TaxTMI Updates e-Newsletter
Mar 29,2022

Refund from electronic cash/electronic liability register - statutory refund procedure under Section 54 of the CGST Act - utilisation of amounts in electronic ledger for future tax liability - recovery from third person under Section 79(1)(c) of the CGST Act and Rule 145 - provisional attachment and requirement of tangible material/formation of opinion - summary adjudication under Article 226 where disputed questions of fact exist

Refund from electronic cash/electronic liability register - statutory refund procedure under Section 54 of the CGST Act - summary adjudication under Article 226 where disputed questions of fact exist - Whether a writ of mandamus can be issued to direct refund of amounts lying in the petitioner's electronic cash/electronic liability register. - HELD THAT: - The Court held that refund of any unutilised balance in the electronic liability (cash) ledger is governed by the statutory refund scheme under Section 54 of the CGST Act read with Chapter X of the CGST Rules and must be pursued by the petitioner under that procedure. A contention that payments were obtained under coercion and should be summarily refunded raises disputed questions of fact which cannot be resolved in summary writ proceedings under Article 226. Amounts deposited in the electronic cash ledger may have been made by third parties on behalf of a registered person and cannot be ordered refunded outside the statutory mechanism. Consequently, no writ relief for immediate refund could be granted in the present summary proceeding; the petitioner must work out remedy under Section 54/Chapter X. The Court further noted that where there are serious allegations of fraudulent availment of input tax credit on bogus invoices, granting an immediate refund is inappropriate. [Paras 31, 33, 34, 37, 38]

Writ for mandamus directing refund is refused; petitioner must seek refund only in accordance with Section 54 of the CGST Act read with Chapter X of the CGST Rules and disputed factual questions cannot be decided in this writ.

Recovery from third person under Section 79(1)(c) of the CGST Act and Rule 145 - provisional attachment and requirement of tangible material/formation of opinion - Whether the invocation of Section 79(1)(c) (recovery from a third person) and related actions were legally sustainable at the present stage. - HELD THAT: - The Court observed that recovery under Section 79 must be exercised in consonance with Chapter XVIII of the CGST Rules, notably Rule 145 (procedure for recovery from a third person). While Section 79 provides modes of recovery, its invocation must follow the procedural safeguards and the statutory scheme. The Court found that at the present stage invocation of Section 79(1)(c) was premature given the ongoing investigation and the absence of final adjudication; the proper course is to proceed in accordance with the Rules and the scheme of the Act. [Paras 29, 31, 33]

Invocation of Section 79(1)(c) at this stage is premature; recovery must follow the procedure in Chapter XVIII/Rule 145 and be exercised in accordance with the statutory scheme.

Provisional attachment and requirement of tangible material/formation of opinion - issue of Show Cause Notice under Sections 73/74 and consequential adjudication - Direction on completion of investigation and further proceedings in respect of alleged fraudulent availment of input tax credit. - HELD THAT: - Having regard to the respondent's ongoing investigation and serious allegations of large-scale fraudulent availment of input tax credit, the Court directed that the investigation be completed and that if justified a proper show cause notice under Sections 73 or 74 be issued. The Court relied on the principle that provisional measures and attachments are draconian and must be preceded by formation of opinion based on tangible material; however, in the factual matrix here the Court refrained from independently adjudicating guilt or coercion and instead ordered statutory proceedings to follow. The petitioner was granted liberty to pursue statutory refund remedies and was required to reply to any show cause notice within the time prescribed by the Court. [Paras 24, 32, 33, 35, 36]

Investigation to be completed within three months and appropriate show cause notice under Sections 73/74 to be issued; petitioner may reply and pursue refund under Section 54, with refund subject to final outcome of adjudication.

Final Conclusion: Writ petition dismissed. Immediate mandamus for refund of amounts in the electronic liability register cannot be granted; refund must be sought under Section 54 read with Chapter X of the CGST Rules. Invocation of Section 79(1)(c) is premature and recovery must follow the procedural scheme in Chapter XVIII/Rule 145. Respondent directed to complete investigation and issue show cause notice within three months; consequences of refund or recovery will follow the outcome of statutory proceedings.

Placement of goods as supply - transfer of right to use as supply of services under Schedule II - consideration including monetary value of any act or forbearance - nexus between minimum purchase obligation and consideration - value of supply where consideration not wholly in money - binding nature of advance ruling

Placement of goods as supply - transfer of right to use as supply of services under Schedule II - consideration including monetary value of any act or forbearance - nexus between minimum purchase obligation and consideration - Placement of specified medical instruments at customers' premises under the Reagent Supply and Instrument Use Agreement constitutes a 'supply' under Section 7 of the CGST Act, 2017 and is taxable as supply of services. - HELD THAT: - The authority found that the activity involves transfer of the right to use instruments without transfer of title and therefore prima facie falls within Sl. No. 1(b) of Schedule II, treating it as supply of services. The transaction is commercially linked to the appellant's sale of reagents under a common agreement and thus occurs in the course or furtherance of business. The definition of 'consideration' in Section 2(31) expressly includes the 'monetary value of any act or forbearance' made in respect of, in response to, or for the inducement of a supply. The contractual covenants-exclusive purchase obligation and monthly minimum purchase obligation with a contractual right to recover the deficit-constitute an act/forbearance having monetary value and are linked to the placement of instruments. Consequently, the obligation to purchase reagents (and the attendant forbearance) supplies the requisite consideration for the placement of instruments. The authority also observed that valuation and timing issues arising from non-monetary consideration are addressable under Section 15 and Rules 27-32. Given these conclusions, the placement satisfies all essential ingredients of 'supply' under Section 7 read with Section 2(31). [Paras 6]

The placement of specified medical instruments at hospitals/labs is a supply of services attractable to GST.

Movement of goods otherwise than by way of supply - binding nature of advance ruling - The movement of instruments in pursuance of the agreement does not constitute 'movement of goods otherwise than by way of supply' within the meaning of the Act; the placement is a taxable supply. - HELD THAT: - Having concluded that the placement of instruments is a supply for consideration (by reason of the linked minimum purchase and related covenants), the authority held that the movement of the instruments to customers under the agreement cannot be treated as movement otherwise than by way of supply. The authority also noted that advance rulings of other States are not binding on this authority and proceeded to apply the statutory definitions and the agreement's terms to reach its conclusion. [Paras 6]

The movement of the instruments is not 'otherwise than by way of supply'; it forms part of the taxable supply concluded above.

Final Conclusion: The Appellate Authority upholds the Advance Ruling (with modifications): placement of the appellant's instruments at unrelated hospitals/labs under the agreement constitutes a taxable supply of services under the CGST Act, 2017; the movement is not 'otherwise than by way of supply'. The appeal is rejected and the Advance Ruling stands affirmed as modified.

Composite supply - Works contract treated as supply of services - Determination of tax liability on composite and mixed supplies - Nil rate benefit for composite supply to Government where value of goods is not more than 25% of composite supply - Advance ruling - applicability conditioned on factual and documentary matrix

Composite supply - Nil rate benefit for composite supply to Government where value of goods is not more than 25% of composite supply - Advance ruling - applicability conditioned on factual and documentary matrix - Whether the applicant sub-contractor is entitled to the same 'nil' rate under Clause 3A of Notification No. 02/2018 in respect of the proposed contract - HELD THAT: - The Authority examined the statutory elements necessary for applicability of Clause 3A: existence of a composite supply, the value of goods not exceeding 25% of the composite supply, supply to a Government entity, and that the activity relates to functions entrusted to Panchayats/Municipalities. The applicant had only applied for participation as a sub-contractor and produced the Notice Inviting Tender; no contract/agreement, work order, scope of work, or documentary evidence was placed on record to establish whether the supply to be performed by the applicant would be a composite supply or the proportionate value of goods vis-a -vis services. In the absence of a clear scope of work, contractual documents, evidence of the principal contractor's entitlement under Clause 3A, or particulars to determine whether goods constitute not more than 25% of the composite supply, the Authority was unable to apply the legal tests under Section 8 and the definition of works contract. Given the lack of material facts and documentary evidence necessary to determine the components and valuation of the proposed supply, the Authority refrained from making a ruling on the entitlement to the nil rate under Clause 3A. [Paras 11, 13, 14]

No ruling is extended due to absence of requisite contractual documents and factual material to determine applicability of Clause 3A of Notification No. 02/2018.

Final Conclusion: The Authority declined to rule on whether the sub-contractor would attract the 'nil' rate under Clause 3A of Notification No. 02/2018 because the applicant did not furnish the contract, scope of work, or other documentary evidence necessary to determine whether the proposed supply satisfies the statutory conditions for the exemption.

Advance ruling - Scope of advance ruling - Maintainability of application for advance ruling - Supplies undertaken or proposed to be undertaken - Exclusion of past transactions from advance ruling - GST Act

Advance ruling - Scope of advance ruling - Maintainability of application for advance ruling - Supplies undertaken or proposed to be undertaken - Exclusion of past transactions from advance ruling - Whether the Authority for Advance Ruling can adjudicate the applicant's claim to exemption in respect of supplies effected prior to filing the advance ruling application. - HELD THAT: - The Authority examined the definition of "advance ruling" under Section 95(a) of the CGST Act and held that the scope of an advance ruling is confined to supplies "being undertaken or proposed to be undertaken" by the applicant. The applicant sought a ruling in respect of supplies effected during the period 01.04.2019 to 31.03.2021, whereas the application for advance ruling was filed on 06.07.2021. Because the subject question relates to transactions already undertaken prior to filing the application, it falls outside the statutory scope of matters on which the Authority may give an advance ruling. Consequently the Authority cannot decide on the availability of the exemption for those past supplies. [Paras 7, 8, 9, 10]

Application for advance ruling is not maintainable and is rejected as the questions relate to supplies undertaken prior to filing the application.

Final Conclusion: The advance ruling application is rejected as not maintainable because the Authority cannot pronounce on the availability of the exemption for supplies already effected during 01.04.2019 to 31.03.2021; advance rulings are confined to supplies being undertaken or proposed to be undertaken.

Reopening of assessment under Section 148 vis-a -vis assessment under Section 153A/153C - Interim stay of assessment proceedings

Reopening of assessment under Section 148 vis-a -vis assessment under Section 153A/153C - Interim stay of assessment proceedings - Whether proceedings in furtherance of the impugned notice dated 31.03.2021 issued under Section 148 should be stayed pending consideration of the petitioner's contention that the assessing authority ought to have proceeded under Section 153A read with Section 153C. - HELD THAT: - The Court recorded the petitioner's contention that the assessing authority could not have adopted the procedure under Section 148 because the action was taken on the basis of material revealed during assessment proceedings of another entity (DRA Group, Ahmedabad), and that any proceedings should be under the scheme of Section 153A read with Section 153C. On hearing the parties on the interim application, the Court found it appropriate to preserve the status quo by staying all proceedings in furtherance of the impugned notice dated 31.03.2021 until final disposal of the connected matters. The stay was granted as an interim measure without deciding the substantive question raised regarding the correct statutory route for assessment/reopening.

All proceedings in furtherance of the impugned notice dated 31.03.2021 are stayed; matters are directed to be heard together and listed for final disposal on 10.05.2022.

Final Conclusion: Interim stay granted of all proceedings pursuant to the impugned reopening notice dated 31.03.2021; the petition is to be heard with connected writ petition and listed for final disposal on 10.05.2022.

Re-opening of assessment under Section 148 - reasons to believe for initiation of proceedings under Section 147/148 - reliance on third-party statement as sole basis for reassessment - retraction of statement and its effect on sufficiency of material to form belief

Re-opening of assessment under Section 148 - reasons to believe for initiation of proceedings under Section 147/148 - reliance on third-party statement as sole basis for reassessment - retraction of statement and its effect on sufficiency of material to form belief - Validity of the notice issued under Section 148 for AY 2017-18 and the order rejecting objections where the sole basis was a statement of the assessee's husband which was subsequently retracted. - HELD THAT: - The Court examined the material recorded as the basis for forming reasons to believe and found that the only ground for re-opening was the statement of the petitioner's husband recorded during survey, which attributed additional income to the petitioner. The husband later retracted that statement. In the absence of any other independent material on record corroborating escapement of income, the retracted statement cannot furnish a valid basis to form the requisite belief under Section 147/148. Applying the court's prior approach in similar circumstances, retraction of the pivotal statement resulted in absence of material to warrant re-opening the assessment; accordingly the order rejecting objections and the notice under Section 148 could not be sustained. [Paras 9, 10, 11, 12, 13]

Impugned order rejecting objections and the notice under Section 148 for AY 2017-18 set aside for want of any material beyond a retracted statement to justify re-opening.

Final Conclusion: Writ allowed; the order rejecting objections (Annexure-'N') and the Section 148 notice (Annexure-'E') quashed for lack of any material other than a retracted statement to form the belief necessary to reopen assessment for AY 2017-18.

