company and the Resulting Company are directed to deposit specified sums with the Pay & Accounts Office for the Regional Director and with the Company Law Tribunal Bar Association Chandigarh within four weeks of receipt of certified copy. The Tribunal further directed petitioners to file by affidavit the schedule of properties (freehold and leasehold) in the prescribed format (Form CAA 7/affidavit) and to ensure statutory formalities including registration are completed. [Paras 28, 29]

Petitioners to file certified copy with ROC for registration leading to dissolution of Transferor Company; specified deposits and filing of property schedules are directed within prescribed timelines.

Final Conclusion: The Tribunal, having found statutory notices, publications and statutory reports in order and no outstanding objections, sanctioned the Composite Scheme of Arrangement under Sections 230 232 of the Companies Act, 2013; ordered consequential transfer and vesting of assets, liabilities, proceedings and employees to the designated Transferee/Resulting Companies; and issued directions for filing the certified order with the Registrar of Companies, deposit of specified sums and filing of schedules of properties, while preserving rights of tax and regulatory authorities.

Compensatory interest - interest during price-determination period by regulator - SEBI valuation under Regulation 8(16) of the SAST Regulations - discretionary jurisdiction of SEBI - protection of investors

Compensatory interest - protection of investors - Whether the appellant was entitled to compensatory interest from the acquirer and whether SEBI erred in rejecting the application for interest. - HELD THAT: - The Tribunal found that the price fixed by SEBI at Rs. 608.46 per share became final on the Supreme Court's order of December 16, 2019 and that respondent No. 2 made payment to minority shareholders on January 30, 2020 which included interest for the periods April 10, 2018 to October 9, 2018 and August 21, 2019 to January 30, 2020. The Court recognised the object of the SEBI Act and SAST Regulations to protect investors but held that SEBI and the Tribunal were not obliged to direct payment of additional interest beyond what was payable under the Regulations. Applying the determinative facts, the Tribunal concluded there was no error in SEBI's rejection of the appellant's claim for further interest. [Paras 10, 12, 15]

SEBI did not err in rejecting the application for additional compensatory interest; the appeal is dismissed.

Interest during price-determination period by regulator - SEBI valuation under Regulation 8(16) of the SAST Regulations - discretionary jurisdiction of SEBI - Whether interest is payable for the period from October 10, 2018 (publication of draft letter of offer) to July 4, 2019 (date on which SEBI finalized the price). - HELD THAT: - The Tribunal held that interest runs from the date of agreement (April 10, 2018) until publication of the draft letter of offer (October 9, 2018) - a period for which interest was paid. Thereafter, the period during which SEBI was required to determine the price under Regulation 8(16) (i.e., from October 10, 2018 to July 4, 2019) was not in the control of the acquirer. It would be unfair to saddle the acquirer with interest for the period when the regulator was finalising the price. The Tribunal rejected the appellant's submission that discretionary relief should be granted to make the acquirer liable for delay caused by regulatory price-determination or litigation, noting that the appellant itself had litigated against the valuation fixed by SEBI and that reliance on the cited Supreme Court paragraphs was misplaced. [Paras 11, 12, 13, 14]

No interest is payable by the acquirer for the intervening period from October 10, 2018 to July 4, 2019 when SEBI was determining the price.

Final Conclusion: The Tribunal dismissed the appeal and upheld SEBI's order rejecting the claim for additional interest, holding that interest paid by the acquirer for periods before publication of the draft letter of offer and after SEBI finalised the price was adequate and that the acquirer is not liable to pay interest for the period when SEBI was determining the price.

Admissibility of petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 - Pre-existing dispute - Costs of Corporate Insolvency Resolution Process (CIRP) - Liability to pay Interim Resolution Professional's fees - Setting aside admission order by appellate authority

Admissibility of petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 - Pre-existing dispute - Setting aside admission order by appellate authority - Validity of NCLAT's setting aside of NCLT's admission of the Section 9 petition on the ground of pre-existing disputes. - HELD THAT: - The NCLT had admitted the Section 9 petition after treating the Appellant's claim as undisputed. The NCLAT examined documentary material and concluded that pre-existing disputes existed between the parties; on that basis it set aside the NCLT admission order and dismissed the Section 9 application. The Supreme Court found no grounds to interfere with the NCLAT's finding that pre-existing disputes existed and therefore upheld the setting aside of the NCLT order.

