TMI Tax Updates e-Newsletter
Apr 16,2026

Maintainability of Writ jurisdiction under Article 226 - assailing the show cause notice under Section 74 of the Central Goods and Service Tax Act - wrongful utilization of excess ITC from a non-existent firm - efficacious statutory appellate remedy -​​​​​​​ Error apparent on the face of the record - Clerical or arithmetical error- breach of fundamental rights - violation of natural justice - excess of jurisdiction, or challenge to vires.

Alternate statutory remedy - HELD THAT: - The Court held that where an efficacious statutory appeal is available, writ jurisdiction would ordinarily not be exercised except in the recognised exceptional categories. It found that the petitioner's challenge to the corrigendum and the consequential order would require examination of the nature of the correction and the underlying material, which would involve appreciation of facts and therefore fall outside the limited certiorari jurisdiction. Since the adjudicating authority had already dealt with those aspects and an appeal under Section 107 read with Rule 109A was available, mere disagreement with the conclusions reached in adjudication was held insufficient to bypass the statutory remedy. The Court also clarified that it had not examined the merits of the controversy. [Paras 22, 23, 24, 25, 26]

The writ petition was dismissed, leaving the petitioner at liberty to pursue the statutory appellate remedy.

Final Conclusion: The Court declined to entertain the writ petition against the order passed under Section 74 of the CGST Act, holding that the challenge was directed against matters requiring factual examination and that an efficacious statutory appeal was available. The petition was accordingly dismissed with liberty to avail remedies in accordance with law, without any opinion on the merits.

Entitlement to Regular bail - Economic offence - fraudulent availment of input tax credit under the CGST Act - Documentary evidence - Custodial interrogation.

Regular bail - HELD THAT:- The Court held that the allegations were founded primarily on documentary material already in possession of the prosecution. It noted that the complaint had been filed and, so far as the applicant was concerned, the investigation appeared to be substantially complete, with no further custodial interrogation shown to be necessary. The Court also took into account that the maximum punishment under the provision invoked was up to five years, the offences were compoundable in nature, the applicant had remained in judicial custody since his arrest, and no specific apprehension was shown that his release would result in tampering with evidence or influencing witnesses, particularly when the evidence was largely documentary. [Paras 6]

Regular bail was granted to the applicant, subject to furnishing bond and surety as directed.

Final Conclusion: The Court allowed the bail application and directed release of the applicant on regular bail on the terms imposed, having found that further custodial detention was not warranted in the facts of the case.

Writ jurisdiction - statutory appellate remedy - Multi-tiered Adjudicatory Process -HELD THAT:- The Court held that the statute provides a multi-tiered adjudicatory process and, in that view, it would be prudent to require the petitioners to approach the appellate authority at the first instance. The Court did not adjudicate the merits of the challenge, including the objection as to jurisdiction, and directed that all points raised by the petitioners be considered by the appellate authority on merits if the appeal is filed within the time granted. [Paras 6, 7]

Liberty was granted to the petitioners to file an appeal under Section 107, and the appellate authority was directed to consider all grounds, including the jurisdictional objection, on merits.

Final Conclusion: The writ petition was disposed of without examining the merits, on the ground that the petitioners should avail the statutory appeal. The appellate authority was directed to entertain the appeal, if filed within the permitted time, and decide all issues including jurisdiction expeditiously.

Challenged the order passed under Section 129(3) - efficacious statutory appellate remedy available under Section 107 -Multi-tiered adjudicatory process -Exercise of writ jurisdiction.

Alternative remedy under statutory appeal - HELD THAT: - The Court held that, having regard to the scheme of the Act providing a multi-tiered adjudicatory process, it would be prudent to require the petitioners to approach the appellate authority at the first instance. The Court did not adjudicate the merits of the challenge, and specifically left it open to the appellate authority to consider all points raised by the petitioners, including the objection as to jurisdiction. [Paras 6, 7]

The writ petition was disposed of with liberty to file an appeal, and the appellate authority was directed to decide the appeal on merits, including the jurisdictional objection, if filed within the time granted.

Final Conclusion: The Court declined to entertain the writ petition against the order under Section 129(3) and relegated the petitioners to the statutory appellate remedy under Section 107. All contentions, including the plea of jurisdiction, were left open for consideration by the appellate authority.

Challenged the assessment order passed under Section 73(9) - Want of opportunity of hearing in view of Section 75(4) - violation of the mandatory requirement of hearing - Adverse determination without personal hearing. - HELD THAT: - The Court held that, having regard to Section 75(4), once an adverse decision was contemplated, the proper officer was bound to grant the petitioner an opportunity of hearing before determining liability. This obligation was not dispensed with merely because the petitioner's response to the show cause notice was filed beyond the stipulated time. Since it was admitted that no hearing was given and the communication relied on by the State was not available on the portal, the impugned order suffered from infraction of the statutory requirement of hearing and was liable to be set aside on that technical ground. As a consequential measure, the officer was directed to restore the registration only to enable disposal of the show cause proceeding, permit filing of response to the later show cause within the time granted, and proceed afresh after affording hearing in accordance with law. [Paras 8, 9, 10, 11, 12]

The impugned order was set aside for violation of the mandatory requirement of hearing, and the matter was directed to be proceeded with afresh after restoring portal access and granting the petitioner an opportunity to respond and be heard.