Adjustment of refund under Section 245 - Right to refund under intimation under Section 143(1) - Stay of tax demand on deposit of 20% - Objections to notice under Section 245 and reconsideration

Adjustment of refund under Section 245 - Stay of tax demand on deposit of 20% - Objections to notice under Section 245 and reconsideration - Validity of adjustment of the refund for AY 2019-20 against a demand for AY 2017-18 which is the subject matter of appeal and stayed on deposit of 20% - HELD THAT: - The court found that the Department had already adjusted the refund pursuant to the intimation under Section 245 but the petitioner had lodged specific objections to that notice. Given that the demand for AY 2017-18 is the subject matter of appeal and a stay had been granted subject to deposit of 20% of the tax demand, the court did not finally adjudicate the merits of whether adjustment was permissible in these circumstances. Instead, the court set aside the adjustment already effected and relegated the matter to the Authority to reconsider the intimation under Section 245 after taking into account the petitioner's objections (Annexure-K Series). The Authority is directed to complete the reconsideration and pass appropriate orders within six weeks from release of the order, and if the petitioner is found entitled to a refund, to release it expeditiously.

Adjustment under Section 245 set aside; matter remitted to respondents to reconsider the Section 245 intimation after considering the petitioner's objections and pass orders within six weeks, with refund to be released if entitled.

Final Conclusion: The writ petition is disposed of by setting aside the refund adjustment made under the Section 245 intimation and directing the respondents to reconsider the matter in light of the petitioner's objections within six weeks; if entitlement to refund is established, the refund shall be released expeditiously.

Applicability of substituted reassessment scheme (Finance Act, 2021) to notices issued after 01.04.2021 - Non-survival of pre-amendment reassessment provisions - Requirement to follow Section 148A procedure before issuance of notice under Section 148 - Limitation proviso preventing revival of time-barred notices - Invalidity of CBDT explanatory notifications exceeding delegated legislative power

Applicability of substituted reassessment scheme (Finance Act, 2021) to notices issued after 01.04.2021 - Non-survival of pre-amendment reassessment provisions - Notices under Section 148 issued after 01.04.2021 must comply with the reassessment scheme introduced by the Finance Act, 2021 and pre-amendment provisions do not continue to govern reopening for periods prior to that date. - HELD THAT: - The Court accepted the view that substitution by the Finance Act, 2021 effected a repeal of the prior reassessment provisions so that those provisions ceased to have effect after substitution. The new scheme materially departs from the earlier law (notably by introducing Section 148A and altering time limits) and there is no indication that the legislature intended the pre-amendment provisions to survive for past assessment years. The proviso to the substituted limitation provision demonstrates that notices issued after 01.04.2021 must be governed by the substituted scheme and cannot revive notices that were time-barred under the prior law. Consequently, notices issued after 01.04.2021 without adhering to the substituted scheme are invalid. [Paras 36, 37]

Notices issued after 01.04.2021 must be in accordance with the reassessment provisions substituted by the Finance Act, 2021; pre-amendment provisions do not survive for issuance of such notices.

Requirement to follow Section 148A procedure before issuance of notice under Section 148 - Limitation proviso preventing revival of time-barred notices - Notices issued after 01.04.2021 without following the procedural enquiry prescribed by Section 148A and in reliance on extended limitation under substituted Section 149(1)(b) are invalid. - HELD THAT: - The substituted scheme places an obligation on the Assessing Officer to conduct the preliminary steps prescribed by Section 148A before issuing a notice under Section 148. The first proviso to substituted Section 149(1) prevents the revenue from invoking the extended limitation retrospectively to revive notices which had become time-barred under the earlier law. Where notices were issued after 01.04.2021 without compliance with Section 148A and by seeking to rely on the substituted extended limitation, such notices do not satisfy the statutory scheme and are therefore invalid. [Paras 37]

Notices issued after 01.04.2021 without observing the Section 148A procedure and by attempting to rely on the extended limitation are bad in law.

Invalidity of CBDT explanatory notifications exceeding delegated legislative power - The explanatory clarifications in the CBDT notifications dated 31.03.2021 and 27.04.2021, to the extent they sought to preserve or defer application of pre-amendment reassessment provisions, are ultra vires and invalid. - HELD THAT: - The notifications were issued under delegated power conferred by the Relaxation Act, 2020 to extend time limits; that delegation did not empower the CBDT to alter, clarify so as to change or preserve the substantive effect of the Income Tax Act's reassessment provisions. By introducing an explanation that the pre-amendment provisions would apply for issuance of notices, the notifications travelled beyond the scope of the delegated power and attempted to alter the statutory scheme; such subordinate legislation cannot amend or override the parent Act and is therefore unconstitutional and invalid. [Paras 38, 40, 41]

The CBDT explanations in the cited notifications are beyond the delegated power and are declared invalid.

Final Conclusion: The writ petitions are allowed; the impugned notices issued after 01.04.2021 are quashed as invalid for failure to comply with the substituted reassessment scheme introduced by the Finance Act, 2021, and the CBDT notifications' explanatory clarifications purporting to preserve pre-amendment provisions are held ultra vires and set aside.

Disallowance under section 14A read with Rule 8D - Recording of satisfaction by the Assessing Officer before invoking section 14A - Apportionment of interest expenses and netting of interest income - Carry forward and set-off of speculation loss against speculation income

Disallowance under section 14A read with Rule 8D - Recording of satisfaction by the Assessing Officer before invoking section 14A - Apportionment of interest expenses and netting of interest income - Deletion of disallowance made under section 14A read with Rule 8D was justified and the CIT(A)'s order deleting the addition was sustained. - HELD THAT: - The Tribunal noted that the AO had not recorded the mandatory satisfaction required before invoking section 14A read with Rule 8D. The facts showed no fresh investment in shares during the year (opening investment substantially higher than closing) and the assessee had made a suo moto disallowance at 0.5% of average investment. The Tribunal agreed with the CIT(A)'s reliance on precedent and the principle that where assessee's own funds exceed investments yielding exempt income, and where netting of interest income and interest expense results in a positive net interest income, no disallowance under section 14A is called for. Given these findings, Rule 8D(ii) was not attracted in the year under consideration and the additional disallowance made by the AO was to be deleted. [Paras 6, 7, 9]

The disallowance of Rs. 2,31,057/- under section 14A r.w. Rule 8D (over and above the suo moto 0.5% disallowance already made) is deleted and the CIT(A)'s order is confirmed.

Carry forward and set-off of speculation loss against speculation income - Direction to the AO to verify and deal with the claimed carry forward of speculation loss in accordance with law was sustained for statistical purposes. - HELD THAT: - The assessee sought carry forward of a speculation loss arising on commodity exchange for set off in future years. The CIT(A) directed the AO to verify the amount of speculation loss in accordance with law and allowed carry forward subject to the statutory restriction that such losses, if established, may be set off only against future speculation income. The Tribunal found no infirmity in permitting the AO to proceed as per law and declined to interfere with the limited direction given by the CIT(A). [Paras 11, 12, 13]

The matter is remitted to the AO for verification and, if established, the speculation loss may be carried forward and set off only against speculation income in accordance with law.

Final Conclusion: The appeal filed by the Revenue is dismissed; the CIT(A)'s deletion of the section 14A disallowance is upheld and the CIT(A)'s direction to verify the claimed speculation loss for carry forward is sustained.

Bogus purchases - addition under section 69C - reopening of assessment under section 147 - burden of proof on the assessee to establish genuineness of purchases - estimation of concealed profit by applying a reasonable gross profit percentage - use of third party information and distinguishability of precedents

Bogus purchases - addition under section 69C - burden of proof on the assessee to establish genuineness of purchases - estimation of concealed profit by applying a reasonable gross profit percentage - use of third party information and distinguishability of precedents - Whether the entire recorded purchases from certain suppliers should be added as income for Assessment Year 2009-10 or whether only a portion representing estimated profit should be taxed - HELD THAT: - The Tribunal found that the assessment was reopened on information from investigation authorities that the assessee had taken accommodation entries. Notices under section 133(6) returned undelivered and the AO could not trace certain suppliers, leading to treatment of the purchases as non genuine. However, the assessee produced purchase invoices, ledger entries, bank payment evidence and corresponding sales invoices showing that the purchases had been reflected in sales. The CIT(A) and the Tribunal accepted that, on the facts, taxing the full amount of purchases was not justified and instead a reasonable estimate of profit embedded in the bogus purchases should be brought to tax. The Tribunal distinguished authorities relied upon by Revenue (including NK Proteins and others) on the ground that those cases involved materially different incriminating evidence (seizures, blank cheque books, vouchers and other search/seizure material) which are absent here. In view of the assessee's documentary production and the absence of the extreme factual matrix present in the cited precedents, the Tribunal upheld the CIT(A)'s direction to treat 12.5% of the identified bogus purchases as the taxable addition, rejecting the assessee's contention to restrict addition to only 2% and Revenue's contention for 100% addition. The Tribunal noted the assessee had earlier conceded to a 5% addition before the CIT(A), and that estimating a profit at 12.5% was reasonable on the material on record. [Paras 11, 12, 13, 14]

The Tribunal dismissed both Revenue's appeal and the assessee's cross appeal for Assessment Year 2009-10 and upheld an addition equal to 12.5% of the identified bogus purchases.

Bogus purchases - reopening of assessment under section 147 - estimation of concealed profit by applying a reasonable gross profit percentage - Whether the same approach as adopted for Assessment Year 2009-10 applies to Assessment Year 2010-11 - HELD THAT: - The Tribunal recorded that the facts for Assessment Year 2010-11 are identical to those of 2009-10. For the reasons earlier articulated in relation to AY 2009-10 - including information from investigation, non traceability of suppliers, the assessee's production of transactional documents and corresponding sales, and the distinguishability of adverse precedents relied upon by Revenue - the Tribunal applied the same conclusion to AY 2010-11. [Paras 15, 16]

All appeals relating to Assessment Year 2010-11 are dismissed and the reasoning and result for AY 2009-10 are applied to AY 2010-11.

Final Conclusion: On the facts, where purchases from certain suppliers could not be traced but the assessee produced purchase invoices, bank payments and corresponding sales, the Tribunal upheld the CIT(A)'s estimation approach and confirmed an addition equal to 12.5% of the identified bogus purchases for Assessment Year 2009-10 and applied the same conclusion to Assessment Year 2010-11; all appeals are dismissed.

Assessment under section 153A where original assessment had attained finality - no addition permissible in absence of incriminating material found during search - reiteration of completed assessment in case of unabated assessment - scope of exercise of power under section 263 to reopen completed assessment post-search - disallowance under section 14A and Rule 8D in proceedings under section 153A

Assessment under section 153A where original assessment had attained finality - no addition permissible in absence of incriminating material found during search - reiteration of completed assessment in case of unabated assessment - scope of exercise of power under section 263 to reopen completed assessment post-search - Whether the Pr. CIT was justified in invoking section 263 to cancel orders passed under section 143(3) read with section 153A(1)(b) for the assessment years 2007-08 and 2008-09 where original assessments had attained finality and no incriminating material was found during search. - HELD THAT: - The Tribunal found that for both assessment years the original assessments had been completed before the search and no incriminating material was discovered during the search operations. Applying the settled principle that where an assessment has not abated and no fresh incriminating material is unearthed in search proceedings, the Assessing Officer completing assessment under section 153A cannot disturb the completed assessment, the Tribunal held that the Pr. CIT erred in holding the assessments to be erroneous and prejudicial and in issuing directions under section 263. The Tribunal relied on consistent precedent to the effect that additions in unabated assessments are permissible only if based on tangible, cogent incriminating material found during search; absent such material the previously completed assessment must be reiterated. Although the Pr. CIT had directed verification on foreign exchange difference and on disallowance under section 14A/Rule 8D, the Tribunal concluded that initiation of proceedings under section 263 was not justified in the facts of these cases where no material from the search supported disturbing the completed assessments. [Paras 5, 6, 10]

The Tribunal allowed the appeals, set aside the orders passed under section 263 and upheld reiteration of the completed assessments for AYs 2007-08 and 2008-09.

Final Conclusion: The appeals are allowed: where original assessments had attained finality and no incriminating material was found in search, the Pr. CIT's exercise of jurisdiction under section 263 to cancel the section 143(3) read with section 153A(1)(b) orders was held to be erroneous and the completed assessments were reiterated.

Exemption under section 11(2) - filing of Form No.10 - processing under section 143(1) - electronic furnishing of Form No.10 effective from 1.4.2016 - rectification under section 154 - rule of consistency

Exemption under section 11(2) - filing of Form No.10 - processing under section 143(1) - electronic furnishing of Form No.10 effective from 1.4.2016 - rectification under section 154 - rule of consistency - Whether denial of the deduction claimed under section 11(2) while processing the return under section 143(1) was erroneous where the assessee had furnished Form No.10 physically within time - HELD THAT: - The Tribunal found on the record that the assessee, a trust registered under section 12A, had filed the return declaring nil income and had furnished Form No.10 physically within the prescribed time, which was acknowledged by the Assessing Officer. The AO denied the claim in the section 143(1) intimation solely on the ground that Form No.10 was not filed online. Rule 17, relied upon by the assessee, makes electronic furnishing obligatory only for assessment years beginning on or after 1 April 2016; it therefore did not apply to the year under challenge. In those circumstances the AO erred in denying the exemption, and the CIT(A) erred in dismissing the rectification appeal under section 154. The Tribunal also noted that earlier similar relief had been allowed and that the revenue authorities ought to have followed the rule of consistency. Accordingly the Tribunal allowed the appeal but directed the AO to rectify the order and allow the claim under section 11(2) after due verification of the facts asserted by the assessee.

The denial of deduction under section 11(2) was erroneous; the appeal is allowed and the AO is directed to rectify the order and grant the exemption after verification.

