TaxTMI Updates e-Newsletter
Apr 07,2021

Scope of powers of check-post/anti-evasion officer under Section 68 of the CGST Act, 2017 - scope of detention and assessment powers under Section 129 of the CGST Act, 2017 - verification of goods in transit by inspection of prescribed documents and e-way bill - prohibition on inquiry into genuineness of purchase and corresponding input tax credit while goods are in transit - Circular dated 13.04.2018 of the Central Board of Indirect Taxes and Customs on inspection and release of goods in transit - release of detained goods on furnishing of solvent sureties and undertaking

Verification of goods in transit by inspection of prescribed documents and e-way bill - prohibition on inquiry into genuineness of purchase and corresponding input tax credit while goods are in transit - scope of powers of check-post/anti-evasion officer under Section 68 of the CGST Act, 2017 - Scope of inquiry that an anti-evasion officer/check-post in charge may undertake while goods are in transit. - HELD THAT: - The Court held that where goods in transit are accompanied by the prescribed documents and physical verification confirms conformity of goods and weight with those documents, the scope of inquiry by an Anti Evasion Officer or check post officer under Section 68 ends. Such officers are confined to verifying transit documents and physical conformity; they cannot initiate a fishing inquiry into the genuineness of the purchase transaction or the correctness of the supplier's input tax credit claim while goods are moving in transit. Allowing an officer intercepting goods in transit to probe antecedent events of purchase and input tax credit would impede free flow of trade and amount to impermissible overreach of the powers conferred for inspection of transit consignments. [Paras 15, 16]

Inquiry into genuineness of purchase and corresponding input tax credit by Anti Evasion/Check Post officers while goods are in transit is beyond their scope once prescribed transit documents and physical conformity are in order.

Scope of detention and assessment powers under Section 129 of the CGST Act, 2017 - verification of goods in transit by inspection of prescribed documents and e-way bill - Applicability of Section 129(1) where goods in transit are accompanied by required documents and tax has been appropriately charged. - HELD THAT: - The Court examined the language of Section 129(1) and concluded that it applies where goods are transported or stored in transit in contravention of the Act or the Rules. In the present case, the goods were accompanied by invoice, e-way bill and weighment and applicable tax had been charged; therefore, prima facie the conditions envisaged by Section 129(1) for detention and penalty were not made out. The Court noted that the allegation of wrongful availment of input tax credit concerns antecedent events separated from the act of movement in transit and hence Section 129 could not be invoked on that basis. The Court further observed procedural irregularity in the manner the proposing authority had jumped to a higher penal clause instead of first proposing tax under the appropriate clause, thereby rendering statutory remedies potentially inefficacious. [Paras 18, 19, 26]

Section 129(1) could not be resorted to prima facie where goods in transit are accompanied by prescribed documents and tax has been charged; detention and proposed penalty on the ground of alleged wrong input tax credit were not justified at that stage.

Release of detained goods on furnishing of solvent sureties and undertaking - Circular dated 13.04.2018 of the Central Board of Indirect Taxes and Customs on inspection and release of goods in transit - Interim relief in the form of release of detained goods and vehicle and the conditions for such release. - HELD THAT: - Balancing the authorities' power and the hardship caused by indefinite detention, and noting that inspection and physical verification had been completed and documents were in order, the Court directed immediate release of the goods and vehicle on specified security conditions. The Court declined to insist on bank guarantee or cash security and instead required petitioner No.1 to furnish two solvent sureties executed by dealers registered in Rajasthan to the prescribed amount and to file an undertaking that, if liability is finally established, the amount will be paid. The Court treated this interim measure as without prejudice to final adjudication and recognised that final disposal would require fuller examination of facts and law. [Paras 29, 30, 31]

Goods and vehicle to be released forthwith upon petitioner furnishing two solvent sureties by Rajasthan registered dealers and filing an undertaking as to payment if liability is finally established; bank guarantee or cash security not to be insisted upon.

Final Conclusion: Writ petition issued; Court held that anti evasion/check post officers are limited to verifying prescribed transit documents and physical conformity and cannot, while goods are in transit, investigate the genuineness of purchase or alleged wrongful input tax credit; Section 129(1) was held not prima facie attracted where documents and tax conformity existed. In the interim, the detained goods and vehicle were ordered released on furnishing specified solvent sureties and an undertaking, without requirement of bank guarantee or cash security, pending further proceedings.

Interim stay - deposit as condition for stay - anti-profiteering determination - exclusion of GST component - Central Consumer Welfare Fund

Interim stay - deposit as condition for stay - exclusion of GST component - Central Consumer Welfare Fund - Interim suspension of the operation of the impugned anti-profiteering order subject to deposit of a specified portion of the amount determined by the authority. - HELD THAT: - The petitioner, without prejudice to its rights, offered to deposit 50% of the purported anti profiteering amount as calculated by respondent no.2/NAPA, after excluding the GST component. The court directed that 50% of the amount so calculated, excluding the GST portion, be deposited by the petitioner with the Central Consumer Welfare Fund before the next date of hearing and that proof of such deposit be placed on record. Having secured that undertaking and conditional deposit, the court granted a stay on the operation of the impugned order. The timeline for filing counter affidavits and rejoinder was recorded for further progression of the matter to the next listing. [Paras 4, 5, 6]

Stay of the impugned order granted subject to the petitioner depositing 50% of the purported profiteered amount excluding GST into the Central Consumer Welfare Fund and placing proof of deposit on record.

Final Conclusion: Notice issued; interim stay of the impugned anti profiteering order directed on the condition that the petitioner deposit 50% of the determined amount excluding GST into the Central Consumer Welfare Fund and place proof of deposit on record; matter listed for further hearing.

Rectification under Section 254(2) of the Income Tax Act - Notional interest addition - Remand to Assessing Officer

Rectification under Section 254(2) of the Income Tax Act - Remand to Assessing Officer - Whether the Tribunal exceeded its power of rectification under Section 254(2) by recalling its earlier order dated 03.09.2019 in respect of the notional interest issue. - HELD THAT: - The Court examined the Tribunal's impugned order and the earlier order dated 03.09.2019 and observed that the question of notional interest did not form part of the findings in the 03.09.2019 order. Since the matter concerning notional interest arose for assessment years 2008-2009 to 2011-2012 and had not been adjudicated in the earlier order, the Tribunal was entitled to exercise its powers under Section 254(2) to rectify/recall insofar as that unaddressed issue was concerned. The Court therefore held that the Tribunal did not exceed its rectification power by taking the matter on merits. [Paras 10, 11]

Tribunal correctly exercised its powers under Section 254(2); the revenue's challenge to the exercise of rectification is rejected.

Notional interest addition - Remand to Assessing Officer - Whether the Tribunal was justified in treating the interest income added by the Assessing Officer as notional where the HSBC account balance was interest-bearing and whether sufficient material existed to treat the interest as actual income. - HELD THAT: - The Court did not decide the merits of whether the interest addition was correctly held to be notional. Instead, it directed that the legal question regarding the characterization of the interest be considered along with the assessee's separate appeal (ITA No.612/2017) that challenges the remand direction on existence of the bank deposits. The matter is therefore deferred for adjudication in conjunction with the related appeal, and listed for hearing with that appeal. [Paras 12, 13]

Merits of the notional-interest question deferred and to be considered with ITA No.612/2017; the captioned appeal listed for hearing with that appeal on 05.08.2021.

Final Conclusion: The revenue's challenge to the Tribunal's exercise of rectification under Section 254(2) is dismissed; the substantive question as to whether the interest addition was notional is deferred for consideration with ITA No.612/2017 and the matter is listed accordingly.

Bogus purchases - addition to income - rejection of books of account - estimation by adopting gross profit rate from earlier assessment - summons under Section 133(6) of the Income Tax Act - invocation of Section 69C - failure to confront assessee with material

Bogus purchases - failure to confront assessee with material - addition to income - Sustainability of the addition made by the AO in respect of alleged bogus purchases for AY 2007-2008 when summons returns from suppliers were not placed before the assessee. - HELD THAT: - The Tribunal and CIT(A) found that summons under Section 133(6) had been issued to the suppliers of the alleged bogus purchase bills but information received from only one party was not furnished to or confronted with the assessee. Because the assessee was not put to the material received from the summoned party, the assessment was vitiated. In those circumstances the CIT(A) did not reject the books of account wholesale but, noting prior treatment in AY 2006-2007, sustained a limited addition by applying the gross profit rate earlier accepted in the assessee's case. Given the factual findings that the investigation was "half-baked" and the lack of confrontation, interference with the concurrent findings of the CIT(A) and Tribunal was not warranted. [Paras 4, 5, 9, 10, 11]

Addition in respect of alleged bogus purchases could not be sustained in full as the assessee was not confronted with material obtained from summoned parties; a limited addition was sustained by applying the gross profit rate adopted in the earlier assessment.

Invocation of Section 69C - rejection of books of account - Permissibility of the revenue's contention that addition ought to have been sustained under Section 69C where the assessment order made no reference to that provision. - HELD THAT: - The revenue argued before the Court that the addition should have been sustained under Section 69C. The Court observed that the assessment order contained no reference to Section 69C and the revenue conceded that the provision was not invoked in the assessment. Consequently the contention based on Section 69C was unavailable on the facts of this case and could not be entertained on appeal. [Paras 7, 8]

Argument based on Section 69C was not available to the revenue since the assessment order did not invoke that provision.

Final Conclusion: The appeal is dismissed; the concurrent findings of the CIT(A) and the Tribunal that the assessment was vitiated by non-confrontation of material and that only a limited addition (by applying the earlier accepted gross profit rate) could be sustained are upheld, and no substantial question of law arises.

Reopening of assessment after four years for failure to disclose fully and truly all material facts - Reopening based on subsequent specific and reliable information exposing falsity of earlier disclosure - Independent application of mind by Assessing Officer on information from investigation wing - Validity of recorded reasons for reopening under Section 148 - Prior sanction and timing for issuance of notice under Section 151 - Borrowed satisfaction and reliance on third party/investigation reports

Reopening of assessment after four years for failure to disclose fully and truly all material facts - Reopening based on subsequent specific and reliable information exposing falsity of earlier disclosure - Whether reopening of assessment for A.Y. 2012-13 beyond four years was justified on the ground that the assessee failed to disclose fully and truly all material facts and tangible material subsequently came to light - HELD THAT: - The Court applied the established two fold test for invoking jurisdiction beyond four years, namely that the Assessing Officer must have reason to believe that income chargeable to tax has escaped assessment and that such escapement was occasioned by omission or failure to disclose fully and truly all material facts. The Court found that investigation wing material showing credit entries of Rs. 51,00,000 as accommodation entries constituted tangible, specific and reliable information which prima facie exposed the falsity of the earlier disclosure. Mere disclosure of banking entries during original assessment did not amount to disclosure of the full and true facts where subsequent information demonstrates the transaction to be bogus. The Assessing Officer, after verifying the information and applying his mind, formed an opinion that income had escaped assessment; consequently jurisdiction under Section 147 was properly attracted and reopening was justified. [Paras 14, 19, 20, 22, 23]

Reopening beyond four years was validly initiated as tangible subsequent information showed non disclosure of full and true facts and the Assessing Officer had reason to believe income had escaped assessment.

Validity of recorded reasons for reopening under Section 148 - Independent application of mind by Assessing Officer on information from investigation wing - Borrowed satisfaction and reliance on third party/investigation reports - Whether the reasons recorded for issuance of the notice under Section 148 were valid and reflected application of independent mind rather than mere mechanical action on third party information - HELD THAT: - The Court examined the reasons and the material placed before the Assessing Officer from the investigation wing. It held that the Assessing Officer had verified the information, analysed bank statements vis a vis ITRs and other material, and recorded reasons indicating application of independent mind. Reliance on investigation reports or third party information does not vitiate the recording of reasons provided the Assessing Officer peruses the material, applies his mind and reaches a bona fide satisfaction; the facts here showed such verification and satisfaction. Consequently the challenge that the notice was a product of borrowed or mechanical satisfaction was rejected. [Paras 12, 13, 22]

Reasons recorded under Section 148 were valid; Assessing Officer applied independent mind to investigation material and the reopening was not based on mere borrowed satisfaction.

Prior sanction and timing for issuance of notice under Section 151 - Validity of recorded reasons for reopening under Section 148 - Whether sanction under the competent authority was obtained prior to issuance of the notice in accordance with Section 151 - HELD THAT: - The Court considered the paperwork of approval and observed that the competent authority had endorsed satisfaction in handwriting and accorded sanction on the date the impugned notice was issued. On this basis the Court held that sanction was obtained as required and the contention that sanction was not procured before issuance of the notice was not sustainable. [Paras 21]

Sanction under Section 151 was shown to have been accorded and the requirement for prior approval was satisfied.

Final Conclusion: The writ petition is dismissed. The Court held the reassessment proceedings for A.Y. 2012-13 to be validly initiated: the Assessing Officer had tangible subsequent information, applied independent mind, recorded valid reasons, and obtained necessary sanction, hence reopening under Section 147/148/151 was sustained.