The NCLAT's order setting aside the NCLT admission of the Section 9 petition on account of pre-existing disputes is upheld; no interference is warranted.

Costs of Corporate Insolvency Resolution Process (CIRP) - Liability to pay Interim Resolution Professional's fees - Sustainability of the direction that the Operational Creditor pay CIRP costs and the fees of the Interim Resolution Professional. - HELD THAT: - Paragraph 8(C) of the impugned order directed the Interim Resolution Professional to place particulars of CIRP costs and fees before the Adjudicating Authority and directed the Operational Creditor to pay those costs and fees as certified. The Court observed that such a direction, imposing CIRP costs and IRP fees in the circumstances of this case, was found to be unsustainable in law. The Court noted that the party which succeeded in the appeal cannot be saddled with such costs. Nevertheless, the overall appellate conclusion did not require upsetting the NCLAT's order under challenge.

The direction to saddle the successful party with CIRP costs/IRP fees is unsustainable in law; however, this does not change the Court's decision to dismiss the appeal and to decline interference with the NCLAT order.

Final Conclusion: The civil appeal is dismissed; no interference is called for with the NCLAT order which set aside the NCLT admission on account of pre-existing disputes, and the direction concerning CIRP costs and IRP fees is noted as unsustainable in law but does not alter the dismissal.

Access to corporate debtor's books and records by creditors/former employees - Confidentiality of Committee of Creditors minutes - Liquidator's duty to furnish financial information to creditors - Information Utility access restrictions - Cost recovery for supply of documents by liquidator - Protection of liquidation bidding process

Access to corporate debtor's books and records by creditors/former employees - Liquidator's duty to furnish financial information to creditors - Cost recovery for supply of documents by liquidator - Whether the Liquidator must provide the documents sought by the applicants (other than Committee of Creditors minutes) upon payment/adjustment of the costs already remitted. - HELD THAT: - The Tribunal found that the interim directions previously issued had been substantially complied with and that the Liquidator undertook to furnish any outstanding documents on payment of the balance amount, except for the minutes of meetings of the Committee of Creditors which are confidential. The applicants had paid a sum which was to be adjusted against the cost of providing documents; the Tribunal directed the respondent to recalculate photocopying charges at Rs. 1.50 per A4 black-and-white sheet (as per the quotation relied upon) and to inform the applicants of any balance to be paid. Having regard to the undertaking of the Liquidator and the applicants' prior remittance, the Tribunal directed supply of all other requested documents after adjustment of the amount already paid and collection, if any, of the balance, within one week of the order. [Paras 7, 10]

Directed the Liquidator to provide all documents sought in the applications except the Committee of Creditors' minutes, after adjusting the Rs. 31,500 already remitted and collecting any balance (with photocopy rate fixed at Rs. 1.50 per sheet); compliance to be within one week.

Confidentiality of Committee of Creditors minutes - Information Utility access restrictions - Protection of liquidation bidding process - Whether the applicants are entitled to be furnished with the minutes of meetings of the Committee of Creditors. - HELD THAT: - The Tribunal accepted the Liquidator's contention that minutes of the Committee of Creditors contain confidential and commercially sensitive information (including valuation and other secretive information) and that disclosure may adversely affect the bidding process in the liquidation. The decision was informed by the statutory scheme and regulations which restrict access to certain insolvency records (including the limited access regime contemplated for information utilities), and by the Tribunal's view that such minutes are not necessary to establish the individual claims of the former employees. Consequently, the prayer for supply of the Committee of Creditors' minutes was rejected. [Paras 6, 8, 9, 10]

Request for supply of Committee of Creditors' minutes refused on confidentiality and bidding-process protection grounds; such minutes not to be furnished to the applicants.

Final Conclusion: The applications are disposed by directing the Liquidator to supply all requested documents other than the Committee of Creditors' minutes, after adjusting the Rs. 31,500 already paid and collecting any balance (photocopy rate fixed at Rs. 1.50 per sheet); the request for the minutes is refused as confidential and likely to prejudice the liquidation bidding process.

