TaxTMI Updates e-Newsletter
Mar 21,2026

Validity of the ex-parte order passed without evidence of physical service of the show cause notice and without giving the petitioner an opportunity to be heard - cancellation of registration - reversal of input tax credit - interest and penalty.HELD THAT:- The Court found that the petitioner's GST registration had been cancelled w.e.f. 09.11.2022 and there was no material on record to show that the cancellation was recalled or that any physical/offline show cause notice had been served prior to passing the impugned ex-parte order. In the absence of evidence that the petitioner had actual knowledge of the notice, issuance of the show cause notice through electronic mode long after cancellation and passing an ex-parte order amounted to failure to afford the petitioner an opportunity to defend herself, thereby violating the principles of natural justice. The Court set aside the ex-parte order and directed that the petitioner be permitted to submit a reply/clarification within three weeks and that the adjudicating authority shall pass a fresh order after affording opportunity in accordance with law. [Paras 6, 7]

The impugned ex-parte order is set aside; petitioner to file reply within three weeks and respondent to decide afresh after affording opportunity to be heard.

Final Conclusion: The High Court set aside the ex-parte order for lack of service and denial of opportunity to be heard, and remanded the matter for fresh adjudication after permitting the petitioner to file a reply within three weeks.

Availability of efficacious alternative statutory remedy - non-supply of relied upon documents, service and service dates of summons - scope of the appellate forum - abstention from judicial interference - non-application of mind.

Availability of efficacious alternative statutory remedy - The writ petition seeking to quash the order under Section 74(9) of the CGST Act was not maintainable because an efficacious statutory appeal was available and had not been availed. - HELD THAT: - The Court declined to enter into the merits and held that the grievances raised-alleged non-supply of relied-upon documents, delayed or non-service of summons, and alleged non-consideration of the petitioner's replies-arise from the adjudicatory record and fall within the scope of the statutory appellate remedy under Section 107 of the CGST Act read with Rule 109A of the CGST Rules. In view of the existence of that efficacious alternative remedy, and the settled principle that extraordinary writ jurisdiction will ordinarily be withheld where such remedy is available, the petition could not be entertained and the petitioner was granted liberty to avail the prescribed appellate forum; the Court expressly did not adjudicate the merits. [Paras 14, 15, 16, 17, 18]

Writ petition dismissed for non-availment of the efficacious statutory remedy; liberty granted to pursue appeal under the statutory scheme and merits left open.

Final Conclusion: The petition was dismissed on the ground that an efficacious statutory appeal under the CGST Act was available and had not been availed; the High Court refrained from adjudicating the merits and granted liberty to the petitioner to pursue the statutory appellate remedy.

Maintainability of Writ petition - Availability of alternative statutory remedy and bar on writ relief - failure to disclose the availability of that remedy and the misleading statement​​​​​​​ - non-service of show cause notices - service by electronic means - violation of principles of natural justice.

Availability of alternative statutory remedy and bar on writ relief - HELD THAT: - The Court found that the petitioner had a statutory remedy of appeal under Section 107 of the Jharkhand GST Act against the order under Section 73(9). The petitioner's failure to disclose the availability of that remedy and the misleading statement that no alternate efficacious remedy existed warranted dismissal. The Court applied the principle that when a complete statutory mechanism exists to challenge assessment orders, ordinarily the writ jurisdiction should not be exercised to bypass that scheme. [Paras 4, 14, 15]

Petition dismissed on the ground that an alternate statutory remedy exists and the petitioner cannot bypass it; liberty granted to prefer an appeal.

The Court recorded conflicting sworn statements: respondents averred service of notices by e-mail and uploading on the GST portal, while the petitioner denied receipt. The Court held that such disputed questions of fact-including whether statutory notices and opportunity of hearing were given-are not ordinarily amenable to summary disposal under Article 226, and a mere belated statement of ignorance does not suffice to extend limitation or to justify bypassing the appellate forum. [Paras 9, 11, 13]

Allegations of failure of natural justice and non-service are disputed factual questions unsuitable for resolution in writ jurisdiction; they do not justify entertaining the writ petition.

Final Conclusion: The petition is dismissed for being instituted despite an available appellate remedy and for raising disputed factual issues of service and natural justice unsuitable for summary adjudication under Article 226; the petitioner is granted liberty to pursue the remedy of appeal and all contentions are left open to the appellate authority.

Power to drop cancellation proceedings upon compliance with proviso to Rule 22(4) - cancellation of registration for non filing of returns for a continuous period of six months - Computation of limitation under Section 73(10) and special treatment of financial year 2025-26.

Power to drop cancellation proceedings upon compliance with proviso to Rule 22(4) - HELD THAT:- The Court held that the proviso to sub rule (4) of Rule 22 empowers the officer, duly authorized, to drop proceedings and pass an order in Form GST REG 20 if the person served with a show cause notice under Section 29(2)(c) furnishes all pending returns and makes full payment of tax dues with applicable interest and late fee. In view of the civil consequences of cancellation, the petitioners, upon complying with the proviso, are entitled to approach the empowered officer for consideration of restoration and the officer has jurisdiction to pass orders in accordance with law. [Paras 7, 10, 11]

The officer has authority to drop cancellation proceedings and consider restoration if the petitioners furnish pending returns and pay dues as per the proviso to Rule 22(4).

Computation of limitation under Section 73(10) and special treatment of financial year 2025-26 - HELD THAT: - The Court directed that the period referred to in Section 73(10) of the Central/State GST Act shall be computed from the date of the present order for all relevant years, while the financial year 2025 26 shall be governed by Section 44 of the Central/State GST Act. The petitioners remain liable to pay arrears including tax, penalty, interest and late fees. [Paras 12]

Section 73(10) period is to be computed from this order except that the financial year 2025 26 shall be treated as per Section 44; arrears remain payable.

Final Conclusion: Writ petition disposed with direction that the petitioners may approach the concerned authority within two months seeking restoration of GST registration, and on compliance with the proviso to Rule 22(4) the authority shall consider and decide the application in accordance with law; the order is not to be treated as a precedent.

Power to drop cancellation proceedings upon compliance with proviso to Rule 22(4) - non-filing of returns - time limit prescribed for filing of appeal - restoration of registration upon compliance - computation of limitation period.

Power to drop proceedings under proviso to sub-rule (4) of Rule 22 of the CGST Rules, 2017 - Authority's jurisdiction to revive/restore registration and drop cancellation proceedings upon compliance with the proviso to sub rule (4) of Rule 22 - HELD THAT:- The Court held that where a person served with a show cause notice under Section 29(2)(c) furnishes all pending returns and makes full payment of tax dues along with applicable interest and late fee as provided in the proviso to sub rule (4) of Rule 22, the proper officer has the authority and jurisdiction to drop the cancellation proceedings and pass the prescribed order (Form GST REG 20). The Court directed that the petitioners be permitted to approach the concerned authority within a specified timeframe and that the authority shall consider and decide such application in accordance with law, completing the process expeditiously. [Paras 8, 10, 11]

Petitioners may apply to the proper officer within two months, and on compliance with the proviso to sub rule (4) of Rule 22 the officer shall consider dropping proceedings and pass orders in accordance with law; the matter is remitted to the authority for fresh consideration.

Computation of limitation under Section 73(10) of the CGST Act - HELD THAT: - The Court directed that the period stipulated under Section 73(10) of the Central/State GST Act shall be computed from the date of the instant order for the purposes of any recovery proceedings, except that for the financial year 2025 26 the limitation shall be governed by Section 44 of the Central/State GST Act. This clarifies the temporal point from which limitation runs in the present disposal. [Paras 12]

Limitation under Section 73(10) shall be computed from the date of this order, with the exception of FY 2025 26 which shall be governed by Section 44; petitioners remain liable for arrears, interest, penalty and late fees.

Final Conclusion: Writ petition disposed by permitting the petitioners to apply to the competent authority within two months for restoration of GST registration on compliance with the proviso to sub rule (4) of Rule 22; the authority is directed to decide expeditiously and the limitation for recovery under Section 73(10) is computed from this order (except FY 2025 26 as per Section 44).

Writ jurisdiction -Scope of Sections 73 and 74 - Availability of an efficacious alternative remedy by way of appeal under Section 107 - fraudulent availment of input tax credit - Validity of Consolidation of multiple financial years in notices under sections 73/74 - classification of supply and rate of tax.

Alternative statutory remedy - HELD THAT:- The Court declined to enter into the merits of whether fraud was made out because an alternative remedy by way of appeal under Section 107 of the CGST Act and Rule 109A of the CGST Rules was available and not exhausted. The Court applied settled principle that where an efficacious statutory remedy exists, the writ jurisdiction ought not to be invoked to decide substantive issues appropriate for the statutory appellate forum, and accordingly refrained from adjudicating the factual/legal merits. [Paras 19, 26]

The Court refused to examine the merits in writ proceedings and left the petitioner free to pursue the statutory appellate remedy.

Consolidation of multiple financial years in notices under sections 73/74 - HELD THAT: - The Court held itself bound by the decision in Ambika Traders [2025 (9) TMI 1338 - SC ORDER] which accepts that the language of Sections 73 and 74 permits issuance of notices covering more than one financial year and contemplated consolidation where the statutory language permits a notice 'for any period' or 'for such periods'. The Court rejected the petitioner's submission that Ambika Traders is confined to fraud-ITC cases and declined to follow divergent views of other High Courts, noting the binding effect of the earlier decision and that pendency of proceedings elsewhere did not justify deviation. [Paras 21, 22, 23, 24, 25]

The Court upheld the principle that consolidation of multiple years in show-cause notices under Sections 73/74 is permissible and found no ground to interfere with the impugned order on that basis.

Final Conclusion: The writ petition was dismissed; the Court declined to adjudicate merits in view of the available statutory appeal and, applying Ambika Traders, approved consolidation of multiple financial years in the impugned proceedings while granting liberty to the petitioner to pursue remedies in accordance with law.

Supply of service - Scope of assignment/sale/transfer of leasehold rights in a GIDC allotted plot to a third party for consideration - supply of service taxable​​​​​​​ under the State Goods & Service Tax Act, 2017 Or is a transfer of immovable property outside the scope of GST.

Assignment of leasehold rights constitutes transfer of immovable property - HELD THAT:- The Court applied and followed the reasoning in Gujarat Chamber of Commerce, Industries & Ors.[2025 (1) TMI 516 - GUJARAT HIGH COURT], holding that (i) a long term leasehold interest (as in GIDC allotments) constitutes an interest in immovable property which, when assigned for consideration, operates as a transfer of benefits arising out of immovable property; (ii) such assignment is therefore not within the scope of "supply of service" under section 7 read with the relevant entries in Schedule II and Schedule III of the GST Act; and (iii) the legislative scheme and relevant notifications confirm that transfers amounting to sale/assignment of immovable property are to be excluded from GST levy. The Court concluded that therefore GST liability and related demands founded on treating the assignment as a supply of service do not arise, and the question of utilisation of input tax credit in respect of such assignment does not arise. [Paras 6, 8, 9, 10]

The show cause notice and Order in Original demanding GST on assignment of leasehold rights were held unsustainable and the impugned order was quashed.

Final Conclusion: The petition succeeds; the Court held that assignment of GIDC leasehold rights to a third party is a transfer of immovable property and not a taxable supply of service under the GST Act, and accordingly set aside the impugned demand order.

Assessment and recovery proceedings initiated under the GST enactments concerning levy of GST on seigniorage fee/royalty - non-compliance under the reverse charge mechanism - Stay of departmental proceedings pending higher court decision - conditional deposit for interim relief.

Proceedings initiated under the GST enactments were to be kept in abeyance pending the decision of the Hon'ble Supreme Court on levy of GST on seigniorage fee/royalty - HELD THAT:- The Court, noting that an identical question regarding levy of GST on seigniorage fee/royalty is pending before the Hon'ble Supreme Court and relying on its earlier order in S. Pichandhi [2025 (9) TMI 1765 - MADRAS HIGH COURT], disposed the writ petition at the admission stage and directed the Respondent to keep all proceedings in abeyance and to await the orders of the Hon'ble Supreme Court. The Court applied its prior direction to the facts of the present petition as the facts were found to be almost identical and did not adjudicate the underlying tax liability on merits. [Paras 3, 5, 6]

The respondent was directed to keep the impugned proceedings in abeyance and await the Supreme Court's decision.

Following the approach in the Court's earlier order in S. Pichandhi, the petitioner was directed to deposit 10% of the disputed tax as security while the departmental proceedings remain in abeyance. This condition was imposed as part of the interlocutory arrangement and not as a determination on the substantive tax liability. [Paras 5, 6]

Final Conclusion: The writ petition was disposed of at the admission stage by directing the respondent to keep the impugned GST proceedings in abeyance and to await the Supreme Court's decision on the levy of GST on seigniorage fee/royalty, subject to the petitioner depositing 10% of the disputed tax as security; no costs.

Locus to challenge show-cause notice - confiscation in Form GST MOV-10 relating to the intercepted consignment - bogus and suspicious transactions -intention to evade tax - discrepancy in the documentation of the goods​​​​​​​ - premature judicial interference.

Locus to challenge show-cause notice - HELD THAT: - The Court found serious doubt as to the petitioner's nexus with the intercepted consignment because the E-way bill showed dispatch from Maharashtra-Pune and a recipient in Gujarat, the petitioner is registered in Delhi, and the transaction was not a 'Bill to Ship' transaction. The affidavit-in-reply and record indicated neither supplier, recipient nor transporter had sought release. On this basis the Court concluded that the petitioner lacked sufficient locus to maintain the writ petition and that this ground alone justified dismissal. [Paras 8, 9]

Petition dismissed for want of locus to challenge the impugned notice and related detention/confiscation proceedings.

Interference with show-cause notice under Section 130 - HELD THAT: - The Court declined to disturb the show-cause notice. It relied on the Apex Court's observation in The State of Punjab v. Shiv Enterprises & Ors. [2023 (1) TMI 842 - SUPREME COURT] that it is premature for a High Court to decide on evasion of tax when such questions are to be considered in appropriate proceedings under Section 130. The Court also observed that the record manifested discrepancies and indicia of deceptive documentation (including issues as to E-way bill particulars and registration), and therefore refrained from quashing the notice. [Paras 10]

No interference with the show-cause notice; the challenge to Form GST MOV-10 is dismissed.

Final Conclusion: The writ petition is dismissed: the petitioner lacks locus to challenge the impugned detention/confiscation proceedings and, on the material before the Court and in view of precedent, the Court refrains from interfering with the show-cause notice issued under Section 130.

Jurisdictional scope of writ against appellate order - non-compliance with the mandatory pre-deposit requirement under Section 107(6).

Validity of the High Court order setting aside the Appellate Commissioner's dismissal for non-compliance with pre-deposit and remitting the matter for reconsideration -HELD THAT:- The High Court concluded that the writ petition challenged only the Appellate Commissioner's order dated 24.04.2023 which dismissed the appeal for non-payment of the statutory pre-deposit, and not the original adjudication order dated 01.04.2021. The Single Judge set aside the Appellate Commissioner's order and remitted the matter to the Appellate Commissioner for fresh consideration. The Court made clear that any such reconsideration by the Appellate Commissioner is subject to the mandatory pre-deposit requirement prescribed by Section 107(6) of the CGST Act, 2017. [Paras 5, 6]

The order of the Appellate Commissioner dated 24.04.2023 was set aside and the matter remitted for fresh consideration, subject to compliance with the statutory pre-deposit requirement.

Final Conclusion: The writ appeal is disposed of by affirming that only the Appellate Commissioner's order dated 24.04.2023 was set aside and remitted for reconsideration; such reconsideration must comply with the mandatory pre-deposit requirement under the CGST Act.

Seeking revocation of GST registration cancellation- belated return filing -non- filing of returns for a continuous period of six months due to health reasons - payment of penalty and fee - input tax credit verification.

Whether the order cancelling the petitioner's GST registration should be revoked - HELD THAT: - The Court accepted the petitioner's inability to file returns for six months on account of health reasons as a genuine cause and held that cancellation of GST registration ought to be revoked. The Court directed restoration of the registration but imposed time-bound compliance: the respondent to instruct GSTN to enable filing and payment within four weeks and the petitioner to file outstanding returns and pay tax, interest and belated filing fee within four weeks of restoration. The revocation was made conditional on these directions and non-compliance would terminate the benefit granted. [Paras 6, 7]

Cancellation of GST registration revoked subject to the Court's specified conditions requiring restoration, enabling portal changes, and time bound filing and payment.

The Court directed that payment of tax, interest, fine or fee shall not be permitted to be made or adjusted from any unutilized or unclaimed ITC held by the petitioner. Any ITC remaining must first be scrutinized and approved by a competent officer; only such approved ITC may thereafter be utilized for future tax liability. These conditions are part of the restoration order and non observance will result in cessation of the benefit. [Paras 7]

Unutilized ITC cannot be used to meet outstanding liabilities until scrutinized and approved; only approved ITC may be used subsequently.