Reopening of assessment beyond four years - reason to believe income escaped assessment - failure to disclose fully and truly all material facts - reopening based on third party or borrowed satisfaction - sanction under Section 151 of the Act

Reopening of assessment beyond four years - reason to believe income escaped assessment - Validity of reopening assessment for AY 2012-13 beyond four years on the basis of recorded reasons and material received by the Assessing Officer. - HELD THAT: - The Court applied the settled test that, for reopening beyond four years, the Assessing Officer must have a reason to believe that income chargeable to tax has escaped assessment due to either failure to file a return or failure to disclose fully and truly all material facts. The reasons recorded show that tangible material from the investigation wing (relating to alleged bogus foreign remittances and accommodation entries involving entities including Agni Gems Pvt. Ltd.) was placed before the Assessing Officer, who examined assessment records and identified the assessee's purchases from the alleged concern. The Court found that the material relied upon was specific and capable of imparting a reason to believe that escapement had occurred and that the reasons had a live link with the materials gathered during inquiry. Consequently, the statutory test for forming a belief under Section 147 was satisfied. [Paras 10, 12, 13, 14, 15]

Reopening of the assessment beyond four years for AY 2012-13 was validly initiated on the basis of the reasons recorded and material before the Assessing Officer.

Failure to disclose fully and truly all material facts - Whether the assessee had truly and fully disclosed material facts at the time of original assessment so as to preclude reopening. - HELD THAT: - The Court held that mere disclosure of transactions in the original assessment does not necessarily amount to true and full disclosure if subsequent reliable information shows the transactions to be bogus. Relying on precedent, the Court observed that where subsequent specific and reliable information exposes the falsity of earlier statements, the Assessing Officer may form a belief that material facts were not truly and fully disclosed. The reasons recorded demonstrated that the assessee's purchases, though shown in books, were shown to be accommodation entries on the basis of the investigation, thereby constituting failure of true and full disclosure. [Paras 11, 16, 17, 22]

The Court held that there was failure to disclose fully and truly material facts, justifying reassessment proceedings.

Reopening based on third party or borrowed satisfaction - reason to believe income escaped assessment - Whether the reopening was merely mechanical or based on 'borrowed satisfaction' without independent application of mind by the Assessing Officer. - HELD THAT: - The Court examined the reasons and the inquiries made by the Assessing Officer after receipt of investigating agency material. It found that the Assessing Officer did not proceed merely on the basis of third party material but verified and analysed the information, examined the assessee's records and formed an independent satisfaction that the purchase transactions appeared to be bogus. The Court relied on authorities recognising that departmental or other government investigations may supply relevant material which an Assessing Officer can independently consider to form a bona fide belief under Section 147. [Paras 13, 14, 15, 25]

Reopening was not founded on mere borrowed satisfaction; the Assessing Officer applied his mind and formed an independent belief.

Sanction under Section 151 of the Act - Whether requisite sanction was validly obtained before issuance of the notice under Section 148. - HELD THAT: - The Court perused the sanction papers and noted that the competent authority had recorded satisfaction in handwriting and granted sanction on the date of issue of the notice. On this basis the Court rejected the contention that sanction was not obtained prior to issuance, holding that the approval demonstrated that the requirement of sanction had been met. [Paras 24]

Sanction under Section 151 was validly accorded and the requirement satisfied.

Final Conclusion: Writ petition dismissed; the High Court upheld the validity of reopening proceedings for AY 2012-13, holding that the Assessing Officer had tangible material and formed an independent reason to believe that income had escaped assessment, the assessee had not truly and fully disclosed material facts, and requisite sanction was obtained.

Application of Section 68 to unexplained cash credits - Identity, creditworthiness and genuineness of investors - Onus of proof in private placement transactions - Adverse inference for failure to produce parties or directors - Reliance on third party/statements obtained in search and necessity of confrontation - Admission of additional evidence under Rule 46A and remand for verification

Application of Section 68 to unexplained cash credits - Identity, creditworthiness and genuineness of investors - Admission of additional evidence under Rule 46A and remand for verification - Reliance on third party/statements obtained in search and necessity of confrontation - Whether the addition made under Section 68 in respect of OFCD subscriptions (Assessment Year 2012- 13) could be sustained. - HELD THAT: - The Tribunal upheld the Commissioner (Appeals)'s deletion of the addition. The assessee had produced documentary evidence (names, addresses, PANs, ITR acknowledgements, bank statements, ledger confirmations and repayment entries) and furnished additional evidence at the appellate remand which the AO sent for independent verification. Notices u/s 133(6) to the investor entities elicited confirmations and supporting bank and return records. The AO's adverse inferences rested largely on (a) historical search/seizure statements regarding third parties (Tarun Goyal and J.P. Purohit) and (b) non production of directors at a late, short notice stage; the Tribunal found those materials insufficient to negate the documentary evidence and insufficiently confronted to the assessee. The Tribunal accepted the CIT(A)'s view that (i) the sample inquiries and stale statements did not conclusively show the investors to be sham in light of the remand replies and bank trails, (ii) repayment through banking channels and confirmations established that sums did not remain unexplained in the assessee's hands, and (iii) on the facts and material the assessee discharged the primary onus as to identity, creditworthiness and genuineness so that the AO could not sustain the addition merely on suspicion or extraneous investigative material. The Tribunal therefore confirmed deletion of the addition. [Paras 40, 41, 42]

Deletion of the addition made under Section 68 for OFCD subscriptions for Assessment Year 2012- 13 is confirmed; the Revenue's appeal is dismissed on this issue.

Application of Section 68 to unexplained cash credits - Onus of proof in private placement transactions - Adverse inference for failure to produce parties or directors - Whether the addition made in the companion appeal (M/s Arizona Ventures Pvt. Ltd.) could be sustained and whether part of the claimed OFCD receipts pertained to an earlier year. - HELD THAT: - The Tribunal applied the same reasoning mutatis mutandis to the companion appeal and confirmed the CIT(A)'s deletion of the addition save that it noted that a portion of the OFCD receipts had been allotted/received in Assessment Year 2011-12 and therefore could not be added in Assessment Year 2012- 13. On comparable facts the material produced by the assessee and the remand responses satisfied the Tribunal that the primary onus was discharged and the AO's contrary reliance on sample inquiries and extraneous statements did not sustain the addition. [Paras 43]

Revenue's appeal in respect of M/s Arizona Ventures Pvt. Ltd. is dismissed; amounts received in Assessment Year 2011-12 cannot be added in Assessment Year 2012- 13.

Final Conclusion: Both Revenue appeals are dismissed; the additions under Section 68 in respect of OFCD subscriptions for Assessment Year 2012- 13 are deleted, and the companion appeal is decided mutatis mutandis (with the Tribunal noting that part of the receipts related to Assessment Year 2011-12 and could not be taxed in 2012- 13).

Infructuous appeal - giving effect to appellate order - jurisdiction under section 263 dependent on existence of assessment order - set aside assessment order - benefit under sections 11 and 12

Infructuous appeal - giving effect to appellate order - set aside assessment order - Validity of proceedings taken for giving effect to the CIT(A)'s order dated 8.3.2017 in respect of the assessment for Asstt. Year 2012-13. - HELD THAT: - The Tribunal had earlier set aside the CIT(A)'s order dated 8.3.2017 in ITA No. 1422/Ahd/2017 and directed recomputation of the assessee's income giving benefit in accordance with the Gujarat High Court decision. Once the foundation (the CIT(A)'s order of 8.3.2017) was set aside by the Tribunal, any consequential order purporting to give effect to that now-extinguished order had no legal basis. The Vice President recorded that in the absence of the CIT(A)'s order (having been set aside), the giving-effect proceedings and consequent appellate steps became redundant and without locus. [Paras 4]

Appeal challenging the order giving effect to the CIT(A)'s order is dismissed as infructuous.

Jurisdiction under section 263 dependent on existence of assessment order - set aside assessment order - benefit under sections 11 and 12 - infructuous appeal - Sustainability of assessment framed under section 143(3) read with section 263 (assessment dated 27.3.2017) for Asstt. Year 2012-13 where the 263 order and the original assessment were set aside in earlier proceedings. - HELD THAT: - The Tribunal in ITA No. 978/Ahd/2017 held that the jurisdiction of the CIT under section 263 depended upon the existence of the original assessment order dated 16.3.2015, which itself had been set aside by the Tribunal in ITA No. 1422/Ahd/2017. Because the 263 proceedings were founded upon an assessment that the Tribunal had already invalidated, the subsequent assessment passed pursuant to the 263 direction (dated 27.3.2017) lacked a sustainable foundation. The Tribunal further recorded that the original assessment had been disapproved for denying benefit under sections 11 and 12 in view of the Gujarat High Court decision, and directions were given to treat the assessee as entitled to those benefits. In that factual and legal matrix, the assessment and appellate proceedings arising from the now-invalid 263 order had no legs to stand and were rendered infructuous. [Paras 6, 7]

Appeal against the assessment passed under section 143(3) r.w. section 263 is dismissed as infructuous.

Final Conclusion: Both appeals filed by the Revenue in respect of Asstt. Year 2012-13 are dismissed as infructuous because the CIT(A)'s order relied upon was set aside by the Tribunal and the 263-based assessment had no sustenance after the original assessment was vacated; accordingly, subsequent proceedings lack foundation.

Suppressed production - estimation based on electricity consumption - absence of direct nexus between production and electricity consumed - requirement of cogent reasons for estimating income - rule of consistency in adjudication

Suppressed production - estimation based on electricity consumption - requirement of cogent reasons for estimating income - Deletion of addition made by AO on account of suppressed production estimated from electricity consumption was justified. - HELD THAT: - The Assessing Officer estimated suppressed production and made an addition having observed variation in month-wise electricity units per MT, adopting a DGCEI benchmark, but did not establish a direct nexus between production and electricity consumption or provide cogent reasons for the particular method of computation. The assessee had explained plausible factors causing variation in electricity consumption (quality of raw material, voltage, power interruptions, mechanical/electrical breakdowns and chemical composition), which the AO failed to appreciate. The Tribunal noted that the AO proceeded on supposition without corroborative material and that precedent - including this Tribunal's decision in the assessee's own case and other coordinate benches - disallows additions made solely on electricity-consumption formulas absent direct evidence. Applying the rule of consistency and considering that the CIT(A) recorded reasons and followed relevant Tribunal precedent, the deletion of the addition was found to be fair and reasonable and did not call for interference. [Paras 6, 7, 8]

Addition made on account of suppressed production based on electricity-consumption estimation is deleted and the CIT(A) order is upheld.

Final Conclusion: The Revenue's appeal is dismissed; the Tribunal upholds the CIT(A)'s deletion of the addition made for alleged suppressed production founded on electricity-consumption estimates.

Unilateral surrender of registration - cancellation of registration - order in writing and retrospective effect - registration under section 12A as foundational requirement for exemption under section 11 - benefit versus obligation doctrine in tax exemptions - duty of revenue authority to exercise conferred powers when circumstances warrant - tax consequences of cancellation - interaction with section 10(34) and section 115TD

Unilateral surrender of registration - cancellation of registration - order in writing and retrospective effect - duty of revenue authority to exercise conferred powers when circumstances warrant - Whether the appellant's communication and acquiescence before the Commissioner in March 2015 effected surrender of registration and from which date the cancellation must be effective - HELD THAT: - The Tribunal held that the trust's March 2015 communications and its confirmation at the hearing of 20th March 2015 amounted to formal acquiescence to cancellation proceedings initiated by the Commissioner, and that once the Commissioner had notice of the admitted non compliance he had not only the power but the duty to cancel the registration. The Tribunal rejected the revenue's contention that cancellation could only operate prospectively from the date of the later order and observed that, on the facts, inaction by the Commissioner between 2015 and 2019 could not be allowed to prejudice the assessee. Applying authorities on the duty to exercise statutory powers where circumstances exist, and recognising that cancellation may be made to relate back depending on facts, the Tribunal concluded that cancellation should be effective from the date the hearing on the first show cause notice was concluded and acquiesced to by the assessee (20 March 2015). The Tribunal emphasised that allowing the revenue's approach would reward inaction and produce adverse tax consequences (notably under section 10(34) and section 115TD) to the assessee. [Paras 61, 62, 63, 68]

Cancellation of registration is to be treated as effective from 20 March 2015 (date of conclusion of the hearing and formal acquiescence).