Liquidation under section 33(1) of the Insolvency and Bankruptcy Code, 2016 - appointment of liquidator under section 34(1) of the Insolvency and Bankruptcy Code, 2016 - entitlement of liquidator to fees under regulation 4(2)(b) of the IBBI (Liquidation Process) Regulations, 2016 - vesting of powers in the liquidator and cessation of powers of board of directors and key managerial personnel - public notice and intimation to Registrar of Companies on initiation of liquidation - bar on suits and proceedings subject to section 52 of the Insolvency and Bankruptcy Code, 2016

Liquidation under section 33(1) of the Insolvency and Bankruptcy Code, 2016 - Liquidation of M/s. Harneshwar Agro Products Power and Yeast (I) Ltd. was ordered under section 33(1) of the Code in the absence of any resolution plan. - HELD THAT: - The Adjudicating Authority found that the resolution professional complied with the Code and regulations, public announcement and form G advertisement were made, no expression of interest or resolution plan was received, and the Committee of Creditors unanimously resolved in its meeting of September 16, 2019 that the corporate debtor had no prospects of revival. On that basis the Tribunal held it was a fit case to pass a liquidation order under section 33(1).

The corporate debtor is ordered to be liquidated under section 33(1) of the Code.

Appointment of liquidator under section 34(1) of the Insolvency and Bankruptcy Code, 2016 - Mr. Jigar Shah was appointed as liquidator under section 34(1) of the Code. - HELD THAT: - The resolution professional who carried out the CIRP and was approved by the CoC agreed to act as liquidator. The Tribunal, satisfied with compliance of procedure by the RP, appointed him as liquidator pursuant to section 34(1).

Mr. Jigar Shah is appointed as liquidator.

Entitlement of liquidator to fees under regulation 4(2)(b) of the IBBI (Liquidation Process) Regulations, 2016 - The liquidator is entitled to fees in accordance with regulation 4(2)(b) of the IBBI (Liquidation Process) Regulations, 2016. - HELD THAT: - Having appointed the liquidator, the Tribunal directed that his remuneration and fees shall be as provided in regulation 4(2)(b) of the Liquidation Process Regulations, thereby fixing the basis of payment to the liquidator in conformity with the prescribed regulation.

The liquidator shall be paid fees as per regulation 4(2)(b) of the IBBI (Liquidation Process) Regulations, 2016.

Vesting of powers in the liquidator and cessation of powers of board of directors and key managerial personnel - On commencement of liquidation, all powers of the board of directors, key managerial personnel and partners of the corporate debtor cease and vest in the liquidator. - HELD THAT: - The Tribunal ordered that upon initiation of the liquidation process the statutory effect of vesting would follow: the board, KMP and partners would cease to exercise their powers and those powers would henceforth be vested in the liquidator to enable him to manage the liquidation process.

Powers of the board, KMP and partners cease and vest in the liquidator for the liquidation process.

Public notice and intimation to Registrar of Companies on initiation of liquidation - bar on suits and proceedings subject to section 52 of the Insolvency and Bankruptcy Code, 2016 - The liquidator is to issue a public notice and the Tribunal's liquidation order shall be intimated to the Registrar of Companies; further, no suit or other proceeding may be instituted by or against the corporate debtor except as permitted under section 52 of the Code and subject to the liquidator's liberty to initiate proceedings with prior approval of the Adjudicating Authority. - HELD THAT: - The Tribunal directed the liquidator to publish a public notice that the corporate debtor is in liquidation and to send the order to the Registrar of Companies. It also recorded the statutory bar that, once liquidation is initiated, suits or legal proceedings by or against the corporate debtor are restrained subject to section 52, while preserving the liquidator's liberty to institute proceedings on behalf of the corporate debtor with prior leave of the Adjudicating Authority. The order was also framed to operate as notice of discharge for officers, employees and workmen except where the business continues under the liquidator.

Public notice and RoC intimation to be effected; suits and proceedings barred as per section 52, and the order operates as notice of discharge to officers, employees and workmen except as specified.

Final Conclusion: The Tribunal allowed the application and ordered liquidation of the corporate debtor, appointed the resolution professional as liquidator with fees as per regulation 4(2)(b), directed publication and Registrar of Companies intimation, vested management powers in the liquidator, and gave consequential directions regarding suits and discharge of personnel.