Final Conclusion: The High Court revoked the cancellation of the petitioner's GST registration, subject to specified directions including portal-enabled restoration, filing of outstanding returns and payment of dues within four weeks, and a prohibition on utilising unapproved Input Tax Credit until departmental scrutiny and approval; non-compliance will terminate the relief.

Seeking revocation of GST registration cancellation- belated return filing -non- filing of returns for a continuous period of six months due to health reasons - payment of penalty and fee - input tax credit verification.

Revocation of GST registration cancelled for failure to file returns - HELD THAT: - The Court accepted the petitioner's explanation of financial difficulty for continuous non-filing of returns for six months as a genuine reason and, on that basis, exercised its jurisdiction to revoke the impugned cancellation order. [Paras 8]

Cancellation of GST registration revoked on the ground that the petitioner's reason for non-filing is genuine.

The Court directed the respondent to instruct GST Network to modify the portal architecture to permit the petitioner to file returns and pay dues, and directed the petitioner to file all outstanding returns and pay tax liabilities, interest and late filing fee within four weeks of restoration; non-compliance would cause the benefit to cease automatically. [Paras 9]

Registration restored subject to portal changes by GSTN and the petitioner filing returns and paying dues, interest and fees within four weeks, failing which the benefit will cease.

The Court expressly prohibited adjustment of outstanding payments from any unutilised ITC and required departmental scrutiny and approval before any ITC may be used to discharge tax liabilities; only approved ITC may thereafter be utilised for future tax liabilities. [Paras 9]

Unutilised ITC shall not be used to discharge dues until scrutinised and approved by the competent authority; only approved ITC may be utilised thereafter.

Final Conclusion: The High Court revoked the respondent's order cancelling the petitioner's GST registration, subject to directions to restore portal access, filing of pending returns and payment of dues within four weeks, and a prohibition on using unapproved Input Tax Credit pending departmental scrutiny; non-compliance will terminate the relief.

Legality of issuing a single show cause notice/assessment order covering more than one financial year - Clubbing show cause notices for multiple financial years.

Validity of a show cause notice and assessment order issued collectively for several financial years instead of separately for each tax period - HELD THAT: - The Court applied its prior ruling in W.P.Nos.29716 of 2024, etc., batch, holding that under the GST scheme show cause notices must be grounded in the applicable tax period - annual returns where filed, or monthly returns if issued prior to annual filing - and that issuance of a single notice or order covering more than one financial year is impermissible. Following that legal principle, the impugned assessment order and consequential orders issued for the financial years 2019-20 to 2023-24 were held to have been passed without jurisdiction. The Court therefore quashed the impugned order and set aside the clubbed show cause notice while granting liberty to initiate separate proceedings for each financial year. [Paras 5, 9]

The impugned assessment order and consequential orders are quashed; the show cause notice is set aside and the respondent may initiate separate proceedings for each financial year.

Final Conclusion: The Court quashed the impugned assessment order and set aside the clubbed show cause notice on the ground that show cause notices must be confined to individual tax periods; liberty was given to the respondent to proceed separately for each financial year 2019-20 to 2023-24.

Seeking revocation of GST registration cancellation - failure to file returns - belated appeal rejected on limitation - non-filing to health and financial problems and seeks restoration conditioned on filing returns and payment of dues.

Whether the cancellation of the petitioner's GST registration should be revoked in view of the petitioner's inability to file returns due to health and financial problems -HELD THAT:- The High Court found the petitioner's explanation of health and financial difficulties for non-filing of returns over a six-month period to be genuine. Applying that factual conclusion, the Court held that the cancellation order warranted revocation and directed restoration of the petitioner's GST registration subject to specific conditions requiring filing of returns and payment of outstanding liabilities, and technical steps to enable filing on the GST portal. [Paras 8, 9]

The cancellation of GST registration is revoked subject to the conditions specified by the Court.

The Court concluded that, in view of the petitioner's genuine reasons for delay, the rejection of the appeal on limitation could not stand. The rejection order was therefore quashed to permit the appeal to be entertained and to facilitate restoration under the conditions directed. [Paras 8, 9]

The rejection of the appeal on limitation is quashed to enable restoration and compliance as ordered.

The Court imposed a prohibition on using any unutilised or unclaimed ITC to make the payments directed for restoration; any ITC standing to the petitioner's credit shall not be utilised until it is scrutinised and approved by the competent officer. Only ITC approved after such scrutiny may be applied towards future tax liabilities, and failure to comply with the Court's conditions will terminate the benefit granted. [Paras 9]

Unutilised or unapproved ITC cannot be used for the required payments; approved ITC alone may be utilised thereafter.

Final Conclusion: The High Court quashed the rejection of the petitioner's appeal and revoked the cancellation of his GST registration, directing restoration subject to conditions including portal facilitation, filing of returns with payment of dues and interest, and prohibiting utilisation of unapproved ITC until departmental scrutiny and approval.

Seeking revocation of GST registration cancellation- belated return filing -non- filing of returns for a continuous period of six months due to health reasons - payment of penalty and fee - input tax credit verification.

Whether the cancellation of the petitioner's GST registration should be revoked and on what conditions -HELD THAT:- The Court found the petitioner's explanation of non-filing for six months due to financial and health difficulties to be genuine and was therefore inclined to revoke the cancellation. The revocation is subject to specified conditions requiring (a) the respondent to instruct the GST Network to enable the petitioner to file returns and pay dues, and (b) the petitioner to file outstanding returns and pay tax, interest and late-filing fee within four weeks of restoration. The Court made the revocation conditional and time-bound, and expressly linked restoration to compliance with those procedural steps. [Paras 8, 9]

Cancellation of registration revoked subject to the Court's specified conditions, including remediation of the GST portal and timely filing and payment by the petitioner

The Court directed that payments of tax, interest, fines or fees shall not be made or adjusted from any unutilized or unclaimed ITC. Any ITC remaining in the petitioner's account must not be utilized until it is scrutinized and approved by a competent officer; only such approved ITC may thereafter be used for future tax liabilities. The Court further provided that failure to comply with the conditions will automatically terminate the benefit granted. [Paras 9]

ITC cannot be used to discharge outstanding liabilities until scrutinised and approved by the competent authority; only approved ITC may be utilised thereafter

Final Conclusion: The High Court revoked the respondent's order cancelling the petitioner's GST registration, subject to specified conditional directions requiring portal enablement, filing of outstanding returns and payment of dues within four weeks, and prohibiting utilization of unapproved ITC until departmental scrutiny and approval.

Limitation period to pass the re-assessment order pursuant to the provisions of Section 153 -Applicability of extended limitation under Section 153(6)(i) - meaning of "finding" and "direction" for limitation purposes - limitation under the first proviso to Section 153(2) read with Explanation 1 proviso

Meaning of "finding" and "direction" for limitation purposes - Whether the High Court's remand order dated 29.08.2023 contained any "finding" or "direction" within the meaning of clause (i) of Section 153(6) so as to attract the extended limitation period - HELD THAT: - The Court examined the expressions "finding" and "direction" as requiring a decision or express direction necessary for disposal of the particular case and capable of controlling or governing subsequent assessment steps. A remand order prescribing procedural timelines (supply of reasons, opportunity to file objections, disposal of objections, and a four week bar before passing assessment) does not constitute a "finding" necessary for disposal nor an express "direction" as contemplated by clause (i) of Section 153(6).

As held by this court in Wavy Construction LLP vs. ACIT [2024 (12) TMI 1274 - BOMBAY HIGH COURT]the Revenue can seek to take recourse to sub-section (6)(i) of Section 153 of the IT Act so as to avail all the benefits of the extended period as stipulated by such provision, only in the event when such assessment, reassessment and recomputation is being made qua the Assessee “in consequence of or to give effect to any finding or direction” of any Court, as relevant in the present facts.

Relying on the principles in Murlidhar Bhagwan Das [1964 (1) TMI 5 - SUPREME COUR], Rajinder Nath [1979 (8) TMI 3 - SUPREME COUR] and related authorities, the Court held that the remand and procedural timetable were not of the character that creates the "consequence" required by sub section (6)(i) and therefore cannot extend limitation under that provision [Paras 16, 21, 22, 23, 24]

The order dated 29.08.2023 did not contain any "finding" or "direction" within the meaning of Section 153(6)(i); therefore the extended limitation under Section 153(6)(i) is not attracted.

Limitation under the first proviso to Section 153(2) read with Explanation 1 proviso - Whether the re-assessment proceedings were barred by limitation under the first proviso to Section 153(2) read with the first proviso to Explanation 1 to Section 153 - HELD THAT: - Having held that Section 153(6)(i) was inapplicable, the Court applied the ordinary limitation regime under the first proviso to Section 153(2) read with the first proviso to Explanation 1 and computed the relevant excluded period arising from the earlier writ proceedings. The Court concluded that, upon applying the applicable exclusions and the additional 60 day extension under the proviso, the last date for passing the reassessment order had expired prior to any final assessment being passed. Consequently, the reassessment proceedings are time barred (see paras. 11-12, 25). [Paras 11, 12, 25]

Applying the first proviso to Section 153(2) read with the first proviso to Explanation 1, the limitation to pass the reassessment order had expired and the reassessment proceedings are barred by limitation.

Final Conclusion: The writ petition was allowed on the ground that the reassessment proceedings are time barred: the High Court's remand order did not attract the extended limitation under Section 153(6)(i), and therefore limitation under the first proviso to Section 153(2) read with Explanation 1 proviso governed and had expired, rendering reassessment impermissible.

Rejection of renewal of registration u/s 12AB - trust deed or instrument constituting the concerned entities does not contain an explicit clause stating that the trust is “irrevocable” and/or providing for the manner of dissolution and the applicants, in their online Form 10AB did not answered the question in 'Yes' “Whether the trust deed contains clause that the trust is irrevocable?”

Public charitable trust irrevocability - construction of section 63 revocable transfer - whether the absence of an explicit “irrevocability clause” in a trust deed renders a public charitable trust “revocable” in law, thereby justifying the rejection of its registration?- HELD THAT: - The Court held that section 12AB prescribes an objective satisfaction regarding objects, genuineness of activities and compliance with material laws and contains no requirement that a trust deed must expressly state that the trust is irrevocable. Section 63 creates a fiction of a 'revocable transfer' only where the instrument contains a positive provision for re-transfer or a right to re-assume power; silence in the deed does not convert a trust into a revocable one. The statutory framework of the MPT Act, judicial precedents and principles of trust law confirm that once property is dedicated to a public charitable purpose the settlor is divested of ownership unless a specific power of revocation is reserved, and hence mere absence of an irrevocability clause cannot be equated with revocability. [Paras 25, 27, 30, 31, 45]

A public charitable trust is deemed irrevocable by operation of law absent an express power of revocation in the instrument; absence of an explicit irrevocability clause is not a valid ground for rejection or non-renewal under section 12AB.

Furnishing false information in registration form - administrative utility coerce false declaration - HELD THAT: - The Court observed that the online Form 10AB forced applicants to select 'Yes' to upload the form and that using this forced response as a basis to treat the applicant as having furnished false information is arbitrary. The verification at the end of the form cannot validate a system design that compels an incorrect declaration, and therefore respondents must not treat such compelled answers as specified violations or grounds for rejection. The respondents were directed to amend the utility so applicants can state their position correctly and to modify the relevant question for clarity. [Paras 44, 46]

Row 6 responses compelled by the departmental utility shall not be treated as furnishing false information; the respondents must not reject applications on that basis and must amend the utility and the question wording

Final Conclusion: The writ petition is allowed: rejections of renewal under section 12AB solely for absence of an explicit irrevocability or dissolution clause are quashed; compelled 'Yes' answers in Form 10AB shall not be treated as furnishing false information; the departmental utility and the form's question shall be amended; and respondents are directed to decide the affected applications afresh in accordance with the Court's reasoning.

Non issuance or service of the notices - notices issued on wrong email id -assessee's duty to furnish valid communication details - condonation of delay in filing appeals where pandemic-related non-communication shown -

Notices of reopening were issued to wrong email ID - Appellant, submits that the notice issued u/s 148 and the subsequent notices were sent to an email ID maintained by an employee of the Chartered Accountant and at relevant point of time, the said employee had left the office of the Chartered Accountant, and consequently, the notices were not brought to the notice of the assessee for compliance - HELD THAT: - The Court held that notices under Section 148 were issued to the email ID furnished in the income-tax database and therefore non-service cannot be attributed to the Assessing Officer. It is incumbent on the assessee to furnish a valid and accessible email ID for communication; if the email ID is not accessed, the consequences follow. Nevertheless, the Court acknowledged that the assessee should not be denied opportunity to be heard on that sole ground. [Paras 9, 10]

Notices issued to the email ID in the tax database were valid in law; the assessee bears responsibility to provide and monitor a valid email ID, but must be afforded an opportunity to be heard notwithstanding non-access of that email.

Condonation of delay in filing appeals where pandemic-related non-communication is plausibly shown - HELD THAT: - The Court found that notices were issued during the COVID-19 period and that non-communication and consequent non-compliance for reasons attributable to the pandemic could not be ruled out; therefore the delay in filing appeals to the CIT(A) was condoned. The Court directed that the appeals be adjudicated on merits by the CIT(A) but only after the assessee deposits 20% of the demand with the Assessing Officer; the CIT(A) is to consider the appeals on merits upon such deposit. The Court declined to remand the matter to the Assessing Officer for reopening or fresh assessment, confining relief to appellate reconsideration. [Paras 13, 14]

Delay in filing appeals is condoned for pandemic-related reasons and the appeals are remanded to the CIT(A) for adjudication on merits subject to the condition that the assessee deposits 20% of the demand.

Final Conclusion: The appeals are allowed to the limited extent of restoring the appeals to the CIT(A) for adjudication on merits; delay in filing those appeals is condoned on pandemic-related grounds subject to deposit of 20% of the demand, the Tribunal.

Denial of Foreign Tax Credit - delay in filing of Form 67 by the assessee -Whether Procedural defect does not extinguish substantive right?

HELD THAT: - The Tribunal held that the assessee's belated submission of Form No.67 was a procedural defect which does not extinguish the substantive right to foreign tax credit. Following the decision of M/S. REAL TIME DATA SERVICES PRIVATE LIMITED [2026 (2) TMI 1060 - DELHI HIGH COURT] the Tribunal directed that the claim for FTC, supported by the belated Form No.67, be considered and verified by the AO. The matter was restored to the AO for limited purposes of verification of the facts and allowance of the FTC if found admissible in accordance with law. [Paras 5, 6]

Final Conclusion: The Tribunal allowed the appeal, holding that delay in filing Form No.67 is a procedural lapse which does not defeat entitlement to foreign tax credit, and remitted the matter to the AO for verification and decision on the FTC claimed for AY 2023-24.

Addition on account of cash deposited during the demonetization period - Recorded cash sales treated as unexplained income - books of accounts are not rejected - addition based solely on higher cash deposits during demonetisation

HELD THAT: - The Tribunal held that where cash transactions are recorded in the assessee's books of account, accepted as regular business transactions (books not being rejected), and no defects in books, stocks, sales or purchases are pointed out by the Assessing Officer, the mere fact of higher cash deposits during the demonetisation period does not convert recorded cash sales into unexplained income attractable to section 68/69

Addition made under section 68 is deleted and the appeal is allowed.

Final Conclusion: The Tribunal allowed the appeal, holding that recorded cash sales shown in the books (which were not rejected and where no defects were pointed out) could not be treated as unexplained income merely because of larger bank deposits during the demonetisation period, and directed deletion of the addition.

LTCG - sale consideration which the assessee is deemed to have received on sale of immovable property - Application of First proviso to section 50C(1) retrospectively - Stamp duty valuation as on date of agreement to be used for computation of full value of consideration - date of transfer for section 54 reckoned from registered transfer deed where capital gain is offered in that year

LTCG - Scope of First proviso to section 50C(1) - computation of full value of consideration u/s 50C(1) - long term capital asset - reference to value adopted by the Stamp Valuation Authority - HELD THAT: - The Court held that the first proviso to section 50C(1), though introduced by Finance Act, 2016, is a beneficial provision and applies retrospectively to mitigate hardship caused by delayed registration. Where the date of the agreement fixing consideration and the date of registration differ, the value adopted by the Stamp Valuation Authority on the date of the agreement may be taken for computing full value of consideration. On the facts the assessee executed an MOU, received consideration earlier and had held the property for over 36 months; the authorities failed to apply the proviso and to verify the stamp duty valuation as on the MOU. Accordingly the AO is directed to recompute capital gain taking the stamp duty valuation as on the date of the MOU and to treat the asset as long-term for computation of capital gain. [Paras 9, 10, 11]

Recompute long-term capital gain by using stamp duty valuation as on the date of the MOU and treat the asset as a long-term capital asset

Deduction u/s 54 - date of transfer for computing investment period - HELD THAT: - The Court found that the assessee offered capital gain in the assessment year based on the registered transfer deed; therefore the statutory period for making the investment under section 54 is to be counted from the date of execution of that registered transfer deed. As the assessee made the investment within the stipulated period counted from the date of the registered deed, he is eligible for deduction under section 54. AO is directed to allow the deduction after recomputing the capital gain as directed. [Paras 12]

Allow deduction u/s 54 after recomputation of capital gain, counting the investment period from the date of the registered transfer deed

Final Conclusion: The appeal is partly allowed: the Assessing Officer is directed to recompute long-term capital gain by applying the first proviso to section 50C(1) using the stamp duty valuation as on the date of the MOU and, thereafter, allow deduction under section 54 treating the registered transfer deed as the date of transfer for computing the investment period.