Registration under section 12A as foundational requirement for exemption under section 11 - benefit versus obligation doctrine in tax exemptions - Whether registration obtained under section 12A (pre 12AA regime) is a benefit which an assessee may relinquish and whether it can be compelled to continue with such registration - HELD THAT: - The Tribunal held that registration obtained under section 12A prior to the insertion of section 12AA was essentially a foundational condition to claim exemption under section 11 and, in that pre 12AA context, operated as a benefit rather than imposing independent ongoing obligations. Applying established principles that a person need not be forced to accept a statutory benefit and that a privilege may be waived unless the statute provides otherwise, the Tribunal concluded that an assessee unwilling to avail the benefit of registration obtained under section 12A cannot be compelled to continue with it, absent a clear statutory bar. The Tribunal distinguished obligations that arise upon claiming exemption under section 11 from the mere fact of registration and noted the legislative and circular context indicating that the special dispensation under sections 11-13 is voluntary. [Paras 56, 57, 58, 59]

Registration under section 12A (as obtained pre 12AA) is a benefit that an assessee may relinquish and cannot be forced to retain against its will.

Tax consequences of cancellation - interaction with section 10(34) and section 115TD - Whether peripheral factual and compliance issues raised by the revenue (e.g., alleged violations under sections 11-13) were finally decided - HELD THAT: - The Tribunal expressly declined to adjudicate ancillary factual disputes and compliance questions raised by the revenue that relate to the trust's conduct and applicability of sections 11-13. Those matters were left open for adjudication at the appropriate forums or in assessment and related proceedings, and the Tribunal's determination on the effective date does not prejudge those issues. [Paras 69]

Peripheral compliance and fact intensive issues are left open for determination in appropriate proceedings; they are not decided in this appeal.

Final Conclusion: The appeal is allowed in part: the cancellation of the trust's registration under section 12A is held to be effective from 20 March 2015 (the date the hearing on the first show cause notice was concluded and acquiesced to). Other factual and compliance issues raised by the revenue are left open for adjudication at the appropriate stage.

Characterisation of receipts as royalty v. business profits under DTAA - Permanent establishment - Applicability of domestic amendment to treaty interpretation - Attribution to PE and application of Rule 10 estimation - Treatment of surcharge and education cess under tax treaty - Verification of TDS credit

Characterisation of receipts as royalty v. business profits under DTAA - Applicability of domestic amendment to treaty interpretation - Whether receipts from Tata Communications Ltd. are 'royalty' or business profits not taxable in India under the India UK DTAA - HELD THAT: - The Tribunal's precedents in the assessee's own cases for earlier years, dealing at length with facts and treaty interpretation, were followed. On the undisputed factual matrix the receipts for provision of satellite telecommunication services do not fall within the definition of 'royalty' under Article 12 of the India UK DTAA and the retrospective domestic explanations to section 9(1)(vi) cannot be read into the treaty definition. The appellate bench therefore accepted the assessee's position, relying on the coordinate Benches and higher court reasoning that where the DTAA contains an express definition, domestic amendments cannot alter that treaty meaning and that the Tribunal's earlier conclusions on identical facts are binding for the year under appeal. [Paras 9, 11]

Grounds of appeal Nos. 2 to 5 allowed; receipts from TCL are not to be treated as royalty under the India UK DTAA.

Permanent establishment - Attribution of income to PE and application of Rule 10 estimation - Whether the assessee had a permanent establishment (PE) in India and consequences for attribution/estimation under Rule 10 - HELD THAT: - The Tribunal's earlier detailed findings on the liaison office (LO), Space Segment Monitoring System (SSMS) and Land Earth Station (LES) were followed. The assessee held valid RBI permission for the LO which was confined to liaison activities, and evidence showed SSMS was not used in the relevant period and LES was owned/operated by TCL. Revenue failed to discharge the burden of proving that the LO or the equipment constituted a PE or performed income generating activities. Because the primary finding is that no PE existed, the question of attributing income to a PE and the AO's application of Rule 10 (30% ad hoc profitability) became academic and was dismissed as infructuous. [Paras 11, 15]

Grounds of appeal Nos. 6 and 7 allowed; no PE in India. Ground of appeal No. 8 dismissed as infructuous.

Treatment of surcharge and education cess under tax treaty - Whether surcharge and education cess can be levied in addition to the tax rate prescribed by the India UK DTAA - HELD THAT: - The Tribunal's precedent establishes that when the tax rate is determined under the tax treaty the prescribed treaty rate must be followed strictly and additional charges in the form of surcharge or education cess are not leviable over the treaty rate. The appellate bench accepted and followed coordinate decisions holding that Article 2/related treaty provisions encompass income tax including surcharge only to the extent contemplated by the convention and that additional domestic levies cannot be read as augmenting the treaty rate. [Paras 12, 13]

Ground relating to surcharge and education cess allowed; issue remitted to AO for recomputation of tax liability in conformity with the treaty.

Verification of TDS credit - Whether the assessee is entitled to the TDS credit claimed - HELD THAT: - The correctness of the TDS credit involves factual verification of records and entitlement which the Tribunal did not decide on merits. The matter requires fresh examination and verification by the Assessing Officer. [Paras 14]

Disputed TDS credit restored to the file of the AO for verification and grant of credit if found due; ground allowed for statistical purposes.

Non pressing of grounds of appeal - Disposition of grounds not pressed by the assessee - HELD THAT: - The assessee did not press certain grounds before the Tribunal. In absence of submissions the Tribunal treated those grounds as not pressed and dismissed them. [Paras 15, 16]

Unpressed grounds treated as not pressed and dismissed.

Final Conclusion: The appeal is partly allowed: grounds 2-7 are allowed (receipts from TCL not taxable as royalty and no PE in India); the Rule 10 estimation issue is rendered infructuous; surcharge and education cess cannot be levied over the treaty rate and tax liability is remitted to the AO for recomputation; TDS credit issue is remanded to the AO for verification; remaining unpressed grounds dismissed.

Violation of principle of natural justice - Lack of reasonable opportunity to be heard - Electronic service under amended Rule 17A of the Income Tax Rules - Validity of ex-parte order passed without affording hearing - Remand for fresh adjudication after affording opportunity

Violation of principle of natural justice - Lack of reasonable opportunity to be heard - Validity of ex-parte order passed without affording hearing - The ex parte order of the Commissioner of Income Tax (Exemptions) was set aside as passed in violation of the principle of natural justice for failure to afford the Trust a reasonable opportunity of hearing. - HELD THAT: - The Tribunal found that notices were issued through the Departmental online portal but the Trust did not access the portal and therefore could not respond to queries; the affidavit of the Trust's President and the e proceedings on record corroborate that no adjournment was sought and that there is no material to infer deliberate non access by the assessee. In these circumstances the impugned ex parte order was held to be arbitrary and unsustainable because the Trust was deprived of an opportunity to present its case, which is contrary to the requirements of natural justice. While electronic service under the amended Rule 17A is recognised, its operation cannot validate an ex parte disposal where the assessee did not have a reasonable opportunity to be heard and there is no deliberate omission on the assessee's part to access the portal. [Paras 5]

Ex parte order set aside and held to be in violation of the principle of natural justice; assessee entitled to opportunity to be heard.

Remand for fresh adjudication after affording opportunity - Electronic service under amended Rule 17A of the Income Tax Rules - The matter was remitted to the Commissioner of Income Tax (Exemptions) for fresh decision on merits after affording the Trust a reasonable opportunity of hearing. - HELD THAT: - Having concluded that the impugned order could not stand for want of a hearing, the Tribunal did not decide the merits of the registration application. Instead, it directed that the application be reconsidered afresh by the CIT(E) on merits, after giving the Trust a reasonable opportunity to present its case and cooperatation with the authority; the Tribunal also cautioned against seeking frivolous adjournments. The remand preserves the Department's procedure of electronic communication but requires that the assessee be heard before any final adverse action is taken. [Paras 5]

Application remitted to the CIT(E) for fresh adjudication on merits after affording a reasonable opportunity of being heard to the Trust.

Final Conclusion: The Tribunal allowed the appeal for statistical purposes, set aside the ex parte order of the CIT(E) as violative of natural justice, and remitted the application to the CIT(E) for fresh decision on merits after affording the Trust a reasonable opportunity to be heard.

Allowability of contribution to an approved gratuity fund under section 36(1)(v) - approval of employees' group gratuity scheme by competent authority - deductibility of contribution to a group leave encashment plan - requirement of actual payment to employees under clause (f) of section 43B - precedential value of co-ordinate bench and consistency in appellate decisions

Allowability of contribution to an approved gratuity fund under section 36(1)(v) - approval of employees' group gratuity scheme by competent authority - Deletion of addition relating to premium paid for group gratuity fund was sustainable as the gratuity scheme was approved by the competent authority. - HELD THAT: - The assessee paid premium to LIC for an Employees Gratuity Scheme and claimed deduction under section 36(1)(v). The AO disallowed the amount on the premise that the scheme was not approved. The record contains a corrigendum dated 03.07.2020 showing that the competent authority granted approval to the scheme with effect from 28.02.2012. The Revenue did not dispute the corrigendum. The CIT(A) deleted the addition, following earlier appellate orders in the assessee's own cases and co-ordinate bench precedent. In these circumstances the Tribunal found no infirmity in the CIT(A)'s conclusion and upheld deletion of the addition. [Paras 5]

The addition made on account of premium for group gratuity was rightly deleted; the CIT(A)'s order is upheld.

Deductibility of contribution to a group leave encashment plan - requirement of actual payment to employees under clause (f) of section 43B - precedential value of co-ordinate bench and consistency in appellate decisions - Deletion of addition relating to contribution towards LIC-based group leave encashment plan was sustainable and deductible. - HELD THAT: - The assessee created an LIC-based group leave encashment fund and debited the contribution to profit and loss account. The AO disallowed the amount on the ground that no actual payment was made to employees. The CIT(A) allowed the claim, observing that the contribution was to secure a group leave encashment plan for payment to employees on retirement, and relied on identical orders in the assessee's earlier years and a co-ordinate bench decision. Given the consistency of appellate treatment and that the CIT(A)'s findings accord with co-ordinate bench precedent, the Tribunal found no reason to interfere and upheld the deletion of the addition. [Paras 6]

The addition on account of leave salary contribution to the LIC-based plan was rightly deleted; the CIT(A)'s order is upheld.

Final Conclusion: Both grounds of the Revenue's appeal for assessment year 2012-13 are dismissed and the CIT(A)'s deletions in favour of the assessee are upheld.

Characterisation of income as business income versus long term capital gain - intention to hold as capital asset - definition of capital asset under Section 2(14) - adventure in the nature of trade - deemed transfer on capital contribution under Section 2(47) and taxation under Section 45(3)

Characterisation of income as business income versus long term capital gain - intention to hold as capital asset - adventure in the nature of trade - definition of capital asset under Section 2(14) - deemed transfer on capital contribution under Section 2(47) and taxation under Section 45(3) - Whether the gains on sale/transfer of specified land parcels should be treated as business income or as long term capital gains - HELD THAT: - The Tribunal examined the factual matrix and concluded that the question was essentially one of fact requiring assessment of regularity, frequency, intention and conduct. The assessee held about 215 bigha of agricultural land, derived agricultural income from it, converted portions to non-agricultural use years before sale and retained the land for 5-6 years before disposals. The books consistently recorded the lands as capital assets and wealth-tax returns showed the parcels as investments. The Revenue failed to demonstrate any systematic, regular commercial exploitation or an adventure in the nature of trade; instead the AO unduly privileged isolated factors (co-ownership, early conversion application, modest agricultural yield) while disregarding cumulative circumstances indicating capital orientation. The Tribunal relied on the broad sweep of the definition of capital asset under Section 2(14) to hold that an asset may be a capital asset even if connected with business, and that co-ownership or occasional transactions do not ipso facto convert capital assets into stock-in-trade. The Tribunal therefore found the AO's reclassification to be without adequate factual foundation and not sustainable. It also noted the tax consequences of treating certain transfers as capital contributions under Section 2(47) and taxation under Section 45(3) insofar as they bear on the characterization, but the primary conclusion rested on the absence of evidence of systematic commercial activity. [Paras 8, 9]

The gains arising on sale/transfer of the impugned land parcels shall be treated as long term capital gains and not as business income; the revenue authorities' reclassification is set aside.

Final Conclusion: Appeal allowed. The Tribunal set aside the Assessing Officer's and CIT(A)'s reclassification of the gains as business income and restored the assessee's claim that the gains on the specified land parcels are chargeable as long term capital gains for AY 2011-12.

Taxation of capital gains in the hands of the person in whose hands the income arises - presumption of equal share among co owners when instrument is silent - reopening of assessment and notice under section 147/148

Presumption of equal share among co owners when instrument is silent - Whether the Assessing Officer and the Commissioner (Appeals) were justified in treating the assessee's share as 50% in the absence of a specifically quantified share in the purchase deed. - HELD THAT: - The Tribunal examined the assessment record, the sale deed, bank evidence of receipt and affidavits of the co owners/legal heirs and found that the assessee had proved receipt of one fourth of the sale consideration. The AO had presumed, without supporting evidence, that co owners held equal shares and assessed capital gain on 50% of the consideration; the CIT(A) affirmed that presumption. The Tribunal held that such a presumption could not override contemporaneous documentary evidence showing actual receipt by the assessee and that the AO and CIT(A) erred in disregarding that evidence. (paras 7-10). [Paras 7, 8, 9, 10]

The presumption of equal share was rejected on the facts; the assessee proved receipt of 25% of sale consideration and assessment on 50% was set aside.