Final Conclusion: Appeal allowed; order of the Assessing Officer (and the CIT(A) in upholding it) quashed to the extent of denying the section 11(2) claim - AO directed to rectify the assessment and allow the claim after due verification.

Treatment of profit from share transactions as business income or capital gains - application of CBDT Circular No. 6/2016 dated 29.02.2016 - verification of facts and evidentiary support for delivery/off market transactions and STT credit - credit for Security Transaction Tax (STT) - exemption of dividend under section 10(35) and section 10(38)

Treatment of profit from share transactions as business income or capital gains - application of CBDT Circular No. 6/2016 dated 29.02.2016 - verification of facts and evidentiary support for delivery/off market transactions and STT credit - Whether the profits/losses from the assessee's share and derivatives transactions (STCG, LTCG and speculation profit) are to be assessed as business income or as capital gains-remanded for fresh consideration. - HELD THAT: - The Tribunal noted that the Assessing Officer had treated the assessee's share and derivatives profits as business income and the CIT(A) upheld that treatment subject to STT credit. The assessee relied upon CBDT Circular No.6/2016 and subsequent Gujarat High Court decisions, but those authorities were not available to the AO or CIT(A) when they decided the matter. In view of this, the Tribunal set aside the CIT(A)'s order on this issue and restored the matter to the file of the Assessing Officer for fresh adjudication. The AO is directed to verify the relevant facts (including delivery evidence, demat records, nature and frequency of transactions, and STT payments), consider the applicability of CBDT Circular No.6/2016 and the cited High Court decisions, and decide the classification afresh after giving the assessee proper and sufficient opportunity of hearing. The Tribunal therefore did not decide the classification on merits but required factual re examination and legal application in light of the later circular and decisions. [Paras 8]

Issue remanded to the Assessing Officer to decide afresh in accordance with law, verifying facts and giving the assessee opportunity to be heard, having regard to CBDT Circular No.6/2016 and the relevant High Court decisions; STT credit to be examined.

Exemption of dividend under section 10(35) and section 10(38) - Whether the addition of dividend income treated as business income was sustainable. - HELD THAT: - The CIT(A) examined the Assessing Officer's treatment of dividend receipts as business income and, applying the statutory exemptions, deleted the addition in respect of dividend income under the provisions relating to exempt dividends. The Tribunal did not disturb this conclusion of the CIT(A) in its order and did not direct any further reconsideration on this point.

The deletion of the addition of dividend income as held by the CIT(A) is sustained.

Final Conclusion: The appeal is partly allowed for statistical purposes. The Tribunal sustains the deletion of the addition of dividend income but sets aside the CIT(A) order on the classification of profits from share and derivatives transactions and directs remand to the Assessing Officer for fresh consideration in light of CBDT Circular No.6/2016 and the relevant Gujarat High Court decisions, with opportunity to the assessee to be heard.

Corpus donation - Voluntary contribution (grants in aid) - Proviso to section 2(15) (commerciality/business test) - Treatment of government grants in aid for charitable trusts - Application of income for charitable purposes and capital expenditure - Entitlement to depreciation on assets applied for charitable purposes (prospective effect of amendment to section 11(6))

Corpus donation - Voluntary contribution (grants in aid) - Proviso to section 2(15) (commerciality/business test) - Treatment of government grants in aid for charitable trusts - Whether the government grants of Rs. 6,18,22,000 received by the assessee and credited to corpus fund constituted taxable income or constituted corpus donations not chargeable to tax - HELD THAT: - The Tribunal found that the assessee is a registered charitable trust whose objects-testing, calibration and certification for the public benefit-are not disputed. The sanction letters and grant documents show that the grants were given for specific projects (infrastructure, antenna testing laboratory, upgrading facilities and strengthening calibration/test facilities) consonant with the objects of the trust. Applying the ratio of the jurisdictional decisions relied upon (including Gujarat Safai Kamdar Vikas Nigam) and the decision of the Delhi High Court in Bureau of Indian Standards (on incidental receipts and non commercial character), the Tribunal held that grants made to the trust under the scheme for implementation of specified projects cannot be treated as income merely because they were not expressly labelled as corpus by the donor. The Tribunal therefore accepted that the grants constituted corpus fund received for specific projects and were not exigible to tax in the hands of the trust. [Paras 15]

The grants of Rs. 6,18,22,000 were held to be corpus donations forming part of corpus fund and not taxable income; Revenue's ground is dismissed.

Application of income for charitable purposes and capital expenditure - Verification and apportionment between corpus and income - Whether the expenditure/capital acquisition of Rs. 1,10,04,394 claimed as application of income is allowable and the manner in which the Assessing Officer should verify and allow such expenditure - HELD THAT: - The Tribunal treated this issue as consequential to the finding on the corpus nature of the grants. Following the CIT(A)'s direction, the Tribunal directed that the Assessing Officer must verify whether the capital expenditure claimed was financed from corpus or from the income of the trust; only the portion actually applied out of income is allowable as application of income under section 11. The Tribunal upheld the CIT(A)'s direction to the AO to calculate and allow only that part of the expenditure incurred from the trust's income and to include capital expenditure in the computation of application of income as necessary. The matter therefore requires factual verification and quantification by the Assessing Officer in accordance with the direction. [Paras 18, 19]

Direction to the Assessing Officer to verify and apportion the expenditure between corpus and income stands; only the portion applied out of income shall be allowed-issue remanded for quantification/verification as directed.

Entitlement to depreciation on assets applied for charitable purposes (prospective effect of amendment to section 11(6)) - Application of income for charitable purposes and allowance of depreciation under section 32 - Whether the assessee is entitled to claim depreciation of Rs. 5,58,37,346 on assets whose cost had been allowed as application of income for charitable purposes for AY 2014 15 - HELD THAT: - Both parties accepted that the Supreme Court decision in CIT v. Rajasthan & Gujarati Charitable Foundation Poona governs the issue. That decision held that where cost of assets has been allowed as application of income under section 11(1)(a), depreciation under section 32 is also allowable; the Finance (No.2) Act, 2014 amendment to section 11(6) which prohibits such depreciation operates prospectively from AY 2015 16. As AY 2014 15 predates the amendment's effective year, the Tribunal followed the Supreme Court ratio and directed the Assessing Officer to allow the claim for depreciation. [Paras 21]

Assessee's claim for depreciation of Rs. 5,58,37,346 is allowed in accordance with the Supreme Court precedent; assessee's appeal is allowed on this issue.

Final Conclusion: The Tribunal dismissed the Revenue's appeal and upheld the CIT(A)'s order holding the government grants of Rs. 6,18,22,000 to be corpus donations not chargeable to tax; it upheld the CIT(A)'s direction to the Assessing Officer to verify and apportion the capital expenditure between corpus and income (remanded for quantification/verification); and it allowed the assessee's appeal by directing allowance of depreciation for AY 2014 15 in accordance with the Supreme Court's decision.

Penalty under section 271D - reasonable cause under section 273B - contravention of section 269SS - journal entries vis-a -vis account payee cheques and bank drafts - assignment of receivables / squaring up of transactions as business exigency - reliance on coordinate bench and High Court precedents

Penalty under section 271D - reasonable cause under section 273B - Deletion of penalty under section 271D upheld on the ground of reasonable cause under section 273B. - HELD THAT: - The Tribunal examined the facts and the reasoning of the CIT(A) and found that the journal entries in issue were passed as part of ordinary business transactions-assignment of receivables, squaring up of mutual liabilities and administrative conveniences-and there was no finding of mala fides or introduction of unaccounted income. In these circumstances, and following the reasoning of coordinate bench decisions and relevant High Court authority, the behaviour explained by the assessee amounted to a reasonable cause within the meaning of section 273B, rendering imposition of penalty under section 271D inappropriate. Consequently the Tribunal confirmed the deletion of the penalty for the assessment years under appeal. [Paras 13, 14, 15, 18]

Penalty levied under section 271D deleted as CIT(A)'s finding of reasonable cause under section 273B is affirmed.

Journal entries vis-a -vis account payee cheques and bank drafts - contravention of section 269SS - Journal entries treated as adjustments/assignments in books and not necessarily equivalent to acceptance of loan by cash or non banking modes attracting penal consequences. - HELD THAT: - The Tribunal accepted the CIT(A)'s factual conclusion that the entries were for adjustment/assignment of receivables, consolidation/squaring up and administrative purposes, and that the assessing officer had not doubted the genuineness of underlying transactions in assessment. While journal entries may fall within the literal ambit of section 269SS in some cases, on these facts they did not reflect receipt of cash loans nor any tax evasion intent; therefore journal entries constituted a mode of business adjustment which, coupled with honest belief rooted in prior decisions, supported the conclusion of reasonable cause. [Paras 13, 14]

Journal entries held to be business adjustments/assignments and not grounds for sustaining penalty under section 271D.

Reliance on coordinate bench and High Court precedents - assignment of receivables / squaring up of transactions as business exigency - Reliance on coordinate bench and High Court decisions to conclude reasonable cause was appropriate and did not render the CIT(A)'s order perverse. - HELD THAT: - The Tribunal noted that identical issues had been considered by coordinate Benches and that the CIT(A) had applied the legal principles distilled from those decisions (including the Bombay High Court's treatment of 'reasonable cause' and Tribunal precedents identifying categories of journal entries constituting reasonable cause). The Revenue did not point to any distinguishing material facts or malafides that would warrant departing from those precedents. Consequently the Tribunal found no infirmity in relying on the said authorities to uphold deletion of penalty. [Paras 13, 14]

Reliance on precedents was valid; the CIT(A)'s orders are confirmed and the Revenue's contention of perversity is rejected.

Final Conclusion: Both appeals filed by the Revenue for Assessment Years 2013-14 and 2014-15 are dismissed and the deletions of penalty under section 271D made by the CIT(A) are affirmed.

Allowability of ESOP expense as business expenditure under Section 37(1) of the Income Tax Act - accrued liability and recognition of employee share based payment expense - notional loss versus revenue expenditure - precedential effect of Special Bench and High Court decisions on ESOP claims - withdrawal of challenge to addition under Section 14A read with Rule 8D

Allowability of ESOP expense as business expenditure under Section 37(1) of the Income Tax Act - accrued liability and recognition of employee share based payment expense - notional loss versus revenue expenditure - precedential effect of Special Bench and High Court decisions on ESOP claims - Deletion of addition of Rs. 4,99,46,617/- disallowing ESOP expenses accounted in profit and loss for the year ended 31.03.2013. - HELD THAT: - The Tribunal examined whether the difference between fair market value of shares and exercise/offer price accounted as ESOP cost constituted a deductible business expense under Section 37(1) or was a notional/capital expenditure. The assessee had accounted the ESOP cost in the audited financial statements in accordance with SEBI guidelines and relevant accounting guidance, spreading the cost over the vesting period. The Tribunal found existing precedents - including the Special Bench decision in Biocon Ltd. (affirmed by the Karnataka High Court) and jurisdictional High Court decisions in Lemon Tree Hotels and New Delhi Television Ltd., as followed by a Coordinate Bench of this Tribunal in People Strong HR Services - to be squarely applicable. Those decisions treat the employee discount as consideration for services (revenue expenditure), recognize the liability as ascertainable though quantified on exercise, and hold it deductible under Section 37(1). Neither party pointed to distinguishing facts. Applying that consistent precedent, the Tribunal directed deletion of the addition, holding in favour of the assessee.

Addition of Rs. 4,99,46,617/- on account of ESOP expense deleted; appeal allowed on this issue.

Withdrawal of challenge to addition under Section 14A read with Rule 8D - Ground challenging the addition made under Section 14A read with Rule 8D was withdrawn by the assessee and dismissed as not pressed. - HELD THAT: - At the hearing the assessee's counsel expressly stated that ground no.2 (challenge to the Section 14A/Rule 8D addition) was not being pressed and was withdrawn. The Tribunal treated the ground as dismissed accordingly and recorded that the ground stood withdrawn.

Ground challenging the Section 14A/Rule 8D addition dismissed as not pressed/withdrawn by the assessee.

Final Conclusion: The appeal is partly allowed: the ESOP expense addition of Rs. 4,99,46,617/- is deleted in favour of the assessee; the challenge to the addition under Section 14A/Rule 8D was withdrawn and is dismissed as not pressed.

Jurisdiction under section 263 - adequacy of inquiries and application of mind by the Assessing Officer - requirement of independent inquiry by the Commissioner before invoking revisionary power under section 263 - setting aside assessment as erroneous and prejudicial to the interests of Revenue - show cause notice requirement for raising fresh issues in revision

Jurisdiction under section 263 - setting aside assessment as erroneous and prejudicial to the interests of Revenue - Validity of the Principal Commissioner of Income Tax's exercise of revisionary jurisdiction under section 263 in quashing the assessments and directing de novo assessments. - HELD THAT: - The Tribunal found that the Assessing Officer had raised specific queries, called for voluminous documents and evidences (including Demat statements, ledger accounts, bank particulars and company annual returns) and completed the assessments after due consideration and after obtaining necessary approvals under the scheme of the Act. The Principal Commissioner set aside the assessments in a summary manner without conducting independent enquiries or specifying what further inquiries were required. Reliance on authorities distinguishing lack of inquiry from inadequate inquiry supports that mere difference of opinion or perceived inadequacy, without the Commissioner conducting verification himself, cannot sustain exercise of section 263. Applying these principles, the Tribunal held that the exercise of revisionary jurisdiction by the PCIT was improper and the revisionary orders were liable to be quashed. [Paras 9]

The orders passed by the Principal Commissioner under section 263 quashing the assessments are quashed; the revisionary proceedings set aside.