Final Conclusion: The writ petition was disposed of by setting aside the order passed under Section 73(9) on the ground of breach of the statutory requirement of hearing. The authority was directed to restore the registration for limited portal access, receive the petitioner's response, and decide the show cause afresh after granting personal hearing.

Validity of the order-in-original passed under Section 74 - Failure to consider material submissions - Non-application of mind in adjudication - legal effect of the explanation to Entry 5 of Schedule II - HELD THAT: - The Court found that the discussion and findings in the impugned order did not appropriately address the contentions raised in the reply to the show cause notice. It held that the petitioner's objections, along with the scope of interpretation of the explanation to Entry-5, required fresh consideration by the authority. Since the defect lay in the adjudicatory process itself, the matter was required to be reconsidered after detailed examination of the reply and legal submissions, with all merits left open. [Paras 7, 8]

The impugned order was set aside and the matter was remitted for fresh consideration after proper examination of the petitioner's reply and legal contentions, without expressing any view on the merits.

Final Conclusion: The Court set aside the order-in-original for failure to properly consider the petitioner's reply and legal contentions, and remitted the matter to the authority for fresh adjudication. All contentions on merits were kept open.

Non-application of mind - Failure to consider material explanation - mismatch in Input Tax Credit on import of goods and the related bill of entries - Principles of Natural Justice. - HELD THAT:- The Court found that, though the impugned order referred to the taxpayer's reply, the authority had prima facie not adverted to the petitioner's specific contention regarding reversal of part of the ITC. The finding that the address in the bills of entry did not match the additional place of business shown on the portal also required reconsideration in light of the petitioner's pleaded explanation that the business premises had shifted, while the corresponding amendment in the importer-exporter records was made later. On that limited aspect, the order disclosed non-application of mind and required fresh consideration by the authority. [Paras 3, 4, 7]

The order was set aside only to the extent of the ITC mismatch relating to import of goods for the financial year 2020-21, along with consequential interest and penalty, and the matter was remitted for reconsideration with all contentions kept open.

Final Conclusion: The writ petition was disposed of by setting aside the adjudication order only on the limited issue of ITC mismatch in respect of imported goods for the financial year 2020-21 and remitting that issue for fresh consideration.

Entitlement to obtain a temporary identification number - unregistered person - Separate summary orders for separate appellate remedies - Right of Appeal -availability of temporary identification number under Rule 16A - composite adjudication order and a single Form GST DRC-07 fastening liability on both the company and its Managing Director - tax liability imposed under Section 122(1)(a) of the CGST Act, separate Form DRC-07.​​​​​​​ - HELD THAT: - The Court accepted the submission of the revenue based on Rule 16A of the Central Goods and Services Tax (amendment) Rules, 2025 that the Proper Officer could grant a temporary identification number to the Managing Director. Since the impugned summary order in Form GST DRC-07 had been issued in a composite manner for both the company and its Managing Director, the Court held that the Managing Director should be enabled to avail the appellate remedy independently. For that purpose, separate fresh Form GST DRC-07s were required to be issued, one for the company and the other for the Managing Director. The Court further clarified that the Managing Director would be at liberty to raise all grounds of fact and law before the appellate authority, and that limitation for filing appeal would commence only after issuance of the fresh Form GST DRC-07. [Paras 6, 7]

The Managing Director was permitted to seek temporary registration/identification number, the competent authority was directed to issue it, separate fresh Form GST DRC-07s were directed to be issued for the company and the Managing Director, and the period of limitation for appeal was held to run only from the fresh DRC-07.

Final Conclusion: The writ petitions were disposed of by directing issuance of a temporary identification number to the Managing Director and fresh separate Form GST DRC-07s for the company and the Managing Director, so that each could avail an independent appellate remedy. The Court did not examine the merits of the underlying tax dispute.

Entitlement to inspection and extracts - Right to Inspection of Relied Upon Documents - Inspection of seized records- Validity of the show cause notice, issued under Section 74(1). - HELD THAT: - The Court held that since the show cause notice had been issued by relying on documents forming part of the earlier search and seizure, the petitioners had to be given effective access to those materials for answering the notice. On that basis, the Court found that they were at least entitled to inspection and/or extracts of all relied upon records, and where particular accounting records from the computer hard drive, such as excel or tally data, were relied upon and specifically sought, copies had to be furnished. The Court expressly confined itself to this procedural entitlement and did not examine the other challenges raised to the notice. [Paras 4, 5, 6, 7, 8]

The respondents were directed to make available the relied upon documents within the time fixed by the Court, the petitioners were granted time to reply thereafter and to receive a personal hearing, and the period for completion of the proceedings was correspondingly extended.

Final Conclusion: The writ petition was disposed of by directing disclosure and access to the records relied upon in the show cause proceedings, including copies of specific accounting data if required, and by extending the time for completion of the adjudication. The Court left all other issues open.