Taxation of capital gains in the hands of the person in whose hands the income arises - Whether income (capital gain) can be taxed in the hands of a person other than the person who actually received it. - HELD THAT: - The Tribunal applied the settled proposition that income is taxable only in the hands of the person to whom it belongs and that tax is leviable on real income, not on hypothetical or presumed income. The Court observed that section 2(45) (as considered by the authorities) indicates liability arises in the hands of the right person and no option exists to tax another person. Given the assessee established that he received only one fourth of the consideration through bank evidence and corroborative affidavits, the income could not be assessed on a presumed larger share. (paras 8-10). [Paras 8, 9, 10]

Capital gain was to be taxed only in respect of the actual share/consideration received by the assessee; assessment on a presumed larger share is impermissible.

Final Conclusion: The Tribunal allowed the appeal, holding that the assessee had proved receipt of only 25% of the sale consideration and that income-tax can be levied only on the real income of the person in whose hands it arises; the assessment and the CIT(A)'s confirmation treating the assessee's share as 50% were set aside.

Transfer pricing adjustment - comparability of companies - arm's length price - transactional net margin method (TNMM) - operating profit to operating costs (OP/OC) as profit level indicator - provision for doubtful debts as operating expenditure - turnover filter (upper limit) in comparability analysis - working capital adjustment - notional interest on delayed receivables - agreed credit period under Master Service Agreement - verification under section 133(6)

Comparability of companies - turnover filter (upper limit) in comparability analysis - transfer pricing adjustment - arm's length price - Whether certain high turnover companies and other alleged comparables should be excluded from or included in the final set of comparables for computing the arm's length margin of the assessee in the software development segment. - HELD THAT: - The Tribunal held that applying only a lower turnover threshold without an appropriate upper limit is impermissible where turnover materially affects comparability; companies with substantially larger turnovers than a captive, risk mitigated service provider may be excluded. Following precedents which treat turnover as a relevant comparability criterion, the Bench directed exclusion of specified high turnover companies (including Tata Elxsi (segment), Mindtree, L&T Infotech, RS Software (India), Persistent Systems, Nihilent, Infosys, Cybage) as not comparable with the assessee, a captive service provider. The Tribunal examined Infobeans and found it functionally dissimilar (full enterprise, not risk mitigated captive) and excluded it. For a set of other company candidates put forward by the assessee (Evoke Technologies Ltd., I2T2 India Ltd., Indiagames Ltd., FCS Software Solutions Ltd., DCIS DOT COM Pvt. Ltd.), the Tribunal set aside the rejection and remitted those comparables to the AO/TPO for fresh consideration/verification. [Paras 40, 41, 43, 44, 48]

Allowed in part: specified high turnover companies and Infobeans excluded from final comparable set; certain assessee proposed comparables remitted to AO/TPO for reconsideration and verification.

Provision for doubtful debts as operating expenditure - transactional net margin method (TNMM) - operating profit to operating costs (OP/OC) as profit level indicator - recomputation of margins - Whether provision for doubtful debts should be treated as operating expenditure for computing operating margin under TNMM and whether margins of the assessee and comparables should be recomputed accordingly. - HELD THAT: - Relying on coordinate authority and tribunal reasoning, the Bench held that provisions for doubtful debts/advances are part of operating activities and must be treated as operating expenditure when computing OP/OC under TNMM. The Tribunal directed the AO to recompute the operating margins of the assessee and the comparables by treating such provisions as operating expenditure. Separately, the Tribunal recorded that the assessee is a no risk (risk mitigated) enterprise and therefore risk adjustments may be necessary; the assessee is directed to file supporting details and the AO/TPO may seek information under section 133(6) where required to compute appropriate adjustments. [Paras 25, 26]

Assessee's ground allowed: margins to be recomputed treating provision for doubtful debts as operating expenditure; directions given for filing/obtaining information for any necessary risk adjustments.

Notional interest on delayed receivables - agreed credit period under Master Service Agreement - working capital adjustment - LIBOR plus basis points - Whether notional interest should be imputed on trade receivables from Associated Enterprises, the applicable credit period, and the appropriate rate or restriction on rate if adjustment is warranted. - HELD THAT: - The Tribunal found that the AO/TPO erred in adopting a 30 day credit period when the Master Service Agreement provided a 90 day credit period and the assessee had filed invoice wise details. The Bench directed AO/TPO to verify invoice wise receipts against the agreed credit period. If receivables are within the agreed 90 days, no notional interest is to be charged. If any receivable falls beyond 90 days, the AO/TPO must check whether that exposure is subsumed within the working capital adjustment under TNMM; if subsumed, no separate adjustment is to be made. If not subsumed, any adjustment shall be computed at LIBOR plus 300 basis points (restricted), rather than LIBOR plus 400 basis points as adopted earlier. [Paras 54, 55, 56, 57]

Assessee's plea allowed for statistical purposes and remitted: invoices to be verified; no interest if within 90 days or subsumed in working capital adjustment; otherwise interest limited to LIBOR + 300 bps.

Final Conclusion: The appeal is allowed in part. The Tribunal directed recomputation of margins treating provision for doubtful debts as operating expenditure and allowed exclusion of specified high turnover and functionally dissimilar comparables; certain assessee proposed comparables were remitted for verification. The notional interest addition was remitted for verification invoice wise in light of the 90 day contractual credit period, with any non subsummed adjustment to be limited to LIBOR + 300 bps. Consequential issues were treated as arising from these directions.

Revision under section 263 - limitation for exercise of revisional power - reopened assessment under section 147 - disallowance under section 14A - computation under Rule 8D - disallowance not to exceed exempt income

Revision under section 263 - limitation for exercise of revisional power - reopened assessment under section 147 - Validity of the Principal Commissioner of Income Tax's order under section 263 insofar as it seeks to revise the assessment passed on 30.01.2015. - HELD THAT: - The Tribunal examined whether the order under section 263 dated 07.12.2018 was within the two year period prescribed by section 263(2) having regard to the assessment order dated 30.01.2015 in which section 14A was considered and disallowance made. Although the assessment proceedings were later reopened under section 147 on a separate issue (deduction under section 80IA), the reassessment did not revisit the section 14A disallowance. The revisional power under section 263 relates back to the earlier assessment order of 30.01.2015; therefore the two year limitation from the end of the relevant financial year for exercising revision applied. The order under section 263 was passed on 07.12.2018, which is beyond the statutory two year period for revisional action against the 30.01.2015 assessment, and is accordingly time barred. [Paras 7]

The revisional order under section 263 is barred by limitation and is invalid.

Disallowance under section 14A - computation under Rule 8D - disallowance not to exceed exempt income - Whether, on merits, the disallowance under section 14A made by the Assessing Officer was erroneous and prejudicial to the interests of revenue. - HELD THAT: - On the merits the Tribunal noted that the AO had applied Rule 8D and made a disallowance of Rs. 2,35,039/-. The assessee contended that exempt income was Rs. 2,02,337/- and that the disallowance under section 14A should not exceed the exempt income. The Principal CIT directed a higher disallowance, but the Tribunal observed that it is settled that the section 14A disallowance cannot exceed the exempt income and that the AO's order of 30.01.2015 was therefore not shown to be erroneous. Having found the AO's disallowance not to be prejudicial to revenue on this basis, the Tribunal concluded that the revisional exercise was also unsustainable on merits. [Paras 8]

The Assessing Officer's disallowance under section 14A was not erroneous on merits; the assessee succeeds on merit.

Final Conclusion: Appeal allowed. The order passed by the Principal Commissioner of Income Tax under section 263 is held to be time barred and, on merits, the Assessing Officer's disallowance under section 14A is sustained; the revisional direction is quashed.

Refund of IGST on zero-rated supplies - interest for delayed refund of IGST - treatment of duty drawback and CENVAT credit in refund adjudication

Refund of IGST on zero-rated supplies - treatment of duty drawback and CENVAT credit in refund adjudication - Direction to refund IGST paid on goods exported by the petitioners after verification of duty drawback/CENVAT credit position. - HELD THAT: - The Court recorded the verification by respondent no.2 that all petitioners had availed duty drawback, none had availed CENVAT credit of Central Excise, and only one petitioner (M/s Inter Trade, Kolkata) had availed CENVAT credit of Service Tax to the extent of Rs. 1856/- for FY 2015-16. On this basis, and following the undertaking by M/s Inter Trade, Kolkata to forgo input tax credit to the extent of that amount, the Court directed that the IGST refund be sanctioned to the petitioners. The Court imposed a timeline for disbursal, directing respondent no.2 to ensure refund at the earliest and in any event not later than 26.04.2021, and required service of the order on all concerned Commissionerates and action on a digitally signed copy. [Paras 7, 8, 11]

IGST refund to the petitioners directed after verification of duty drawback/CENVAT position and on the basis of the recorded undertaking by M/s Inter Trade, Kolkata; respondent no.2 to effect refund and serve the order on concerned Commissionerates.

Interest for delayed refund of IGST - Grant of interest on delayed refund of IGST at the rate of 7% simple from date of shipping bills until actual refund. - HELD THAT: - The Court accepted the principle applied in the cited Gujarat High Court decision and held that petitioners are entitled to simple interest at 7% from the date the shipping bills were filed until the date of actual refund. The Court directed that interest be included with the refund and stipulated that the refund process should be completed by the outer timeline fixed by the Court. [Paras 9, 10, 11]

Refund to be made with 7% simple interest from the date of filing of shipping bills until actual refund; refund to be completed by 26.04.2021.

Final Conclusion: Writ petition disposed of by directing respondent no.2 to sanction the IGST refund to the petitioners after the verified adjustments regarding duty drawback/CENVAT credit and on the basis of the recorded undertaking, with simple interest at 7% from the date of the shipping bills until actual refund, and with the refund to be effected by 26.04.2021 and the order served on all concerned Commissionerates.

Natural justice - opportunity of cross-examination - right to fair hearing - reassessment de novo

Natural justice - opportunity of cross-examination - right to fair hearing - reassessment de novo - Impugned assessment order passed without affording the petitioner an opportunity of cross-examination was invalid for non-compliance with principles of natural justice and liable to be set aside. - HELD THAT: - The Court found that the assessment impugned in the petition was finalized without granting the petitioner an opportunity to cross-examine the person on whose statements or evidence the Assessing Authority had placed reliance. The Commissioner (Appeals) had allowed the petitioner's appeal holding that principles of natural justice require that such an opportunity be afforded before finalizing assessment. In view of that, the High Court held that the impugned order could not stand, set it aside, and directed that the petitioner be permitted to conduct cross-examination, be heard in full, and that the Assessing Authority shall pass a fresh order of assessment after affording such opportunity.

Impugned order set aside; matter remitted to the Assessing Authority to afford cross-examination, hear the petitioner and pass assessment de novo within six weeks.

Final Conclusion: Writ petition allowed; impugned assessment quashed and remitted for fresh consideration after affording the petitioner an opportunity of cross-examination and hearing, with directions to complete reassessment within six weeks.

Release of imported goods under bond pending production of licence - requirement of DGFT/WPC licence for import of drones - public purpose exception / emergency procurement during pandemic - personal penalty for wrongful clearance under the Customs Act - adjudication requires application of mind and is not a mechanical application of law

Release of imported goods under bond pending production of licence - public purpose exception / emergency procurement during pandemic - requirement of DGFT/WPC licence for import of drones - Release of the imported drones and thermal batteries was correctly ordered by the Commissioner (Appeals) under bond despite absence of the prescribed licence, in view of their import for use by the police to meet exigencies of the COVID-19 pandemic. - HELD THAT: - The Tribunal noted the goods were imported specifically for supply to the Commissioner of Police for surveillance to contain COVID-19, supported by the end user certificate and correspondence from the Police Commissioner. Given the urgent public purpose and the time sensitive nature of use during the lockdown, the Commissioner (Appeals) applied his mind and directed release under bond subject to production of necessary licences within six months. The Tribunal held that administrative authorities should view such imports in the appropriate perspective during a worldwide pandemic and that releasing the goods for immediate use served no less a public interest than strict, mechanical refusal in absence of licence. Having considered the facts and reasoning of the Commissioner (Appeals), the Tribunal found no grounds to interfere with the order directing release. [Paras 4]

Appeal dismissed insofar as it challenged the order of release; the release under bond was upheld.

Personal penalty for wrongful clearance under the Customs Act - adjudication requires application of mind and is not a mechanical application of law - public purpose exception / emergency procurement during pandemic - The departmental order denying clearance and imposing a personal penalty was not sustained insofar as the Commissioner (Appeals) granted release and the Tribunal found no reason to interfere with that exercise of discretion. - HELD THAT: - The Tribunal observed that the original authority denied release and imposed a personal penalty, but the Commissioner (Appeals) reviewed the matter in light of the end use, exigency of the pandemic and produced documentation, and ordered release under bond. Emphasising that adjudication demands application of mind to the circumstances rather than automatic application of provisions, the Tribunal endorsed the appellate authority's view and declined to disturb it. Consequently, the department's challenge to the release/penalty was dismissed. [Paras 1, 4]

The appeal against the Commissioner (Appeals) order (including the departmental denial and penalty to the extent challenged) was dismissed.