Quashing of show-cause notice - Service tax liability of professional partners - Use of information retrieved from Income Tax Department for demand proceedings - Verification and fresh proceedings in respect of income from other sources - Pursuit of proceedings only where material warrants issuance of notice

Quashing of show-cause notice - Service tax liability of professional partners - Impugned show-cause-cum-demand notice dated 30.12.2020 issued to the petitioner - HELD THAT: - The respondents, by sworn affidavit, recorded that the information from the Income Tax Department had initially prompted issuance of the show-cause notice, but on verification they concluded that the activities of the petitioner as partner or salaried individual at specified firms are not liable to service tax under the Finance Act, 1994. The Court accepted this admission and held that in view of the respondents' concession of non-liability as to those activities, the impugned notice could not be sustained. The determinative reasoning is that where the revenue authority disclaims liability for the activities which formed the basis of the notice, continuation of that specific demand is not justified and the notice must be set aside. [Paras 5, 8]

Impugned show-cause-cum-demand notice dated 30.12.2020 is set aside and quashed.

Use of information retrieved from Income Tax Department for demand proceedings - Verification and fresh proceedings in respect of income from other sources - Pursuit of proceedings only where material warrants issuance of notice - Respondents' liberty to verify petitioner's income from other sources and to issue fresh proceedings if warranted - HELD THAT: - The respondents' affidavit indicates that although the particular demands relating to the partner/salaried activities are not maintainable, certain aspects relating to income from other sources require clarification. The Court, while quashing the impugned notice, expressly left the respondents free to continue verification on those limited points and to initiate fresh proceedings in accordance with law should satisfactory clarification not be furnished. The court thereby confined its decision to the specific demand found untenable and permitted lawful further action limited to unresolved matters. [Paras 5, 8]

Respondents are at liberty to pursue verification regarding income from other sources and may, if justified, issue a fresh show-cause notice in accordance with law.

Final Conclusion: Writ petition disposed of by quashing the show-cause-cum-demand notice dated 30.12.2020; respondents permitted to verify and, if justified by appropriate material, issue fresh proceedings limited to income from other sources.

Cenvat credit on input services - definition of input service under Rule 2(l) of the Cenvat Credit Rules, 2004 - service tax on commission charged by advertising agency - extended period of limitation/change of opinion

Cenvat credit on input services - definition of input service under Rule 2(l) of the Cenvat Credit Rules, 2004 - service tax on commission charged by advertising agency - Entitlement of the appellant to avail cenvat credit of service tax paid on invoices issued by advertising agencies (including commission component) for advertisement/sales promotion services used in providing output service. - HELD THAT: - The Tribunal found that the appellant, being the recipient of services from advertising agencies for placing and preparing advertisements, had paid service tax which was legitimately availed as cenvat credit in terms of the definition of "input service" in Rule 2(l). The Department's approach seeking to re-classify the service on the basis of the service-entry at the level of the advertising agency or the print media was held to be misconceived: the relevant inquiry is whether the service was received by the appellant and utilised in providing the appellant's output service. The Tribunal applied Rule 2(l) to hold that services used in relation to advertisement or sales promotion, by whatever nomenclature called, qualify as input service when received and utilised by the provider of the output service, and accordingly the appellant was entitled to credit. The Tribunal also noted precedent before a co-ordinate Bench taking a similar view, and concluded that denial of credit on the ground advanced by the Department was unsustainable.

The appellant is entitled to avail cenvat credit of the service tax paid on advertising agency invoices; the impugned denial on this ground is set aside.

Extended period of limitation/change of opinion - Validity of the demand invoking extended period of limitation on the basis that the action amounted to a change of opinion in respect of credits previously declared and regularly filed by the appellant. - HELD THAT: - The Tribunal observed that the Department's reassessment amounted to a change of opinion, since the appellant had been a regular assessee filing ST-3 returns and had earlier availed the credit which was reflected in returns. The show cause action initiated after a long interval sought to recast the earlier treatment; such exercise was characterised as a mere change of opinion and thus the basis for invoking extended period of limitation was not sustainable. This formed part of the reasoning for setting aside the impugned order and restoring the appellant's entitlement to credit.