Adequacy of inquiries and application of mind by the Assessing Officer - Whether the Assessing Officer had conducted adequate inquiries and applied his mind in framing the assessments. - HELD THAT: - On the record the AO had issued detailed questionnaires, raised specific queries on long term and short term capital gains, exemption claims and unsecured loans, and the assessees furnished detailed replies and supporting documents which were examined by the AO. The Tribunal accepted that enquiries had been made, that material was on record, and that the AO took a possible view after examination of documents; therefore there was no lack of inquiry and no failure of application of mind that would render the assessments 'erroneous and prejudicial' within the meaning of section 263. [Paras 9]

The AO had made adequate inquiries and applied his mind; that finding precludes exercise of section 263 in these cases.

Requirement of independent inquiry by the Commissioner before invoking revisionary power under section 263 - Whether the Principal Commissioner could set aside assessments without conducting independent verification when he considered the AO's inquiries inadequate. - HELD THAT: - Applying precedents, the Tribunal explained the distinction between 'no inquiry' and 'inadequate inquiry' and held that where inquiries have been made, the Commissioner must himself conduct verification if he is to record that the AO's order is erroneous; merely directing the AO to make further inquiries, without undertaking any independent enquiry or pointing out specifically what was missing, is impermissible. The PCIT did not carry out independent inquiries and failed to specify what further inquiries were required; hence the revision was unsustainable. [Paras 9]

The PCIT should have conducted independent verification or recorded specific omissions before invoking section 263; absence of such inquiry renders the revision invalid.

Show cause notice requirement for raising fresh issues in revision - Whether the Principal Commissioner could set aside assessments on issues (unsecured loans) not included in the show cause notice in respect of two assessees. - HELD THAT: - The Tribunal found that in the cases of M/s Sanjay Jain & Sons and Shri Tarun Jain no show cause notice under section 263 had been issued in respect of unsecured loans; consequently the PCIT could not validly exercise revisionary jurisdiction on that ground. This procedural omission contributed to quashing the revisionary orders insofar as those issues were concerned. [Paras 4, 9]

PCIT could not set aside assessment on unsecured loans in those two appeals where no show cause notice had been issued on that issue; such part of the revision is invalid.

Final Conclusion: All four appeals are allowed: the Tribunal quashed the orders passed by the Principal Commissioner under section 263 for Assessment Year 2016-17, holding that the Assessing Officer had made adequate inquiries and applied his mind, that the PCIT did not conduct independent verification nor specify required further inquiries, and that in two appeals revision was impermissible on unsecured loan grounds where no show cause notice had been issued.

Deduction under section 36(1)(vii) of the Income Tax Act - provision for doubtful debts - actual write-off by simultaneous reduction of sundry debtors on the asset side of the balance sheet - Explanation 1 to clause (vii) of section 36(1) - provision for doubtful advances - deduction under section 37 of the Income Tax Act - preservation of individual debtor accounts to protect civil recovery proceedings

Deduction under section 36(1)(vii) of the Income Tax Act - provision for doubtful debts - actual write-off by simultaneous reduction of sundry debtors on the asset side of the balance sheet - Explanation 1 to clause (vii) of section 36(1) - preservation of individual debtor accounts to protect civil recovery proceedings - Assessee entitled to deduction for the provision for doubtful debts where the amount was debited to the profit and loss account and simultaneously reduced from sundry debtors in the balance sheet. - HELD THAT: - The Tribunal applied the principle in Vijaya Bank, as explained with reference to Explanation 1 to clause (vii) of section 36(1), that after the 1989 amendment a mere provision debited to profit and loss is not sufficient unless it is reflected as an obliteration from the asset side so that loans and advances/debtors are shown net of such provision. On the facts the assessee had debited the provision to the profit and loss account and adjusted the same against sundry debtors in the balance sheet, which the Tribunal held amounts to an actual write-off and qualifies for deduction. The Tribunal also relied on its precedent in Vidras India Ceramics (P.) Ltd. and the assessee's legitimate choice not to close individual debtor ledgers to preserve rights in civil recovery proceedings; the absence of closure of individual accounts, for that reason, did not defeat the claim where the balance-sheet adjustment showed the debtors net of provision. The authorities below were therefore reversed and the addition deleted. [Paras 9]

Addition disallowing the provision for doubtful debts deleted and deduction allowed.

Provision for doubtful advances - deduction under section 37 of the Income Tax Act - actual write-off by simultaneous reduction of sundry debtors on the asset side of the balance sheet - Provision for doubtful advances, given in the course of business, allowed as a deduction under section 37 on the same reasoning as for doubtful debts. - HELD THAT: - The Tribunal held that provisions for doubtful advances stand on the same footing as provisions for doubtful debts when they arise in the course of business. Applying the same factual and legal reasoning-debit to profit and loss and corresponding effect in the balance sheet-the provision for doubtful advances was held allowable as a deduction under section 37. The AO's disallowance was therefore reversed and the addition deleted. [Paras 9]

Addition disallowing the provision for doubtful advances deleted and deduction allowed.

Final Conclusion: Both appeals for Assessment Years 2010-11 and 2011-12 are allowed; the Tribunal directed deletion of the additions made by the Assessing Officer in respect of the provisions for doubtful debts and doubtful advances.

Taxation of deferred payment guarantee commission - receipt versus accrual - deductibility of provision for diminution/ depreciation on matured securities - disallowance under section 14A and Rule 8D - method of computation - deduction for depreciation on leased assets - genuineness/finance lease test - deduction for bad debts written off under section 36(1)(vii) (non rural advances) - treatment of appreciation/depreciation in AFS and HFT securities - non realised gains rule - taxability of recovery of bad debts under section 41(4) - remit for fresh consideration - taxation of income of foreign branches - remit for fresh consideration - deductibility of education cess on income tax - broken period interest - revenue v. capital character for banks - taxing interest on securities - due date/ specified date principle

Taxation of deferred payment guarantee commission - receipt versus accrual - Entire deferred payment guarantee commission received in advance is to be spread to the relevant years and not taxed in the year of receipt. - HELD THAT: - The Tribunal followed its consistent earlier decisions in the assessee's own case and held that deferred payment guarantee commission, though received in advance, cannot be taxed in the year of receipt but must be allocated to the years to which it legitimately belongs. The coordinate bench precedent covering multiple earlier assessment years was treated as binding on the present controversy and the ground of appeal of the assessee was allowed. [Paras 9]

Ground No.1 of the assessee's appeal allowed; deferred payment guarantee commission to be spread to relevant years.

Deductibility of provision for diminution/ depreciation on matured securities - Disallowance of depreciation/provision on securities that matured but were not redeemed is sustained. - HELD THAT: - Relying on earlier Tribunal and High Court/Supreme Court precedents in the assessee's own case, the Tribunal held that amounts receivable on maturity constitute real income under the mercantile system and ad hoc provision for diminution on matured securities which are due cannot be allowed as deduction. The coordinate decisions against the assessee were followed and the CIT(A)'s conclusion in favour of the revenue was affirmed. [Paras 12]

Ground No.2 of the assessee's appeal dismissed; disallowance of depreciation on matured securities upheld.

Disallowance under section 14A and Rule 8D - method of computation - Disallowance under section 14A is to be restricted to 1% of exempt income for the year under appeal. - HELD THAT: - Applying the Supreme Court's guidance and coordinate bench decisions in the assessee's own case for earlier years, and noting that Rule 8D (introduced with effect from A.Y.2008-09) is not applicable to A.Y.2005-06, the Tribunal concluded that the appropriate measure of disallowance for expenses attributable to tax exempt income is 1% of the exempt income. The AO was directed to disallow 1% accordingly. [Paras 18]

Ground No.3 of the assessee allowed; AO to disallow 1% of exempt income under section 14A.

Deduction for depreciation on leased assets - genuineness/finance lease test - Disallowance of depreciation on leased assets was upheld against the assessee. - HELD THAT: - The Tribunal followed earlier coordinate bench decisions in the assessee's own case which had consistently decided the lease treatment issue against the assessee. On that basis, and in absence of any distinguishing facts or a favourable higher court ruling, the CIT(A)'s confirmation of the AO's disallowance was sustained and the assessee's grounds on the genuineness/finance lease character were dismissed. [Paras 21]

Grounds No.4.1 to 4.3 of the assessee dismissed; depreciation on leased assets disallowed.

Deduction for bad debts written off under section 36(1)(vii) (non rural advances) - Deduction under section 36(1)(vii) is allowable for bad debts written off in respect of non rural advances. - HELD THAT: - Following Supreme Court authority and a series of Tribunal and High Court decisions, the Tribunal held that sections 36(1)(vii) and 36(1)(viia) are distinct and that the proviso limiting deduction applies to advances covered by clause (viia) (rural advances). Explanation 2 inserted w.e.f. 01.04.2014 was held clarificatory for later years and did not affect the assessee's right for the year under appeal. Consequently, the assessee was entitled to the deduction for non rural bad debts written off. [Paras 25]

Grounds No.5.1 and 5.2 of the assessee allowed; deduction under section 36(1)(vii) for non rural bad debts allowed.

Treatment of appreciation/depreciation in AFS and HFT securities - non realised gains rule - Depreciation relating to AFS/HFT securities is allowable and appreciation (unrealised gains) is not to be taxed by netting across scrips contrary to the non realisation principle. - HELD THAT: - Relying on established accounting and judicial principles that unrealised profits are not to be brought to tax, and following coordinate bench decisions in the assessee's own case and relevant High Court and Supreme Court precedents, the Tribunal held that netting appreciation against depreciation within a classification for book purposes cannot lead to taxation of notional gains. The AO and CIT(A) erred in disallowing/deeming appreciation taxable and the ground was allowed for the assessee. [Paras 29]

Ground No.6 of the assessee allowed; reducing depreciation/ tax on appreciation in AFS/HFT securities disallowance set aside.

Taxability of recovery of bad debts under section 41(4) - remit for fresh consideration - Issue of taxation of recovery of bad debts written off (section 41(4)) is restored to the file of the Assessing Officer for fresh adjudication after giving the assessee an opportunity of hearing. - HELD THAT: - Following prior Tribunal decisions in the assessee's own case, the Tribunal found that the controversy on taxation of recoveries required fresh consideration by the AO in accordance with directions earlier given in similar matters. The matter was therefore remitted to the AO for fresh decision, and the grounds were allowed for statistical purposes. [Paras 33]

Grounds No.7.1 and 7.2 restored to the AO and allowed for statistical purposes; remitted for fresh consideration.

Taxation of income of foreign branches - remit for fresh consideration - Treatment of income of foreign branches is restored to the AO for fresh adjudication with opportunity to the assessee. - HELD THAT: - Following coordinate bench precedent in the assessee's own case, the Tribunal held that the question whether foreign branch income is taxable in India requires fresh examination by the AO in accordance with prior directions and consistent guidelines. Accordingly, the matter was remitted to the AO to decide afresh after affording the assessee an opportunity of being heard. [Paras 36]

Grounds No.8.1 and 8.2 restored to the AO and allowed for statistical purposes; remitted for fresh consideration.

Deductibility of education cess on income tax - Education cess on income tax paid is deductible while computing business income. - HELD THAT: - Following the Bombay High Court decision in Sesa Goa Ltd. and related reasoning that 'cess' was omitted from earlier restrictive wording in section 40(a)(ii), the Tribunal held that education cess paid in relation to business is allowable as a deduction. The AO was directed to allow the claim. [Paras 41]

Additional grounds regarding education cess allowed; AO directed to permit deduction.

Broken period interest - revenue v. capital character for banks - Broken period interest paid on purchase of securities is allowable as revenue expenditure for the bank. - HELD THAT: - Relying on consistent earlier Tribunal and High Court authority in the assessee's own case and on Supreme Court precedents, the Tribunal accepted that the securities were stock in trade/business assets and that broken period interest paid in acquiring such securities is deductible as revenue expenditure. The CIT(A)'s allowance was affirmed. [Paras 50]

Ground No.4 of the Revenue dismissed; broken period interest allowed to the assessee.

Taxing interest on securities - due date/ specified date principle - Interest on securities is to be taxed on the specified due dates in the security (due basis), not merely on accrual entries under the mercantile system. - HELD THAT: - Following a line of Tribunal and High Court authorities, the Tribunal held that for taxation the right to interest on specified securities arises on the specified dates and cannot be conjured merely from mercantile accounting entries. The CIT(A)'s approach of taxing interest on due dates was sustained and prior favourable decisions for the assessee were noted. [Paras 54]

Ground No.5 of the Revenue dismissed; taxing interest on securities on due dates upheld.

Staff welfare expense - reservation of school seats - wholly and exclusively for business - Payment for reservation of school seats treated as allowable staff welfare expenditure in the assessee's case; Revenue's challenge dismissed. - HELD THAT: - The Tribunal followed earlier consistent decisions in the assessee's own case where similar payments were held to be deductible staff welfare expenses. As the issue had been repeatedly decided in favour of the assessee up to A.Y.2008-09 and Revenue's appeals had not overturned that position, the CIT(A)'s allowance was maintained and Revenue's ground dismissed. [Paras 47]

Ground No.2 of the Revenue dismissed; staff welfare expense on reservation of seats allowed.