Challenged an order passed by the proper officer under the provisions of section 73 -barred by limitation - Alternative remedy - Non-functional Appellate Tribunal - loss of revenue for the exchequer. - HELD THAT:- The Court held that the writ petition had been entertained when the statutory tribunal was not in existence, and though the Tribunal had since been constituted, judicial hearings had not yet commenced. Since the matter had remained pending before the Court for a considerable period and its non-adjudication was prejudicing both sides, the dispute required expeditious disposal. At the same time, as the controversy involved diverse factual issues, the appellate authority under the Act was found to be the more appropriate forum to examine the matter on merits with access to the record available on the online portal. On that basis, the order rejecting the appeal on limitation was set aside and the matter was remanded to the appellate authority for a fresh decision on merits, without any adjudication by the Court on the merits of the dispute. [Paras 6, 7, 8, 9]

The order of the appellate authority was set aside and the matter was remanded to that authority for expeditious disposal on merits in accordance with law.

Final Conclusion: The writ petition was disposed of by setting aside the appellate order and remanding the matter to the appellate authority for a decision on merits. The Court did not examine the merits of the underlying dispute and left all such issues open for fresh consideration.

Pendency of rectification application filed under Section 161 -Premature dismissal of statutory appeal - HELD THAT: - The Court found that, when the assessee's application for rectification of the adjudication order was still pending, the appellate authority ought to have had that application decided before proceeding to dismiss the statutory appeal. Since the appeal was rejected during the pendency of the rectification proceedings, the impugned appellate order could not be sustained. The Court therefore directed that the rectification application be decided after granting personal hearing and by a reasoned order. [Paras 4, 6]

The appellate order dismissing the appeal was set aside, and the rectification application was directed to be decided afresh after personal hearing and by a reasoned order.

Final Conclusion: The writ petition was allowed to the extent that the appellate order dismissing the appeal on delay was set aside. The State was directed to first decide the pending rectification application, after personal hearing and by a reasoned order, within the time granted by the Court.

Cancellation of registration for non-filing of returns - Conditional restoration of registration. - HELD THAT:- Hon’ble Division Bench of this Court in the case of Subhankar Golder v. Assistant 6 Commissioner of State Tax, Serampore Charge & Ors.[2024 (5) TMI 1262 - CALCUTTA HIGH COURT], propose to set aside the order dated 1st July, 2019, cancelling the registration of the petitioner under the said Act, subject to the condition that the petitioner files his returns for the entire period of default and pays requisite amount of tax, interest, fine and penalty, if not already paid.

The Court found that the registration had been cancelled for non-filing of returns and that it was not the respondents' case that the petitioner had adopted any dubious process to evade tax. It held that continued cancellation would be counterproductive to the interest of revenue, since absence of registration would prevent the petitioner from carrying on business and raising invoices, thereby adversely affecting tax recovery. On that basis, the Court took a pragmatic view and set aside the cancellation, while requiring the petitioner to file returns for the entire default period and pay the requisite tax, interest, fine and penalty, if not already paid. The respondents were also directed to activate the portal to enable such compliance, failing which the petitioner would not get the benefit of restoration. [Paras 5, 6, 7, 8]

The cancellation order was set aside and restoration of registration was directed subject to filing of all pending returns and payment of the requisite dues within the time granted.

Final Conclusion: The Court set aside the order cancelling the petitioner's GST registration and directed conditional restoration upon filing of pending returns and payment of the requisite statutory dues. The portal was directed to be activated to facilitate compliance, and failure to comply within the prescribed time would disentitle the petitioner to the benefit of the order.

Validity of the show cause notice not in consonance with the prescribed format under FORM GST REG-17 and does not disclose any reasons - Cancellation of GST registration.

Vague show cause notice - HELD THAT: - The Court found on perusal of the notice that, apart from a bald allegation that the registration had been obtained by fraud, it contained no reasons or material particulars and was not in conformity with the prescribed form. The governing principle applied was that a show cause notice must furnish sufficient details to enable an effective response; in the absence of such reasons and particulars, the notice becomes vague and unsustainable. Since the cancellation proceedings rested on such a defective notice, the cancellation order as well as the appellate order affirming it were held unsustainable. [Paras 7, 8]

The impugned cancellation order and the appellate confirmation order were quashed, and the authority was directed to restore the petitioner's GST registration.

Final Conclusion: The writ petition was allowed on the ground that the foundation notice for cancellation of GST registration was vague and devoid of reasons. The consequential cancellation and appellate orders were quashed, with a direction to restore the registration.

Operation and mismanagement - statutory appeal - efficacious appellate remedy -pre-deposit - HELD THAT:- The writ petition was disposed of by granting liberty to the petitioner to file a statutory appeal against the impugned order within the time stipulated by the Court, subject to deposit of 50% of the disputed tax, with a direction that the Appellate Authority entertain and decide the appeal on merits and that further recovery shall stand abated on such compliance.