Final Conclusion: The Tribunal upheld the Commissioner (Appeals) order releasing the imported drones and batteries under bond for use by the police to meet COVID 19 exigencies and dismissed the Revenue's appeal, finding no reason to disturb the appellate authority's discretionary, fact based decision.

Forfeiture of earnest money deposit (EMD) for non-remittance of balance sale consideration - failure to comply with terms of confirmed auction sale - inconsistent pleadings and conduct disentitling a party to relief - requirement of prompt challenge to forfeiture and consequences of unexplained delay - oral direction on court file vs. absence of judicial order - re-tendering/re-auction of assets where confirmed sale lapses - equitable discretion as to costs for mala fide or negligent conduct

Forfeiture of earnest money deposit (EMD) for non-remittance of balance sale consideration - failure to comply with terms of confirmed auction sale - Validity of the Official Liquidator's forfeiture of the EMD and dismissal of applications seeking to set aside forfeiture or to allow payment by instalments. - HELD THAT: - The Court upheld the forfeiture because the appellant failed to remit the balance sale consideration within the time provided after confirmation of sale and did not seek extension or promptly challenge the forfeiture. The appellant repeatedly sought return of the EMD and thereafter sought to be allowed to pay the balance, showing inconsistent conduct. The Company Judge permissibly treated the long delay and lack of explanation as fatal to the appellant's claims and allowed re-tendering of the goods. The forfeiture under the tender terms was therefore not interfered with. [Paras 4, 5, 8, 13, 14]

Forfeiture of the EMD was valid and the applications seeking to set aside the forfeiture or to permit payment by instalments were rightly dismissed; re-tendering was permissible.

Oral direction on court file vs. absence of judicial order - oral direction on court file vs. absence of judicial order - Whether there was an oral direction by the Company Judge on 09.12.2020 permitting the appellant to remit the sale consideration. - HELD THAT: - The Court accepted the Company Judge's finding that no order was passed permitting the appellant to remit the amount and that there was no reason for an oral direction. The order sheet, treated as authoritative, did not record any such direction. The appellant's assertion of an oral direction was rejected as an attempt to revive earlier dismissed applications. [Paras 11, 15, 16, 17]

There was no oral direction permitting remittance; the contention that such a direction existed was rejected.

Inconsistent pleadings and conduct disentitling a party to relief - requirement of prompt challenge to forfeiture and consequences of unexplained delay - Effect of the appellant's inconsistent positions and delay on entitlement to relief and costs. - HELD THAT: - The Court noted the appellant's flip-flopping between seeking return of the EMD and seeking to complete the sale, finding such inconsistency and the long, unexplained delay to be lacking bonafides. Although the facts warranted exemplary costs, the Court exercised its discretion to refrain from imposing them after considering submissions. [Paras 13, 14, 15, 18]

Appellant's inconsistent conduct and unexplained delay disentitled him to relief; imposition of exemplary costs was considered but withheld in the exercise of judicial discretion.

Re-tendering/re-auction of assets where confirmed sale lapses - re-tendering/re-auction of assets where confirmed sale lapses - Whether the appellant could successfully contend that a re-auction would fetch a lower price and thereby challenge the re-tendering. - HELD THAT: - The Court rejected the contention that re-auction would inevitably fetch a lower price. Apart from the appellant's assertion, there was no material to show that re-auction would yield a price inferior to the appellant's bid. Moreover, a purchaser who resiles after acceptance and confirmation cannot take advantage of his own wrong. The Company Court's decision to re-tender pending assets was therefore appropriate. [Paras 18]

The contention that re-auction would fetch less was rejected; re-tendering was appropriate and not vitiated.

Final Conclusion: The appeal is dismissed. The forfeiture of the EMD for non-payment of the balance sale consideration was valid, the appellant's claim of an oral judicial direction to remit payment was rejected, the appellant's inconsistent conduct and unexplained delay disentitled him to relief, and the Company Court was justified in permitting re-tendering; costs were considered but not imposed.

Extension of limitation by suo motu order - condonation of delay under proviso to Section 421(3) - limitation as applied to persons served after passing of order - estoppel of regulatory authorities - power of NCLT under Section 230 to issue directions affecting regulatory functions - grant of ad-interim stay of operation of specific directions

Extension of limitation by suo motu order - condonation of delay under proviso to Section 421(3) - Whether the Appeal was filed within limitation and whether delay beyond the prescribed period could be condoned. - HELD THAT: - The Appellate Tribunal examined the impact of the Supreme Court's Suo Motu Writ Petition (Civil) No. 03 of 2020 order dated 08.03.2021 which, for limitation expiring between 15.03.2020 and 14.03.2021, grants a benefit of a 90-day period from 15.03.2021 (or the longer actual balance period if greater). The Tribunal found that the prescribed 45-day limitation in the present case had expired on 15.02.2021 (within the covered period) and therefore the appellant was entitled to the extended limitation window, making the appeal filed on 19.03.2021 within the extended period. Independently, the Tribunal considered that the appellant received the impugned order on 01.01.2021 and filed the appeal within 77 days, explaining a delay of 32 days. Under the proviso to Section 421(3) the Appellate Tribunal has power to condone delay up to 45 days if satisfied that the appellant was prevented by sufficient cause. Having regard to the appellant's attempt to intervene, listing dates before the NCLT, time taken to collect documents and obtain approvals, and distinguishing the facts of the cited Sagufa Ahmad decision, the Tribunal concluded that the delay was adequately explained and within the period it could condone. [Paras 5, 6, 7]

The appeal was held to be within the extended limitation period; alternatively, the Tribunal condoned the delay of 32 days under the proviso to Section 421(3) and allowed the application for condonation.

Estoppel of regulatory authorities - power of NCLT under Section 230 to issue directions affecting regulatory functions - grant of ad-interim stay - Whether the NCLT could pass directions estopping the Reserve Bank of India from taking coercive steps and, if arguable, whether operation of that direction should be stayed pendente lite. - HELD THAT: - The scope of the appeal in respect of the impugned order was confined to whether the Tribunal, exercising jurisdiction under Section 230, could pass the direction in Para 34 estopping governmental or regulatory authorities from taking coercive steps including reporting or changing the account status of the company. The Appellate Tribunal observed that expressing any final view on the substantive question would prejudice the merits of the appeal; however, it considered that staying the operation of the specific direction during the pendency of the appeal would not prejudice the proceedings before the Tribunal. The Tribunal therefore found it appropriate to pass an ad-interim order staying the operation of the clause which estopped governmental or regulatory authorities from taking coercive steps, without deciding the ultimate question whether such directions were permissible vis-a -vis a statutory regulator. [Paras 20, 21]

The direction in Para 34 of the impugned order restraining governmental or regulatory authorities from taking coercive steps is stayed pendente lite; I.A. No. 595 of 2021 is allowed to the extent indicated.

Final Conclusion: The application for condonation of delay is allowed: the appeal is within the extended limitation or, alternatively, delay of 32 days is condoned under the proviso to Section 421(3). Separately, the operation of the impugned direction estopping governmental or regulatory authorities from taking coercive steps is stayed pending disposal of the appeal.

Maintainability of petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 - validity and execution requirements of a special power of attorney under the Power of Attorney Act, 1882 - requirement of supporting documents to prove operational debt (purchase order, delivery challan, partnership deed) - dismissal without prejudice to alternative remedies before appropriate forum

Maintainability of petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 - validity and execution requirements of a special power of attorney under the Power of Attorney Act, 1882 - requirement of supporting documents to prove operational debt (purchase order, delivery challan, partnership deed) - Whether the Section 9 petition filed by the operational creditor is maintainable in view of a defective special power of attorney and absence of required supporting documents. - HELD THAT: - The Adjudicating Authority examined preliminary compliance with the Code and Rules and the formal validity of the document authorising the signatory. The special power of attorney executed on 27th June, 2019 was not signed by the purported attorney and lacked an affixed photograph of the agent; on that basis the power of attorney was held to be invalid and incapable of conferring authority to sign the petition. In addition, the applicant failed to place on record purchase order/delivery challan and a copy of the partnership deed to substantiate its claim as an operational creditor. Having regard to the statutory requirement that the petition conform to the Code and Rules and to the legal requirements governing powers of attorney, the defects in authorisation and absence of material supporting documents rendered the petition not maintainable. The petition was therefore dismissed on maintainability grounds without adjudication on the merits of the claim. [Paras 12, 14, 15, 16]

The petition under Section 9 is not maintainable and is dismissed for defective special power of attorney and non-production of required supporting documents.

Final Conclusion: The Company Petition CP (IB) 760 of 2019 is dismissed on maintainability grounds for a defective special power of attorney and failure to produce required supporting documents; dismissal is without prejudice to the petitioner pursuing its claim before the appropriate forum.

Corporate Insolvency Resolution Process - application under Section 9 of the Insolvency and Bankruptcy Code, 2016 - admission criteria - existence of default and threshold debt - service of demand under Section 8 of the Insolvency and Bankruptcy Code, 2016 - non-collusiveness of petition - moratorium - appointment of Interim Resolution Professional - IRP duties and powers - public announcement and submission of claims - continuity of supply during moratorium

Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 - admission criteria - existence of default and threshold debt - service of demand under Section 8 of the Insolvency and Bankruptcy Code, 2016 - Application under Section 9 for initiation of CIRP was maintainable and admissible and therefore admitted. - HELD THAT: - The Tribunal found that the Operational Creditor supplied goods and raised invoices, part payment was made and a balance remained due. A demand notice under Section 8 was served and proof of service is on record. The application was complete, defect-free and the claimed debt exceeded the statutory threshold for initiation of CIRP. On these facts the Adjudicating Authority concluded that the statutory preconditions for admission under Section 9 were satisfied and admitted the Corporate Debtor into CIRP. [Paras 2, 6]

Application under Section 9 admitted and Corporate Debtor admitted into CIRP.

Non-collusiveness of petition - The petition was not filed in collusive manner. - HELD THAT: - When a query was raised as to collusiveness, the Corporate Debtor denied any collusive relationship with the Operational Creditor and the Tribunal verified that another application under Section 7 was pending against the Corporate Debtor on the cause list. On this verification the Tribunal held that collusiveness was adequately rebutted. [Paras 4]

Collusiveness allegation rejected.

Moratorium - continuity of supply during moratorium - Moratorium under Section 14 was declared and its scope specified, including protection of continuing supplies. - HELD THAT: - Upon admission the Tribunal declared moratorium prohibiting institution or continuation of suits or proceedings, transfer or disposal of assets, actions to enforce security interest and recovery of property occupied by the Corporate Debtor. The Tribunal further directed that supply of goods or services to the Corporate Debtor, if continuing, shall not be terminated, suspended or interrupted during the moratorium period, and that the IRP shall protect and preserve the value of the Corporate Debtor and manage operations as a going concern.

Moratorium declared with specified prohibitions and continuity of supply protected.

Appointment of Interim Resolution Professional - IRP duties and powers - public announcement and submission of claims - The proposed IRP was appointed and directed to perform statutory functions including public announcement, claims calling, management duties and to seek interim funds. - HELD THAT: - Although naming an IRP is not mandatory in a Section 9 application, the Tribunal noted the proposal and recorded that the proposed IRP's consent was on record and there was no material showing disciplinary proceedings. Under the statutory scheme the Tribunal appointed the proposed IRP and directed her to perform functions under Sections 17, 18, 20 and 21, to make the public announcement and call for claims as required, and to manage the Corporate Debtor as a going concern. The Operational Creditor was directed to pay an initial advance to facilitate conduct of CIRP and the IRP was permitted to seek further interim funds as per rules. [Paras 5]

Proposed IRP appointed and directed to perform statutory duties; initial interim fund directed to be paid by Operational Creditor.

Final Conclusion: The Tribunal admitted the Section 9 application and instituted CIRP against the Corporate Debtor, declared moratorium with specified protections, appointed the proposed Interim Resolution Professional with directions to make public announcement, call for claims and manage the Corporate Debtor as a going concern, rejected collusiveness, and directed initial interim funding for the IRP.