Revision u/s 263 - claim of CSR expenditure claimed as deduction u/s 80G - whether the action of the AO allowing the said claim amounts to the assessment order being erroneous and prejudicial to the interest of the Revenue in the absence of enquiry conducted by the Ld. AO as alleged by the Revenue?

HELD THAT: - The Tribunal held that the PCIT was not justified in invoking section 263 because the twin conditions for revision - that the assessment order is erroneous and prejudicial to the interest of the Revenue - were not satisfied. The Court observed that where the legal question (deductibility under section 80G of donations forming part of CSR obligations) can be resolved on the material on record and settled coordinate-bench decisions support allowability, the mere fact that the AO did not undertake detailed enquiries does not by itself render the assessment order erroneous.

Applying that principle, and noting that the settled position of law of co-ordinate Benches favours allowability of CSR-related donations u/s 80G (the provision does not expressly require voluntariness), the Tribunal concluded that the AO's failure to examine the claim did not prejudice the Revenue and therefore did not justify exercise of revisional power u/s 263 [Paras 7, 8]

Final Conclusion: The Tribunal allowed the appeal, quashed the PCIT's revisionary order under section 263 and upheld the AO's allowance of the deduction claimed under section 80G in respect of the CSR-related donation, concluding that the assessment order was not erroneous or prejudicial to the Revenue.

Disallowance of expenditure incurred on earning the income exempt u/s 10(15) and section 10(23G) -scope of head office expenditure under section 44C - sequence of computing deduction under section 36(1)(viia) vis a vis section 44C - operation of section 195 and consequences under section 40(a)(i) where no amount is credited or paid - characterisation of a transfer as a slump sale and applicability of section 50B

Disallowance of expenditure incurred on earning the income exempt u/s 10(15) and section 10(23G) - contention that the assessee had sufficient interest-free funds for making investments for earning tax-free income - HELD THAT: - Tribunal upheld the CIT(A)'s deletion of the AO's disallowance because the assessee's own interest free funds exceeded the investments in tax free bonds and lending to infrastructure projects, and in that factual matrix the presumption is that investments were financed from own funds. The Tribunal followed binding decisions of CIT v/s HDFC Bank Ltd. [2014 (8) TMI 119 - BOMBAY HIGH COURT] and South Indian Bank Ltd [2021 (9) TMI 566 - SUPREME COURT] to hold that section 14A disallowance is not warranted where interest free own funds exceed the investment in exempt securities and no specific interest bearing funds have been shown to have been diverted. [Paras 7]

Deletion of the disallowance upheld and Ground No.1 in Revenue's appeal dismissed.

Scope of head office expenditure under section 44C - Whether expenses incurred by overseas branches for NRI desks are head office expenditure within section 44C and therefore subject to its limitation? - HELD THAT: - Applying the tripartite test laid down by the Supreme Court in American Express Bank Ltd. [2025 (12) TMI 980 - SUPREME COURT] Tribunal found the three ingredients satisfied: the expenditures were incurred outside India; they were in the nature of executive and general administration of the bank (salaries, rent, utilities, communications, equipment etc.); and they fall within the specific species enumerated in the Explanation to section 44C. The Tribunal rejected the assessee's characterisation of the expenses as marketing alone and reinstated the AO's restriction under section 44C. [Paras 24]

Impugned order deleted by CIT(A) set aside; AO's restriction under section 44C reinstated and Ground No.2 in Revenue's appeal allowed.

Sequence of computing deduction under section 36(1)(viia) vis a vis section 44C - Order in which deduction under section 36(1)(viia) and restriction under section 44C must be computed - HELD THAT: - The Explanation to section 44C defines "adjusted total income" as total income without giving effect to specified allowances and deductions; since deduction under section 36(1)(viia) is not expressly excluded, its effect must be given before computing the 5% threshold under section 44C. The Tribunal therefore upheld the CIT(A)'s sequencing. [Paras 28]

CIT(A)'s direction to compute deduction under section 36(1)(viia) prior to applying section 44C upheld; Ground No.3 in Revenue's appeal dismissed.

TDS u/s 195 - addition u/s 40(a)(i) where no amount is credited or paid - Disallowance under section 40(a)(i) of expenditure allocated to Indian branch in respect of costs of Croydon Data Processing Centre - HELD THAT: - The Tribunal held that section 195 liability to deduct tax arises on payment or credit to the non resident; in the present case the amount allocated to the Indian branch was neither credited nor paid to the overseas data centre. Relying on the limited purpose of the fiction of hypothetical independence, the Tribunal concluded that without credit or payment there was no obligation under section 195 and therefore no consequent disallowance under section 40(a)(i). [Paras 36]

Disallowance under section 40(a)(i) deleted and Ground No.1 in assessee's appeal allowed.

Characterisation of a transfer as a slump sale and applicability of section 50B - Whether the sale of the Retail Banking Business was a slump sale attracting section 50B? - HELD THAT: - On construction of the purchase agreement and Exhibit A, the Tribunal found that consideration included a lump sum purchase premium and values were not assigned to each individual asset and liability; the Retail Banking Business was transferred as a part of an undertaking/part of an undertaking on an "as is where is" basis. Given that separate values were not distinctly assigned to every individual item, the transaction qualified as a slump sale within section 2(42C) and capital gains were to be computed under section 50B after determining net worth as required. [Paras 55]

Transaction held to be a slump sale; provisions of section 50B apply and Ground No.2 in assessee's appeal dismissed.

Final Conclusion: For A.Y. 2000 01 the Tribunal: upheld deletion of the section 14A disallowance; reinstated the AO's restriction under section 44C on overseas NRI desk expenditures; upheld the CIT(A)'s sequencing that section 36(1)(viia) is to be given effect before applying section 44C; deleted the section 40(a)(i) disallowance in respect of the Croydon data centre costs as no amount was credited or paid; and held the sale of the Retail Banking Business to be a slump sale attracting section 50B.

Depreciation on goodwill arising out of amalgamation of certain companies with the assessee - block of assets concept - denial ofset-off of loss of the Dahej SEZ Unit against profits of other business units.

Depreciation on goodwill and block of assets concept - Allowability of depreciation in respect of alleged goodwill arising on amalgamation where the asset was not recognised or brought into the block of intangible assets in the year of amalgamation - HELD THAT: - The Tribunal held that while goodwill is in principle a depreciable intangible asset, depreciation under section 32 operates through the block of assets mechanism in section 43(6). An asset must be brought into the relevant block and its actual cost recognised to compute Written Down Value; Explanation 5 to section 32 only applies where an asset already forms part of the block and does not assist where the asset was never capitalised.

Because the assessee consistently adjusted the excess consideration to General Reserve and did not capitalise the alleged goodwill or determine any actual cost or opening WDV in the year of amalgamation, the statutory computation mechanism did not operate and depreciation could not be allowed in the year under appeal. The Tribunal further observed that admitting such a claim would necessitate recomputing earlier years after those assessments had attained finality and would risk giving an unintended double tax advantage where the excess consideration was exempt in the hands of transferors under section 47(vii). On these factual and legal bases the Tribunal found no infirmity in the rejection of the claim. [Paras 11, 12, 13, 14, 15]

Claim for depreciation on alleged goodwill rejected as the asset was not capitalised or brought into the block of intangible assets and statutory depreciation computation could not be applied.

Denial of set-off of loss of the Dahej SEZ Unit against profits of other business units - HELD THAT: - The Tribunal held that the restriction in Goetze as to fresh claims applies to the Assessing Officer and does not curtail appellate powers. Explanation 5 to section 32 means depreciation cannot be denied merely because it was not claimed in the return if otherwise allowable. However, the allowability of the Dahej unit depreciation involves factual verification (existence of depreciable assets, use in business, determination of WDV) which the Assessing Officer had not examined on merits. Accordingly the Tribunal set aside the appellate decision on this issue and restored the matter to the Assessing Officer for limited verification and recomputation after giving the assessee opportunity of being heard; the Tribunal distinguished the revenue decision relied upon by the Department as being inapposite to intra-year set-off. [Paras 18, 20, 21]

Issue remitted to the Assessing Officer for verification of the depreciation claim relating to the Dahej unit and recomputation of income, with direction to afford the assessee opportunity of being heard.

Final Conclusion: The appeal is partly allowed: the claim for depreciation on alleged goodwill is dismissed for failure to capitalise the asset and bring it into the block of assets, while the claim for set-off of the Dahej unit loss is remitted to the Assessing Officer for verification and recomputation of income.

Validity of reassessment u/s 147/148 - addition u/sec 69A - non providing proper opportunity and overlooking the facts and material evidences - notice was issued within 6 years after the end of relevant asst year

Validity of reopening assessment -HELD THAT: - The Tribunal examined the timeline of earlier assessment, the survey operations and subsequent proceedings, found that the impugned notice under section 148 was issued within six years from the end of the relevant assessment year, and agreed with the CIT(A)'s application of section 147 to uphold the validity of reassessment. The Tribunal did not find any infirmity in the CIT(A)'s conclusion on the initiation of reassessment and dismissed the related ground of appeal. [Paras 6]

Validity of reassessment under section 147/148 upheld; ground of appeal dismissed.

Addition u/s 69A - HELD THAT: - Cash transactions are duly recorded in the books of accounts and the assessee has a good case on merits. Prima-facie, the CIT(A) has dealt on the findings of the AO and has not considered the submissions/evidences of the assessee filed in the proceedings and has not allowed the grounds of appeal. Therefore, considering the facts, submissions and principles of natural justice, shall provide with one more opportunity of hearing to the assessee to substantiate the case with evidences and information.[Paras 6]

Final Conclusion: The Tribunal upheld the validity of the reassessment under section 147/148 but set aside the CIT(A)'s confirmation of the addition under section 69A and remitted that issue for fresh consideration with directions to afford the assessee adequate opportunity to produce and have its evidence considered; the appeal is therefore partly allowed for statistical purposes.

Validity of Reopening of assessment - reasons to believe - onus u/s 68 and burden of rebuttal by AO - treatment of pre-operative expenditure in audited books as explanation for unexplained expenditure

Reopening of assessment - belief on wrong/factually erroneous foundation - Validity of reassessment proceedings u/s 147/148 where reopening proceeded on the basis that no return was filed - HELD THAT: - The Tribunal found that the Assessing Officer's recorded reasons repeatedly stated that no return was filed, whereas the administrative approval and case file showed the return was filed on 05-10-2013. AO invoked Explanation 2(a) to section 147 (applicable only where no return is furnished) and the approving authority granted approval on the erroneous premise that the taxpayer had failed to file a return. The combined reading demonstrated reopening proceeded on a wrong foundation and without due application of mind; approval was effectively mechanical and not informed by complete facts. Accordingly, reassessment jurisdiction was held vitiated and the reassessment quashed on this legal ground. [Paras 4, 5]

Reopening u/s 148/147 quashed because formation of belief and approval proceeded on erroneous facts and without proper application of mind.

Addition u/s 68 on unexplained cash credits -Onus u/s 68 and burden of rebuttal by AO - Whether additions made u/s 68 for unsecured loans could be sustained on the facts - HELD THAT: - The Tribunal proceeded on the merits and reaffirmed the legal position that the assessee must initially prove identity, creditworthiness and genuineness; once documentary evidence is furnished, the onus shifts to the AO to rebut with cogent concrete evidence. The CIT(A) recorded that the assessee produced confirmations, PAN/ITR copies, bank statements, ledger extracts and showed repayments/interest in subsequent years; many lenders were assessed u/s 143(3) without adverse view. The AO did not carry out independent enquiry to dislodge these documents and relied on suspicion, cash-deposit trails and common bank branches without producing cogent material to rebut the assessee's documentary proof. Applying these principles, the Tribunal endorsed the deletion of additions under section 68. [Paras 6, 7, 8, 9]

Additions under section 68 deleted as the assessee discharged initial onus and the AO failed to bring cogent evidence to rebut genuineness and creditworthiness of lenders.

Treatment of pre-operative expenditure in audited books as explanation for unexplained expenditure - HELD THAT: - The Tribunal accepted CIT(A)'s finding that the impugned expenditure was reflected as pre-operative expenditure in the balance sheet and that the assessee maintained regular audited books on which the return was filed and which were not rejected u/s 145(3). In the absence of any specific discrepancy pointed out by the AO in the books, the explanation in audited financial statements was held sufficient to discharge the explanation requirement and the addition was rightly deleted. [Paras 10]

Addition treated as unexplained expenditure deleted because the amount was explained as pre-operative expenditure in audited books and books were not rejected.

Final Conclusion: The reassessment proceedings were quashed because the reopening and its approval proceeded on a wrong factual foundation; alternatively, on merits the Tribunal upheld the deletion of additions under section 68 and the deletion of the unexplained expenditure addition, and accordingly dismissed the revenue's appeal while allowing the assessee's appeal.

Validity of reassessment order passed within four weeks of disposing the assessee's objections to reasons recorded u/s 148 - Four-week prohibition after disposal of objections to reopening

Four-week prohibition after disposal of objections to reopening - - HELD THAT: - The Tribunal applied the ratio in Asian Paints Ltd. [2007 (1) TMI 159 - BOMBAY HIGH COURT] and the subsequent decision in Bharat Jayantilal Patel [2015 (5) TMI 950 - BOMBAY HIGH COURT] and followed the Tribunal's earlier decision in Pramod Manikchand Dugad [2025 (6) TMI 1469 - ITAT PUNE] holding that when objections to the reasons for reopening are disposed of, the Assessing Officer shall not proceed with assessment proceedings within four weeks from service of that disposal order.

On the facts, the AO concluded the reassessment within a period shorter than four weeks from disposal of the assessee's last objection; non-adherence to the four-week mandate rendered the reassessment proceedings invalid. The Tribunal therefore quashed the reassessment order as it did not comply with the four-week requirement established by the cited precedents. [Paras 6, 7, 8, 9]

Reassessment proceedings quashed for being completed within four weeks of disposal of the assessee's objections; the reassessment held invalid.

Final Conclusion: The Tribunal, following binding jurisdictional precedents, quashed the reassessment order for non-compliance with the four-week prohibition after disposal of objections; the remaining grounds were held academic.

Allowability of business expenditure under section 37(1) - scope and limitation of disallowance u/s 14A read with Rule 8D - requirement of recorded satisfaction before invoking Rule 8D

Allowability of business expenditure u/s 37(1) - power and fuel expenses claimed u/s 37 - HELD THAT: - The Tribunal applied the ratio of its earlier decision in the assessee's own case for earlier assessment years, which examined identical facts regarding a captive power plant and concluded that the power and fuel expenses were genuine and utilised for manufacturing activities. On that basis the Tribunal held the deletion by the CIT(A) was correctly made and the Revenue's reassessment of the same disallowance in the year under appeal could not be sustained. [Paras 6, 7]

The deletion of the disallowance of power and fuel expenses under section 37 is upheld in favour of the assessee.

Disallowance u/s. 14A r.w.r. 8D - Scope and limitation of disallowance - CBDT circular cannot override statute and judicial precedent - Extent of disallowance u/s 14A r.w. Rule 8D and restriction to amount of exempt income - HELD THAT: - Following the Tribunal's earlier consideration of identical issues in assessee’s own case [2025 (6) TMI 151 - ITAT DELHI] for the Assessment Years 2016-17 and 2018-19, and the line of judicial authorities cited, the Tribunal held that disallowance under section 14A read with Rule 8D cannot exceed the exempt income for the relevant year and that reliance on the CBDT Circular cannot override the statutory scheme or binding precedent. The CIT(A)'s restriction of the disallowance to the exempt income was therefore maintained. [Paras 6, 7]

The disallowance under section 14A r.w. Rule 8D is restricted to the quantum of exempt income and the CIT(A)'s order on this point is sustained.

Final Conclusion: All appeals are decided following the Tribunal's earlier orders in the assessee's own case; the assessee's appeals are allowed and the Revenue's appeals are dismissed, with deletions and restrictions made by the CIT(A) being sustained as set out above.

Computation of capital gain - Disallowance of registration charges incurred by the assessee on the sale of immovable property - HELD THAT: - The Tribunal found that the registered sale deed contains an express agreement that the seller would bear the purchase/registration expenses. While the Bombay Stamp Act ordinarily places the expense on the purchaser in absence of agreement, the registered document here overrides that presumption.