Validity of continuing the petitioner's bank account attachment - Recovery notice in Form GST DRC - Reversal of input tax credit - HELD THAT:- The Court noted that the petitioner had admittedly received the supplies and had reversed the input tax credit availed on those invoices pursuant to the departmental proceedings initiated against it, which were thereafter dropped. At the same time, the Court found that there remained a possibility of the petitioner making payment to the supplier for the value of the supplies and that the supplier's entitlement to recover such amount was itself liable to be worked out in separate proceedings. On that basis, the Court balanced the interests of the petitioner and the supplier and held that the attachment of the petitioner's bank account pursuant to the impugned recovery notice should be vacated, but only on the condition that the petitioner should not make any direct or indirect payment to the supplier pending resolution of the collateral disputes before the appropriate forum. [Paras 13, 14]

The impugned attachment was directed to be vacated subject to a restraint on the petitioner from making any direct or indirect payment to the supplier unless appropriate orders are obtained in the collateral proceedings.

Final Conclusion: The writ petition was disposed of by directing release of the petitioner's bank account from attachment, while protecting the competing interests by restraining any payment by the petitioner to the supplier pending resolution of the related disputes in appropriate proceedings.

Set-off of amalgamating company's losses - Carry forward of loss after amalgamation - Eight-year limitation for carry forward of loss - Succession to business - amalgamated company entitlement under the Kerala Agricultural Income Tax Act, 1991 to set off the losses of the amalgamating company against its own income - HELD THAT: - The Court held that the appellant could not point to any provision in the Kerala Act under which losses suffered by the amalgamating company could be treated as losses of the amalgamated company. Section 12 permits carry forward of loss by the person who sustained it, while Section 54 dealing with succession to business only contemplates assessment of the respective shares of income and, through its proviso, recovery of tax dues from the successor; it does not confer any right on the successor to claim the predecessor's losses.

The appellant's reliance on Clause 14.2 of the scheme of amalgamation and on Dalmia Power Ltd. and Another [2019 (12) TMI 991 - SUPREME COURT] was rejected because, unlike that case, there was neither any statutory requirement to issue notice to the State Government in the amalgamation proceedings under the 1956 Act nor had any such notice been issued. The scheme, therefore, could not by itself create a tax benefit not provided by the Kerala Act. [Paras 13, 14]

The claim for set-off of the amalgamating company's losses by the amalgamated company was rightly denied.

Eight-year limitation for carry forward of loss - HELD THAT: - The Court accepted the High Court's factual finding that, for Assessment Year 2006-07, the losses of the amalgamating company related to a period beyond eight years, and noted that the remaining appeals concerned subsequent assessment years. Since Section 12 does not permit carry forward of loss for more than eight years, the appellant was not entitled to the claimed set-off. The Court also noted that no specific ground had been raised before it to assail that factual finding. [Paras 15]

The set-off was also unavailable on account of the expiry of the eight-year period prescribed by Section 12.

Final Conclusion: The appeals were dismissed. The Court held that the Kerala Agricultural Income Tax Act did not permit the amalgamated company to claim set-off of the amalgamating company's losses, and that the claim was in any case barred by the eight-year limit for carry forward of loss.

Validity of Reassessment proceedings - period of limitation - Corrigendum to notice - mandate of a detailed investigation at the time of issuance of notice u/s 148 - Specified authority for sanction - Jurisdiction of Assessing Officer - Judicial review at notice stage

Reassessment limitation - Corrigendum to notice - Specified authority for sanction - less than 'seven days’ to furnish response to Section 148A(b) - HELD THAT: - The Court held that, although the original notice under section 148A(b) granted less than the minimum seven days, the first corrigendum issued on 31.03.2022 validly extended the time to reply till 02.04.2022. Since the corrigenda were not challenged in the writ petition, the matter had to proceed on the basis that the extension stood. Applying the third proviso to section 149(1), the time allowed to the assessee to respond had to be excluded, with the result that the order under section 148A(d) and the notice under section 148 issued on 07.04.2022 fell within limitation. Once the proceedings were treated as being within three years on such exclusion, the objection that sanction ought to have been taken from PCCIT/CCIT did not survive, and approval by the PCIT/CIT was competent. [Paras 50, 51, 55, 56, 57]

The plea of limitation failed, and the challenge to sanction on the footing that the case had crossed three years was rejected.

Jurisdiction of Assessing Officer - Faceless reassessment scheme - HELD THAT: - Rejecting the contention that only the Faceless Assessing Officer could issue the notice, the Court followed its earlier view that both the officers are competent to issue notice. The pendency of the earlier decision before the Supreme Court did not alter the position, since no stay of that decision was shown. [Paras 58]

The objection to the competence of the Jurisdictional Assessing Officer was rejected.