Corporate Insolvency Resolution Process - admission under section 7 of the IBC, 2016 - default of financial debt - acknowledgment of debt as proof of default - record of default filed with an Information Utility - appointment of Interim Resolution Professional - moratorium under Section 14 of the IBC, 2016

Default of financial debt - acknowledgment of debt as proof of default - admission under section 7 of the IBC, 2016 - Whether the Financial Creditor proved existence of a financial debt and default so as to admit the Section 7 application. - HELD THAT: - The Tribunal examined the loan agreement dated 09.06.2017, correspondence between the parties and three separate letters dated 05.07.2019, 15.10.2019 and 05.12.2019 in which the Corporate Debtor repeatedly admitted inability to pay the loan and sought time. The Tribunal held that these acknowledgments establish that a financial debt exceeding the statutory threshold was due and payable and that default had occurred. The Tribunal further noted that the Financial Creditor filed a memo showing submission of details to the National E-Governance Services Limited (Information Utility) and observed that non-filing before institution does not vitiate the right to approach the Adjudicating Authority where default is otherwise established on record. On this basis the only determinative fact-existence of debt and default-was found proved and the Section 7 petition was admitted. [Paras 14, 15, 16, 17, 18]

The Section 7 application was admitted as the Financial Creditor proved the financial debt and default.

Record of default filed with an Information Utility - Corporate Insolvency Resolution Process - Whether the Financial Creditor's submission to the Information Utility affected admissibility of the petition. - HELD THAT: - The Tribunal recorded that the Financial Creditor submitted a memo dated 06.07.2020 to the National E-Governance Services Limited (Information Utility) and observed that the Financial Creditor had undertaken to produce the record of default. The Tribunal held that the non-filing of the record of default before institution of the petition did not, in the facts of the case, vitiate the Financial Creditor's right to approach the Adjudicating Authority because default was otherwise established by the loan agreement and the Corporate Debtor's acknowledgments. Consequently, the petition was admitted notwithstanding the timing of the Information Utility filing. [Paras 9, 11, 16, 18]

The petition's admissibility was not negatived by the timing of Information Utility submission; admission proceeded.

Appointment of Interim Resolution Professional - Corporate Insolvency Resolution Process - Whether the IRP proposed by the Financial Creditor should be appointed. - HELD THAT: - The Financial Creditor proposed the name of Mr. Bhaskar B., whose registration details appeared on the IBBI website and who furnished written consent in Form-2 dated 18.05.2020. The Tribunal noted no departmental enquiry was shown to be pending against him and directed his appointment as Interim Resolution Professional, subject to filing of valid authorization for assignment in the Registry within three days. The IRP was directed to take charge and perform statutory functions including public announcement and calling for claims. [Paras 18]

Mr. Bhaskar B. was appointed as Interim Resolution Professional on the terms directed by the Tribunal.

Moratorium under Section 14 of the IBC, 2016 - supply of essential goods or services during moratorium - What operative reliefs follow upon admission of the petition. - HELD THAT: - On admission, the Tribunal declared the moratorium under Section 14 of the Code with the standard prohibitions: institution or continuation of suits, transfer or disposition of assets, enforcement of security, and recovery of leased property, subject to exceptions contained in the Code. The Tribunal also directed that supply of essential goods or services shall not be terminated during the moratorium where necessary to preserve the corporate debtor as a going concern, save where current dues for such supplies are not paid. The IRP's obligations under Sections 13(2), 15, 17 and 18 were reiterated and the corporate debtor's management directed to cooperate. [Paras 18]

Standard moratorium and attendant directions were imposed from the date of the order until completion of the CIRP.

Final Conclusion: The Tribunal admitted the Section 7 petition, holding that the Financial Creditor had proved the financial debt and default; appointed the proposed Interim Resolution Professional subject to validation formalities; and declared the statutory moratorium with directions to the IRP and parties to give effect to the Corporate Insolvency Resolution Process.

Financial Creditor - default in repayment of financial debt - admission to Corporate Insolvency Resolution Process - moratorium under the Insolvency and Bankruptcy Code - appointment of Interim Resolution Professional

Financial Creditor - The petitioner is a financial creditor of the corporate debtor. - HELD THAT: - The corporate debtor admitted that the petitioner infused funds as an unsecured loan, partly from his own funds and partly by procuring a bank loan which was remitted directly to the corporate debtor. The petitioner had procured 33.33% shares and was appointed director on the condition of infusing the unsecured loan. The Tribunal held that the unrelated commercial dispute between the petitioner and a third party (Galaxy Enterprise / Mr. Dahyabhai Thummar) did not involve the corporate debtor and therefore did not affect the petitioner's status as a financial creditor. The corporate debtor's defence that the petitioner was not a financial creditor was rejected in toto. [Paras 6, 9]

Petitioner held to be a financial creditor of M/s. Shreeya Peanuts Private Limited.

Default in repayment of financial debt - The corporate debtor committed default in repaying the financial debt to the petitioner. - HELD THAT: - It was admitted that the petitioner was to receive a composite sum each month towards remuneration and interest, and that the corporate debtor ceased making such payments from 29.05.2017. The Tribunal found that nothing was received by the petitioner since May 2017 and held that this constituted a default in payment of the unsecured loan. The amount in default exceeded the statutory threshold for initiation of CIRP under the Code. [Paras 11]

Default in payment by the corporate debtor established.

Admission to Corporate Insolvency Resolution Process - The application under Section 7 of the Insolvency and Bankruptcy Code, 2016 is admitted and the corporate debtor is placed under CIRP. - HELD THAT: - On the admitted facts of infusion of funds by the petitioner and the established default, the Tribunal found the application to be defect free and proceeded to admit the corporate debtor into the Corporate Insolvency Resolution Process under Section 7. The order of admission was accordingly passed. [Paras 11, 13]

M/s. Shreeya Peanuts Pvt. Ltd. admitted into CIRP.

Moratorium under the Insolvency and Bankruptcy Code - A moratorium under Section 14 of the Code is declared consequent to admission into CIRP. - HELD THAT: - Following admission, the Tribunal declared the moratorium prohibiting institution or continuation of suits or proceedings against the corporate debtor, transfer or disposal of its assets, enforcement of security interests and recovery of property occupied by the corporate debtor. The moratorium was ordered to operate from the date of the order until completion of CIRP or approval of a resolution plan or liquidation as applicable. [Paras 13]

Moratorium under Section 14 declared with effect from the date of the order.

Appointment of Interim Resolution Professional - An Interim Resolution Professional is appointed to conduct the CIRP. - HELD THAT: - The petitioner proposed a registered insolvency professional for appointment. The Tribunal appointed the suggested professional as Interim Resolution Professional, directed him to perform functions under the Code (including making public announcement and calling for claims) and to manage the corporate debtor as a going concern. Directions were also given regarding advance funds to be provided by the financial creditor and cooperation to be extended to the IRP. [Paras 12, 13]

Mr. Sunil Kumar Agarwal appointed as Interim Resolution Professional and directed to perform statutory functions.

Final Conclusion: The Tribunal held that the petitioner is a financial creditor, that the corporate debtor defaulted in repayment of the unsecured loan, admitted M/s. Shreeya Peanuts Pvt. Ltd. into CIRP, declared the statutory moratorium and appointed an Interim Resolution Professional to conduct the CIRP.

Moratorium under Section 14 of IBC - Overriding effect of Section 238 of IBC - Validity of sale/realisation of security during CIRP - Prohibition on enforcement actions under SARFAESI during moratorium - Completion of sale dependent on full payment and issuance of sale certificate

Moratorium under Section 14 of IBC - Validity of sale/realisation of security during CIRP - Completion of sale dependent on full payment and issuance of sale certificate - Whether the sale/realisation of the Corporate Debtor's assets which was concluded by receipt of balance sale consideration after commencement of CIRP is valid. - HELD THAT: - The Tribunal held that mere receipt of 25% of the sale proceeds prior to the commencement of CIRP did not conclude the sale where the balance 75% was received after the insolvency commencement date. As on the date of moratorium the assets continued to stand in the name of the Corporate Debtor in revenue records; the sale was therefore incomplete when CIRP commenced. Receipt of the balance sale consideration after imposition of moratorium was held to be impermissible and illegal. The Appellant's filing of a revised claim during the moratorium was also inconsistent with the protection afforded by Section 14. On these factual and legal bases the Adjudicating Authority was correct in setting aside the sale transaction. [Paras 22, 25, 28, 34]

Sale concluded by receipt of balance consideration after commencement of CIRP is invalid; the Adjudicating Authority rightly set aside the sale.

Overriding effect of Section 238 of IBC - Prohibition on enforcement actions under SARFAESI during moratorium - Whether the provisions of the IBC prevail over actions under other laws (including SARFAESI Act) during CIRP and moratorium. - HELD THAT: - Relying on Supreme Court authority, the Tribunal reiterated that Section 238 gives the IBC an overriding effect over inconsistent provisions of other laws. Section 14's moratorium specifically prohibits any action to foreclose, recover or enforce a security interest, including actions under the SARFAESI Act, during the insolvency period. Consequently, enforcement or realisation of security that occurs in breach of the moratorium is voidable and cannot be sustained. The Tribunal also noted earlier Tribunal and Supreme Court decisions holding that alienation of corporate assets during CIRP jeopardises stakeholders and is impermissible. [Paras 22, 29, 31, 34]

IBC prevails over inconsistent provisions of other laws and actions under SARFAESI during moratorium are prohibited; the sale effected in breach of moratorium cannot be sustained.

Final Conclusion: The appeal is dismissed. The Tribunal upholds the Adjudicating Authority's order setting aside the sale of the Corporate Debtor's assets because the sale was not completed before commencement of CIRP and its completion (receipt of balance consideration and related acts) after imposition of moratorium was contrary to Section 14 and to the overriding effect of Section 238 of the IBC.

Maintainability of writ petition challenging provisional attachment under PMLA - provisional attachment under Section 5 of the Prevention of Money Laundering Act - adjudication and opportunity of hearing under Section 8 of the Prevention of Money Laundering Act - alternative statutory remedy as bar to exercise of Article 226 jurisdiction - provisional attachment as akin to a show-cause notice - principles of natural justice in the context of provisional attachment - statutory infractions to be raised before the Adjudicating Authority and appellate fora under the Act - refusal to adjudicate interim orders of other fora or extraneous factual disputes at writ stage

Maintainability of writ petition challenging provisional attachment under PMLA - alternative statutory remedy as bar to exercise of Article 226 jurisdiction - Whether the writ petition challenging provisional attachment under Section 5 of the PMLA is maintainable before the High Court under Article 226 in presence of the statutory scheme of adjudication and appeals. - HELD THAT: - The court held that the statutory scheme under the PMLA (Chapter III: Sections 5 to 11, Section 8 adjudication, Section 26 appeals to the Appellate Tribunal and Section 42 appeals to the High Court) provides a multi layered and efficacious remedy for persons aggrieved by provisional attachment. The petition did not impugn lack of jurisdiction, the vires of the Act, or invoke enforcement of a fundamental right; nor did it present a case of inherent jurisdictional failure. In these circumstances, and in light of authorities recognising that where a statute creates a special remedy that remedy must ordinarily be pursued, the court declined to exercise discretionary constitutional jurisdiction to entertain the writ. The availability of the statutory remedies and the absence of any threshold jurisdictional or vires challenge rendered the writ not maintainable.

Writ petition dismissed as not maintainable; petitioner must avail remedies under the PMLA.

Provisional attachment under Section 5 of the Prevention of Money Laundering Act - provisional attachment as akin to a show-cause notice - principles of natural justice in the context of provisional attachment - Whether absence of a pre-attachment hearing before passing an order under Section 5 breaches principles of natural justice permitting interference by the High Court. - HELD THAT: - The court observed that the PMLA does not provide for an opportunity of hearing prior to a provisional attachment under Section 5 and that such an order is of limited duration (180 days) and is followed by a full adjudicatory process under Section 8 which affords a complete opportunity to be heard. On this basis the provisional attachment was characterised as akin to a show cause notice, and the contention of breach of natural justice at the provisional attachment stage was held unsustainable as a ground for entertaining the writ petition in view of the statutory redress available.

No interference on grounds of breach of natural justice at the provisional attachment stage; remedies under the Act are the proper forum for such grievances.

Statutory infractions to be raised before the Adjudicating Authority and appellate fora under the Act - adjudication and opportunity of hearing under Section 8 of the Prevention of Money Laundering Act - Whether alleged failures such as non-recording of 'reasons to believe' or other procedural irregularities in the provisional attachment can be addressed in writ jurisdiction or must be raised under the statutory process. - HELD THAT: - The court held that alleged procedural infirmities and statutory infractions in issuance of the provisional attachment order are matters that can and should be raised before the Adjudicating Authority under Section 8 and, if necessary, in the appellate remedies provided by the Act. The statutory adjudicatory framework is intended to consider the full range of materials and objections; therefore such contentions do not justify bypassing the statutory remedies by invoking extraordinary constitutional writ jurisdiction.

Alleged procedural irregularities to be ventilated and adjudicated under the PMLA's statutory mechanisms; not a ground for writ interference.