Assessee produced the registered sale deed identifying the purchasers and the clause stipulating seller's liability for registration charges, and the Revenue did not produce independent evidence or verification from the purchasers to contradict the documentary record.

On these facts the Tribunal concluded the registration charges were correctly claimed against the sale consideration and the disallowance by the assessing authority and the appellate authority lacked basis. [Paras 7, 8]

Final Conclusion: The Tribunal allowed the assessee's appeal, deleted the impugned disallowance of registration charges, and directed that the claimed registration expenses be allowed in computing capital gain for AY 2014-15.

Deduction for indexed cost of acquisition and improvement of the property sold by the assessee

Whether the claimed indexed cost of improvement should be allowed despite absence of complete documentary proof? - HELD THAT:- Noting the registered sale deed's description that a triple-storeyed residential building existed on the plot and that the deceased assessee lacked complete documentary details, the Tribunal held that in the interest of justice a part-relief was appropriate.

Tribunal exercised evaluative discretion to allow 80% of the improvement cost claimed in the return for the specified years, and directed the AO to compute the revised indexed cost of improvement by adopting 80% of the claimed amounts and grant deduction accordingly, thereby setting aside the contrary finding of the CIT(A). [Paras 7]

Final Conclusion: The Tribunal condoned the delay in filing the appeal and partly allowed the appeal by directing that 80% of the improvement cost claimed be adopted for computing indexed cost of improvement; the AO is directed to compute and allow the deduction accordingly, setting aside the CIT(A)'s contrary finding.

Condonation of delay - review petition - seeking exemption from filing certified copy - HELD THAT:- Delay of 108 days in filing the Review Petitions is condoned.

Application seeking exemption from filing certified copy of the impugned order is allowed.

These petitions have been filed by the petitioners seeking review of the Order dated 18th July, 2025 passed in the captioned Special Leave Petitions by which the said petitions were dismissed.

We have carefully gone through the Order [2025 (7) TMI 1903 - SC ORDER] and the record. In our opinion, no case for review is made out. Consequently, the review petitions are dismissed.

Relevance and admissibility of statements recorded under section 108 without compliance with section 138B- mandatory procedure for admissibility of investigative statements - electronic evidence and provenance of emails - rejection of transaction value under Rule 12 and re-determination under Rule 9 of the CVR, 2007 - redetermination of value under comparable invoices - beneficial owner doctrine.

Relevance and admissibility of statements recorded under section 108 without compliance with section 138B - HELD THAT:- The Tribunal accepted the appellant's account of physical assault, supported by medical reports, and held that the Commissioner failed to examine the statutory procedure required before admitting statements recorded under section 108. Relying on analogous authorities and statutory principles, the Court concluded that statements recorded during investigation acquire relevance only after the adjudicating authority examines the person and forms an opinion under section 138B(1)(b); absence of that process and evidence of coercion rendered the statements inadmissible and they could not be used to reject transaction value or to found other findings. [Paras 23, 24, 26, 33]

Statements under section 108 recorded without the procedure in section 138B(1)(b) and in circumstances of coercion could not be relied upon and were disregarded.

The appellant had asserted that his e-mail account and devices were accessed while he was in custody and that documents were uploaded or coerced on 04.09.2021. The Commissioner did not investigate or address this contention. The Tribunal found no satisfactory explanation for why contemporaneous invoices would be sent on the stated date after import and held that reliance on such e-mails and attachments, without resolving the appellant's challenge about custody and DRI access, was unsustainable. [Paras 36, 37, 38, 39]

The e-mails dated 04.09.2021 and their attachments could not be relied upon as parallel/actual invoices for valuation purposes.

Rejection of transaction value under Rule 12 and re-determination under Rule 9 of the CVR, 2007 - HELD THAT:- Because the Commissioner primarily relied upon statements recorded under section 108 (held inadmissible) and on e-mails/documents the provenance of which was not satisfactorily established, the statutory preconditions for rejecting the declared transaction value under Rule 12 were not met. Consequently, redetermination under Rule 9 based on those materials and on the questioned price-list/pdf could not stand and the demand for differential duty, interest and penalty based on that valuation was invalid. [Paras 40, 41, 42]

Rejection of transaction value under Rule 12 and re-determination under Rule 9 were set aside and the consequent demand for differential duty, interest and penalty could not be sustained.

Treatment as beneficial owner under section 2(3A) based on inadmissible evidence - HELD THAT:- The Commissioner treated the appellant as the mastermind and beneficial owner on the basis of the rejected statements. Having held those statements inadmissible, the Tribunal concluded that the factual and legal basis for invoking section 2(3A) did not survive and the finding could not be maintained. [Paras 35]

The finding of beneficial ownership under section 2(3A) based on inadmissible statements was set aside.

Penalties and confiscation founded on unsupported valuation and inadmissible evidence - HELD THAT:- Since the foundational rejection of transaction value and the determination of beneficial ownership were unsustainable, the ancillary findings of confiscation liability and imposition of penalties under various provisions of the Customs Act lacked a valid basis. The Tribunal therefore set aside penalties imposed on the appellant and co-appellants insofar as they rested on those findings. [Paras 42, 43, 44]

Penalties and confiscation-related findings were set aside and appeals allowing relief to the appellant and co-appellants were directed.

Final Conclusion: The Tribunal held that statements recorded under section 108 without compliance with section 138B(1)(b) and evidence shown to have been received while the appellant was in custody could not be relied upon; accordingly the rejection of transaction value under Rule 12, re-determination under Rule 9, the finding of beneficial ownership and the consequential demands, penalties and confiscation-related orders were set aside and the appeals allowed.

Confiscation under Section 111(d) for non-compliance with PSIC conditions - guilty of issuance and use of fake PSIC - import of Aluminum scrap was in violation of the guidelines of Foreign Trade Policy and para 2.32.2 of the Hand Book of Procedure - mis-declaration in inspection certificate - joint and several liability​​​​​​​ - penalty under Section 112(a) for abetment in issuance of invalid PSIC.

Confiscation under Section 111(d) for non-compliance with PSIC conditions - HELD THAT: - The Tribunal accepted that both PSICs produced by the importer were later found to be invalid, but held that mere non-compliance with DGFT/PSIC requirements, in the absence of importation of prohibited or incriminating material, does not amount to 'improper import' warranting confiscation under Section 111(d). The Court relied on the regulatory scheme in the Handbook of Procedure which places responsibilities on PSIA and importer/exporter and on precedents distinguishing non-compliance (which may attract inspection or administrative action) from prohibited importation that triggers confiscation. Applying those principles to the facts, the Tribunal found insufficient basis to treat the consignment as improperly imported and set aside confiscation and redemption fine. [Paras 5]

Confiscation of the goods and the redemption fine were set aside because invalid PSICs, without evidence of prohibited content, do not justify confiscation under Section 111(d).

Penalty under Section 112(a) for abetment in issuance of invalid PSIC - HELD THAT: - The Tribunal examined the material and found no sufficient evidence that the appellants abetted the issuance or use of fraudulent PSICs. In the absence of proof of abetment or mens rea required to attract penal liability under Section 112(a), and having held that the import was not an improper import warranting confiscation, the imposition of penalties on the importer, its director and the indenting agent could not be sustained and were therefore set aside. [Paras 5]

Penalties imposed under Section 112(a) on the appellant company, its director and the indenting agent were set aside for lack of evidence of abetment.

Final Conclusion: The Tribunal allowed the appeals of the importer, its director and the indenting agent, setting aside confiscation, redemption fine and penalties because invalid PSICs, without evidence of prohibited import or abetment, do not warrant confiscation under Section 111(d) or penalty under Section 112(a).

Limitation for issuance of show cause notice - re-export requirement for concessional duty - statutory or procedural limitation for issuance of a show cause notice - time barred - goods imported under Notification No. 32/1997-C.

Validity of the show cause notice issued after a delay in relation to imports availing concessional duty subject to re-export condition -HELD THAT:- The Tribunal recorded that although certain consignments were not re-exported within the six month period and no extension had been sought, the goods had in fact been re exported. The determinative finding was that the show cause notice was issued after the one year limitation period and, being issued after more than three years, was time barred. Consequently the delay in issuance rendered the demand invalid despite the earlier non compliance with the six month re export condition. [Paras 7, 8]

The show cause notice was time barred and the impugned order upholding the Commissioner(Appeal)'s dropping of proceedings is upheld.

Final Conclusion: The appeal is dismissed; the impugned order is upheld because the show cause notice was issued beyond the one year limitation period and thus was time barred, notwithstanding that some consignments were not re exported within six months.

Imposition of penalties - noreasoned finding based on evidence and consideration of the defence - non-application of mind - want of evidence.

Failure to consider explanation - reliance on unverified statements - decision based on surmise and conjecture - HELD THAT: - The Tribunal found that the adjudicating authority did not consider or discuss the appellant's detailed replies to the Show Cause Notice and proceeded to impose penalties without proper application of mind. The adjudicating authority relied on parts of statements of co-noticees without any evident attempt to verify their veracity. The alleged agency relationship with the principal was disputed by the appellant and no evidence was produced to support the factual allegations. Several conclusions in the impugned order were held to rest on mere surmises and conjectures rather than admissible evidence, rendering the penalties unsupportable. [Paras 4, 5, 6]

Penalties under Section 114(i) and 114AA set aside and the appeal allowed with consequential benefits as per law.

Final Conclusion: The Tribunal allowed the appeal, set aside the penalties imposed under Section 114(i) and 114AA of the Customs Act, 1962 on the ground that the adjudicating authority failed to consider the appellant's explanations and relied on unverified material, and awarded consequential reliefs as per law.

Legality and jurisdiction of search and seizure at the point of interception within airport premises - seizure of gold recovered from the passenger after arrival - presumption of smuggling - Burden of proof in respect of notified goods under Section 123 of the Customs Act - denial of cross-examination of panch witnesses - principles of natural justice in customs adjudication - Admissibility and evidentiary value of statements recorded under Section 108 of the Customs Act.

Power to search suspected persons under Sections 100 and 101 of the Customs Act - HELD THAT:- The Tribunal held that once a passenger arrives from a foreign country carrying goods liable for declaration, liability under the Customs Act arises irrespective of the precise point of interception. The statutory scheme in Sections 100 and 101 empowers proper officers to search persons arriving from abroad and specific classes of goods (including gold), and the facts showing concealment on the person and subsequent handing over to Customs established a reasonable belief justifying search and seizure. [Paras 18, 21, 33]

The contention that interception outside the customs area vitiated search and seizure is rejected; officers had jurisdiction and acted on reasonable belief.

Denial of cross-examination and principles of natural justice in customs adjudication - HELD THAT:- The Hon’ble supreme Court in Kanungo & company Vs Collector of Customs [1972 (2) TMI 35 - SUPREME COURT] has held that adjudication proceedings in the Customs Act are not strictly governed by the rules of evidence applicable to criminal trials, and therefore reliance upon documentary and circumstantial evidence is permissible. The Co-ordinate Bench Mumbai in the case of Mukhtar Umar Gojana [2008 (5) TMI 251 - CESTAT, MUMBAI] held that no hard and fast rule that in each case cross-examination is must, even case depends upon its own peculiar facts. Hon’ble Supreme Court in the case of Shri Romesh Chandra Mehta [1968 (10) TMI 50 - SUPREME COURT], where in it was held that statements made before the Customs officers under Section 108 of the Customs Act, 1962 are admissible evidence.

Applying settled authorities, the Tribunal observed that adjudication under the Customs Act is not governed by the strict rules of criminal evidence and that the right to cross-examine is not unfettered. Because the case rested on physical recovery, panchanama proceedings and an un-retracted statement of the appellant, the denial of cross-examination caused no demonstrable prejudice and did not amount to a breach of natural justice in the circumstances. [Paras 23, 28, 35]

Denial of the appellant's request to cross-examine panch witnesses does not invalidate the adjudication in the present facts.

Admissibility and evidentiary value of statements recorded under Section 108 of the Customs Act - HELD THAT: - The Tribunal relied on authorities holding that statements recorded under Section 108 are admissible. The appellant's un-retracted admission that he attempted to smuggle gold, along with the melting/processing of the recovered paste into bars and the assayer's certification of purity and weight, furnished corroborative primary evidence sufficient to support confiscation and penalty. [Paras 2, 23, 29]

The Section 108 statement and corroborative recovery evidence are admissible and support the finding that the seized material was gold.

Burden of proof in respect of notified goods under Section 123 of the Customs Act - Once possession of notified goods (gold) is established, the statutory burden under Section 123 shifts to the person from whose possession the goods were seized to prove lawful acquisition; the appellant failed to discharge that burden. - HELD THAT:- Hon’ble Kerala High Court in the case of Om Prakash Khatri [2019 (3) TMI 457 - KERALA HIGH COURT] which is affirmed by Hon’ble Supreme Court [2019 (11) TMI 796 - SC ORDER], wherein, it was held that unmarked gold recovered from the possession of person and their statement as to the source of gold is sufficient to have a reasonable belief that gold is smuggled. No any satisfactory explanation given to prove the legitimacy of the gold carried b intercepted person, burden of proof under Section 123 of the Customs Act, being only a reasonable belief, effectively discharged by the Department. Mere fact that interception and seizure not affected in an international border or near an airport or seaport, it is an irrelevant, onus to prove that the gold was not smuggled, squarely rested on, who claims otherwise.

The Tribunal applied Section 123 and relevant precedents to conclude that possession of unmarked gold, coupled with the appellant's admission and lack of documentary proof of lawful import, sustains a reasonable belief of smuggling. The presumption under Section 123 thus remained unrebutted, and the Department's burden of reasonable belief was satisfied by seizure, statements and chemical/assayer reports. [Paras 30, 31, 34]

The appellant did not discharge the statutory burden to prove licit origin; the presumption of smuggling stands.

Final Conclusion: The Tribunal found no infirmity in the impugned order: customs officers had jurisdiction to make the search and seizure, the recovered material was established as gold, the appellant's Section 108 statement and recovery corroborated the case, the burden under Section 123 remained unrebutted, and denial of cross-examination did not vitiate the proceedings; the appeal is dismissed.

Liability of a customs broker for exporter's misdeclaration - proof of broker's role - facilitation of overvaluation of export consignments to obtain excess drawback - penalty under Section 114(iii) of the Customs Act, 1962 -

Whether the penalty imposed on the customs broker under Section 114(iii) for alleged overvaluation of exported goods is sustainable in the absence of any finding as to the broker's specific role in over invoicing. - HELD THAT:- The Tribunal held that a customs broker acts on the instructions of the exporter and the primary responsibility to ensure correctness of particulars in shipping bills, including valuation, lies with the exporter. The adjudicating authority did not record any specific finding that the broker committed any omission or commission that rendered the goods liable to confiscation or that the broker had facilitated over invoicing. The Tribunal relied on earlier decisions treating CHAs as agents who must act on exporter instructions and requiring positive proof of the broker's culpability before imposing penalty under Section 114(iii). Because the investigation and impugned orders did not establish the appellant's role in the alleged overvaluation, the penalty could not be sustained. [Paras 6, 7, 8, 9]

An identical issue came up for consideration before the Tribunal at Delhi in the case of World Cargo Movers v. Commissioner of Customs, New Delhi [2001 (10) TMI 139 - CEGAT, NEW DELHI], wherein, under similar facts and circumstances, the penalty imposed on the CHA under Section 114 ibid. was set aside.

The ld. adjudicating authority has not given any finding as to the specific role played by the appellant herein in the alleged offence, for imposition of penalty under Section 114(iii) of the Customs Act, 1962. In the impugned order also, the Ld. Commissioner (Appeals) has not recorded any finding regarding the role of the appellant in the alleged overvaluation of goods. Therefore, we observe that the investigation has not established the role of the appellant in the alleged over-invoicing of the export goods with a view to avail excess drawback.

Penalty imposed on the appellant under Section 114(iii) is not sustainable and is set aside.

Final Conclusion: The appeal is allowed; the penalty imposed on the customs broker under Section 114(iii) of the Customs Act, 1962 is set aside for failure to establish the broker's role in the alleged overvaluation.

Classification of goods - imported technical manuals, specification handbooks and reports - classifiable under CTH 49019900 OR under CTH 49119990 - preference of specific tariff heading 49.01 over residuary heading 49.11 - Entitlement to exemption under Notification No.12/2012-Cus dated 17.03.2012 and Notification No.50/2017-Cus dated 30.06.2017.