Judicial review at notice stage - Reassessment on disputed facts - taxability, NRE account status - HELD THAT: - The Court noted that the petitioner's challenge was essentially founded on the assertion that the impugned amounts stood explained, were either inter-bank transfers or not taxable, and that the interest on the NRE deposits was exempt. The Revenue, on the other hand, maintained that sufficient supporting material had not been produced and that the issue whether the NRE account had been maintained with the requisite RBI permission remained relevant to the claim of exemption. The Court held that these matters required factual verification by the Assessing Officer and that, in writ jurisdiction, it would not undertake an enquiry into the sufficiency of the material or itself examine whether there was no escapement of income. It observed that, as regards the larger deposit received from the petitioner's father and the claim surrounding the NRE account, the petitioner could place the relevant material before the Assessing Officer. No interference was therefore warranted with the reassessment proceedings. [Paras 68, 69, 70, 71, 72]

The reassessment proceedings were allowed to continue, with liberty to the petitioner to raise all factual and legal submissions before the Assessing Officer.

Final Conclusion: The Court upheld the initiation of reassessment for AY 2018-19, holding that the proceedings were within limitation after exclusion of the time granted by corrigendum and that the approval obtained was competent. It also rejected the objection to the jurisdiction of the Jurisdictional Assessing Officer and left the petitioner to raise all factual and legal contentions before the Assessing Officer in the reassessment proceedings.

Application under Section 119(2)(b) rejected - delay in filing Form 10IC - exercising the option under Section 115BAA - Genuine hardship u/s 119(2)(b) - scope of beneficial circular issued under section 119(2)(b)

HELD THAT: - The Court held that, although the assessee had admittedly delayed filing Form 10IC beyond the due date prescribed for filing the return under section 139(1), the governing circular for condonation of delay in filing such forms was the circular dated 18.11.2024 and not the earlier circular dated 01.10.2024, which did not deal with condonation of delay in filing forms. The omission of AY 2023-24 from the circular dated 18.11.2024 was treated as non-determinative, since the circular had been issued in exercise of power under section 119(2)(b) to address genuine hardship.

The Court held that restricting the benefit of such a beneficial circular only to the assessment years expressly named, without any discernible rationale linked to its object, would create anomaly and injustice. It therefore declared that the circular must apply to all genuine and bona fide cases irrespective of the assessment year, unless the CBDT consciously provides otherwise. [Paras 12, 13, 14, 15, 16]

Final Conclusion: The High Court held that the beneficial circular issued under section 119(2)(b) for condonation of delay in filing prescribed forms is not confined only to the assessment years expressly mentioned therein and extends to genuine cases for AY 2023-24 as well. The rejection order was accordingly set aside and the matter was remitted for fresh consideration in accordance with law.

Reassessment u/s 148 - Live link with seized material - Vague and non-specific information - scope of expressions "relates to" and "pertains to" in Explanation 2 to Section 148 - sale of the land nexus between the petitioner and the alleged escapement of income

HELD THAT: - The Court held that though at the stage of reopening it is not required to test the sufficiency of evidence, there must still exist prima facie material capable of linking the assessee with the alleged escaped income.

The expressions relates to and pertains to in the statutory explanation cannot be applied in vacuum, and the revenue must analyse the seized material in the light of surrounding circumstances and record its relevance to the assessee. In the present case, the loose paper relied upon was vague and unspecific: it referred to non-agricultural land, mentioned another broker, did not contain the petitioner's name, and was sought to be connected with the petitioner's registered purchase made several months later only through information gathered from a government website. As no direct or indirect live link was established between the seized document and the petitioner, the reopening was founded on conjectures and surmises. [Paras 15, 16, 17, 18]

The notices issued for reopening and the consequential assessment orders were quashed as the invocation of reassessment proceedings was ill-conceived and unsustainable.

Final Conclusion: The High Court allowed the writ petitions and held that the reassessment proceedings for A.Y. 2021-22 were initiated on the basis of vague material lacking any live nexus with the petitioner. The impugned reopening notices and the consequential assessment orders were therefore quashed.

Reassessment u/s 148 - Live link with seized material - Vague and non-specific information - scope of expressions "relates to" and "pertains to" in Explanation 2 to Section 148 - sale of the land

HELD THAT: - The Court held that although, at the stage of reopening, sufficiency of evidence is not to be examined, there must still exist prima facie material capable of linking the assessee to income escaping assessment.

The loose paper relied upon by the Revenue merely referred to survey numbers, a rate and the name of a third person, but did not contain the petitioner's name or disclose any connection between the petitioner and the person named therein. The land had already been sold by the petitioner earlier and had subsequently been converted to non-agricultural use by the purchasers, yet the Revenue sought to apply a later noting retrospectively to the earlier sale transaction. The Court held that the expressions "relates to" and "pertains to" in Explanation 2 to Section 148 cannot operate in vacuum, and the Revenue must analyse the seized material in light of surrounding circumstances and record prima facie relevancy establishing escapement of income in the hands of the assessee. Since the information relied upon was vague, unspecific and lacked the requisite live link, the reopening was invalid. [Paras 6, 7, 8]

The notice issued under Section 148 and the consequential reopening action were quashed.

Final Conclusion: The High Court held that the reopening was founded on vague and disconnected material which did not prima facie relate to the petitioner or establish escapement of income in her hands. The impugned notice under Section 148 and all consequential action were therefore quashed.