Treatment of securities as stock in trade and loss on revaluation as revenue expenditure - Securities were held as stock in trade and loss on revaluation treated as revenue expenditure; Revenue's challenge rejected. - HELD THAT: - The Tribunal, following a series of earlier decisions in the assessee's own case (and confirmation by the jurisdictional High Court in relevant years), upheld the CIT(A)'s view that the securities constituted business stock and that revaluation loss was revenue in nature. Revenue's appeal on this point was dismissed. [Paras 58]

Grounds No.6(a) and 6(b) of the Revenue dismissed; securities treated as stock in trade and revaluation loss as revenue expenditure.

Final Conclusion: The Tribunal partly allowed the assessee's cross appeal and dismissed the Revenue's cross appeal. Key outcomes: deferred guarantee commission to be spread; depreciation on matured securities disallowed; section 14A disallowance fixed at 1% of exempt income; depreciation on leased assets disallowed; deduction under section 36(1)(vii) for non rural bad debts allowed; depreciation/valuation treatment for AFS/HFT securities favourable to the assessee; issues on recovery of bad debts under section 41(4) and taxation of foreign branch income remitted to the AO for fresh consideration; education cess and broken period interest allowed to the assessee; interest on securities to be taxed on specified due dates; several other Revenue grounds dismissed.

Pre-deposit requirement under section 129E of the Customs Act - statutory condition precedent for entertaining appeal - absence of power to waive or reduce pre-deposit after amendment - peremptory bar to entertain appeal unless pre-deposit is made - legislative intention replacing judicial discretion with fixed pre-deposit

Pre-deposit requirement under section 129E of the Customs Act - absence of power to waive or reduce pre-deposit after amendment - statutory condition precedent for entertaining appeal - Whether the Tribunal can entertain an appeal or grant waiver/dispensation of the pre-deposit required by section 129E of the Customs Act where the appellant has not made the statutory pre-deposit. - HELD THAT: - The Tribunal examined the substituted provisions of section 129E as enacted on 06.08.2014 and held that the amended scheme removed the earlier discretionary power to dispense with pre-deposit. The Court applied the principle that where a statute confers a right of appeal it may prescribe conditions for exercise of that right and such conditions, if mandatory, must be complied with before the appellate forum can entertain the appeal. Reliance was placed on the Supreme Court's decisions (including Narayan Chandra Ghosh and subsequent authorities) and on High Court decisions interpreting pari materia provisions, which uniformly held that an appellate tribunal cannot waive or grant a full exemption beyond what the statute permits and that the peremptory language of the provision creates an absolute bar to entertaining appeals unless the prescribed pre-deposit is made. The Tribunal further noted that the statutory scheme itself affords the reduced obligation (7.5% or 10% as applicable) and that courts cannot be more liberal than the express terms of the statute. The appellant's contentions of financial inability and of pending proceedings in respect of a co-noticee in the Supreme Court do not alter the statutory mandate. Applying these principles, the application for waiver of pre-deposit was rejected and, consequently, the appeal could not be entertained and was dismissed.

Application for waiver/dispensation of the statutory pre-deposit under section 129E is rejected; appeal is not maintainable and is dismissed for non-compliance with the mandatory pre-deposit requirement.

Final Conclusion: The Tribunal dismissed the application for waiver of the pre-deposit under section 129E and, as a result of non-payment of the mandatory pre-deposit, dismissed the appeal, holding that post-amendment the appellate forums lack power to waive or reduce the statutory pre-deposit and cannot entertain the appeal until the condition precedent is satisfied.

Right to claim refund accrues on subsequent sale - limitation for refund claims - interpretation of "so far as may be" in applying Customs Act provisions to duties under the Customs Tariff Act - applicability of Notification No.93/2008-Cus. prescribing one year period for SAD refund

Right to claim refund accrues on subsequent sale - limitation for refund claims - applicability of Notification No.93/2008-Cus. prescribing one year period for SAD refund - Whether the appellant's refund claims for Special Additional Duty (SAD) were time barred by the one year limitation prescribed by the amending notification. - HELD THAT: - The Tribunal held that the appellant's refund right under the notification crystallises only upon subsequent sale of the imported goods and deposit of sales tax/VAT; therefore a limitation period computed from the date of payment of SAD would commence before the right to claim had accrued. The Tribunal followed the reasoning of the Hon'ble Delhi High Court in Sony India that the provisions of the Customs Act and its limitation regime apply to duties under the Customs Tariff Act "so far as may be"; that expression limits the incorporation of the Customs Act regime where the levies under the Tariff Act are conditional (as SAD is) and the right to refund is market driven. Although the Bombay High Court disagreed with aspects of Sony India, it did not disturb the core findings that (i) the refund right accrues on resale and (ii) the limitation clause introduced subsequently by Circular No.6/2008 and Notification No.93/2008 altered the departmental practice; those core findings remain intact. Applying that determinative reasoning, the Tribunal concluded that the amending notification could not be used to cut down a substantive right of refund which arises only on sale, and therefore the refund claims, though filed after one year from payment of SAD, could not be rejected as time barred on that ground. [Paras 8, 11, 12]

The Tribunal allowed the appeal, held that the refund right accrued upon subsequent sale so the one year limit from date of payment could not bar the claim, set aside the impugned order and directed grant of consequential benefits in accordance with law.

Final Conclusion: Appeal allowed. The Tribunal followed the Delhi High Court's view that the right to claim SAD refund accrues on subsequent sale and that the one year limitation prescribed by Notification No.93/2008 Cus. cannot defeat that right; the impugned rejection as time barred is set aside and the appellant is entitled to consequential reliefs as per law.

Valid requisition - shareholders' right to call extraordinary general meeting - injunction restraining calling or holding of an EGM - interpretation of Section 100(4) - discretionary power of Tribunal under Section 98 - ouster of civil court jurisdiction under Section 430 - prior permission requirement of Ministry of Information & Broadcasting for change in board - appointment and qualification of independent directors under Sections 149, 150 and 160 and Nomination & Remuneration Committee obligations under Section 178 - board composition requirement under Regulation 17 of SEBI LODR

Valid requisition - shareholders' right to call extraordinary general meeting - interpretation of Section 100(4) - judicial precedent on corporate democracy - Scope and effect of a 'valid requisition' under Section 100(4) and the entitlement of shareholders to call an EGM - HELD THAT: - The Court held that the adjective "valid" in Section 100(4) is confined to numerical and procedural compliance prescribed by Section 100 and does not permit the Board to refuse to call a meeting on the ground that the object of the requisition is illegal. The reasoning aligns with earlier authoritative interpretations that corporate democracy entitles members, subject only to statutorily prescribed procedural and numerical requirements, to call an EGM and that the Board has no jurisdiction to sit in judgment over the merits or motives of resolutions which meet those requirements. Consequently, whether the proposed resolutions are acceptable or lawful is a matter for the general meeting (and, where applicable, subsequent statutory forums) and not a basis for the Board to decline to convene the meeting. [Paras 14, 15, 16, 22]

The words "valid requisition" in Section 100(4) are limited to procedural and numerical compliance; shareholders meeting those requirements are entitled to call an EGM and the Board cannot refuse to call it on grounds going beyond those requirements.

Injunction restraining calling or holding of an EGM - ouster of civil court jurisdiction under Section 430 - discretionary power of Tribunal under Section 98 - Whether a Civil Court could grant an injunction restraining shareholders from calling or holding an EGM and whether the Impugned injunction was barred by Section 430 - HELD THAT: - The Court found that the Single Judge's grant of an injunction restraining the appellants from calling and holding the requisitioned EGM was contrary to settled law protecting shareholder rights and was unsustainable. Further, the Court concluded that the Impugned Judgment is hit by Section 430: the statutory scheme governing calling and conduct of meetings (including the remedial route to the Tribunal under Section 98 where it is impracticable to call a meeting) falls within the purview of the Tribunal and the ouster provision in Section 430 operates to bar the Civil Court's injunctive intervention in respect of matters the Tribunal is empowered to determine. For these reasons the injunction could not have been lawfully granted and was set aside. [Paras 56, 64, 69, 70, 71]

The injunction restraining the appellants from calling or holding the EGM was set aside; a Civil Court cannot grant such an injunction in the circumstances, and the Impugned Judgment is squarely hit by Section 430.

Prior permission requirement of Ministry of Information & Broadcasting for change in board - appointment and qualification of independent directors under Sections 149, 150 and 160 and Nomination & Remuneration Committee obligations under Section 178 - board composition requirement under Regulation 17 of SEBI LODR - Whether the proposed resolutions in the requisition were illegal or incapable of lawful implementation for want of prior MIB approval, for non compliance with statutory procedure for appointing independent directors, or for breaching Regulation 17 - HELD THAT: - Although the Court reiterated that the Board may not refuse to call an EGM that meets procedural and numerical requirements, it nonetheless examined Zee's asserted infirmities. On MIB approval the Court held that the MIB obligation to give prior permission is practically and historically understood to apply to appointments (vetting the incoming appointee) and does not preclude removal; MIB approval has in practice been granted post-resolution and the Board's failure to seek pre approval could not be used to block the requisition. On appointment of independent directors, the Court construed Sections 149, 150 and 160 together and held that Section 160 preserves a shareholder's statutory right to propose persons (including independent directors) for appointment at a general meeting; the statutory scheme contemplates Board/NRC opinion and post appointment compliances (such as consent and filings) but does not operate to prevent shareholders from proposing candidates who satisfy Section 160. On Regulation 17 and the contention that removal of the sole executive director would leave the board non compliant, the Court observed that statutory provisions (including Section 203(4)) permit the company to fill resultant vacancies within prescribed timeframes and that the requisitioned resolutions were not inherently incapable of lawful implementation. The Single Judge's conclusions that the resolutions were illegal were therefore set aside. [Paras 82, 93, 99, 106, 109]

The proposed resolutions were not illegal or incapable of lawful implementation; the Single Judge's findings to the contrary are set aside.

Final Conclusion: The Appeal is allowed. The injunction restraining the appellants from calling or holding the requisitioned EGM is set aside; the court holds that a "valid requisition" under Section 100(4) is confined to numerical and procedural compliance, a Board cannot refuse to call an EGM on broader legality grounds, the Impugned Judgment is hit by Section 430, and the proposed resolutions in the requisition are not intrinsically illegal or incapable of lawful implementation.

Scheme of arrangement - demerger - sanction under Sections 230 to 232 of the Companies Act, 2013 - undertaking on Accounting Standard-14 (Pooling of Interests) - no retrenchment undertaking for employees on the appointed date - preservation of books and papers under Section 239 of the Companies Act, 2013 - filing of order in Form INC-28 with the Registrar of Companies - compliance with statutory and tax liabilities

Scheme of arrangement - sanction under Sections 230 to 232 of the Companies Act, 2013 - Sanction of the Scheme of Arrangement for demerger between the Petitioner companies - HELD THAT: - On consideration of the Scheme, the reports of the Regional Director and Official Liquidator, and the replies and undertakings furnished by the Petitioner Companies, the Tribunal found the Scheme to be fair and reasonable, not contrary to public policy and not violative of any law. The RD's queries were addressed by filing requisite forms and confirmations; the OL's observations were replied to and subsequently the OL raised no objection. The Tribunal recorded that all statutory compliances required under Sections 230 to 232 have been made and that there were no tenable objections to sanctioning the Scheme. [Paras 11, 12, 13]

The Scheme of Arrangement is sanctioned and declared binding on the companies, their shareholders, creditors, employees and all concerned; the Company Petition is allowed and disposed of.

Undertaking on Accounting Standard-14 (Pooling of Interests) - no retrenchment undertaking for employees on the appointed date - Acceptance of undertakings given by the Petitioner Companies respecting accounting treatment and employee continuity - HELD THAT: - The Official Liquidator had requested an undertaking that the Demerged and Resulting Companies would not deviate from Accounting Standard-14 (Pooling of Interests) and that there would be no retrenchment of employees in service on the Appointed Date. The Petitioners furnished written undertakings complying with these requests. The Tribunal recorded the Petitioners' undertakings and observed that the OL ultimately accepted the Petitioners' submissions and raised no objection to the Scheme. [Paras 8, 9, 10, 11]

The undertakings given by the Petitioners regarding compliance with Accounting Standard-14 and non-retrenchment of employees as on the Appointed Date are accepted and must be strictly complied with.

Preservation of books and papers under Section 239 of the Companies Act, 2013 - filing of order in Form INC-28 with the Registrar of Companies - compliance with statutory and tax liabilities - Directions for consequential and statutory compliance following sanction of the Scheme - HELD THAT: - The Tribunal directed the Petitioner Companies to preserve books of accounts and records and not to dispose of them without prior permission of the Central Government in terms of Section 239. It further directed compliance with Rule 17(2) and filing of the order in Form INC-28 with the Registrar of Companies, submission of the Scheme to the ROC within the stipulated period, newspaper publication of the sanction in the same newspapers as earlier, and strict compliance with all statutory and tax obligations and other undertakings furnished. These directions were issued as conditions of sanction to ensure procedural and statutory regularity and transparency. [Paras 5, 7, 12]

The Petitioner Companies are directed to preserve records under Section 239, to file the sanctioned order and Scheme with the Registrar of Companies (including Form INC-28), to publish the sanction as directed, and to comply with all consequential statutory and tax obligations.