Classification of printed technical documents - HELD THAT:- Having analysed the nature and content of the imported materials and the HSN explanatory notes, the Tribunal applied the principles in the Supreme Court jurisprudence (including the guidance in Gujarat Perstorp Electronics Ltd. [2005 (8) TMI 657 - SUPREME COURT]) and relevant Tribunal decisions to conclude that the specific tariff entry for printed books, manuals and similar printed matter (Chapter 49.01) takes priority over the residuary entry (Chapter 49.11). The imported items - technical manuals, drawings, reports and management/system engineering documentation intended for use in defence projects - fall within the scope of Chapter 49.01 as textual/technical publications or textual matter for binding in loose-leaf form rather than the residuary category. The Tribunal followed its earlier decision in Hindustan Aeronautics Ltd. [2025 (10) TMI 628 - CESTAT BANGALORE] as factually analogous and therefore held that the goods are not properly classifiable under the residuary heading 4911.99. Consequently the classification under CTH 49019900 was adopted and the question of applying the HSN notes and priority of specific over residuary entries was determinative of the outcome. [Paras 10, 23]

The imported technical documents are classifiable under CTH 49019900 and not under CTH 49119990.

Entitlement to exemption notifications - HELD THAT: - Because the Tribunal concluded that the imported materials fall under Chapter 49.01, it held that the shipments fall within the scope of the relevant exemption entries invoked by the appellant. The classification being determinative, the Tribunal allowed the benefit of the claimed notifications and set aside the impugned order which had denied those benefits on the basis of classification under the residuary heading. [Paras 10, 23]

The appellant is eligible for the benefit of Notification No.12/2012-Cus. and Notification No.50/2017-Cus. for the imports in question.

Final Conclusion: The impugned order is set aside: the imported technical manuals, handbooks and reports are classifiable under CTH 49019900, and the appellant is entitled to the claimed exemptions under the cited notifications; the appeals are allowed with consequential relief as per law.

Determination of IGST payable on the import of bulk drugs - Definition of "drug" under Section 3(b) of the Drugs and Cosmetics Act, 1940 - benefit of Notification no. 09/2025 -Integrated Tax-IGST (Rate) - Whether Integrated Goods and Services Tax ("IGST") is leviable @5% for the import of "bulk drugs" in terms of SI. No. 226 of Schedule I of Notification No. 9/2025-Central Tax (Rate) dated 17.09.2025 under the Customs Tariff Act, 1975.

Specific Entry vis-à-vis General Entry - HELD THAT:- It is a well-settled principle of classification that when a product is covered by both a general entry and a specific entry, the specific entry shall prevail over the general entry (generalia specialibus non derogant). Accordingly, Active Pharmaceutical Ingredients (APIs), though classifiable under Chapters 28 or 29 for tariff purposes, when they satisfy the description of "drugs", are appropriately classifiable under SI. No. 226 for the purpose of determination of applicable rate of tax. The SI. No. 226 entry is a specific entry which will prevail over the general entry of "all organic chemicals other than gibberellic acid"

APIs / bulk drugs are "drugs" for the purposes of SI. No. 226 and thus fall within the expression "All Drugs and medicines".

The definition of "drug" under Section 3(b) of the Drugs and Cosmetics Act, 1940 is wide and inclusive in nature, and expressly covers substances intended for use as components of a drug. Active Pharmaceutical Ingredients (APIs) / bulk drugs, being pharmaceutical substances used as such or as ingredients in formulations, squarely fall within the ambit of the said definition.

On a conjoint reading of the definition of "active pharmaceutical ingredient / bulk drug" under the Drugs (Price Control) Order, 2013 with the definition of "drug" under Section 3(b) of the Drugs and Cosmetics Act, 1940, and the definitions of "bioavailability study", "bioequivalence study" and "clinical trial" under the New Drugs and Clinical Trials Rules, 2019, it is evident that APIs, even when imported for testing, bioequivalence, bioavailability or clinical research purposes, retain their statutory character as "drugs" and are not excluded merely on account of their stage or purpose of use.

APIs are regulated and licensed as "drugs" by the Central Drugs Standard Control Organization (CDSCO) under the statutory framework of the Drugs and Cosmetics Act, 1940 and the New Drugs and Clinical Trials Rules, 2019, including for import under Forms 10 and CT-17. Their regulatory recognition as drugs reinforces their statutory character.

Judicial precedents and advance ruling authorities have consistently held that, in the absence of any restrictive language, the expression "drugs" includes "bulk drugs", and no artificial distinction can be introduced between the two where the notification does not provide so.

The wording of SI. No. 226 of Schedule I to Notification No. 9/2025-Integrated Tax (Rate) is broad and description-based, covering "All drugs and medicines ... " without restriction to finished formulations, and further extends to goods falling under "Chapter 30 or any Chapter", thereby encompassing APIs classifiable under Chapters 28 and 29.

Sl. No. 226 is a specific entry describing goods by their essential character as "drugs", and therefore prevails over the general entries covering "all inorganic chemicals" or "all organic chemicals" under Chapters 28 and 29.

The character of APIs as "drugs" does not change merely because they are imported for clinical trials, bioavailability or bioequivalence studies. Such studies are integral to the drug approval process and do not alter the intrinsic statutory identity of the goods.

Final Conclusion: The Authority ruled that bulk drugs / Active Pharmaceutical Ingredients (APIs) - including those imported for manufacture or for clinical trials, bioavailability or bioequivalence studies - fall within SI. No. 226 of Schedule I to Notification No. 9/2025 and attract IGST at 5%, unless they are covered by the NIL rated entry at SI. No. 113 of Notification No. 10/2025.

Validity of investigation order under Section 210 - Requirement of disclosed reasons for exercise of executive power to investigate- minor violations of Section 129 of the Companies Act, 2013 and minor violation by the Auditor of the Company under Section 143 read with Section 147(2) of the Companies Act, 2013.

Validity of investigation order under Section 210 - Legality of the notice issued under Section 217 for initiating an investigation under Section 210 where the inspection report under Section 208 did not recommend investigation and no reasons for the Ministry's opinion were disclosed - HELD THAT:- The Court examined the statutory bases in Section 210(1) and the material placed by the respondents. The report prepared under Section 208 recorded that no instance of the major allegations had been found though some violations and irregularities were reported, and it contained no recommendation for investigation under Section 210. The Ministry's order referring to a Regional Director's proposal and stating that the matter was 'serious in nature' did not disclose the proposal or the reasons which led the Ministry to form that opinion. The Regional Director's proposal post-dated the inspection report and its contents were not placed before the Court. Applying precedent that executive power to order an investigation must be supported by relevant material and reasons, the Court found that the order on which the notice was issued lacked substance and did not sufficiently disclose circumstances justifying the exercise of power to order an investigation in public interest. [Paras 21, 22, 23, 26, 27]

The notice issued for initiation of investigation under Section 210 was without substance and is quashed.

Final Conclusion: The writ petition is allowed; the impugned notice for initiating investigation under Section 210 is quashed and the related application is dismissed.

Validity of shareholder's post-facto ratification -Diversion of the funds raised through the preferential allotment - advancement of loans and investment in shares - Fraud - misutilisation of preferential issue proceeds - disclosure of objects - violations of the SEBI (PFUTP) Regulations and provisions of the Securities Contracts (Regulation) Act, 1956, by relying on a post-facto shareholders' ratification and related amendments - power to impose penalty under Section 15HA.

Validity of shareholders' post-facto ratification to cure diversion of preferential-issue proceeds and to negate violations of SEBI regulations and SCRA -HELD THAT: - In Kanaiyalal Baldevbhai Patel [2017 (9) TMI 1269 - SUPREME COURT] this Court clearly laid down a touch stone namely that a Court must weigh against any interpretation which would protect unjust claims over just, fraud over legality and expediency over principle and once this Rule is established, individual cases should not pose any problem.

In Kishore R. Ajmera [2016 (2) TMI 723 - SUPREME COURT] this Court held that proof of violation of Regulations may have to be inferred by a logical process of reasoning from the totality of attending facts and circumstances. In this case, though there is admission that there is diversion of purpose, the claim that it was due to market conditions is false, is established from the speed with which the amounts were diverted. The reliance on newspaper articles about GDP rate hitting a new low is to say the least not convincing at all and is too general.

The diversion of the funds raised through the preferential allotment, the purpose for which they were diverted, namely, advancement of loans and investment in shares is relatable to the Memorandum of Association as it originally stood and, in any event, was covered by the amendment to the Memorandum of Association made on 12.03.2014. We are not able to countenance the submission What is crucial for our purpose is that the object set out in the explanatory note appended to the notice of EoGM prior to the issuance of preferential shares. The funds were not utilized for those disclosed objects. To make the matters worse for the respondents here the diversions were made soon after the amounts were raised between 16.10.2012 and 08.11.2012. The diversion was contrary to the object set out to the explanatory note and was before any amendment was carried out to the Memorandum of Association and the purported resolution of ratification dated 29.09.2017. More importantly, the diversion was contrary to the PFUTP Regulations of SEBI, the SEBI Act and the disclosure norms under Section 173(2) of the Companies Act read with Regulation 73(1) of the SEBI ICDR Regulations, 2009. Being a plainly illegal act impacting a vast array of stakeholders other than the shareholders of the company, the question of ratification cannot arise at all.

The matter cannot be viewed from the prism of the shareholders alone. When matter involves public interest it cannot be deemed as private waivable right. What applied to waiver will also apply to ratification. No condonation or ratification on aspects opposed to public policy can be made, as it will seriously jeopardize public interest.

Shareholders' post-facto ratification did not validate the prior diversion and could not negate violations under the PFUTP Regulations and related disclosure/listing obligations.

Misuse of preferential issue proceeds attracts PFUTP liability - HELD THAT: - The Court concluded that diversion of funds raised for stated objects to investments in shares and advances, especially where diversion occurred almost immediately after receipt, falls within the broad and inclusive definition of fraud and unfair trade practices under PFUTP Regulations (including provisions proscribing deceptive devices, dissemination of misleading information and planting misleading news). The Court emphasised the statutory scheme requiring disclosure of objects and reporting of deviations, and held that such diversion misled investors and contravened the regulatory framework. [Paras 40, 41, 43, 44, 45]

The diversion of proceeds attracted liability under Regulations 3 and 4 of the PFUTP Regulations and corresponding listing/SC(R)A obligations.

Concurrent protective powers and adjudicatory penalty jurisdiction may co-exist - HELD THAT: - The Court held that the WTM's interim protective directions (restraining market access and disgorgement powers then available) and the Adjudicating Officer's subsequent penalty proceedings under separate statutory provisions are not ipso facto impermissible as parallel or duplicative. The reasoning distinguished prior authorities on factual grounds, noted the distinct statutory powers and remedies available to different authorities at the relevant time, and found nothing objectionable in the AO exercising jurisdiction to impose monetary penalty where the protective order previously imposed did not and could not substitute for the AO's penal powers. [Paras 67, 69, 71, 72, 75]

The AO's penalty proceedings and order were valid and not barred by the prior WTM orders.

Final Conclusion: The SAT's order reversing the Adjudicating Officer was set aside. The Court held that shareholders' post-facto ratification could not cure the diversion of preferential-issue proceeds or negate regulatory violations, and that the Adjudicating Officer's penalty order was valid; consequently the AO's order is restored and the appeals are allowed.

Seeking permission to withdraw money for monthly expenditure - HELD THAT:- While we are not inclined to interfere with the Judgment and Order passed by the Securities Appellate Tribunal dated 22.01.2026, the appellant(s) will be entitled to withdraw Rs. 2.25 Crores to meet its monthly expenditure.

We make it clear that we have not varied the directions of the Tribunal and the respondent – SEBI will be entitled to enforce them.

With these observations, the civil appeal is dismissed.

Pending interlocutory application(s), if any, stands disposed of.

Misuse of insolvency moratorium to frustrate SARFAESI proceedings - long delay by the borrowers/guarantors after service of notice under Section 13(2) - physical possession - waiver and equitable estoppel by repeated OTS proposals - crystallization of auction purchaser rights - Writ jurisdiction to correct manifest misuse and jurisdictional error.

Whether the DRT erred in restraining the secured creditor from proceeding on the ground that a moratorium under the IBC had been triggered by a collateral/possibly collusive filing -HELD THAT:- The Court held that chronic defaulters and guarantors were resorting to proceedings under Sections 94-96 of the IBC as a tactical device to stall and frustrate lawful steps under the Securitisation Act, thereby defeating both statutes' objects and causing failure of justice. The DRT's one line order halting further steps until disposal of the interim application amounted to a jurisdictional error in the peculiar factual matrix, because it permitted manifest misuse of the IBC to paralyze enforcement carried out pursuant to SARFAESI and the competent Magistrate's orders. In these exceptional circumstances the writ Court exercised jurisdiction to set aside the impugned DRT order so as to prevent perpetuation of the misuse of legal process. [Paras 1, 25, 37, 43, 44]

The impugned order of the DRT was set aside and the secured creditor need not await disposal of the interim application before taking further steps in pursuance of the auction sale and registered sale certificate.

Waiver and equitable estoppel by repeated OTS proposals - Whether the borrowers and guarantors, by repeatedly proposing One Time Settlements and failing to challenge notices and proceedings for years, waived their statutory rights and are estopped from obstructing completion of the auction sale - HELD THAT:- Relying on established principle that waiver is an intentional relinquishment of a known right, the Court found that the borrowers/guarantors repeatedly made OTS proposals, failed to follow up, and did not object to the notice under Section 13(2) for many years. Such conduct demonstrated waiver/estoppel, placed the secured creditor and third party auction purchasers in a position of detriment, and reinforced the conclusion that the borrowers could not be permitted to defeat third party rights created by the completed sale. [Paras 26, 28, 39, 40]

The borrowers' conduct amounted to waiver and equitable estoppel, which weighed against permitting them to frustrate completion of the auction and possession to the purchasers.

The Court accepted and relied upon the NCLT's findings (confirmed by NCLAT and the Supreme Court) that actions lawfully completed prior to commencement of the moratorium are not invalidated by a subsequently invoked moratorium. The sale to the auction purchasers and issuance/registration of the sale certificate crystallized their rights before the insolvency petition was filed, and therefore the secured asset stood excluded from the personal guarantor's estate and could not be shielded by a later filed moratorium. [Paras 14, 30, 31, 34]

The secured asset and the registered sale certificate were excluded from the moratorium because the sale and crystallisation of purchaser's rights occurred prior to the commencement of moratorium.

Given the demonstrated pattern of misuse, the confirmed exclusion of the asset from moratorium, and the DRT's failure to take the securitisation application on merits, the Court exercised its discretionary writ jurisdiction to ensure justice. It directed the DRT to complete pleadings within a fixed short time frame and to decide the securitisation application expeditiously, while permitting the secured creditor to proceed in pursuance of the registered sale certificate and the competent Magistrate's order. [Paras 41, 44, 45]

The Court directed that the secured creditor need not await disposal of the interim application and ordered the DRT to complete pleadings and decide the securitisation application on merits by the specified date.

Final Conclusion: The writ petition was allowed; the DRT's impugned order was set aside so that the secured creditor and registered auction purchasers may take consequential steps in pursuance of the sale certificate, and the DRT was directed to complete pleadings and decide the securitisation application on merits within the time frame specified by the Court.

Closure of liquidation process on account of sale of the corporate debtor as a going concern and relieving the liquidator - extinguishment of existing shares - protection of purchaser from antecedent liabilities.

Effect of a subsequent NCLT order closing liquidation following sale of the corporate debtor as a going concern on pending appeals against the liquidation order -HELD THAT:- The Tribunal recorded that the Learned NCLT, by an order dated 03.12.2025, found that the liquidator had sold the corporate debtor as a going concern and ordered closure of the liquidation proceedings in terms of the applicable Regulations, relieved the liquidator and directed steps to reconstitute the company and update records. In view of that subsequent order, the impugned order directing commencement of liquidation no longer has practical significance. The Tribunal therefore dismissed the pending Company Appeals as having been rendered infructuous, while preserving the parties' rights to agitate any available remedies before appropriate fora in accordance with law.

The appeals are dismissed as rendered infructuous because the liquidation proceedings have been closed following sale of the corporate debtor as a going concern; rights of the parties are left open.

Final Conclusion: The appeals were dismissed as having been rendered infructuous in view of the NCLT order closing the liquidation after sale as a going concern; the decision is without prejudice to parties pursuing any other remedies available in law.

Rejection of EPFO's application seeking recovery and priority payment of provident fund dues from the liquidation proceeds - return/reallocation under Regulation 43 - dissolution of corporate debtor - exclusion from liquidation estate - insolvency resolution process costs.

Whether the application by the Employee's Provident Fund Organization for recovery of provident fund dues could be sustained after distribution and dissolution where the liquidator had already distributed available funds and no assets remained - HELD THAT:- The Tribunal accepted that sums due to workmen from provident, pension and gratuity funds are excluded from the liquidation estate by Section 36(4)(a)(iii). However, on the admitted facts the only funds available had been applied by the liquidator to meet CIRP costs, liquidation costs and a small portion of employee dues; there were no remaining assets to satisfy the appellant's claim. The Court held that in this exceptional factual matrix strict compliance with Section 36(4)(a)(iii) could not be ordered to the prejudice of statutory processes, since payment of CIRP and liquidation costs is necessary for the orderly conduct of insolvency/liquidation; consequently the NCLT's rejection of the recovery application was justified and did not warrant interference. [Paras 16, 17, 18]

The NCLT's dismissal of the EPFO's application for recovery was upheld on the ground that no assets remained after payments towards CIRP costs, liquidation costs and priority payments already made, and therefore no relief could be granted.