Refusal to adjudicate interim orders of other fora or extraneous factual disputes at writ stage - alternative statutory remedy as bar to exercise of Article 226 jurisdiction - Whether the High Court should examine interim orders of the Supreme Court, findings of other authorities (such as the Competition Commission), or allegations of political vendetta while deciding maintainability of the writ. - HELD THAT: - The court declined to adjudicate or record findings on the interim order of the Apex Court, the outcomes of proceedings before other authorities, or allegations of political motive, observing that such inquiry at the writ stage could prejudice the parties before the Adjudicating Authority and appellate fora. These factual and interlocutory matters are better left to the statutory forums established under the PMLA where the complete adjudicatory process is available.

Court will not examine or decide on interim orders of other fora, CCI findings, or allegations of political vendetta in the writ; such matters are for the statutory adjudicatory process.

Final Conclusion: The writ petition challenging provisional attachment order No. 02 of 2021 dated 09.03.2021 is dismissed as not maintainable; the petitioner is at liberty to pursue the remedies provided under the Prevention of Money Laundering Act (adjudication under Section 8 and the appellate remedies under Sections 26 and 42).

Erroneous refund - recovery under Section 11A of the Central Excise Act, 1944 - quasi-judicial orders and collateral reopening - precedential effect of a judgment rendered per incuriam - finality of judicial orders and res judicata inter partes - binding effect of departmental circulars issued under Section 37B

Erroneous refund - recovery under Section 11A of the Central Excise Act, 1944 - Whether refunds of Education Cess and Secondary & Higher Education Cess granted pursuant to SRD Nutrients can be treated as "erroneous refunds" and recovered under Section 11A of the Central Excise Act merely because SRD Nutrients was later held per incuriam in Unicorn Industries. - HELD THAT: - The Court held that the term "erroneous" in Section 11A requires that the departmental officer be satisfied of the circumstances enumerated in sub-section (4) (fraud, collusion, wilful misstatement, suppression of facts or contravention with intent to evade duty) before invoking recovery. A subsequent change of law or a later decision declaring an earlier judgment to be per incuriam does not, by itself, convert an earlier refund which was granted in accordance with the law then prevailing (including refunds sanctioned pursuant to judicial orders) into an "erroneous refund" for the purposes of Section 11A. The Department had accepted and implemented the SRD Nutrients decision and granted refunds; no appeal or review against those departmental refund orders was shown. As such, the impugned show cause notices based solely on the later per incuriam finding do not satisfy the statutory pre-conditions of Section 11A(4) and cannot validly be used to recover the refunds.

Refunds granted pursuant to SRD Nutrients cannot be treated as "erroneous" and recovered under Section 11A merely because SRD Nutrients was later held to be per incuriam; the impugned show cause notices based on that sole premise are unsustainable.

Quasi-judicial orders and collateral reopening - finality of judicial orders and res judicata inter partes - Whether departmental officers may co-laterally reopen or unilaterally revoke refunds sanctioned by other departmental officers (or by courts) by issuing show cause notices under Section 11A without resort to the statutory/judicial remedies available to the Department. - HELD THAT: - The Court reiterated that orders passed by departmental officers in exercise of quasi-judicial powers attain finality inter partes and cannot be collaterally impeached except by the remedies provided by statute (appeal/review) or judicial proceedings. Where refunds were sanctioned pursuant to an Apex Court judgment (SRD Nutrients) or pursuant to orders of this Court, and no appeal or review was pursued by the Department, those refunds attained finality between the parties. A co-ordinate departmental authority cannot reopen such concluded matters by invoking Section 11A unless the statutory conditions (including those in sub-section (4)) are shown to exist. Collateral revocation of quasi judicial orders by internal departmental action is impermissible.

Departmental officers cannot co-laterally reopen or revoke refunds granted by other quasi-judicial orders or courts by issuing Section 11A show-cause notices; statutory/judicial remedies must be followed and final orders remain binding inter partes.

Precedential effect of a judgment rendered per incuriam - finality of judicial orders and res judicata inter partes - Whether the declaration by the Apex Court that a prior judgment was rendered per incuriam (Unicorn Industries declaring SRD Nutrients per incuriam) operates retrospectively to undo inter partes finality of refund orders already granted on the basis of the earlier judgment. - HELD THAT: - The Court applied settled precedents (including A.R. Antulay and subsequent authorities) and held that a decision declared per incuriam loses its precedential value but does not, ipso facto, undo the operative, inter partes effect of the earlier judgment or orders made in proceedings between the parties. Thus, overrulement or denudation of precedent does not automatically reverse or render erroneous orders already granted between the litigating parties; such operative orders retain finality unless set aside by appropriate appellate or review proceedings.

A later declaration that an earlier judgment was per incuriam does not, by itself, negate the inter partes finality of refunds granted pursuant to that earlier judgment; such refunds are not automatically rendered erroneous.

Binding effect of departmental circulars issued under Section 37B - judicial review of show cause notices - Whether departmental circulars/instructions (including the Board's circular of 09.01.2020) bind departmental officers and whether show cause notices issued contrary to such circulars or without jurisdiction are amenable to judicial review under Article 226. - HELD THAT: - The Court observed that circulars/directions issued by the Board under Section 37B bind departmental officers and it is not open for the Revenue to take a stance contrary to such binding instructions. The Board's circular instructed officers to contest adverse decisions by statutory appeals, writ appeals, review or SLP proposals. The Court further held that High Courts may exercise judicial review to quash show cause notices issued wholly without jurisdiction or by wrongful usurpation of power; where a show cause notice is issued contrary to the legal position and in breach of binding Board instructions, it can be set aside in writ proceedings.

Board circulars under Section 37B are binding on departmental officers; show cause notices issued without jurisdiction or contrary to such binding instructions are amenable to judicial review and may be quashed.

Validity of impugned demand-cum-show cause notices - judicial review of show cause notices - Whether the particular impugned demand-cum-show cause notices issued to the petitioners in these writ petitions are sustainable. - HELD THAT: - Applying the legal principles above - that refunds granted pursuant to SRD Nutrients and consequent departmental or court orders had attained finality inter partes, that Section 11A(4) conditions were not pleaded or satisfied, and that the Department did not pursue statutory appeals or reviews - the Court found the impugned notices were issued without jurisdiction insofar as they sought to recover refunds solely on the ground of a later per incuriam finding. In addition, the Board circular required departmental contest by prescribed remedies rather than unilateral recovery. The Court therefore concluded that the notices were legally unsustainable.

The impugned demand-cum-show cause notices are without jurisdiction and are set aside.

Final Conclusion: The writ petitions are allowed. Refunds of Education Cess and Secondary & Higher Education Cess granted pursuant to SRD Nutrients and consequent orders of this Court having attained finality cannot be treated as "erroneous refunds" and recovered by issuance of Section 11A show cause notices merely because SRD Nutrients was later declared per incuriam in Unicorn Industries; departmental officers cannot collaterally reopen such quasi judicial or judicially-sanctioned orders without availing statutory/judicial remedies, and the impugned notices are quashed.

High seas sale - document of title - Bill of Lading as determinative document of title - Bill of Entry not a document of title - exemption for sale in the course of import under Section 5(2) of the CST Act - satisfaction of either limb - appellate fact-finding and interference by Tribunal

Bill of Lading as determinative document of title - high seas sale - exemption for sale in the course of import under Section 5(2) of the CST Act - satisfaction of either limb - Bill of Entry not a document of title - Whether the assessee's high seas sales were established and entitled to exemption despite discrepancies in the Bill of Entry. - HELD THAT: - The First Appellate Authority accepted the Bills of Lading showing endorsement to the high seas buyers and permitted departmental verification, concluding that the goods were sold on high seas sale basis by transfer of documents of title before crossing the customs station and thereby satisfied the second limb of the test in Section 5(2) of the CST Act; accordingly exemption was allowed. The Tribunal reversed that finding by relying on differences in the Bill of Entry. The High Court held that the Bill of Entry is not a document of title and that where the Bill of Lading shows endorsement in favour of the ultimate buyer before the goods crossed the customs station, the claim of exemption cannot be denied merely on the basis of entries in the Bill of Entry. The Court applied the Division Bench decision in Kawarlal & Co. to conclude that the First Appellate Authority's factual conclusion - that the high seas sale was effected by transfer of title as evidenced by the Bill of Lading and verified by the Department - was correct and supports entitlement to exemption. [Paras 11, 12]

The First Appellate Authority's finding that the high seas sales were proved by endorsement in the Bills of Lading and that the assessee satisfied the requirements for exemption was upheld; the Tribunal's rejection based on entries in the Bill of Entry was incorrect.

Appellate fact-finding and interference by Tribunal - reversal of findings of fact - Whether the Tribunal was justified in reversing the First Appellate Authority's factual findings without recording contrary factual conclusions. - HELD THAT: - The High Court observed that the First Appellate Authority had examined the documents produced by the assessee, allowed departmental verification, and recorded factual findings that the sales were genuine high seas sales. The Tribunal's order touched upon those findings and reversed the First Appellate Authority, relying on the Assessing Officer's observation about the Bill of Entry. The Court held that unless the Tribunal recorded a contrary factual finding demonstrating that the First Appellate Authority's conclusions were factually incorrect, it was improper to reappraise and reverse those findings. The Tribunal's interference with the well-considered factual determination of the First Appellate Authority was held to be a serious error warranting interference by the High Court. [Paras 10, 15, 16]

The Tribunal erred in reversing the First Appellate Authority's factual findings; the First Appellate Authority's orders are to be restored.

Final Conclusion: Writ petitions allowed; the Tribunal's common order is set aside and the orders passed by the First Appellate Authority are restored. No costs.

High sea sales exemption - Bill of Entry not a document of title - Bill of Lading as document of title - interpolation in customs documents - clearance of warehoused goods for home consumption under Section 68 of the Customs Act, 1962

High sea sales exemption - Bill of Entry not a document of title - Bill of Lading as document of title - interpolation in customs documents - Whether the alleged interpolation in the Bill of Entry justified disallowance of the claim of high sea sales when the Bill of Lading and other documentary evidence showed transfer of title to the buyer. - HELD THAT: - The Court held that the Bill of Entry is not a document of title under the Customs Act, whereas the Bill of Lading is the document of title and may demonstrate transfer of title before goods cross the customs station. In the present case the Revenue did not dispute that duty was paid by the ultimate buyer and produced no adverse finding other than an assertion of interpolation in the Bill of Entry. The First Appellate Authority had verified the documents produced by the dealer, including the Bill of Lading, invoices, bill of entry and ledger entries, and found them to be in order. Reliance was placed on earlier Division Bench decisions which rejected revenue challenges based solely on variance in the name in the Bill of Entry where the Bill of Lading evidenced endorsement to the purchaser and goods were cleared from warehouse under the appropriate Customs provision. Absent any factual finding displacing the First Appellate Authority's conclusion, the Tribunal was not justified in reversing that order merely on the basis of recorded interpolation in the Bill of Entry.

The Tribunal's order reversing the First Appellate Authority was set aside; the First Appellate Authority's order allowing the claim of high sea sales is restored.

Final Conclusion: Writ petition allowed; impugned Tribunal order set aside and the First Appellate Authority's order dated 28.2.2001 restored. No costs.

Entitlement to declaration in 'C' forms for inter state purchase of High Speed Diesel - Concessional rate of tax for inter state purchases against 'C' forms - Registration under the Central Sales Tax regime for purchasing dealers - Independent liability of purchasing dealer to obtain registration - Effect of narrowing the definition of 'goods' (post 1.7.2017) on rights of purchasing dealers - In rem operation of judicial decisions and applicability to all similarly placed dealers - Freedom of trade under Article 301 read with Article 304(b)

Entitlement to declaration in 'C' forms for inter state purchase of High Speed Diesel - Concessional rate of tax for inter state purchases against 'C' forms - In rem operation of judicial decisions and applicability to all similarly placed dealers - Benefit of concession by use of 'C' forms is available to dealers purchasing High Speed Diesel by way of inter state sales and the departmental authorities must extend the relief to all similarly placed dealers and permit online issuance/download of 'C' forms. - HELD THAT: - The Court applied and followed earlier decisions (including the Single Judge and Division Bench decisions in M/s Ramco Cements Ltd. and other High Court authorities, and the dismissal of the State's Special Leave Petitions) which held that dealers purchasing the specified commodity from other States are entitled to the concessional rate by furnishing 'C' forms. Those precedents operate in rem and bind the Assessing Authorities in Tamil Nadu until stayed or reversed. The department's practice of restricting benefit only to parties to the earlier writs or blocking online issuance was held to be unacceptable; the relief must be extended to all dealers entitled to it in accordance with law. [Paras 14, 15, 39, 40, 41]

The writ petition is allowed insofar as the petitioner seeks entitlement to 'C' forms for inter state purchase of High Speed Diesel; respondents are directed to apply the precedent to all eligible dealers and to permit online downloading/issuance of 'C' forms.