Final Conclusion: The Tribunal sanctioned the demerger Scheme between Babu Tobacco Private Limited and Babu Warehousing Private Limited effective from the Appointed Date (01.11.2020), accepted the undertakings given (including adherence to Accounting Standard-14 and non-retrenchment of employees), and issued directions for preservation of records, filing with the Registrar of Companies, requisite publications and compliance with statutory and tax obligations; the petition is allowed and disposed of.

Admission of additional evidence in appellate proceedings - right to be heard / opportunity of hearing - limitation and acknowledgment of debt - remand for fresh adjudication - restoration of application under Section 9 - maintainability of appeal against order allowing Section 9

Admission of additional evidence in appellate proceedings - right to be heard / opportunity of hearing - limitation and acknowledgment of debt - Impugned order of the Appellate Tribunal allowing the application under Section 9 on the basis of additional e-mail exchanges taken on record during the appeal without affording the corporate debtor adequate opportunity of response. - HELD THAT: - The Court found that although the e-mails not placed before the Adjudicating Authority could be material and thereby warrant consideration, the Appellate Tribunal erred in finally deciding and allowing the Section 9 application on the basis of those additional documents without ensuring adequate opportunity for the corporate debtor to meet the newly produced material. The NCLAT's conclusion that the e-mails constituted timely acknowledgment of debt and thereby saved the claim from limitation was reached while taking those documents on record only at the appellate stage and without affording the corporate debtor a proper chance to respond to their evidentiary effect. For these reasons the part of the impugned order which allowed the Section 9 application on that basis cannot be sustained.

The impugned order to the extent it allowed the Section 9 application on the basis of additional documents taken on record at the appellate stage without affording adequate opportunity to the corporate debtor is set aside.

Remand for fresh adjudication - restoration of application under Section 9 - admission of additional evidence in appellate proceedings - Treatment of the additional documents taken on record by the Appellate Tribunal and the appropriate forum and procedure for fresh adjudication of the Section 9 application. - HELD THAT: - The Court declined to ignore or expunge the e-mails merely because they were not on record before the NCLT, observing that they may be relevant and warrant consideration. At the same time, in order to secure a fair adjudicatory process, the Court set aside the NCLT order of 06.10.2020 and directed that the Section 9 application be restored for reconsideration by the Adjudicating Authority with the additional documents (as taken on record by the NCLAT) being considered. The Court mandated that the Adjudicating Authority shall provide the corporate debtor adequate opportunity of hearing and proceed expeditiously in reassessing limitation, any acknowledged liabilities, and the merits, leaving all evidentiary questions open for fresh examination.

The NCLT order is set aside and the Section 9 application is restored for fresh consideration by the Adjudicating Authority, taking into account the additional documents now on record and after affording the corporate debtor a proper opportunity to be heard.

Maintainability of appeal against order allowing Section 9 - Objection to the maintainability of the appeal by the corporate debtor against the NCLAT order which allowed the Section 9 application. - HELD THAT: - The Court overruled the respondent's preliminary objection to the maintainability of the appeal. It noted that the NCLT had rejected the Section 9 application and that the impugned NCLAT order had allowed it; until the appellate order attained finality, the corporate debtor retained its right to challenge the correctness of that appellate decision. Given that no further steps (such as appointment of a resolution professional) had been taken, the corporate debtor's locus to appeal could not be denied.

Objection to maintainability of the appeal is overruled and the corporate debtor's right to challenge the impugned appellate order is upheld.

Final Conclusion: The appeal is allowed in part: the NCLAT order is set aside insofar as it allowed the Section 9 application on the basis of additional documents admitted at the appellate stage without affording the corporate debtor adequate opportunity to respond; the additional documents are retained on record and the matter is remitted to the NCLT for fresh and expeditious adjudication of the Section 9 application after providing the corporate debtor a proper hearing; no pronouncement is made on merits or on the evidentiary value of the documents.

Avoidance of undervalued transactions - Relevant period for avoidable transactions - Order in cases of undervalued transactions - Related party - Right to use of trade mark - Vesting of property in corporate debtor - Ordinary course of business - Resolution Plan

Avoidance of undervalued transactions - Relevant period for avoidable transactions - Order in cases of undervalued transactions - Right to use of trade mark - Vesting of property in corporate debtor - Resolution Plan - Termination of agreements within the look back period and vesting of the 'right to use' the trade mark "CONCEPT Educations" in the Corporate Debtor under Section 48(a) of the Code to secure implementation of the approved Resolution Plan. - HELD THAT: - The Tribunal found that the sequence of transactions - partnership deed dated 01/02/2019, deed of agreement dated 08/02/2019 transferring a 15 year "right to use" the trade mark to R1 for Rs. 10 lakhs, subsequent reconstitution ousting the corporate debtor - occurred within the look back period preceding admission of the CIRP (admission 26/02/2020). Taking into account the material on record and the Resolution Plan placed before the Bench (which provides for return of the trade mark to the corporate debtor), the Bench concluded that, for ensuring successful implementation of the Resolution Plan, the prayer of the Resolution Professional must be accepted. Accordingly, the agreements between the corporate debtor and Potential Coaching Institute Pvt. Ltd. dated 01/02/2019, 08/02/2019 and any other agreements within the look back period stand terminated and the "right to use" of the trade mark is withdrawn and vested in the corporate debtor in accordance with Section 48(a) of the Code; Potential Coaching Institute Pvt. Ltd. is restrained from further use of the trade mark. The Tribunal also recorded that the delay in filing the application by the RP was justified by COVID restrictions and non cooperation of the suspended management. The order implements the remedial power under Section 48 to vest property back in the corporate debtor to effect the Resolution Plan. [Paras 12, 13, 15, 16, 17]

Agreements within the look back period terminated; the 15 year "right to use" of the trade mark is withdrawn from Potential Coaching Institute Pvt. Ltd. and vested in the corporate debtor under Section 48(a) to secure implementation of the Resolution Plan; R1 prohibited from further use.

Related party - Ordinary course of business - Avoidance of undervalued transactions - Further adjudication of liability, allegations of non cooperation by the suspended management and associated avoidance/other applications under Sections 19, 43 and 66 are to be considered separately along with other pending IAs. - HELD THAT: - While the Tribunal vested the trade mark in the corporate debtor to enable the Resolution Plan, it expressly reserved and directed that matters concerning non cooperation by the suspended management, the agreements for use of the trade mark for Rs. 10 lakhs for fifteen years, and the suspended management's subsequent withdrawal from the partnership shall be heard along with other avoidance and related IAs filed by the RP under Sections 19, 43 and 66 of the Code. Those matters were not finally adjudicated on merits in this interlocutory application and are to be considered in the consolidated proceedings noted by the Bench. [Paras 18, 19]

Issues of non cooperation, alleged undervalue transfers and other consequential liabilities are to be heard and decided along with the RP's other IAs under Sections 19, 43 and 66; they have not been finally adjudicated in this order.

Final Conclusion: IA 24 of 2021 is disposed of: the Tribunal has terminated the agreements within the look back period and vested the "right to use" the trade mark "CONCEPT Educations" in the corporate debtor under Section 48(a) to secure implementation of the approved Resolution Plan; related allegations and other avoidance/ liability issues are directed to be heard with the RP's other pending IAs under Sections 19, 43 and 66.

Admission of Section 7 petition - existence of financial debt - default - limitation - completeness of application - moratorium - prohibition on proceedings and enforcement - appointment of interim resolution professional - duties of interim resolution professional - service by publication - ex-parte admission

Admission of Section 7 petition - existence of financial debt - default - limitation - completeness of application - Petition under Section 7 of the Insolvency and Bankruptcy Code admitted. - HELD THAT: - The Adjudicating Authority found on the material placed by the Financial Creditor that the Corporate Debtor availed the loan facilities, the debt exceeded the statutory monetary threshold, and there was a continuing default. The date of default was recorded as 27.12.2018 and the Section 7 application was filed on 23.09.2021; the Authority held the application to be within limitation. The records, including bank statements, memorandum of interest, valuation report and related documents, were considered sufficient and the application was held complete for initiation of CIRP. On these grounds the petition was admitted. [Paras 13, 21]

IB Petition under Section 7 admitted on 24/03/2022.

Moratorium - prohibition on proceedings and enforcement - Moratorium under the Code declared from the date of this order. - HELD THAT: - Pursuant to Sections 13 and 14 of the Code, the Adjudicating Authority declared a moratorium effective from the date of the order. The moratorium prohibits institution or continuation of suits or proceedings, transfer or disposal of assets, actions to enforce security interests (including under the SARFAESI Act), and interruption of supply of essential goods or services, subject to statutory exceptions. The moratorium will remain in force till completion of the CIRP. [Paras 14]

Moratorium declared with effect from the date of the order and to continue until completion of CIRP.

Service by publication - ex-parte admission - Notice to the Corporate Debtor by publication and consequent ex-parte hearing were treated as satisfactory for proceeding. - HELD THAT: - The Registry's attempts to serve the Corporate Debtor by address were unsuccessful (return marked 'Addressee left'); the Applicant was directed to publish notice in two newspapers (English and Assamese) giving 14 days' clear notice. Despite publication, the Corporate Debtor did not appear and sufficient opportunities were held; the petition was therefore heard ex-parte and reserved. The Authority proceeded on the basis of publication and the materials filed by the Financial Creditor. [Paras 10, 11]

Notice by publication ordered; petition heard ex-parte due to non-appearance of the Corporate Debtor.

Appointment of interim resolution professional - duties of interim resolution professional - public announcement - Interim Resolution Professional appointed and directed to perform statutory duties including public announcement. - HELD THAT: - The Authority appointed the proposed Interim Resolution Professional and directed him to make the public announcement of moratorium upon receipt of an authenticated copy of the order. The IRP was directed to adhere to the time limits for CIRP and to perform duties as specified in the Code, Rules and Regulations, including preservation of assets, management of affairs subject to the Code, and to file the assignment declaration within two days. The IRP was also reminded of the obligation of personnel connected with the Corporate Debtor to extend cooperation under Section 19 and of recourse available to the IRP in case of non-cooperation. [Paras 15, 16]

Mr. Purshotam Gaggar appointed as Interim Resolution Professional with directions to make public announcement and perform all statutory duties.

Final Conclusion: The Tribunal admitted the Section 7 petition filed by the Financial Creditor against the Corporate Debtor on 24/03/2022, declared moratorium with effect from the date of the order, directed service by publication and proceeded ex-parte, and appointed an Interim Resolution Professional with statutory duties to conduct the CIRP.

Limitation for initiating insolvency proceedings - pre-existing dispute under Section 8 of the Insolvency and Bankruptcy Code - date of issuance of demand notice as the relevant date for existence of dispute - acknowledged debt and crystallisation of claim

Limitation for initiating insolvency proceedings - date of completion / extended timeline - CP was filed within the period of limitation - HELD THAT: - The Tribunal noted the work order dated 25.09.2013 and the amendment extending completion to 28.02.2015. The petition filed on 09.01.2018 was held to be within three years from the expiry of the extended timeline. The Tribunal relied on the respondent's own admission in the audit report recognizing the extended completion date, and therefore found that the petition could not be dismissed on the ground of limitation. [Paras 12]

Limitation objection rejected; the petition is within time.

Pre-existing dispute under Section 8 of the Insolvency and Bankruptcy Code - date of issuance of demand notice as the relevant date for existence of dispute - acknowledged debt and crystallisation of claim - There existed a pre-existing dispute between the parties prior to the demand notice - HELD THAT: - Applying the settled principle that the relevant date for determining existence of a dispute is the date of issuance of the demand notice (27.11.2017), the Tribunal examined correspondence and materials. Letters dated 12.09.2014 and 03.03.2016, and the audit report indicated complaints about defective work and requests for rectification. The petitioner admitted receipt of the 03.03.2016 letter and replied offering to complete work subject to payment of acknowledged amounts, but did not demonstrate that defects were rectified or that disputes were resolved before the demand notice. On this basis the Tribunal concluded that a pre-existing dispute existed and that the petition was liable to be dismissed for that reason. [Paras 13]

Found existence of pre-existing dispute; petition dismissed on this ground.

Final Conclusion: The Company Petition (IB) No. 17/BB/2018 is dismissed on the ground of pre-existing dispute; dismissal is without prejudice to the petitioner pursuing other legal remedies in accordance with law.

Inordinate delay in adjudication of show-cause notices - duty of revenue to adjudicate show-cause notices within a reasonable time - transfer of files to call book without intimation - refund of amounts deposited under protest with interest - quashing of stale show-cause notices

Inordinate delay in adjudication of show-cause notices - duty of revenue to adjudicate show-cause notices within a reasonable time - quashing of stale show-cause notices - Whether the prolonged failure of the revenue to adjudicate the impugned show-cause notices justifies quashing them. - HELD THAT: - The Court found that although personal hearings were granted on specified dates, no adjudication was carried out and no fresh hearing notices were issued after 19th February, 2016. Having regard to earlier decisions of this Court stressing that show-cause notices should be taken to logical conclusion within a reasonable period and that revenue cannot be allowed to rely on prolonged dormancy or placement in a call book to justify delay, the writ court concluded that the gross delay disentitles the revenue to proceed with adjudication. The Court applied the principles in Parle International Ltd., Sushitex Exports India Ltd., Bombay Dyeing and other precedents to the facts and held that the show-cause notices pending for several years ought to be quashed. [Paras 14, 16, 19]

Impugned show-cause notices quashed for inordinate delay and failure to adjudicate within a reasonable period.