Dissolution of corporate debtor upon complete liquidation under Section 54 - Whether the Adjudicating Authority correctly ordered dissolution of the corporate debtor under Section 54 after completion of liquidation processes and distribution - HELD THAT:- Section 54 contemplates dissolution when a corporate debtor has been completely liquidated. The admitted facts showed the corporate debtor had been placed in liquidation, claims were invited and processed, final distributions under the applicable schedule were effected, Form-H was filed and no assets remained nor was revival possible. On that basis the Adjudicating Authority's order of dissolution following the procedures in the liquidation regulations was in accordance with Section 54 and warranted affirmation. [Paras 21, 24, 25, 26]

The order dissolving the corporate debtor was proper under Section 54 and is affirmed.

Final Conclusion: Both appeals challenging the rejection of the recovery application and the dissolution order were dismissed; the Tribunal upheld the NCLT's conclusions that no assets remained to satisfy the EPFO claim and that dissolution was proper after completion of the liquidation process.

Unregistered agreement for sale - Validity of title or admissible evidence of title -immovable property - failure to execute sale deed and institute suit for specific performance within limitation -bankruptcy estate inclusion - delivery to bankruptcy trustee - title transfer.

Whether the unregistered agreements for sale constituted a right capable of excluding the specified immovable property from the bankruptcy estate -HELD THAT: - It is settled principle of law which needs no detailed and specific reference, that in the light of the provisions contained under Section 17, to be read with Section 49 of the Registration Act, an unregistered document in relation to an immovable property, the registration of which has been made mandatory under law, will not be conferring any valid title on the Appellant, and furthermore, it cannot be even read in evidence for any purposes whatsoever in any judicial proceedings as there is no fructified transfer of title of the subject asset to the Appellant, who is only a holder of an Agreement for Sale which is only a proposal or a settlement between the two contracting the parties and that too having being executed in 2017, for which, the Sale Deed has not yet been executed. Hence, the presumption under law would be that the said Asset property still continues to be the property of the Bankrupt, as there has been no valid conveyance.

The Tribunal found that the two agreements for sale, though admitted to exist and acknowledged by the bankrupt, were unregistered documents in relation to immovable property and therefore did not effectuate a valid transfer of title. Clause 20 of the agreement required institution of a suit for specific performance to obtain enforceable conveyance; no sale deed had been executed and no suit for specific performance had been prosecuted. Applying the principles under Section 17 read with Section 49 of the Registration Act, an unregistered document in respect of property requiring compulsory registration cannot confer title or be relied upon as evidence of a perfected transfer, and hence the property remained vested in the bankrupt and within the bankruptcy estate (paras 15-18). [Paras 15, 16, 17, 18]

The unregistered agreements for sale did not confer title and the immovable property continued to form part of the bankrupt's estate.

Limitation - No exception could be carved out in the instant Appeal in the light of the Column 3 of Article 54 of the Limitation Act because, the period of limitation for filing of a Suit for specific performance cannot be permitted to be extended for an indefinite period owing to an in-action on part of the Appellant himself. Hence, in the light of the provisions contained under Section 27 of the Limitation Act, “the in-action on part of the Appellant itself extinguishes his right over the property covered by the agreement for sale which has been sought to be excluded from the list of Bankruptcy Estate by filing of the Application being IA (IBC) No. 936 / 2025 which has been rejected by the Ld. Tribunal”.

Owing to the fact, that on the basis of the alleged Agreement for Sale there is no valid right has been conferred and conveyed to the Appellant, and that, in the absence of a registered document having been executed in their favour within the prescribed period of limitation under law, the title of the property would be deemed to be continued to be vested with the Bankrupt for which, the proceedings of Bankruptcy has already been drawn, and at this stage, the same cannot be permitted to be excluded from the Bankruptcy Estate.

Final Conclusion: The Tribunal dismissed the appeal and upheld the decision that the unregistered agreements did not vest title in the appellant, the contractual claim was time barred, and the assets remained part of the bankrupt's estate subject to the bankruptcy trustee's administration; the interlocutory application was accordingly rejected.

Fraudulent and wrongful trading with the Corporate Debtor's assets - Forensic audit report insufficiency - Requirement of supporting evidence to invoke Section 66 - non- cooperation of the Suspended Board.

Whether an inconclusive forensic audit report alone can sustain an application under Section 66 of the I&B Code for fraudulent or wrongful trading -HELD THAT: - The Tribunal correctly held that the forensic audit report was inconclusive and lacked the documentary support necessary to classify the impugned transactions as fraudulent or wrongful trading. The Appellate Tribunal applied the legal principle that an application under Section 66 requires evidence establishing the alleged fraudulent conduct on its own merits, and an incomplete forensic report-produced without supporting documents or corroborative material-cannot be the sole basis for directing contribution by suspended directors. The court further noted that non-cooperation by the suspended management, which impeded completion of the forensic audit, does not convert an inconclusive audit into admissible proof; where supporting evidence is unavailable due to such non-cooperation, the appropriate course is investigation by competent criminal authorities (as occurred by filing of a complaint with the CBI), rather than granting civil relief under Section 66 on the basis of the incomplete report. [Paras 10, 11, 12]

The rejection of the Section 66 application was justified because the forensic audit report was incomplete and unsupported by requisite evidence, and the matter was properly left to criminal investigation rather than being decided on the basis of the report alone.

Final Conclusion: The Appellate Tribunal found no error warranting interference: the impugned order rejecting the Section 66 application was upheld because the forensic audit report was inconclusive and unsupported by necessary evidence; the appeal is dismissed.

Seeking extension of time for payment of 2nd Tranche and 3rd Tranche of the Resolution Plan - implementation of resolution plan - non-restoration of electricity supply - consensual settlement with financial creditor - Whether the impugned orders refusing extension of time and directing liquidation could be set aside in view of the parties' settlement.

Settlement between parties effecting judicial disposal - HELD THAT:- The Tribunal recorded that the parties reached a consensual settlement in which the sole Financial Creditor agreed in principle to grant an extension of time for payment of the balance tranches subject to stipulated terms and conditions, and the Appellants accepted those terms. On that basis the Tribunal treated the affidavit of settlement as determinative and allowed the Appeals by quashing the impugned orders, making the settlement terms part of the Tribunal's order. The Tribunal made clear that compliance with the agreed conditions is a pre condition to the continued suspension of the liquidation order and that failure to comply would revive the order of liquidation and forfeiture consequences specified in the settlement. [Paras 7, 8, 9, 10]

Appeals allowed and impugned orders quashed subject to the settlement terms recorded in the affidavit; non-compliance will revive the liquidation order and forfeiture consequences.

Conditional suspension of liquidation orders - HELD THAT: - The Tribunal directed that the terms offered by the Financial Creditor and accepted by the Appellants be treated as part of its order; accordingly the earlier order appointing a Liquidator is suspended so long as the Appellants strictly comply with those conditions. The Tribunal expressly provided that any breach of the agreed terms would permit revival of the liquidation proceedings and forfeiture of amounts paid as specified in the settlement. [Paras 8, 9, 10]

Liquidation order stands suspended on strict compliance with the recorded settlement terms; breach will revive liquidation and trigger forfeiture as agreed.

Final Conclusion: The Appeals were allowed on the basis of a binding settlement recorded on the record: the impugned orders refusing extension and ordering liquidation were quashed and the liquidation order suspended subject to the settlement terms; failure to comply with those terms will revive the liquidation order and the forfeiture consequences set out in the settlement, and all pending interlocutory applications are closed.

Scope of provisional attachment under Section 5(1) - offence of money laundering - definitions of “attachment” and “proceeds of crime” u/s 2(1)(d) and 2(1)(u) - Continuing offence of money laundering.

Whether the offence of money laundering can continue and support provisional attachment where the proceeds derived property was acquired before the PMLA but remained in possession and use after the PMLA came into force -HELD THAT: - The Court held that Sections 3, 5 and 8 must be read as an integrated scheme and that the offence of money laundering is capable of being a continuing offence. Under Section 3 the word "includes" and the Explanations bring within the offence acts such as concealment, possession, acquisition or use of proceeds of crime; Explanation (ii) expressly treats the process or activity as continuing so long as a person enjoys the proceeds by concealment, possession, acquisition, use or by projecting/claiming them as untainted. Consequently, where property purchased from proceeds of a scheduled offence continued to be possessed and used after the PMLA came into force, the offence of money laundering was being committed on and after that date and Section 5 could be invoked to provisionally attach the property. [Paras 55, 56, 59, 61, 62]

The Court held that possession and use of property that constitutes proceeds of crime after the PMLA came into force sustains a continuing offence of money laundering and justifies provisional attachment under the integrated scheme of Sections 3, 5 and 8.

Proceeds of crime includes property purchased from proceeds - prohibition on retrospective penal operation - HELD THAT: - The Court rejected the contention that invoking the PMLA in such circumstances effects impermissible retrospective penal operation. It explained that the PMLA punishes the distinct offence of money laundering, not the predicate scheduled offence; the relevant date for PMLA liability is when the activities that constitute money laundering occur or continue. Reliance on precedents and the inclusive wording of Section 3 led to the conclusion that application of the PMLA to possession/use of proceeds continuing after the Act came into force does not amount to unlawful retrospectivity under Article 20(1). [Paras 30, 68, 69, 71, 72]

The Court held that application of the PMLA to money laundering activity that continued after the Act came into force is not retrospective and does not violate Article 20(1).

Proceeds of crime includes property purchased from proceeds - HELD THAT: - The Court found that the impugned judgment erred in limiting "proceeds of crime" to the monetary receipts and in conflating "coming into possession" with continued "possession." Section 2(1)(u) includes within "proceeds of crime" property obtained directly or indirectly from criminal activity; accordingly the subject property purchased with those funds also constituted proceeds of crime and its continued possession/use after the PMLA came into force meant the offence was not completed prior to the Act. [Paras 30, 52, 53, 54, 55]

The Court held that the Single Judge was in error; the subject property itself is proceeds of crime and could not be treated as having removed the matter from the sweep of the PMLA merely because acquisition began before the Act.

Reasoned belief required for provisional attachment - HELD THAT: - The Court observed that Section 5 requires a recorded reasoned belief by the officer based on material in possession. Given the trail of transactions described in the provisional attachment order and the nature of the alleged scheme, the Court concluded that the subjective reasoned belief of the Deputy Director was not shown to be baseless or wholly without material; under certiorari jurisdiction the High Court should not sit as an appellate fact finder to displace such a belief absent manifest absence of evidence. [Paras 7, 33, 70, 73]

The Court held that there was material to sustain the Deputy Director's recorded reason to believe and that interference with the provisional attachment on that ground was not warranted.

Final Conclusion: The Letters Patent Appeal is allowed; the impugned judgment is quashed and set aside, the provisional attachment order is upheld and the writ petition is dismissed. The Court concluded that the subject property constitutes proceeds of crime and its continued possession and use after the PMLA came into force justified attachment under the integrated scheme of the Act.

Provisional attachment of immovable properties - absence of material establishing flow of proceeds of crime (tainted funds) from the accused/scheduled-offence - definition of "proceeds of crime" under Section 2(1)(u) - value of such property - reason to believe - characterisation of "related companies"​​​​​​​.

Proceeds of crime - value of such property - HELD THAT: - The authority must have reason to believe based on material in its possession that the person is in possession of any proceeds of crime. The definition of proceeds of crime includes the value of such property, but invocation of the value element requires evidence that some part of the actual proceeds flowed to the person in whose hands attachment is sought. The PAO and related records established only common directorship/shareholding between the accused entities and certain companies; they did not establish any flow of funds from the accused entities to those "related" companies, nor from those companies to the appellants. The respondent did not produce evidence rebutting the appellants' contention that no tainted funds flowed to them. In the absence of any material showing such flow, neither the properties themselves nor their value could be treated as proceeds of crime, and the confirmation of attachment could not be sustained on that basis. [Paras 29, 30, 31, 32, 33]

Attachment of the appellants' properties under the PAO cannot be sustained for lack of material showing flow of tainted funds to them; the confirmation of attachment is set aside on this ground.

Reason to believe - Other contentions raised by appellants (non-supply of forensic reports, alleged use of 'related company' concept, attachment to protect revenue, and settlement/repayment of accounts) were not adjudicated because appeal was allowed on the sole ground of absence of material of flow of tainted funds - HELD THAT: - Having decided that there was no material to show flow of proceeds of crime to the appellants, the tribunal did not examine or decide the remaining arguments raised by the appellants, including non-supply of forensic audit reports, the characterisation of "related companies", alleged repayment/settlement of accounts, or the contention that attachments were made to protect revenue. Those issues were left unadjudicated because they were unnecessary to the dispositive finding on the core question of flow of tainted funds. [Paras 32]

Other challenges to the attachment were not considered and remain undetermined because the appeal was allowed solely on the absence of material showing flow of proceeds of crime.

Final Conclusion: The appeals are allowed solely on the ground that there was no material to show flow of proceeds of crime to the appellants; the confirmation of provisional attachment is set aside for that reason, and other contentions were not decided.

Provisional attachment of property - involvement with proceeds of crime - bona fide purchaser - modus operandi for generation of proceeds of crime and its deployment was revealed in the investigation after recording of the ECIR - commission of offence under Section 420, 467, 471 and 120-B of the Indian Penal Code, 1860 - failed to disclose the source of the amount involvement for payment of loan at the time of Agreement to Sell.

Whether the appellants were bona fide purchasers whose properties could not be provisionally attached - HELD THAT:- The Tribunal held that the appellants were not shown to be bona fide purchasers because no sale deed had been executed and title had not passed; significant portions of the advance payments made by the appellants had been returned to them (and in one case returned in full or in excess), and the appellants failed to disclose or justify the source of the consideration. The Tribunal treated these facts as sufficient to infer that the appellants were not innocent third parties entitled to protection and that the provisional attachment could be maintained pending trial. The adjudicatory reasoning and factual findings on these points are recorded in the impugned order and were accepted by the Tribunal as determinative of the entitlement to relief. [Paras 11, 12, 13, 15]

Appellants are not bona fide purchasers and the provisional attachment of their properties was properly confirmed

Final Conclusion: The appeals were dismissed; the Tribunal upheld confirmation of the provisional attachment on the finding that the appellants were not bona fide purchasers, while noting that the attachment remains subject to the final outcome of the trial.

Validity of confirmation of the provisional attachment of bank accounts under the Act of 2002 - scheduled offences - PFI Member and National General Secretary of CFI - fraudulently transfer mpney from abroad in the guise of payments related to international trade of goods - criminal conspiracy to impart training to their cadres - use of explosive weapons with intention to promote enmity between different religious group and prepared them for terrorist activities - proceeds of crime and benami vehicle - requirement of credible documentary nexus.

Provisional attachment under the PMLA - HELD THAT: - The Tribunal examined the material on record and found sufficient evidence to support the Adjudicating Authority's confirmation of the provisional attachment. The court accepted the finding that MBPL was used to park and distribute funds connected to the scheduled offences, noting inter alia the seized document linking MBPL to the group, the nature of credits into the NRE account from abroad, transfers from MBPL to multiple individuals, and banking transactions between MBPL and entities controlled by the organisation. The appellants' documentary explanations were found inadequate: share certificates bore dates inconsistent with incorporation, no credible source was shown for alleged capital contributions by the purported shareholders, the asserted sale deeds were not countersigned, and the balance sheet/auditor material indicated absence of genuine business operations or fixed assets. On this basis the Tribunal upheld the attachment as legally sustainable. [Paras 17, 18, 19, 20, 21]

The confirmation of the provisional attachment was valid and sustainable on the material before the Adjudicating Authority.

Proceeds of crime and benami vehicle - requirement of credible documentary nexus - Whether MBPL and transfers to the appellants constituted legitimate business/returns or proceeds of crime routed through the entity - HELD THAT: - The Tribunal rejected the appellants' contention that transfers represented genuine share application refunds and accumulated profits. It relied on the absence of reliable share documentation, discrepancies in dates of purported share certificates, absence of demonstrated source for capital contributions, lack of counter signed sale agreements, and accounting records showing no revenue operations. The existence of transactions between MBPL and entities controlled by the organisation, together with the pattern of receipts and distributions, supported the conclusion that MBPL functioned as a vehicle for illicit funds rather than a bona fide trading concern. [Paras 17, 18, 19, 20]

MBPL and the transfers to the appellants were not shown to be legitimate business transactions; they were properly treated as proceeds routed through a vehicle used by the organisation.

Final Conclusion: The Tribunal dismissed the appeals and upheld the Adjudicating Authority's confirmation of the provisional attachment, concluding that the material established MBPL's role as a vehicle for funds connected to the scheduled offences and that the appellants failed to substantiate lawful ownership or genuine business transactions.