The demand based on invocation of extended period as part of a change of opinion is unsustainable and is set aside.

Final Conclusion: The Tribunal allowed the appeal, set aside the adjudicating authority's order, and held that the appellant is entitled to avail cenvat credit of service tax paid on advertising agency invoices (including commission), with consequential benefits; the demand and penalty founded on the contrary classification and on invocation of extended limitation were quashed.

Tax dues - appeal pending as on cutoff date - SVLDRS relief computation under section 124(1)(a)(ii) - pre-deposit deduction under section 124(2) - admitted liability and its exclusion from scheme - discharge certificate in Form SVLDRS-4 - refund of excess deposit

Tax dues - appeal pending as on cutoff date - Whether the entire duty confirmed by the adjudicating authority is to be treated as 'tax dues' for the purposes of SVLDRS where an appeal arising out of the order was pending as on 30.06.2019. - HELD THAT: - The Court held that for the purposes of the Scheme, section 123(a) requires that where a single appeal arising out of an order is pending as on 30.06.2019, the total amount of duty which is being disputed in that appeal constitutes 'tax dues'. The petitioner's appeal before the Commissioner (Appeals) arising out of the Order-in-Original dated 31.01.2019 challenged the entire confirmation of duty of Rs. 1,66,26,967/-, and was admittedly pending as on 30.06.2019. Consequently the whole confirmed duty was to be considered as 'tax dues' for computing relief under the Scheme and not a truncated amount based on alleged partial admissions in the appeal papers. [Paras 13]

The entire confirmed duty of Rs. 1,66,26,967.00 is to be treated as 'tax dues' for SVLDRS computation.

Admitted liability and its exclusion from scheme - SVLDRS relief computation under section 124(1)(a)(ii) - pre-deposit deduction under section 124(2) - Whether the petitioner's purported admission of a portion of duty in the memorandum of appeal excludes that portion from relief under SVLDRS and how pre-deposits are to be treated in computing the amount payable. - HELD THAT: - The Court found the Designated Committee's reliance on a paragraph in the memorandum of appeal as an admission that would exclude that portion from 'tax dues' to be unsustainable. The memorandum of appeal challenged the Order-in-Original in its entirety and contained the relevant paragraph prefaced by 'Without prejudice ... and without admitting but assuming', and the appeal itself was pending as on 30.06.2019. Therefore the petitioner's stated alternative calculations could not operate to carve out part of the confirmed duty from 'tax dues'. Applying section 124(1)(a)(ii), relief of 50% applies to the entire tax dues (since the duty exceeds the prescribed threshold). Amounts deposited as pre-deposit or during investigation/appeal under section 124(2) are to be deducted from the relief-determined amount; the Court also noted that the deposit made pursuant to the High Court's earlier order is not to be treated as a pre-deposit attracting the proviso to section 124(2). On this basis the Court computed the payable amount as 50% of Rs. 1,66,26,967.00 less pre-deposits/deposits actually qualifying for deduction. [Paras 12, 13, 14]

The alleged admission does not exclude any portion from 'tax dues'; relief is 50% of the entire duty and qualifying pre-deposits are to be deducted in computing final liability.

Discharge certificate in Form SVLDRS-4 - refund of excess deposit - Relief to be granted consequential on finding: whether the Designated Committee must issue SVLDRS-4 and refund the excess deposit. - HELD THAT: - Having set aside the Designated Committee's computation, the Court directed that the Designated Committee shall issue the discharge certificate in Form SVLDRS-4 determining the amount payable under the Scheme at the figure calculated by the Court (50% of tax dues less qualifying deposits). The Court directed refund of the excess deposit paid by the petitioner pursuant to the earlier order, within specified timeframes, after issuance of SVLDRS-4 and consideration of amounts deposited (including pre-deposits and the deposit under the Court's earlier order). The Court recorded specific figures in its computation and ordered payment of refund within four weeks after issuance of the discharge certificate and final directions accordingly. [Paras 14, 15, 16, 18]

Designated Committee to issue Form SVLDRS-4 in accordance with the Court's computation and refund the excess deposit within the time directed.