Transfer of files to call book without intimation - duty to inform assessee of administrative action affecting adjudication - Whether transferring the show-cause notices to the call book without intimating the petitioner prevented the respondents from proceeding and justified relief. - HELD THAT: - The Court noted that the circular relied upon by the respondents required that intimation be furnished to the assessee when a show-cause notice is transferred to the call book so the assessee may challenge that administrative decision. No such intimation was given to the petitioner. In the absence of notice of such transfer, the petitioner could not be expected to take steps to protect its rights, and the practice of keeping matters dormant could not be used to excuse the prolonged inaction of the revenue. [Paras 15, 18, 19]

Non-intimation of transfer to call book was a further ground supporting interference; the administrative decision could not justify the prolonged inaction of the respondents.

Refund of amounts deposited under protest with interest - Whether amounts recovered from the petitioner during the course of investigation should be refunded with interest. - HELD THAT: - Relying on precedents where this Court quashed long-pending show-cause notices and directed return of amounts paid under protest with interest, the Court held that, given the gross delay and the resultant prejudice to the petitioner, consequential relief in the form of refund was appropriate. The Court directed refund of amounts recovered during investigation with interest at the rate applied in earlier decisions. [Paras 17, 20]

Respondents directed to refund amounts recovered during investigation with interest at 12% per annum within four weeks.

Final Conclusion: Writ petition allowed; impugned show-cause notices quashed for inordinate delay and failure to adjudicate within a reasonable time and for non-intimation of transfer to call book; respondents directed to refund amounts recovered during investigation with interest at 12% per annum within four weeks.

CENVAT credit on renting of immovable property - requirement of registration of premises for availment of CENVAT credit - admissibility of CENVAT credit where invoices indicate earlier/alternate company name - exclusion clause in the definition of input service and conditional nature of exclusions - nexus between input services and output services - remand for production and examination of documentary evidence to establish business purpose

CENVAT credit on renting of immovable property - requirement of registration of premises for availment of CENVAT credit - admissibility of CENVAT credit where invoices indicate earlier/alternate company name - Whether CENVAT credit on renting of immovable property denied for want of registration or because invoices bore earlier/alternate name of the assessee is admissible. - HELD THAT: - The Tribunal examined the invoices and ancillary material and accepted the appellant's explanation that invoices bearing different addresses and the earlier name of the company corresponded to the appellant (formerly known name reflected in fixed assets statement) and were issued by the landladies. The Tribunal noted that the question of denial of credit on unregistered or subsequently registered premises is no more res integra in view of precedent relied upon by the appellant. Having found that the invoices were in the name of the appellant and that the legal position disallows imposing a precondition of registration of premises for denial of CENVAT credit where services were in fact provided to the appellant, the denial by the Commissioner (Appeals) was held unsustainable. [Paras 6, 7, 10]

Refund/credit on CENVAT paid for renting of immovable property is allowed; the Commissioner (Appeals) order denying it is set aside and refund directed with applicable interest.

Exclusion clause in the definition of input service and conditional nature of exclusions - nexus between input services and output services - remand for production and examination of documentary evidence to establish business purpose - Whether CENVAT credit/refund denied on specified input services (Restaurant services, Accommodation services, General Insurance & Auxiliary services, Photography service, Air Travel Agent services) for lack of nexus or because they fall under exclusion clause was correctly rejected on the record. - HELD THAT: - The Tribunal observed that the definition of input service contains conditional exclusions whose applicability depends on the purpose for which the service was availed (personal consumption versus business use). The Commissioner (Appeals) had rejected credits primarily on three grounds: absence of nexus with output services, insufficiency of invoices to demonstrate business purpose in respect of services falling under the exclusion clause, and descriptive invoice entries indicating recreational use. The Tribunal found that the Commissioner (Appeals) had himself recorded that documentary trail beyond invoices could establish purpose of use. Given the factual character of the enquiry and the availability of additional evidence capable of establishing that the services were used for business purposes (meetings, conferences, client-related travel etc.), the Tribunal remanded these items for fresh consideration by the Commissioner (Appeals) and directed the appellant to produce documentary proof; the remand is for examination of eligibility and not a final adjudication on merits. [Paras 8, 9, 10]

Matters relating to Restaurant services, Accommodation services, General Insurance & Auxiliary services, Photography service and Air Travel Agent services are remanded to the Commissioner (Appeals) for fresh examination of documentary evidence to determine eligibility for CENVAT credit; appellant to produce documents and the exercise to be completed within six months.

Final Conclusion: The appeals are allowed in part: the Tribunal set aside the Commissioner (Appeals) order insofar as it denied CENVAT credit/refund on renting of immovable property and directed refund with interest; for specified other services the matter is remanded to the Commissioner (Appeals) for fresh examination of documentary evidence regarding business purpose, to be completed within six months.

Entitlement to service tax refund for contracts entered prior to 1.3.2015 - date of contract as date of financial bid opening / tender opening - unjust enrichment and deposit in Government Treasury - remand for computation of proportionate refund and payment with interest under Section 11BB

Entitlement to service tax refund for contracts entered prior to 1.3.2015 - date of contract as date of financial bid opening / tender opening - Appellant entitled to proportionate refund in respect of contracts where financial bids were opened prior to 1.3.2015 despite work orders being issued after 1.3.2015. - HELD THAT: - The Tribunal, following the Division Bench decision in Shanti Construction Company (as relied upon by the appellant), accepted that where the financial bids were opened and the appellant was declared the successful bidder prior to 1.3.2015, that date constitutes the date of contract for the purpose of entitlement to refund. Although the work orders in the four contracts were issued after 1.3.2015, the contract came into existence on the date of tender/financial bid opening; consequently, the portion of service tax paid in respect of those four contracts falls within the benefit of the retrospective refund notification and is refundable to the appellant. [Paras 10]

Proportionate refund granted in respect of the four contracts where financial bids were opened prior to 1.3.2015.

Remand for computation of proportionate refund and payment with interest under Section 11BB - unjust enrichment and deposit in Government Treasury - Adjudicating Authority directed to compute and grant the proportionate refund for the four contracts with interest under Section 11BB; directions regarding deposit/unjust enrichment preserved as applicable. - HELD THAT: - The Tribunal modified the impugned order to the extent of directing the Adjudicating Authority to work out the proportionate amount of refund relating to the four eligible works and to grant the same within 60 days of the Tribunal's order. Interest is to be paid under Section 11BB of the Central Excise Act. The earlier finding that reimbursement by MES would attract the requirement to deposit refunds in Government Treasury to avoid unjust enrichment remains part of the administrative framework to be given effect to as appropriate. [Paras 5, 11]

Adjudicating Authority to compute and grant the proportionate refund for the four contracts within 60 days, with interest under Section 11BB; directions on deposit to address unjust enrichment to be implemented as applicable.

Final Conclusion: Appeal allowed in part: proportionate refund of the portion of Rs. 11,32,049/- corresponding to four contracts where financial bids were opened prior to 1.3.2015 is directed to be worked out and granted by the Adjudicating Authority within 60 days with interest under Section 11BB; administrative directions regarding deposit to address unjust enrichment to be given effect as applicable.

Business Support Services - Association of Persons / Joint venture - Revenue-sharing arrangement not amounting to taxable service - Principal-to-principal relationship - Requirement of service-provider-service-recipient relationship for levy of service tax - Relevance of administrative Circulars in classification of service

Business Support Services - Revenue-sharing arrangement not amounting to taxable service - Requirement of service-provider-service-recipient relationship for levy of service tax - Principal-to-principal relationship - Whether the services rendered by the exhibitor to the distributors/producers are exigible to service tax under the category of Business Support Services for the period 01.04.2009 to 31.03.2014. - HELD THAT: - The Tribunal held that the contractual arrangement between the exhibitor and the distributor is a licence to exploit theatrical rights on a revenue sharing model in which the exhibitor pays and the distributor receives a share of box office collections. The exhibitor independently decides screens, shows, timings and ticket pricing and conducts its activity on its own account. Revenue sharing per se does not establish a service relationship; the necessary element of a service - a quid pro quo from service recipient to service provider for a specific service - is absent where parties participate as co venturers in a common enterprise. Reliance was placed on the Tribunal's reasoning in Mormugao Port Trust (approved by the Supreme Court on merits and delay) which applies the test in Faqir Chand Gulati for determining joint venture/partnership. The 23.02.2009 Circular supports the view that mere exhibition is not a support service; the 13.12.2011 Circular, being post dating part of the disputed period and not advancing the Department's case for the relevant period, does not sustain the demand. Earlier Tribunal decisions in favour of exhibitors (including Inox Leisure Ltd., affirmed by the Supreme Court) reinforce that screening on revenue sharing basis does not attract service tax under BSS. Applying these principles to the Agreement, the Tribunal concluded that the payments made by the exhibitor to the distributor were not consideration for a Business Support Service and therefore not exigible to service tax for the relevant period. [Paras 17, 18, 21, 23, 28]

Demand of service tax under Business Support Services for the period 01.04.2009 to 31.03.2014 set aside; payments under revenue sharing agreements held not to be taxable as BSS.

Final Conclusion: The order of the Commissioner dated 06.02.2015 confirming service tax demand under Business Support Services is set aside; the appeal is allowed and the Department's cross objections are disposed of.

Negative List entry for services directly provided to farmers (exemption under Section 66D(d)(i) of the Finance Act, 1994) - agriculture operations includes irrigation and allied activities (scope of 'agriculture' for exemption) - sufficiency of evidence to establish that services were provided to farmers (affidavits, land records, Gram Panchayat certificates) - administrative clarification on taxability of drilling of borewells

Negative List entry for services directly provided to farmers (exemption under Section 66D(d)(i) of the Finance Act, 1994) - agriculture operations includes irrigation and allied activities (scope of 'agriculture' for exemption) - Whether services of digging wells and borewells provided to farmers are excluded from service tax as part of agriculture operations under the Negative List entry (Section 66D(d)(i)). - HELD THAT: - The Tribunal examined the nature of services rendered - drilling of wells and borewells for farmers for use in irrigation and other agricultural operations - and the evidentiary material placed on record. The appellant produced affidavits of service receivers, copies of land records, and certificates from the Sarpanch listing recipients and amounts paid. The Tribunal found these materials not shown to be untrue and held that the rejection of such evidence by the Commissioner (Appeals) was arbitrary and contrary to the scheme of the Finance Act and the rules. The Tribunal also relied on the clarificatory letter (F.No.354/35/2014-TRU) addressing taxability of drilling services and on the Supreme Court decision in Raja Binoy Kumar Sahas Roy, adopting the wider meaning of 'agriculture' to include operations such as irrigation. Applying these principles, the Tribunal concluded that digging of borewells/wells for farmers falls within the Negative List entry for services directly provided to farmers and is therefore exempt from service tax. [Paras 9, 10, 11]

Services of digging wells and borewells provided to farmers are covered by the Negative List exemption as agricultural operations (including irrigation) and are not taxable; the appellate order confirming demand is set aside and the order-in-original dropping the demand is restored.

Sufficiency of evidence to establish that services were provided to farmers (affidavits, land records, Gram Panchayat certificates) - administrative clarification on taxability of drilling of borewells - Whether the evidence produced by the appellant was sufficient to establish that the drilling services were rendered to farmers and thereby qualify for exemption. - HELD THAT: - The Tribunal considered the specific documents produced: affidavits of service receivers, land records of recipients, and certificates from the Village Sarpanch listing farmers and amounts paid. The Tribunal observed that these documents were not demonstrated to be false and that the Commissioner (Appeals) erred in rejecting them for insufficiency. The clarificatory letter from the tax administration confirming that drilling of borewells supplying water to farmers is excluded from tax under the Negative List reinforced the conclusion that the evidence sufficed to establish exempt status. [Paras 9, 10]

The evidentiary material produced was sufficient to establish that the services were provided to farmers; the impugned finding of insufficiency is set aside.

Final Conclusion: The appeal is allowed: the Tribunal restores the order-in-original that dropped the service tax demand, holding that drilling of wells and borewells for farmers is an exempt agricultural service under the Negative List (Section 66D(d)(i)); the Commissioner (Appeals) erred in rejecting the appellant's evidence and the appellant is entitled to consequential benefits in accordance with law.

Jurisdiction of Directorate General of Central Excise Intelligence to issue show-cause notice - maintainability of writ petition challenging a show-cause notice - efficacy of alternative remedy by replying to show-cause notice - prima facie material in a show-cause notice requiring reply

Jurisdiction of Directorate General of Central Excise Intelligence to issue show-cause notice - Impugned show-cause notice was issued by an authority having jurisdiction. - HELD THAT: - The Court examined the Circular dated 10.2.2015 which, read with earlier notifications, authorises officers of the Directorate General of Central Excise Intelligence to act as Central Excise Officers and issue show-cause notices in cases investigated by them, and permits assignment of adjudication to field Commissioners. On that foundation the submission that the Principal Additional Director General lacked jurisdiction was rejected. The impugned notice contained particulars of the investigation, identified differences in machine specifications and possible mis-declaration, and thus there was no vitiation of jurisdiction in issuing the notice. [Paras 6, 8, 13]

Jurisdictional objection to the Principal Additional Director General issuing the show-cause notice is repelled.