Provisional attachment - definition of “proceeds of crime” given under Section 2(1)(u) - unexplained cash deposits and transfers, and findings of diversion of investor money from the multi-level marketing scheme - commission of crime and earned out of spongy scheme - burden to establish legitimate source of funds - valuation of the property for attachment exceeds the value attributable to proceeds of crime.

Whether the provisionally attached property was acquired prior to the commission of the predicate offence and therefore could not be treated as proceeds of crime -HELD THAT:- The Tribunal examined statements and transactional material showing acquisition during the period of the offending scheme and found transactions, cash deposits and transfers connecting the appellant or her close family to diversion of investor funds. The appellant's recorded statement admitted the purchase and the Tribunal noted absence of satisfactory explanation for the deposits and transfers purportedly from family members. On these facts the Tribunal held that the property was not shown to have been acquired prior to the offence and could properly be considered as proceeds of crime for the purposes of provisional attachment under the PMLA.

The challenge that the property was acquired prior to the commission of the offence was rejected and the property was held to be capable of attachment as proceeds of crime.

Burden to establish legitimate source of funds - HELD THAT:- The Tribunal accepted that the appellant alleged part payment by her father/husband and sale of gold but found no documentary proof or credible explanation for the cash deposits and transfers revealed by the bank accounts. The husband's involvement as a principal accused and the absence of proof of genuine sources meant the appellant did not discharge the requisite burden to show the funds were legitimate; transfers from the husband were thus susceptible to being treated as derived from proceeds of the offending scheme.

The appellant failed to establish legitimate sources for the funds used to purchase the property and this ground of challenge was rejected.

Fair market value for determining value of property - HELD THAT:- The Tribunal referred to the statutory definition of "value" as the fair market value on the date of acquisition or, if that date cannot be determined, the date of possession. Applying that definition, the Tribunal found no basis to hold that the attachment exceeded the proceeds of crime and therefore found no error in the valuation approach adopted for the purposes of attachment.

The challenge to valuation was rejected; the valuation was held to be consistent with the statutory definition and not excessive relative to the proceeds of crime.

Final Conclusion: The Tribunal found no merit in the appellant's contentions regarding prior acquisition, legitimate source of funds, or valuation and dismissed the appeal, upholding the provisional attachment and its confirmation.

Provisional attachment - commission of fraud by mis- appropriation of loan amounts and generation of proceeds of crime - definition of “proceeds of crime” given under Section 2(1)(u) - value of property equivalent - reason to believe for provisional attachment under Section 5(1) PMLA - siphoning and layering.

Proceeds of crime - Appellant company is part of the same group as M/s Biotor Industries Ltd. and cannot be treated as an independent entity insulated from liability - HELD THAT:- The Tribunal found that the persons who managed and benefited from M/s Biotor Industries Ltd. were previously directors and significant shareholders of the appellant company and, having resigned and replaced directorships with family members without consideration, remained de-facto controllers. The recorded shareholding changes and absence of any material showing of consideration for transfer of shares supported the conclusion that the appellant company cannot escape liability by virtue of formal changes in directorship; consequently the company was treated as part of the same group for purposes of attachment. [Paras 6]

Issue decided against the appellant company; the company is part of the same group as M/s Biotor Industries Ltd.

Attachment of property equivalent in value - HELD THAT:- The judgment of the Apex Court in the case of Smt. Pavana Dibbur v. The Directorate of Enforcement [2023 (12) TMI 49 - SUPREME COURT] has also been considered. However, findings given by three judges Bench of the Apex Court in the Vijay Madanlal Choudhary v. Union of India [2022 (7) TMI 1316 - SUPREME COURT (LB)] has been relied to give interpretation to the definition. In the light of the above, we are of the view that when the proceeds out of crime was not available with the appellant rather vanished and siphoned off, the property of equivalent value can be attached. In the present case, the proceeds of crime were siphoned off by the Directors of M/s Biotor Industries Ltd. by diverting it to various group companies and by layering the proceeds. In the light of the aforesaid, second limb of the definition of “proceeds of crime” has been applied to attach the property of equivalent value, but in fact the said attached properties are quite less than the proceeds of crime. Thus, the ground raised by the appellant cannot be accepted. Accordingly, this issue is decided against the appellant company and in favour of Respondent ED.

Issue decided against the appellant company; the properties at serial nos. 9 and 11 could be attached as equivalent value.

Reason to believe for provisional attachment under Section 5(1) PMLA - The requirements of Section 5(1) PMLA for provisional attachment were satisfied on the material then available - HELD THAT:- The Tribunal held that the material on record - multiple FIRs/charge sheets, consolidated investigation showing large-scale siphoning of loan funds and attempts by the appellant to effect disposal of property - furnished a recorded reason to believe that proceeds of crime existed and that non-attachment would risk frustrating proceedings. The appellant's explanations were treated as afterthoughts and insufficient to rebut the prima facie material justifying the provisional attachment under the second proviso to Section 5(1). [Paras 8]

Issue decided against the appellant company; the ED had reason to believe and lawfully made the provisional attachment.

Final Conclusion: The appeal is dismissed; the Tribunal affirmed the Adjudicating Authority's confirmation of attachment, finding the appellant part of the same group, that properties of earlier acquisition may be attached as equivalent value where tainted property cannot be traced, and that the conditions of Section 5(1) PMLA for provisional attachment were satisfied on the material then available.

Validity of seizure and retention of cash discovered during search - source of funds - Predicate offence for money-laundering - supply of reasons to believe - non-supply of relied upon documents - Withdrawals and cash ledgers - admissions recorded under Section 50 of the Act of 2002 as evidentiary support.

Predicate offence for money-laundering - Existence of a predicate offence sufficient to sustain recording of ECIR and proceedings under the Act of 2002 - HELD THAT:- The Tribunal held that the FIRs and subsequent investigation disclosed offences under the Arms Act and related criminal provisions, and that the ECIR recorded a predicate offence for money-laundering. The court relied on the registered FIRs, the investigations by ATS and other agencies, bank-entry evidence showing receipts described as for licences, and the admissions of the appellants to conclude that offences in relation to trade and illegal facilitation of arms licences were made out as predicate offences; the applicability of central statutes to Jammu and Kashmir following the notified changes was also noted in support of this conclusion. [Paras 12, 13, 17, 21]

The Tribunal held that a predicate offence was made out and that the recording of ECIR and continuation of proceedings under the Act of 2002 was justified.

Supply of reasons to believe and relied upon documents - Whether the appellants were supplied with the reasons to believe and the documents relied upon by the respondent - HELD THAT:- The Tribunal found on the record that the application under Section 17(4) was served and that the show-cause notice and the reasons to believe were sent with the relied-upon documents; the contested claim of non-supply was held to be contrary to the documentary record which showed service of those materials to the appellants. [Paras 20]

The Tribunal held that the reasons to believe and the relied-upon documents were supplied to the appellants.

Admissions recorded under Section 50 of the Act of 2002 as evidentiary support - Sufficiency of the appellants' explanation for the source of seized cash and the evidentiary value of statements under Section 50 - HELD THAT:- The Tribunal examined the appellants' claimed sources for the seized cash and the supporting bank and cash ledger materials, and found the explanations inadequate in view of the pattern and timing of bank withdrawals, absence of corroborative individual bank statements for personal savings, and the appellants' own admissions recorded under Section 50 that receipts related to arranging or charging for arms licences. Those admissions, together with bank entries described as for licence fees and supporting statements of defence personnel, were held to undermine the claimed lawful sources. [Paras 15, 16, 17, 19]

The Tribunal held that the explanation for the source of the seized cash was not satisfactorily established and that the statements under Section 50 supported the finding against the appellants.

Final Conclusion: The appeals were dismissed; the Tribunal found that a predicate offence had been disclosed, that the reasons to believe and relied documents were furnished to the appellants, and that the appellants' explanation for the seized cash was insufficient in light of documentary evidence and admissions, and the seizure and retention were upheld subject to the final outcome of the trial.

Scope of attachment under PMLA - immovable properties mortgaged or assigned to a secured creditor prior to commission of scheduled offences - interplay between SARFAESI / recovery statutes and PMLA - secured creditor remedies under SARFAESI - application for auction sale under PMLA.

Whether immovable properties mortgaged and assigned prior to the scheduled offence could be attached under the PMLA as 'value of proceeds of crime'. -HELD THAT:- The Tribunal accepted the Directorate's position that properties acquired prior to the scheduled offence may nevertheless be attached by the Enforcement Directorate as value of proceeds of crime under PMLA. The Tribunal accordingly upheld the principle that prior mortgage or assignment does not per se immunise the property from attachment under PMLA, subject to the rights of secured creditors to seek appropriate relief under the PMLA regime. [Paras 5]

Properties mortgaged and assigned prior to the scheduled offence can be attached as value under PMLA.

The Tribunal held that although PMLA attachment is maintainable, a secured creditor is not left without remedy; the creditor may stake its claim before the Special Judge in accordance with sections 8(5)-8(8) of PMLA and may even move under section 8(7) for auction of the mortgaged immovable properties prior to conclusion of trial, subject to filing an affidavit/undertaking to deposit any excess realisation with the ED by way of FDRs. The Tribunal rejected the appellant's submission that SARFAESI/RDB statutory priority displaces the PMLA regime, and instead clarified the procedural route available to secured creditors within the PMLA framework. [Paras 5]

Appellant as secured creditor may stake its claim before the Special Judge under sections 8(5)-8(8) and may apply under section 8(7) for auction with the prescribed affidavit/undertaking.

Final Conclusion: The appeal is disposed of with liberty to the appellant to pursue the statutory remedies before the Special Judge under PMLA (including application for auction with an undertaking to deposit any excess realisation), and the order does not affect the parties' rights in the criminal trials.

CENVAT credit availed on services of recovery agents (including repossession activities) - reverse charge on services - definition of “input service” with effect from 01.04.2011 - ​​​​​​​Whether the services of recovery agent, qualifies as ‘input services’ under Rule 2(l) of the Credit Rules after the amendment to the definition of ‘input service’ w.e.f. 01.04.2011.

Input service used for providing an output service - recovery agent services as integral to lending - HELD THAT:- The Court held that the substantive 'means' part of the definition of input service-any service used by a provider of taxable service for providing an output service-remained unchanged after the 01.04.2011 amendment; changes were confined to the illustrative 'includes' part. The determinative test is whether the service is used in providing the output service. Timely recovery is integral to the lending service because without recovery mechanisms lending cannot be practically provided. Services rendered by external collection or recovery agencies thus have a direct and integral nexus with the output service of money lending and qualify as input services. The Tribunal relied on the coordinate bench decision in M/s. Bajaj Finance Ltd.[2017 (11) TMI 658 - CESTAT MUMBAI] which reached the same conclusion that repossession/recovery activities constitute input services. [Paras 5, 7, 8, 9]

Recovery agent services were held to be eligible as input services and CENVAT credit availed thereon is admissible.

Final Conclusion: The impugned orders denying CENVAT credit on recovery agent services were set aside; the appellant is entitled to the credit and consequential relief as per law.

Valuation of Customs House Agent (‘CHA’) service with reference to Section 67 of the Finance Act -reimbursable expenses -failed to consider the CBEC Circular No. 119/13/2009-ST dated 21.12.2009 regarding service tax valuation issues pertaining to CHA service - Whether the expenses recovered by the Respondent from their clients are liable to be included in the gross value charged for provision of service by invoking the provisions of Rule 5(1) of the Service Tax (Determination of Value) Rules, 2006.

Inclusion of expenses reimbursed by a CHA in the gross value of taxable service under Rule 5(1) of the Service Tax (Determination of Value) Rules, 2006. - HELD THAT:- The Tribunal held that the controversy is no longer res integra in view of the Hon'ble Supreme Court in Union of India v. Intercontinental Consultants & Technocrats Pvt Ltd [2018 (3) TMI 357 - SUPREME COURT], which declared Rule 5(1) ultra vires Section 67 because it attempted to include reimbursable expenditures within the valuation of 'such' taxable services. Applying that ratio, reimbursable expenses recovered by the service provider cannot be included in the taxable value of CHA services prior to the statutory amendment effecting such inclusion. [Paras 6, 8]

Rule 5(1) cannot be invoked to include reimbursable expenses in the gross value for service tax; such expenses are not includible under Section 67 as interpreted by the Supreme Court.

Effect of CBEC Circular No.119/13/2009 ST on valuation of CHA services and reimbursement charges. - HELD THAT: - The Tribunal relied on the Board's circular which sets out conditions under which charges over and above CHA service are to be excluded from taxable value (including requirement of actual reimbursement without mark up, separate invoicing/entries, and proof of nexus). The circular was held to support exclusion of reimbursable charges where its conditions are met and to govern disputes arising from 19 April 2006 onwards. [Paras 7]

The CBEC circular supports exclusion of certain reimbursable charges from the gross value of CHA services where its specified conditions are satisfied.

The Tribunal accepted the Adjudicating Authority's factual finding that the respondent received consideration in convertible foreign exchange for services rendered outside India and that such overseas income was not subjected to service tax. Consequently, expenses recovered on an actual basis in respect of those export/overseas services cannot be taxed as part of CHA services in India. [Paras 10, 11]

Expenses recovered in connection with overseas billing for services rendered outside India are not liable to service tax under CHA.

Final Conclusion: The Tribunal upheld the Commissioner's Orders in Original dismissing the service tax demands: reimbursable expenses cannot be included in the taxable value under Rule 5(1) in light of the Apex Court's decision, the Board's Circular No.119 supports exclusion where its conditions are met, and overseas billing expenses for services rendered outside India are not taxable under CHA; the Revenue's appeals are dismissed.

Export of services - beneficiary-location test - commission received in convertible foreign exchange - business auxiliary services - applicability of export of service rule 3(1)(iii) read with Section 65(19) of the Finance Act, 1994 and relevant administrative guidance (Circular No. 111/5/2009-ST) - Whether the service rendered by the appellants to their oversees entities are used outside India.

Export of services - used outside India - Services rendered by the appellant to its overseas group entities qualified as export of services because the beneficiary was located outside India and consideration was received in convertible foreign exchange - HELD THAT:- Since the beneficiary is located outside India and the consideration was received in foreign exchange, there should not be any doubt that the service provided by the appellant is used outside India. It is not the case of the department that the on-cite assignment of the employees was for concentration paid in Indian rupees. The mere fact that the services are rendered in India and in an office located in India cannot be a decisive factor in coming to a conclusion that the services were not exported. Other than alleging that the services were received in India, Revenue did not prove as to how the services were used in India and were not used outside India. Under the circumstances, the claim of the appellant cannot be brushed aside. We do not find any force in the argument of the revenue that the assignment of the employees being on-cite, it can be concluded that the services are used in India. We find that the phrase “on-cite” only indicates the place of working of the employees assigned by the appellants. It in no way conveys an understanding that the services rendered by the said assigned employees were used inside India.

The Tribunal applied the beneficiary-location test under the Export of Services Rules and related Circulars, holding that the relevant factor is the location of the service recipient and where the benefit of the service accrues, not the physical place of performance. The appellants demonstrated that employees were assigned to overseas entities, invoices were raised, and consideration was received in convertible foreign exchange; revenue did not prove that the services were used within India. The Tribunal also relied on earlier decisions of the Bench to conclude that on-site performance in India does not negate export when the recipient/beneficiary is abroad and payment is in foreign exchange.

In Glaxo Smithkline Asia Pvt Ltd [2023 (10) TMI 998 - CESTAT CHANDIGARH],to conclude that on-site performance in India does not negate export when the recipient/beneficiary is abroad and payment is in foreign exchange. [Paras 6, 7]

The services were held to be exported and therefore not liable to service tax as charged by the department.

Final Conclusion: The impugned order confirming service tax demand was set aside; the appeal is allowed as the services were held to be exports (recipient located abroad and payment in convertible foreign exchange) and the absence of a written agreement was immaterial. Consequential relief, if any, to follow as per law.

Disallowance of Cenvat credit - levy of service tax on Renting of Immovable Property Service - ambit of ‘input service’ under Rule 2(l) - Ownership of immovable property - nexus between input and output - sub-letting; permissive possession.

Renting of Immovable Property Service as output service despite transfer of ownership - Disallowance of cenvat credit availed in respect of rent collected for the period 18.06.2012 to 30.06.2012 - HELD THAT: - The Tribunal found on the undisputed facts that transfer of ownership on 18.06.2012 did not conclusively negate the landlord-tenant relationship or the provision of service by the appellant. Ownership is not a condition precedent for levy of the Renting of Immovable Property Service, and the invoice issued by the purchaser for the period 18.06.2012 to 30.06.2012 implied that the appellant had permissive possession and continued to provide the renting service to the tenant. Because the appellant did provide an output service of RIPS during the disputed period, the cenvat credit availed in relation to that output service was properly claimable. [Paras 6, 7]

The disallowance of cenvat credit was set aside and the appellant's claim for credit was held to be in order.