Final Conclusion: The impugned order dated 11.09.2020 of the Designated Committee is set aside. The Court held that the entire confirmed duty is 'tax dues' for SVLDRS purposes, relief of 50% under section 124(1)(a)(ii) applies to the whole duty, qualifying pre-deposits are deductible, and directed issuance of Form SVLDRS-4 and refund of the excess deposit to the petitioner within the time specified.

Rectification of registration certificate - Power to rectify clerical error in registration - Procedure for Amendment of the information - Locus standi of successor company - Issuance of revised registration certificate upon amendment

Rectification of registration certificate - Power to rectify clerical error in registration - Procedure for Amendment of the information - Issuance of revised registration certificate upon amendment - Direction to rectify an error in the registration certificate and to issue a revised registration certificate. - HELD THAT: - The Court examined the petitioner's claim that the registration certificate issued to the predecessor company contains an error in the PAN-based registration number and noted the respondents' own procedural rules for amendment of registration details under the Procedure for Central Excise Registration and Grant of Certificate. The rules contemplate amendment of information and issuance of a fresh registration certificate bearing the earlier allotted PAN-based registration number after surrender of the earlier certificate, and permit suitable database entries upon receipt of amended information. The respondents did not assert inability to rectify the mistake; their counter-affidavit mentioned the issuance was based on incorrect PAN and referred to verification of stocks, but no legal bar to correction was shown. In these circumstances, and notwithstanding the delay in seeking rectification, the Court held that where the power to rectify exists and an error has been demonstrated, the authority ought to correct the registration certificate. The Court therefore directed the nodal officer to carry out the rectification and issue a revised registration certificate within six weeks from receipt of the order's copy. [Paras 6, 7]

The second respondent/nodal officer is directed to rectify the specified error in the registration certificate of the predecessor company and issue a revised registration certificate within six weeks.

Locus standi of successor company - Successor company has locus to seek rectification of registration certificate of the predecessor company which it had taken over. - HELD THAT: - The Court found that M/s. Sabari TMT King Private Limited, having taken over Saga Steels Private Limited, has sufficient interest to maintain the petition for rectification of the predecessor's registration certificate. The petitioner's responsibility for the error did not disentitle it from obtaining the corrective relief sought. Accordingly, the writ petition was entertained on that basis. [Paras 7]

M/s. Sabari TMT King Private Limited has locus to seek and obtain rectification of the registration certificate of Saga Steels Private Limited.

Final Conclusion: Writ petition allowed to the extent of directing rectification of the registration certificate; respondents to issue a revised registration certificate within six weeks; no costs.

Proof of movement of goods - Form XXA under Rule 35A - onus of proof shifting to Revenue - appellate tribunal's duty as last fact-finding authority - failure to verify check post records - benefit of doubt to the dealer

Form XXA under Rule 35A - proof of movement of goods - onus of proof shifting to Revenue - failure to verify check post records - Production of original Form XXA and accompanying transport documents at the appellate stage sufficed to discharge the dealer's initial burden under Rule 35A and required the Revenue to verify and rebut the contention that the goods moved from Chennai to Bangalore. - HELD THAT: - The Court found that the petitioner produced Form XXA and lorry receipts, one duplicate of Form XXA retained by the petitioner containing a round seal resembling the check post seal, and relied upon these documents to prove movement of goods. Having discharged the initial burden under Rule 35A, the onus shifted to the Revenue to establish that the documents were not genuine or that movement did not occur. The Assessing Officer had alleged non-movement based on check post records in the notice but did not verify those records after receipt of the petitioner's reply and did not address the contention when completing the assessment, instead levying tax on the ground of non-registration. The Tribunal, as the final fact-finding authority, failed to make any independent inquiry into the veracity of the Form XXA and other documents and merely reiterated the First Appellate Authority's conclusions without examining the materials or requiring the Revenue to discharge its shifted burden. In these circumstances, the Court held that the Revenue failed to rebut the petitioner's proof and that the benefit should thus accrue to the petitioner. [Paras 11, 12, 13, 14, 15]

The Court answered the reframed substantial question in favour of the petitioner, holding that the petitioner discharged the initial burden by producing Form XXA and related documents and that the Revenue failed to rebut that proof.

Final Conclusion: Tax Case Revision allowed; the reframed substantial question of law answered for the petitioner and the benefit extended to the petitioner; no costs.