Unexplained cash credit u/s 68 -Initial onus to prove -Third-party investigation material - sole basis for the addition appears to be the general allegation that the lender is a shell entity, based on findings in other cases

HELD THAT: - The Tribunal held that the addition had been made only on the basis of general findings emerging from investigation and search proceedings in third-party cases, without bringing on record any specific incriminating material directly relatable to the assessee or establishing a nexus between such material and the impugned transaction. In contrast, the assessee had placed primary documentary material showing the identity of the lender, the banking trail of receipt and repayment, the stated purpose of the transaction, and the lender's financial capacity.

Once such primary evidence was furnished, the initial onus stood discharged and the burden shifted to the Assessing Officer to rebut it by cogent material. In the absence of any finding of cash movement, falsity, or fabrication of the documents, a general allegation that the lender was a shell entity in other proceedings could not by itself justify invocation of section 68. [Paras 24, 25, 26, 27, 28]

Final Conclusion: The Tribunal upheld the deletion of the section 68 addition for A.Y. 2019-20 and dismissed the Revenue's appeal.

Late fee u/s.234E - TDS returns were filed belatedly - Fee levied for the period prior to 01.06.2015 - HELD THAT: - As it is noticed that the issues are now squarely covered by the decisions of Lingeswara Creations [2024 (10) TMI 1577 - MADRAS HIGH COURT], Fatheraj Singhvi v. UOI [2016 (9) TMI 964 - KARNATAKA HIGH COURT] and United Metals vs. ITO. [2021 (12) TMI 1349 - KERALA HIGH COURT] and Coordinate Bench of this Tribunal in the case of ITO vs. Maa Tarini Transport Pvt. Ltd.[2025 (8) TMI 823 - ITAT CUTTACK] wherein held section 200A was not introduced during the said assessment years and it was introduced only with effect from 01.06.2015. Therefore, in the absence of any provisions under Section 200A, fee levied in statements processed prior to 01.06.2015 was liable to be deleted in full.

Final Conclusion: Following the High Court decisions and the co-ordinate Bench decision cited before it, the Tribunal held that fee under section 234E could not be levied through processing under section 200A for the period prior to 01.06.2015. The assessee's appeals were accordingly allowed and the fee demands were deleted.

Leave encashment exemption u/s 10(10AA) -Retrospective applicability of exemption limit notification

AR’s contention that AO was not right in disallowing the exemption exceeding Rs. 3 lakhs u/s 10(10AA)(ii) considering the Gazette Notification No. 50588(E) dated 31.05.2002 issued by CBDT effective from 01.04.1998 - HELD THAT: - The Tribunal accepted the position emerging from Ramesan P. A. vs. Union of India [2024 (6) TMI 1230 - KERALA HIGH COURT] that the revised notification enhancing the ceiling to Rs. 25 lakhs operates only from 01.04.2023 and that retrospective extension of that benefit to employees who had retired earlier could not be directed by the Court, the matter being within the executive domain. Since the assessee had retired prior to that date, the claim that the enhanced limit should apply retrospectively was rejected. On that basis, the restriction of exemption to Rs. 3 lakhs and the consequential addition were upheld. [Paras 6]

The assessee was not entitled to exemption beyond Rs. 3 lakhs, and the addition made by the Assessing Officer was sustained.

Final Conclusion: The appeal was dismissed. The Tribunal held that the later notification enhancing the leave encashment exemption limit to Rs. 25 lakhs did not apply to the assessee's retirement prior to 01.04.2023, and the exemption remained confined to Rs. 3 lakhs for the assessment year in question.

Mandatory draft assessment order - Remand proceedings u/s 144C - Procedure u/s 144C - assessment made after remand

HELD THAT: - The Tribunal held that where, after remand by the appellate forum, issues remain to be dealt with by the AO and the Transfer Pricing Officer, the statutory procedure requiring issuance of a draft assessment order must still be followed so that the assessee can avail the remedy before the Dispute Resolution Panel.

It accepted that, if a matter is restored only to the Dispute Resolution Panel, a further draft order would serve no purpose because the Panel has already issued binding directions.

However, in the present case the remand was not confined to the Dispute Resolution Panel; it extended to the Assessing Officer and the Transfer Pricing Officer as well. In such a situation, non-issuance of a draft assessment order at the initial stage was contrary to the procedure contemplated by section 144C. The final assessment order passed directly after remand was therefore unsustainable. [Paras 18, 19, 20]

The final assessment order was quashed for failure to issue a draft assessment order after remand.

Final Conclusion: The Tribunal allowed the appeal on the procedural ground that, in the facts of the remand, the Assessing Officer was bound to issue a draft assessment order before passing the final assessment. The impugned assessment order was accordingly quashed.

Mandatory draft assessment order u/s 144C - Validity of final assessment order without draft order - Void assessment for non-compliance with section 144C - HELD THAT: - The Tribunal found from the DRP directions that the earlier proceedings before the Panel had been treated as infructuous and the Assessing Officer/TPO were required to consider the issues afresh pursuant to the modified return filed under BAPA. In that situation, the AO proceeded to pass final assessment orders straightaway without issuing draft assessment orders.