Final Conclusion: The impugned order denying cenvat credit was quashed; the Tribunal held that the appellant provided RIPS for 18.06.2012 to 30.06.2012 despite the sale and was therefore entitled to the cenvat credit, allowing the appeal with consequential benefits as per law.

Liable to pay service tax - Construction of residential complex - clarification in CBEC Circular No.108/02/2009-ST - Whether the appellants who rendered service of Construction of Residential Complex Service but registered under Works Contract Service during the period 01.04.2009 to 30.06.2010 are liable to pay service tax prior to 01.07.2010 under Works Contract Service.

Liability to pay service tax on works contract / construction services rendered during the period 01.04.2009 to 30.06.2010 -HELD THAT:- The Tribunal held that services of construction of residential complexes rendered prior to 01.07.2010 are not chargeable to service tax and applied the clarification in CBEC Circular No.108/02/2009-ST and the Tribunal's consistent precedents which treat such services as not taxable in the period before the explanation inserted w.e.f. 01.07.2010. The Tribunal summarised and followed earlier bench decisions in the case of Modi Ventrues vs. CCT, [2020 (3) TMI 1481 - CESTAT HYDERABAD], holding that where construction services were rendered prior to completion/transfer and before 01.07.2010 they amounted to self-service or fell within the non-taxable characterisation and therefore no service tax could be levied on works contract services for that period. [Paras 5, 7]

Appellants are not liable to pay service tax for services rendered in the period 01.04.2009 to 30.06.2010 and the impugned order is set aside.

Final Conclusion: The Tribunal allowed the appeal, holding that construction/works contract services rendered prior to 01.07.2010 (including the period 01.04.2009 to 30.06.2010) are not taxable in view of CBEC Circular No.108/02/2009-ST and consistent Tribunal precedents, and set aside the impugned adjudication accordingly.

Export of services - Denial of refund claims solely on account of minor or curable deficiencies in supporting invoices - deficiencies (unstamped/unsigned/copy invoices, incomplete addresses, change in vessel name, pre-inspection within place of removal) - Benefit of Notification No.41/2012-ST dated 29.06.2012 as amended by Notification No.1/2016-Service Tax dated 03.02.2016.

Whether refund claims can be denied solely on account of minor or curable deficiencies in supporting invoices -HELD THAT:- The Tribunal held that the defects identified in the supporting documents (such as incomplete address, unstamped/unsigned or photocopy invoices, omission of service tax registration number, altered vessel details and similar lacunae) were not substantive defects that affected the receipt or utilisation of the taxed services. Those omissions were curable and did not legally disentitle the appellant to the refund where delivery and use of the services remained undisputed. Consequently, the deficiencies noted after processing did not justify recovery of the refund or denial of the Cenvat credit that had been admitted earlier by the department. [Paras 6, 7, 8]

Deficiencies in the invoices were curable and did not disentitle the appellant to the refund; the orders denying/refunding recovery were set aside.

Entitlement to refund for services provided beyond the place of removal under Notification No.41/2012 as amended - HELD THAT:- The Tribunal noted that the amendment effected by Notification No.1/2016 substituted the relevant sub-clause and that the amended provision was capable of being applied retrospectively to entitle exporters to the benefit in respect of services provided beyond the place of removal. The appellant's claim that such amendment entitled them to the refund was accepted as part of the factual matrix where the services' provision and utilisation were not disputed. [Paras 4]

The appellant was entitled to the benefit of the amended provision in respect of services provided beyond the place of removal, supporting the grant of refund.

Final Conclusion: The Tribunal concluded that the refunds were improperly disallowed for curable documentary defects and that the appellant was entitled to benefit under the amended notification for services provided beyond the place of removal; the impugned orders were set aside and the appeals allowed.

Validity of revisional order - application of precedent of the supreme court - Reversal of CENVAT credit before utilization amounts to non availment of credit - precondition for availing exemption - exemption under Notification No.30/2004-C.E. - HELD THAT:- The Revisional Authority has basically relied on the circular dated 01.02.2007 (Annexure P-18) by which it was clarified that non-availment of credit on inputs is a precondition for availing exemption under this notification, and if manufacturers avail input tax credit, they would be ineligible for exemption under this notification and reversal of credit on a later date would not suffice to make them eligible for this exemption. The Revisional Authority did not notice the subsequent circular dated 08.11.2007 (Annexure P-19) by which the circular dated 01.02.2007 has been superseded because of the judgment of the Apex Court in the case of Bombay Dyeing [2007 (8) TMI 2 - SUPREME COURT]

The order passed by the Revisional Authority cannot be approved because the revisional authority did not consider the judgment passed by the Apex Court given in the case of Bombay Dyeing (supra) and circular dated 08.11.2007. Hence, the impugned order is unsustainable and accordingly, the petition is allowed and the impugned order dated 06.05.2010 (Annexure P-1) passed by the Ministry of Finance (Department of Revenue) (Revisional Authority) is set aside, and the order in the appeal is restored. No order as to cost.

Final Conclusion: The revisional order was set aside and the appellate order restored, the Court holding that reversal of CENVAT credit before utilization constitutes non-availment for the purpose of the exemption and that the Revisional Authority erred in ignoring the Supreme Court decision and the subsequent Board circular.

Refund claim of the CVD payment under transitional provisions of CGST Act - not able to take Cenvat credit of CVD due to introduction of GST regime - applicability of Section 11B limitation to transitional refund claims - imported raw materials of PP bags under advance licence.

Refund under transitional provisions of CGST Act - HELD THAT: - The Tribunal held that the refund claim arises from the transitional provisions of the CGST Act and not independently from Section 11B of the Central Excise Act; consequently the time limit in Section 11B(2) cannot be invoked to deny a refund specifically permitted under Section 142 of the CGST Act. The decision follows this Tribunal's earlier ruling in M/s Ishan Snax Private Limited [2026 (2) TMI 1076 - CESTAT KOLKATA] and the view taken in M/s. New Age Laminators Pvt. Ltd. [2022 (3) TMI 748 - CESTAT NEW DELHI] that where CVD/SAD credit is not available under the GST regime, an assessee is entitled to refund under the CGST transitional provisions, and denial on limitation grounds is impermissible. [Paras 3, 4]

The refund could not be rejected as time-barred under Section 11B and the impugned order was set aside.

Final Conclusion: The appeal was allowed and the refund claim of the appellant was held not to be barred by limitation under Section 11B, the impugned order was set aside and the refund claim was allowed.

Scope of exemption under Notification No.67/1995-CE for captively consumed inputs - Application of Rule 6 of Cenvat Credit Rules, 2004 and clause (vii) - binding effect of tribunal's own precedents.

Whether the appellants were entitled to exemption under Notification No.67/1995-CE for relays cleared for captive consumption in manufacture of control panels where Rule 6 obligations were complied with and clause (vii) applied - HELD THAT:- The Tribunal held that the issue was covered by earlier decisions in the appellant's own cases [2025 (12) TMI 554 - CESTAT CHENNAI] and by other precedent, which found that where the assessee complied with the provisions of Rule 6 of the Cenvat Credit Rules, 2004 and fell within clause (vii), the obligation to reverse credit or to make payment on a fixed percentage did not apply to the clearances in question. The Tribunal recorded that lower authorities' conclusions were self-contradictory when they admitted in original orders that Rule 6 was not applicable but still confirmed demands. The Revenue did not show that the cited tribunal decisions had been overruled. Applying those precedents, the Tribunal concluded the demands were not legally sustainable and followed judicial discipline to apply its prior consistent view. [Paras 4, 5, 6, 8, 9]

The demands were unsustainable; the impugned orders were set aside and the appeals allowed with consequential reliefs.

Final Conclusion: The Tribunal applied its earlier decisions in the appellant's own cases, held that compliance with Rule 6 and applicability of clause (vii) entitled the appellant to exemption under Notification No.67/1995-CE, set aside the impugned orders and allowed the appeals with consequential reliefs.

Eligibility of CENVAT credit for service tax on sales/agency commission as an input service - sole selling agreement - sales promotion and advertisement as components of marketing qualifying as input service - definition of "input service" in Rule 2(1) -invocation of extended period of limitation.

Eligibility of CENVAT credit - HELD THAT:- It is evident that the marketing activity always encompasses advertisement and sales promotion and the same are integral part and parcel of the marketing function and the activities of advertisement and sales promotion are not independent, exclusive, divorced or distinct from the marketing activity and marketing and promotion always go together. Further, following the ratio of the decision relied by the appellant in the matter of Federal Mugul TRP (India) Ltd. [2020 (11) TMI 893 - CESTAT BANGALORE], M/s. Zydus Lifesciences Ltd. [2023 (12) TMI 6 - SC ORDER] and the CBEC Circular vide F. No. 96/85/2015-CX1, dated 7-12-2015, we find that the appellant is eligible for cenvat credit on sales commission as claimed by them. Further we find that demand confirmed for the period from April 2015 to September 2015 and for the period from October 2015 to March 2015 were set aside by Commissioner (Appeals) as per the Order-in-Appeal No. 28/2021-22 dated 21.07.2022 and in the absence of any appeal challenging the said finding, following the ratio of the judgment of the Hon’ble Supreme Court in the matter of M/s. Marsons Fan Industries [2008 (1) TMI 290 - SUPREME COURT], the issue is no more res-integra. Thus, demands with interest and penalty as per impugned orders are unsustainable and impugned orders are liable to be set aside.

CENVAT credit on the service tax paid on the sales commission to the sole selling agent is allowable and the impugned demands on this ground are unsustainable.

Invocation of extended period of limitation - HELD THAT: - The Tribunal noted there was no allegation of suppression of facts to justify invocation of the extended period of limitation and, following the material and precedents relied upon by the appellant, held that the demands confirmed by invoking the extended period were not sustainable in law. [Paras 12, 15, 16]

The demands confirmed under the extended period of limitation are unsustainable and set aside.

Final Conclusion: The appeals are allowed; the Tribunal set aside the impugned orders, held that CENVAT credit on service tax paid on sales/agency commission to the sole selling agent is admissible as an input service (sales promotion/advertisement being integral to marketing), and directed that demands (including those confirmed by invoking the extended period) with interest and penalty are unsustainable.

Condonation of delay - Sufficient cause - delay of 522 days - Review petition - error apparent on the face of the record or any other ground of merit warranting reconsideration - HELD THAT:- On perusal of Office Report dated 26.02.2026, we find that there are certain defects in the Review Petition(s). The defects were communicated to the learned counsel on 31.01.2026 but the same have not been cured.

Application for listing Review Petition(s) in open Court is rejected.

There is a delay of 522 days in filing this Review Petition(s) which has not been satisfactorily explained.

Even otherwise, having carefully gone through the Review Petition(s), the order(s) under challenge and the papers annexed therewith, we are satisfied that there is no error apparent on the face of the record or any merit in the Review Petition(s) warranting reconsideration of the order impugned.

Accordingly, the Review Petition(s) are dismissed both on the ground of delay as well as on merits.

Pending application(s) shall stand disposed of.

Validity of exercise of revisional jurisdiction under Section 64 of the KVAT Act - disallowance of exemption claimed for subcontractor's turnover under the relevant rules - rejection of refund of TDS credit - levy interest and penalty.

Validity of exercise of revisional jurisdiction under Section 64 of the KVAT Act - Turnover exemption where subcontractor has discharged tax liability - HELD THAT:- The Court accepted the respondent's concession that the subcontractors had included the entire contract turnover in their returns and discharged the tax liability thereon. In view of that factual position and the respondent's fair submission, the Court held it unnecessary to examine the merits of the parties' contentions and concluded that the revisional orders under Section 64 could not be sustained. [Paras 8, 9, 10]

The impugned orders passed under Section 64 of the KVAT Act revising the Joint Commissioner (Appeals) orders and disallowing exemption in respect of the subcontracted turnover were set aside.

Final Conclusion: Appeals allowed and the orders passed under Section 64 of the KVAT Act for the Assessment Years 2013-14, 2014-15 and 2015-16 are set aside; no order as to costs.

Maintainability of prosecution against an individual partner without impleading the firm - Negotiable Instruments Act, 1881 - dishonour of a cheque - statutory scheme - preponderance of probabilities - strict compliance for penal provision - existence of a legally enforceable debt - rebuttal of presumption.

Whether a prosecution under Section 138 of the Negotiable Instruments Act can be maintained against an individual partner when the alleged liability arises from a transaction of a partnership firm that has not been impleaded - HELD THAT:- The Court held that where the admitted evidence and documentary record attribute the alleged liability to a partnership firm, the statutory scheme embodied in Section 141 (and its explanation) requires that the firm be arraigned as an accused before individual partners can be proceeded against for offences arising from the firm's transactions. The criminal liability of persons in charge is derivative and contingent upon the firm being before the Court; failure to implead the firm and to serve the statutory notice on it rendered the prosecution fundamentally defective. The Trial Courts' conviction of the petitioner in his personal capacity without examining or satisfying these statutory requisites amounted to non-application of mind and legal error. [Paras 16, 18, 20, 21, 26]

Conviction could not be sustained because the liability was shown to arise from the partnership firm and the firm was not impleaded or served with the statutory notice.

Rebuttal of presumption under Section 139 of the Negotiable Instruments Act - HELD THAT:- The Court reiterated that Section 139 creates a rebuttable evidential presumption but does not render it irrebuttable. The complainant's admission that the transaction and investment related to the partnership firm probabilised the defence that no personal liability of the accused existed. Once such a probable defence is raised on the record, the burden returns to the complainant to prove that the cheque discharged a personal, legally enforceable debt of the accused; the record lacked material to discharge that burden. [Paras 17, 22, 23, 24]

The presumption under Section 139 was rebutted on the materials and admissions, and therefore the prosecution failed to establish a personal legally enforceable liability of the petitioner.

Final Conclusion: The revisional court found fundamental legal infirmities in the prosecution - namely non-impleadment of the partnership firm whose transaction gave rise to the alleged liability and displacement of the Section 139 presumption by admissions on record - and allowed the revisional application, setting aside the conviction against the petitioner.

Territorial jurisdiction in negotiable instruments prosecutions - Misuse of security cheques obtained at the time of extending a loan facility - Dishonour of cheque - non-impleadment of the partnership firm - vicarious liability - security cheque doctrine - direct criminal liability of the drawer/signatory under Section 138 of the Negotiable Instruments Act - validity of demand notice and presentation of a cheque issued as security.

Whether the proceedings before the Judicial Magistrate First Class, Samalkha were vitiated for want of territorial jurisdiction under Section 142(2)(a) of the Negotiable Instruments Act -HELD THAT:- The court held that Section 142(2)(a) prescribes the territorial court in which a prosecution under Section 138 may be inquired into and tried, but non-compliance with that provision affects territorial jurisdiction and not the inherent competence of a Magistrate to try the offence. Where a Magistrate has taken cognizance in good faith despite an erroneous assumption of territorial jurisdiction, the irregularity falls within Clause (e) of Section 460(1) CrPC and is curable; Section 462 CrPC also prevents setting aside proceedings merely because they occurred in the wrong local area unless the error occasioned a failure of justice. Thus the assumed territorial defect does not warrant quashing of the proceedings absent a demonstrated failure of justice. [Paras 13, 14, 21]

The petition alleging want of territorial jurisdiction is rejected; the territorial irregularity is curable under Sections 460 and 462 CrPC and does not vitiate the proceedings.

Direct criminal liability of the drawer/signatory under Section 138 of the Negotiable Instruments Act - HELD THAT:- The court held that where the accused herself is the drawer and signatory of the cheque, criminal liability under Section 138 is direct and personal and does not depend on vicarious liability rules in Section 141. The complaint's averments show the petitioner issued and signed the cheque from a joint account and stood as guarantor/co-borrower; such act gives rise to direct statutory responsibility under Section 138 irrespective of the partnership's internal arrangements. Consequently, absence of impleading the partnership firm as an accused does not render the complaint unsustainable where the drawer personally issued the dishonoured cheque. [Paras 22, 24, 27, 31, 33]

The challenge based on vicarious liability and non-impleadment of the firm is rejected; prosecution may proceed against the petitioner as drawer/signatory under Section 138.

Validity of demand notice and presentation of a cheque issued as security - HELD THAT:- The court found no merit in objections to service or contents of the demand notice; once dispatch to the address in loan documents is established, statutory presumptions of service arise and mere clerical errors do not rebut that presumption. Further, a cheque issued as security, if presented in circumstances where a legally enforceable liability subsists and is dishonoured, attracts Section 138; the characterization as a security cheque does not automatically invalidate the notice. Disputes as to quantum or computation are matters for trial; at the prima facie stage the foundational requirements of Section 138 and proviso (b) are satisfied. [Paras 34, 35, 36, 37]

The objections to the demand notice and the contention that the cheque was a security cheque are dismissed; the complaint is not vitiated on these grounds.

Final Conclusion: The petition is dismissed. The High Court rejected challenges based on territorial jurisdiction, vicarious liability/non-impleadment of the firm, and defects in the demand notice or characterisation of the cheque; the criminal prosecution under Section 138 may proceed against the petitioner.