Registration under the Central Sales Tax regime for purchasing dealers - Independent liability of purchasing dealer to obtain registration - Effect of narrowing the definition of 'goods' (post 1.7.2017) on rights of purchasing dealers - A purchasing dealer has an independent right to registration under the CST Act and the 2017 amendment narrowing the definition of 'goods' to six commodities does not extinguish the purchasing dealer's right to claim concessional purchase against 'C' forms for those commodities. - HELD THAT: - The Division Bench construed sub sections of Section 7 of the CST Act to show that registration is not contingent solely upon being a seller liable to tax; Section 7(2) confers an independent right to obtain registration. The 1.7.2017 amendment limiting 'goods' to six commodities did not amend Section 8(3)(b) so as to remove the right of purchasing dealers to avail concessional rates against 'C' declarations. To deny such rights would produce arbitrariness and infringe freedom of trade as protected by Articles 301 and 304(b). Consequently, the Revenue's contention that registration/entitlement is lost is rejected. [Paras 13, 14, 15, 39]

The Revenue's contention that purchasing dealers have lost entitlement to registration and concessional purchases is rejected; the right to registration and to use 'C' forms for the specified commodities continues.

Final Conclusion: Writ petition allowed. The Court directs respondents to extend the benefit of concessional inter state purchase against 'C' forms to all eligible dealers and to permit online issuance/download of such forms; the departmental practice of restricting the benefit or blocking online access is quashed.

Entitlement to C forms for inter State purchase of High Speed Diesel - right of a purchasing dealer to registration under the CST Act independent of seller's liability - continuing operation of concessional rate and Declaration in C forms for the six specified commodities - in rem effect of High Court decisions on issuance and use of C forms - direction to permit online downloading of Declaration in C forms

Entitlement to C forms for inter State purchase of High Speed Diesel - Petitioner is entitled to obtain C forms to claim concessional tax on High Speed Diesel purchased from suppliers in other States. - HELD THAT: - The Court applied its earlier decision in M/s Ramco Cements Ltd. and other High Court precedents holding that dealers purchasing High Speed Diesel by inter State sale are entitled to the concessional rate by producing Declaration in C forms. The learned Single Judge's reasoning that the benefit of concessional rate is available to purchasing dealers for inter State purchases was accepted and held to be binding until stayed or reversed.

Entitlement to C forms for inter State purchases of High Speed Diesel is upheld and the writ petition is allowed on this ground.

Right of a purchasing dealer to registration under the CST Act independent of seller's liability - A purchasing dealer may continue to obtain registration under the CST Act independent of the seller's liability to pay tax; registration is not confined solely to selling dealers. - HELD THAT: - Relying on the Division Bench ruling in the Ramco Cements appeals, the Court construed sub sections of Section 7 of the CST Act as creating independent rights. Section 7(2) furnishes a separate category enabling dealers who may not be sellers liable under the CST Act to secure registration. Consequently, entitlement to registration and related benefits for purchasing dealers cannot be denied merely because the dealer is not effecting taxable sales under CST. [Paras 13, 14]

The contention that purchasing dealers have lost entitlement to registration under the CST Act is rejected.

Continuing operation of concessional rate and Declaration in C forms for the six specified commodities - Amendment restricting the definition of 'goods' to six commodities does not extinguish the right of purchasing dealers to obtain concessional rate by using C forms under Section 8(3)(b). - HELD THAT: - The Court held that the 2017 amendment narrowing the term 'goods' to six specified items did not alter the seamless operation of inter State trade nor abolish the purchasing dealer's right to concessional treatment under Section 8(3)(b). The legislative changes were not intended to remove the established entitlement of purchasers of the specified commodities to claim concessional rates, and to read otherwise would produce arbitrary classification contrary to Article 14. [Paras 15, 39]

Rights of purchasing dealers to concessional rates and use of C forms for the six commodities continue unabated.

In rem effect of High Court decisions on issuance and use of C forms - direction to permit online downloading of Declaration in C forms - The High Court's decision operates in rem and assessing authorities must apply its rationale to all eligible dealers; authorities are directed to permit online downloading and not to restrict use of C forms. - HELD THAT: - The Court observed that earlier orders in Ramco Cements and allied decisions are binding and operate in rem, thus applying to all dealers entitled to benefit. It rejected departmental practice of limiting extension of relief to parties to the specific writs. The State and revenue authorities were directed not to restrict use of C forms for inter State purchases of the specified commodities and to enable online issuance/download of such Declarations, quashing contrary circulars and consequential notices. [Paras 6, 41]

Assessing authorities must implement the High Court's rationale across the State, permit online downloading of C forms and refrain from restricting their use.

Final Conclusion: Writ petition allowed; petitioner entitled to C forms for inter State purchase of High Speed Diesel and related reliefs. Directions issued to the revenue to apply the High Court's rulings in rem to all eligible dealers and to facilitate online issuance/download of C forms. The State's challenge to the controlling High Court decisions has been dismissed up to the Supreme Court, affirming finality of the principle laid down.

Application of Fundamental Rule 56 to members of the U.P. Trade Tax Tribunal under Section 10(1-B) of the U.P. Trade Tax Act, 1948 - entitlement to retiring pension and pensionary benefits under Fundamental Rule 56 - executive order cannot override statutory or rule based pension entitlement - estoppel and acquiescence against belated denial of pensionary claim - scope and limits of review jurisdiction - error apparent on the face of the record

Application of Fundamental Rule 56 to members of the U.P. Trade Tax Tribunal under Section 10(1-B) of the U.P. Trade Tax Act, 1948 - entitlement to retiring pension and pensionary benefits under Fundamental Rule 56 - executive order cannot override statutory or rule based pension entitlement - estoppel and acquiescence against belated denial of pensionary claim - Whether the petitioner (member of the U.P. Trade Tax Tribunal) is entitled to pensionary benefits under Fundamental Rule 56 as made applicable by Section 10(1-B) of the U.P. Trade Tax Act, 1948, notwithstanding the government order dated 05.05.2000 declaring such services non pensionable. - HELD THAT: - The Division Bench had held that Section 10(1-B) renders Fundamental Rule 56 applicable to members of the Tribunal and that, in absence of a statutory amendment, an executive order cannot curtail or override the entitlement created by application of Fundamental Rule 56. The Court noted that the petitioner served the requisite qualifying period and that the State had permitted continuation of service up to 31.12.2011, which supplied the qualifying service for pension. The review applicant's contention that the appointment was for a fixed term and therefore non pensionable was rejected in view of the renewal/continuation of service and the statutory applicability of Fundamental Rule 56 to tribunal members. The State was held precluded by principles of estoppel and acquiescence from invoking the later executive order to deny pension to a person who had been allowed to serve and who had completed qualifying service. The Court distinguished the executive power precedents relied upon by the State as not being applicable on the facts, and reaffirmed that the government order dated 05.05.2000 cannot have retrospective effect so as to defeat the pensionary right created by application of Fundamental Rule 56 under Section 10(1-B). [Paras 12, 13, 14, 16, 18]

The petitioner is entitled to pensionary benefits under Fundamental Rule 56 as made applicable by Section 10(1-B) of the U.P. Trade Tax Act, 1948, and the government order dated 05.05.2000 cannot defeat that entitlement; the State is estopped from denying the pension.

Scope and limits of review jurisdiction - error apparent on the face of the record - Whether the review petition challenging the Division Bench judgment dated 03.04.2017 discloses any error apparent on the face of the record or other ground warranting exercise of review jurisdiction. - HELD THAT: - The Court applied the settled principles governing review: review is confined to discovery of new evidence, error apparent on face of record, or analogous sufficient reasons and is not an appeal in disguise. After surveying authorities and the grounds advanced by the State, the Court found no patent error, no new material that could not with due diligence have been produced earlier, and no ground analogous to those permitting review. The State's contentions merely sought re examination of the merits and restated arguments already considered; the relied authorities were held inapposite on the facts. Consequently, the review did not satisfy the limited statutory and jurisprudential tests for reopening a final judgment. [Paras 27, 28, 29, 30, 31]

The review petition does not disclose any error apparent on the face of the record or any other ground for review and is dismissed.

Final Conclusion: The review application is dismissed. The earlier judgment holding that Fundamental Rule 56 applies to members of the U.P. Trade Tax Tribunal under Section 10(1-B) and entitles the petitioner to pensionary benefits stands affirmed; the government order of 05.05.2000 cannot be invoked to deny the petitioner's pension and the State is estopped from doing so.

Jurisdiction under Article 226 - self-imposed restraint - alternative efficacious remedy - statutory limitation for appeal - violation of principles of natural justice - unreasonableness - perversity - setting aside penalty and garnishee orders - remand for fresh consideration with opportunity of personal hearing

Jurisdiction under Article 226 - self-imposed restraint - alternative efficacious remedy - statutory limitation for appeal - violation of principles of natural justice - Whether there is an absolute bar on entertaining a writ petition under Article 226 where an alternative statutory remedy exists and the statutory period for appeal has expired - HELD THAT: - The High Court held that there is no absolute bar on the exercise of jurisdiction under Article 226. While the Court must exercise self-imposed restraint and ordinarily not entertain a writ where an effective alternative remedy is available, that power is not ousted altogether by the existence of a statutory limitation for appeal. The court must, however, have regard to legislative intent and may refuse relief where the writ petitioner has unreasonably delayed and has not shown justification for failure to avail the statutory remedy. Intervention under Article 226 is warranted where the action of the statutory authority discloses unfairness, unreasonableness, perversity, want of jurisdiction or violation of principles of natural justice; absent such circumstances the High Court should ordinarily refrain from exercising writ jurisdiction to frustrate the statutory scheme. [Paras 5]

There is no absolute bar on entertaining a writ petition under Article 226, but the High Court must exercise restraint and will intervene only within the identified parameters.

Setting aside penalty and garnishee orders - remand for fresh consideration with opportunity of personal hearing - Whether the impugned penalty and garnishee orders should be set aside and the matter remitted to the Assessing Officer for fresh consideration - HELD THAT: - Applying the principle that writ jurisdiction is not absolutely barred and having found the Single Judge's blanket approach unsustainable, the Court set aside the orders levying penalty and the consequential garnishee orders. The matter was remanded to the Assessing Officer for de novo consideration on merits. The Assessing Officer is directed to afford the appellant's authorised representative personal hearing, permit production of books of account and other records, and thereafter pass a reasoned order in accordance with law. [Paras 6]

The penalty orders and garnishee orders are set aside and the matter is remanded to the Assessing Officer for fresh consideration with directions to afford personal hearing, accept records and pass a reasoned order.

Final Conclusion: The writ appeals are allowed; the Single Judge's observation of a blanket ban on writ petitions is set aside, the penalty and garnishee orders are quashed, and the matter is remanded to the Assessing Officer for fresh, reasoned consideration after personal hearing and production of records.

Release of seized goods and vehicle pending appeal - security by bank guarantee as condition for release - appellate jurisdiction reserved - authority's power to impose lawful conditions on release

Release of seized goods and vehicle pending appeal - security by bank guarantee as condition for release - authority's power to impose lawful conditions on release - Petitioners entitled to release of the vehicle and goods on furnishing a bank guarantee, without adjudication on merits. - HELD THAT: - The Court, while not adjudicating the merits and leaving those to the appellate forum, directed that the petitioner Leeladhar Meghwal shall furnish a bank guarantee for Rs. 70,92,629/- before the respondent authority within 15 days. Immediately upon the bank guarantee being furnished, the respondent authority is required to release the vehicle bearing registration No.RJ30 GA 3473 with the goods. The Court expressly permitted the respondent authority to impose any other condition provided such condition is strictly in accordance with law. The order preserves the appellate jurisdiction and does not decide the substantive dispute on merits.

Petition disposed by directing release of the vehicle and goods on deposit of a bank guarantee of Rs. 70,92,629/-, with liberty to the authority to impose lawful conditions; merits reserved to the appellate court.

Final Conclusion: Writ petitions disposed of by directing release of the specified vehicle and goods upon the petitioner furnishing the stated bank guarantee within 15 days; the substantive dispute is left open for the appellate authority; the connected stay petition is also disposed of.

Protection of life and liberty - threat perception - recording of statements by police officer - shelter in safe house - infructuous disposal

Protection of life and liberty - threat perception - recording of statements by police officer - infructuous disposal - Whether the petition for directions to protect the petitioners from alleged threats required further adjudication or implementation of interim directions - HELD THAT: - The Court had earlier directed that statements of the petitioners be recorded by a police official not below the rank of Deputy Superintendent of Police and permitted shelter in a safe house if requested. On the subsequent hearing the State informed the Court that the statements had been recorded by the Deputy Superintendent of Police, Head Quarter, Ambala, and that those statements recorded that there was no threat perception. The petitioners did not appear or press the matter despite being given opportunity. In those circumstances the Court found that the factual foundation for continuing the petition - namely a live threat to life or liberty - was absent and that the interim direction had been complied with. Consequently there remained no cause of action to pursue the petition further.

Petition disposed of as infructuous for want of a continuing threat and in view of compliance with the direction to record statements; no further relief granted.

Final Conclusion: The petition seeking protective directions was dismissed as infructuous: the police recorded the petitioners' statements which indicated no threat perception, the petitioners did not pursue the matter, and therefore no cause of action survived.