Following the decision of the Delhi High Court in the assessee's own case [2024 (9) TMI 157 - DELHI HIGH COURT] the Tribunal held that issuance of a draft assessment order under section 144C is mandatory, including in such remand or fresh proceedings, and a final assessment order passed without complying with that requirement is bad in law and void ab initio. [Paras 8, 9, 10, 15, 16]

Final Conclusion: For both A.Ys. 2020-21 and 2021-22, the Tribunal held that the final assessment orders having been passed without issuance of draft assessment orders u/s 144C were void ab initio and liable to be quashed.

Exemption u/s 11 - Charitable purpose - Proviso to section 2(15) - - Dominant purpose test - category of “advancement of any other object of general public utility” - predominant source of income of the assessee - Denial of exemption u/s 11 by treating the assessee's receipts from letting out property and allied activities as commercial activities - assessee submitted that it is a charitable trust engaged in activities for public welfare and that the receipts generated were incidental to its objects - AO held that the assessee falls within the category of “advancement of any other object of general public utility” and that the proviso to section 2(15) was attracted inasmuch as the assessee was engaged in commercial activities for consideration.

HELD THAT: - The Tribunal held that the proviso to section 2(15) applies only where an entity advancing an object of general public utility carries on activity in the nature of trade, commerce or business, and that the nature of activity must be examined in the overall factual matrix by applying the dominant purpose test.

It found that the AO had proceeded mainly on the basis of the nature and quantum of receipts without examining the true character of the activities in the context of the trust objects and without considering the application of income.

The predominant receipts were found to be rental income from immovable property held under trust and interest income from permitted investments, and such income could not, by itself, be treated as arising from independent business activity.

Tribunal further found that there was no adverse finding that the assessee's activities were not genuine or not in furtherance of its objects, while the material on record showed that more than 85% of the income had been applied towards the trust objects. On that reasoning, the receipts from letting out property and other incidental activities were held not to attract the proviso to section 2(15), and the assessee was held entitled to exemption under section 11; the denial of claims u/s 11 and the related additions and disallowances, being consequential to that denial, could not survive. [Paras 28, 29, 30, 31, 32]

The assessee was held entitled to exemption under section 11 for both years, and the additions and disallowances sustained on the footing of denial of exemption were directed to be deleted.

Final Conclusion: The Tribunal allowed both appeals and held that the assessee's receipts from property held under trust and incidental activities did not attract the proviso to section 2(15). Exemption under section 11 was therefore allowed for both assessment years and the consequential additions and disallowances were deleted.

Validity of reassessment proceedings - approval granted u/s 151 - non Independent application of mind in sanction for reassessment - Mechanical approval u/s 151 -

HELD THAT: - The Tribunal held that the statutory requirement of approval by the higher authority is meant to ensure that the question whether notice should issue is examined with independent satisfaction by the sanctioning authority. Where the approving authority merely records that the AO's satisfaction note and comments have been seen and, on that basis alone, approves issuance of notice, without disclosing any independent reasoning or satisfaction, the approval is mechanical and defeats the purpose of the statutory safeguard.

On the approval recorded in the present case, the Tribunal found complete reliance on the AO's satisfaction and absence of any independent consideration by the Pr. CIT; the sanction was therefore held to be casual, mechanical, arbitrary and void ab initio. [Paras 5, 6]

The approval under Section 151 was quashed, and consequently the reassessment proceedings founded on such approval were held to be non-est in law.

Final Conclusion: The Tribunal allowed the assessee's appeal by holding that the sanction under Section 151 had been granted mechanically and without independent application of mind. As the approval itself was void, the subsequent reassessment proceedings were also held to be invalid.

Disallowance of occupation charges and related interest -Crystallisation of liability - allowability of business expenditure

HELD THAT:- Tribunal noted that, during A.Y. 2018-19, the assessee was called upon by Kolkata Port Trust to pay occupation charges and related statutory components for the earlier period, and the liability was finally settled in that year.

On that basis, the Tribunal accepted that the liability had crystallised during the year under consideration. As further recorded that the claim in respect of such occupation charges was rightly allowed u/s 37(1), and found no reason to interfere with the appellate order deleting the disallowance. [Paras 7]

The deletion of the disallowance was upheld and the expenditure was held allowable in A.Y. 2018-19.

Final Conclusion: Tribunal dismissed the Revenue's appeal and affirmed the deletion of the disallowance. It held that the liability relating to occupation charges had been finally settled in A.Y. 2018-19 and was therefore allowable in that year.

Validity of Reassessment beyond four years - Failure to disclose fully and truly all material facts - Reason to believe - Change of opinion - new or tangible material to initiate reassessment - while working deduction u/s 36(1)(viii) the assessee has considered the interest earned on HUDCO bonds as being eligible for the purpose of quantifying deduction but the assessee has failed to explain how the interest earned on these loans can be termed as profit derived from the business of providing long-term finance in India.

HELD THAT: - The Tribunal held that where the original assessment had been completed under section 143(3), reopening after four years could be sustained only if escapement of income was attributable to failure by the assessee to disclose fully and truly all material facts necessary for assessment. On the recorded reasons, the very basis of reopening was drawn from the existing assessment record itself, including the computation in which the assessee had specifically shown the interest on HUDCO bonds for the purpose of deduction under section 36(1)(viii).