Offence under Section 138 of the Negotiable Instruments Act - Presumption of consideration under Section 118 of the Negotiable Instruments Act - Presumption under Section 139 of the Negotiable Instruments Act and reverse onus - Standard of proof - preponderance of probabilities - Reappraisal of evidence and appellate interference with an acquittal

Presumption under Section 139 of the Negotiable Instruments Act and reverse onus - Presumption of consideration under Section 118 of the Negotiable Instruments Act - Standard of proof - preponderance of probabilities - Whether, upon proof of issuance and dishonour of the cheques and production of supporting documents, the presumption under Sections 118 and 139 arises and the burden shifts to the accused to rebut that the cheques were issued for discharge of a debt or liability, on the standard of preponderance of probabilities. - HELD THAT: - The Court held that once the complainant proved the basic ingredients - issuance of the cheques in favour of the complainant, their presentation within validity and dishonour for insufficiency of funds, and production of documentary evidence of supply and invoices - the statutory presumptions under Sections 118 and 139 of the Act arise in favour of the complainant. Section 139 operates as a reverse onus clause shifting the burden to the accused to rebut the presumption that the cheque was issued for discharge of a legally enforceable debt or liability. The standard required of the accused to discharge that burden is one of preponderance of probabilities and not the criminal standard of beyond reasonable doubt. Mere denial or recording of statement under Section 313 of the Code, without adducing substantive defence evidence or facts and circumstances which make non-existence of consideration probable, is insufficient to rebut the statutory presumptions. The Court relied on authoritative exposition that the accused may discharge the burden by direct, circumstantial or inferential evidence but must bring on record facts which would lead a prudent person to conclude that consideration or debt did not exist or its non-existence was so probable that the presumption should not hold. [Paras 14, 15, 16, 17, 21]

The presumption arose on the proved facts and the accused failed to rebut it on the preponderance standard; therefore the burden remained on the accused and was not discharged.

Offence under Section 138 of the Negotiable Instruments Act - Reappraisal of evidence and appellate interference with an acquittal - Whether the High Court was justified in reappraising the evidence, setting aside the trial court's acquittal and convicting the appellant for the offence under Section 138. - HELD THAT: - The Court examined the trial record and noted that the complainant had placed on record invoices, delivery particulars, cheques, dishonour memos and proved service of statutory notices, and had examined three witnesses. The trial court had acquitted the accused on finding that complainant had not proved delivery; on reappraisal the High Court concluded that the primary burden was discharged by the complainant and that the appellant had not led any evidence to rebut the presumption under Section 139. The Supreme Court held that the High Court did not commit error in reversing the acquittal because the overall material on record substantiated the complainant's case and the appellant's statement under Section 313 without further defence evidence was not sufficient to displace the statutory presumption. The Court emphasised that proceedings under Section 138 are quasi criminal and governed by the preponderance standard, and appellate interference with an acquittal is not warranted where the appellate view is a plausible reappraisal of the evidence and the accused has not discharged the burden to rebut the presumption. [Paras 11, 18, 19, 20, 24]

The High Court rightly set aside the trial court's acquittal and convicted the appellant under Section 138; the conviction required no interference.

Final Conclusion: The appeals are dismissed; the High Court's conviction under Section 138 of the Negotiable Instruments Act is affirmed as the complainant proved the statutory ingredients and the appellant failed to rebut the presumption of consideration on the preponderance of probabilities.

Existence of arbitration agreement - prima facie examination under Section 11(6A) - scope of judicial review at the referral stage - appointment of arbitrator under Section 11(6) - competence-competence - CFSL report as inconclusive expert opinion

Existence of arbitration agreement - CFSL report as inconclusive expert opinion - prima facie examination under Section 11(6A) - Whether the Delhi High Court was correct in conclusively finding that an arbitration agreement dated 7th July, 2014 existed between the parties. - HELD THAT: - The Supreme Court held that the CFSL report was inconclusive and did not resolve authorship of signatures, and that surrounding circumstances created serious doubts about the asserted agreement - absence of pre execution negotiations on record, subsequent negotiations after the alleged date, notarisation at an unexpected place, and the notary's licence having expired. Several findings by the Single Judge were found contrary to pleadings and documentary record (for example, invoices and payments involving Process rather than the Appellant, and inconsistent characterisations of Process in pleadings). Given these factual disputes and the inconclusive expert opinion, the Court concluded that a conclusive finding at the referral stage that the arbitration agreement existed was unsafe. Applying the Vidya Drolia framework, where the prima facie review is inconclusive or requires deeper examination, the question of existence/validity should be left to the Arbitral Tribunal for detailed evidence and cross examination rather than decided finally in summary referral proceedings. [Paras 23, 24, 25, 26, 27]