Maintainability of writ petition challenging a show-cause notice - efficacy of alternative remedy by replying to show-cause notice - prima facie material in a show-cause notice requiring reply - Writ petition challenging the show-cause notice is premature and not maintainable; petitioner must avail the statutory remedy of replying to the notice. - HELD THAT: - Applying settled precedents, the Court held that where a show-cause notice discloses factual and scientific material calling for an explanation, the appropriate course is to require the recipient to answer the notice and pursue adjudicatory remedies rather than seek pre-emptive relief by writ. The impugned notice set out the investigation, the alleged mis-declaration and the basis for proposed liability, thereby creating prima facie material warranting a reply. Consequently, interference at the threshold would be premature unless the notice was wholly without jurisdiction or entirely non est, which the Court did not find. [Paras 5, 11, 13, 19]

Writ petition dismissed as premature; petitioner directed to reply to the show-cause notice and pursue available statutory remedies.

Final Conclusion: The petition is dismissed at admission as premature: the impugned show-cause notice was lawfully issued by the DGCEI authority and the petitioner has an efficacious alternative remedy of replying to the notice and pursuing adjudication.

Gross delay in adjudication of show-cause notice - violation of principles of natural justice by belated hearing - duty of revenue to adjudicate show-cause notice within a reasonable period - quashing of show-cause notice for inordinate delay - transfer of show-cause notice to call book and effect on noticees

Gross delay in adjudication of show-cause notice - violation of principles of natural justice by belated hearing - quashing of show-cause notice for inordinate delay - duty of revenue to adjudicate show-cause notice within a reasonable period - The show-cause notice dated 17th February, 2006 issued to the petitioner is liable to be quashed for gross and unexplained delay in adjudication. - HELD THAT: - The Court found that there was no communication to the petitioner regarding the show-cause notice or any transfer of the same to call book from 17th February, 2006 until an intimation of personal hearing on 19th February, 2019. The letter relied upon by the respondents did not identify which issue was before audit or indicate that the petitioner had been informed of any call-book action. The delay of over 12 years in adjudicating the notice prevented the petitioner from seeking timely relief and preserving evidence, and a belated hearing would violate principles of natural justice. Relying on earlier decisions of this Court, the bench held that the revenue has the duty to take show-cause notices to a logical conclusion within a reasonable time and, in the absence of justification for the inordinate delay, quashed the notice. [Paras 13, 14, 15, 16, 26]

The show-cause notice dated 17th February, 2006 is quashed and set aside; writ petition allowed.

Gross delay in adjudication of show-cause notice - transfer of show-cause notice to call book and effect on noticees - quashing of show-cause notices for inordinate delay - duty of revenue to adjudicate show-cause notice within a reasonable period - The multiple show-cause notices issued during 2004-07 are liable to be quashed for being kept pending without communication or adjudication for over ten years. - HELD THAT: - The Court recorded that for more than ten years there was no communication to the petitioner about objections said to have been raised with the Comptroller and Accountant General or about any transfer of the files to call book. The reasoning applied in the earlier petition (regarding unreasonable delay, prejudice to the petitioner, and breach of natural justice) was held to be applicable to these show-cause notices as well. In the absence of any explanation justifying the prolonged inaction by the revenue, the Court concluded that adjudication at this belated stage would be oppressive and quashed the impugned notices. [Paras 24, 25, 27]

The show-cause notices issued during 2004-07 (as described in the petition) are quashed and set aside; writ petition allowed.

Final Conclusion: The High Court quashed the impugned show-cause notice dated 17th February, 2006 and the other show-cause notices issued during 2004-07 on the ground of gross, unexplained delay and consequent violation of principles of natural justice; both writ petitions are allowed and there is no order as to costs.

Delay in adjudication - quashing of show cause notice for inordinate delay - call book/dormant list - duty to adjudicate within a reasonable period - non-communication of transfer to call book - remedies under Article 226 of the Constitution

Delay in adjudication - quashing of show cause notice for inordinate delay - call book/dormant list - duty to adjudicate within a reasonable period - non-communication of transfer to call book - Validity of show cause notices which remained undecided for long periods after being transferred to the call book without communicating such transfer to the petitioner; whether writ relief under Article 226 is permissible to quash such notices. - HELD THAT: - The Court found that five show cause notices issued for the stated periods were replied to by the petitioner but were not adjudicated and no hearing dates or communications were sent informing why adjudication was delayed. The respondents first informed the petitioner in April/June 2021 that the files had been transferred to the call book under Board circulars, but there was no prior communication to the petitioner about this transfer. The Board circulars relied upon permit transfer to call book in specified circumstances, but the Court emphasised the established principle that revenue must take show cause proceedings to a logical conclusion within a reasonable period and cannot by long dormancy or placement in the call book justify inordinate delay. The Court applied its earlier decisions (including Parle International Ltd., Sushitex Exports and Bombay Dyeing), which hold that keeping show cause notices dormant for years, without informing the affected party and causing prejudice, warrants relief. Distinctions were noted in authorities relied upon by respondents (including cases where remand or active proceedings/records existed), but those facts did not obtain here. Given the respondents' prolonged inaction, failure to communicate the call-book status and resulting prejudice to the petitioner, the Court held that proceeding further with the aged show cause notices was not permissible and exercise of writ jurisdiction was justified to quash them. [Paras 24, 27, 29, 31, 32]

Five show cause notices transferred to the call book and left undecided for years without communication to the petitioner are quashed and set aside; writ petition allowed.

Final Conclusion: Writ petition allowed; the impugned show cause notices (relating to the periods listed) are quashed on grounds of inordinate delay, non-communication of call-book transfer and failure of the revenue to adjudicate within a reasonable period; no order as to costs.

Refund within period of limitation - interest on delayed refund - interest under S. 11BB - binding effect of appellate Bench's final order - judicial indiscipline

Refund within period of limitation - binding effect of appellate Bench's final order - interest on delayed refund - Whether the authorities were bound to give full refund and consequential interest in accordance with this Bench's Final Order dated 26/04/2019 which held the refund claim to be within limitation. - HELD THAT: - This Bench had earlier, by Final Order dated 26/04/2019, held that the date of filing of the original refund application governed limitation and that the appellant's entire claim fell within the period of limitation, allowing the appeal with consequential interest. The Revenue and subordinate authorities, having accepted that order, were duty-bound to implement its directions fully. The adjudicating authority and Commissioner (Appeals) had nevertheless processed only a partial refund and rejected parts of the claim, including on grounds not consistent with the Final Order. The Tribunal held that once its order became final the same could not be ignored or diluted by lower authorities and that failing to follow the Bench's directions constituted judicial indiscipline. Consequently the impugned appellate order insofar as it failed to grant refund in accordance with the Final Order was set aside and the adjudicating authority directed to grant full refund with consequential relief, including interest under S. 11BB.

Impugned order set aside to the extent it did not implement this Bench's Final Order; adjudicating authority directed to grant full refund and consequential interest in terms of the Final Order (including interest under S. 11BB).

Rejection on a new ground - judicial indiscipline - Whether rejection of part of the refund claim on a ground not raised in the show-cause notice or earlier orders was sustainable. - HELD THAT: - The Tribunal observed that rejection of an amount on a ground which was neither mentioned in the show-cause notice nor in the Orders-in-Original or Orders-in-Appeal amounted to issuing a new ground of denial at a belated stage. Such a course is impermissible, particularly when earlier orders had determined the limitation issue in favour of the appellant. The impugned rejection on that new ground could not be sustained and formed part of the failure to give effect to the Final Order of this Bench.

Rejection on the new ground set aside; the authorities directed to reprocess and sanction the refund consistent with the Final Order.

Final Conclusion: The appeal is allowed insofar as the impugned order failed to give effect to this Bench's Final Order dated 26/04/2019; the impugned portions are set aside and the adjudicating authority is directed to grant the full refund claimed for the periods within limitation and to pay consequential relief, including interest under S. 11BB, in accordance with the Tribunal's earlier directions.

Cenvat credit on outward goods transport agency services - interpretation of "place of removal" in the definition of input - compliance with Board Circular No. 97/8/2007-ST - remand for documentary verification

Cenvat credit on outward goods transport agency services - interpretation of "place of removal" in the definition of input - Whether cenvat credit is prima facie available in respect of outward GTA for the period prior to 01.04.2008. - HELD THAT: - The Tribunal observed that the definition of input was amended with effect from 01.04.2008 to permit services related to removal of inputs "up to place of removal". Consequently, for periods prior to 01.04.2008 the Tribunal found that cenvat credit is prima facie available in respect of outward transportation where services are availed from the place of removal up to the customer's place. The Tribunal noted earlier judicial decisions relied upon by the appellant but based its conclusion on the effect of the amendment to the definition of input and the scope of services covered. [Paras 4]

Cenvat credit on outward GTA for the period prior to 01.04.2008 is prima facie available where services are availed from the place of removal up to the customer's place.

Compliance with Board Circular No. 97/8/2007-ST - remand for documentary verification - Whether the entitlement to cenvat credit should be finally pronounced without verification of compliance with conditions prescribed in Board Circular No. 97/8/2007-ST dated 23.08.2007. - HELD THAT: - The Tribunal accepted the Revenue's submission that the Board Circular prescribed certain conditions for allowing cenvat credit on outward GTA even prior to 01.04.2008 and observed that the adjudicating authority had not verified whether those conditions were satisfied. Accordingly, although credit was held prima facie available, the Tribunal directed that the matter be remanded to the Adjudicating Authority to examine the documentary evidence and decide whether the appellant fulfilled the conditions laid down in the Board Circular. [Paras 4, 5]

Matter remanded to the Adjudicating Authority to pass a fresh order after verifying whether the appellant has complied with the conditions in Board Circular No. 97/8/2007-ST dated 23.08.2007.

Final Conclusion: Impugned order set aside; appeal allowed by way of remand to the Adjudicating Authority for verification of compliance with Board Circular No. 97/8/2007-ST and fresh adjudication on entitlement to cenvat credit for outward GTA prior to 01.04.2008.

Maintainability of writ petition despite alternative statutory remedy - jurisdiction of Consumer Dispute Redressal Forum to stay bank recovery proceedings - exercise of discretionary writ jurisdiction under Article 226 - remand for reconsideration by statutory forum

Jurisdiction of Consumer Dispute Redressal Forum to stay bank recovery proceedings - maintainability of writ petition despite alternative statutory remedy - exercise of discretionary writ jurisdiction under Article 226 - Validity of Exts.P1 and P2 - whether the District Consumer Forum had jurisdiction to pass an order restraining recovery proceedings initiated by the Bank and whether the writ petition filed by the Bank should be entertained instead of relegating it to the statutory remedy. - HELD THAT: - The Court examined precedents establishing that consumer fora ordinarily form a complete code for consumer disputes but recognised exceptions where a writ court may intervene, including where an authority acts without jurisdiction. Applying those principles to the facts, the Court found that Ext.P1 complaint was not maintainable before the District Forum and that Ext.P2, which restrained the Bank's recovery proceedings, was an order passed without jurisdiction. The Court noted that although an interlocutory order could be vacated by the consumer fora, substantial delay, absence of the complainant's appearance and the injustice that would be caused to a nationalised bank justified direct relief by the writ court rather than relegation to the statutory appellate forums. On these grounds the writ petition was allowed and Exts.P1 and P2 were quashed. [Paras 21, 22]

W.P.(C.) No.3801/2014 allowed; Exts.P1 and P2 quashed.

Maintainability of writ petition despite alternative statutory remedy - remand for reconsideration by statutory forum - exercise of discretionary writ jurisdiction under Article 226 - Whether Ext.P9 passed by the District Consumer Forum should be set aside or the petitioner should be relegated to the statutory appeal remedy, and whether the merits of maintainability (which were not raised before the forum) require fresh consideration. - HELD THAT: - The Court acknowledged that Ext.P9 is appealable to the State Commission and that the Consumer Protection Act provides a hierarchical remedy, but observed that the writ petition had been admitted and an interim stay had been in force. Because the grounds now relied upon by the petitioner were not advanced before the District Forum, the Court considered it would be unjust to simply compel the petitioner to proceed by appeal after a long lapse. Balancing the discretionary nature of writ jurisdiction, the Court set aside Ext.P9 and remanded the matter to the District Forum to decide maintainability and related contentions afresh after hearing the parties, directing expeditious disposal taking into account the delay since filing. [Paras 23]

W.P.(C.) No.36086/2015 allowed in part; Ext.P9 set aside and matter remanded to the District Forum for reconsideration after hearing.

Final Conclusion: The High Court held that admission of a writ petition does not bar the Court from deciding maintainability where an alternative statutory remedy exists; W.P.(C.) No.3801/2014 was allowed and the District Forum's complaint and interim order quashed for want of jurisdiction, while W.P.(C.) No.36086/2015 was allowed in part by setting aside the District Forum order and remanding the complaint to the Forum for fresh consideration after hearing the parties.