The Delhi High Court's conclusive finding that an arbitration agreement existed on 7th July, 2014 is set aside and the question of existence/validity is to be determined by the Arbitral Tribunal after detailed consideration.

Appointment of arbitrator under Section 11(6) - scope of judicial review at the referral stage - competence-competence - Whether the appointment of Justice G.S. Sistani as Sole Arbitrator should be sustained and what is the scope of the arbitrator's preliminary jurisdiction. - HELD THAT: - Although the High Court's conclusive finding on existence was set aside, the Supreme Court upheld the administrative act of appointing Justice G.S. Sistani as Sole Arbitrator. The Court directed that the appointed arbitrator shall first determine, as a preliminary issue, whether an arbitration agreement exists between the parties, and only if he finds such agreement to exist, proceed to decide the merits. The Court emphasised that issues left to the tribunal must be decided without being influenced by the prima facie observations made by the Supreme Court, and that the limited prima facie review at the referral stage does not usurp the tribunal's competence to decide jurisdictional and merits questions where deeper fact finding is required. [Paras 27]

Appointment of Justice G.S. Sistani as Sole Arbitrator is upheld; he is directed to first decide as a preliminary issue whether an arbitration agreement exists, and to proceed to merits only if he finds such agreement.

Final Conclusion: The appeal is allowed in part: the Delhi High Court's conclusive finding that an arbitration agreement existed is set aside; however, the appointment of the Sole Arbitrator is upheld and the Arbitrator is directed to determine prima facie disputed issues of existence/validity of the arbitration agreement as a preliminary issue before proceeding to the merits.

Offence under Section 138 of the Negotiable Instruments Act - offence under Section 141 of the Negotiable Instruments Act - signatory to the cheque - account maintained by him - joint liability - offence by companies - abuse of process of law

Offence under Section 138 of the Negotiable Instruments Act - signatory to the cheque - account maintained by him - joint liability - Liability of a non-signatory spouse to be prosecuted under Section 138 when the cheque was drawn and signed by the other spouse from his account which was not a joint account. - HELD THAT: - The Court found on the record that the dishonoured cheque was drawn on and signed by the husband from his bank account and that the account was not a joint account. Section 138 requires that the cheque be drawn by a person on an account maintained by him and be signed by that person; mere joint liability to pay a debt does not satisfy the statutory ingredients for prosecution under Section 138 against a person who neither signed the cheque nor maintained the account. Therefore, an individual who is not a signatory and does not hold the account cannot be prosecuted under Section 138 merely because of a joint liability to the creditor. [Paras 6, 7]

The appellant, being neither the signatory nor the account-holder, cannot be prosecuted under Section 138 of the NI Act.

Offence under Section 141 of the Negotiable Instruments Act - offence by companies - joint liability - abuse of process of law - Applicability of Section 141 (relating to offences by companies) to two private individuals alleged to be jointly liable. - HELD THAT: - Section 141 pertains to offences by companies and includes bodies corporate and, by statutory definition, may extend to firms or other associations of individuals. The Court held that two private individuals who are jointly liable for a debt do not constitute an 'other association of individuals' for the purpose of invoking Section 141. The appellant was neither a director nor a partner of any firm that issued the cheque; consequently Section 141 cannot be employed to prosecute her. Proceeding against the appellant on the combined basis of Sections 138 and 141, given the facts, amounted to an abuse of the process of law. [Paras 8]

Section 141 is not applicable to the appellant; invocation of Section 141 against two private individuals in these circumstances is impermissible and amounts to abuse of process.

Final Conclusion: The High Court order refusing to quash the complaint was set aside; the criminal complaint C.C. No. 2802/SS/2016 against the appellant under Section 138 read with Section 141 of the NI Act is quashed and the appeal is allowed.