Mere assertion in the reasons that there was failure of disclosure was insufficient, since no specific undisclosed material fact was identified. The Tribunal further held that a valid reason to believe requires new or tangible material and application of mind to such material; reassessment based on reappraisal of the same record already available to the Assessing Officer does not satisfy that requirement.

The observation that the issue had not been examined in the original assessment also could not justify reopening under section 147. The reopening was therefore held to be contrary to law, and the consequential assessment was quashed. [Paras 15, 16, 18, 19, 20]

The notice issued u/s 148 and the consequential reassessment order were quashed as bad in law.

Final Conclusion: The assessee's appeal was allowed on the jurisdictional ground that the reassessment for assessment year 2012-13 had been initiated beyond four years without satisfying the statutory conditions.

Validity of Reassessment notice - Prior approval of specified authority u/s 151 - Jurisdictional validity of reassessment

HELD THAT: - The Tribunal held that, under the substituted reassessment regime applicable from 01.04.2021, where more than three years had elapsed from the end of the relevant assessment year, prior approval for issuance of notice u/s 148 had to be obtained from the higher authority specified in section 151(ii), and not from the Principal Commissioner.

In the present case, the notice for AY 2018-19 was issued on 09.04.2022, i.e. beyond three years, but the approval had been taken only from the Principal Commissioner.

Tribunal further held that the proviso inserted in section 151 by the Finance Act, 2023 for exclusion of time allowed u/s 148A(b) could not be applied retrospectively to validate the approval. As the notice was issued without sanction of the specified authority, the assumption of jurisdiction itself was invalid. [Paras 19, 20, 21]

The notice u/s 148 and the consequent reassessment were held to be bad in law and the assessment was quashed.

Final Conclusion: The Tribunal allowed the appeal by holding that the reassessment notice for AY 2018-19, having been issued beyond three years without approval from the authority mandated u/s 151(ii), was without jurisdiction. Consequently, the reassessment order was quashed.

Rejection of the appeals as time-barred under the statutory limitation scheme governing customs appeals - Condonation of delay under Article 226 - Substantive justice vis-a-vis procedural limitation.

Statutory limitation for customs appeals - Limited power of condonation - HELD THAT: - The Court held that under Section 128 of the Customs Act, an appeal must be filed within 60 days from communication of the order, with only a further 30 days being condonable by the appellate authority. Once that outer limit expires, the appellate authority has no jurisdiction to condone the delay or entertain the appeal. Since the appeals were admittedly filed beyond that statutory period, the Commissioner (Appeals) and the Tribunal acted in accordance with law in refusing to entertain them. [Paras 28, 29, 30, 31, 32]

The rejection of the statutory appeals on limitation by the appellate authorities was upheld as legally correct.

Condonation of delay under Article 226 - HELD THAT:- The Court held that although the Limitation Act could not be invoked to enlarge the period prescribed under the Customs Act and the appellate authorities could not travel beyond the statutory limit, that did not create an absolute bar against exercise of constitutional jurisdiction in an appropriate case. The Court found that the delay, though beyond the condonable period, did not disclose deliberate inaction or lack of bona fides, and that the petitioners had otherwise pursued the statutory remedies. As the substantive controversy had never been examined on merits and denial of such opportunity would foreclose the statutory right of appeal and result in injustice, the Court exercised jurisdiction under Article 226, condoned the delay subject to costs, and directed restoration of the appeal for fresh adjudication on merits. [Paras 37, 38, 39, 40, 41]

The order of the Commissioner (Appeals) and the consequential order of the Tribunal were set aside, the delay in filing the appeal was condoned subject to payment of costs, and the appeal was directed to be restored and decided afresh on merits.

Final Conclusion: The writ petition was partly allowed. While affirming that the statutory appellate authorities had no power to condone delay beyond the period prescribed under the Customs Act, the High Court, in exercise of Article 226, condoned the delay in the facts of the case, set aside the appellate orders, and directed restoration of the appeal for adjudication on merits subject to payment of costs.

Maintainability of this appeal - Monetary limits for Revenue appeals - Substantial question of law - Penalty on Customs Broker - Ministerial Conduit - Mens Rea - Due Diligence - specialized investigation conducted by the Directorate of Revenue Intelligence (DRI) concerning a series of 82 import consignments of readymade garments from Bangladesh - imports cleared under the South Asian Free Trade Area (SAFTA) Agreement, whereby the goods were granted 100% duty exemption.

Whether the present appeal involves a substantial question of law that warrants admission under Section 130 of the Customs Act, 1962, particularly in light of the mandatory monetary thresholds prescribed for Revenue appeals. - HELD THAT: - The Court held that the Tribunal, as the final fact-finding authority, had categorically found that the respondent had only performed a ministerial role in filing documents supplied by the importer and that there was no evidence of knowledge, intentional suppression, or participation in fraud. In the absence of any demonstrated perversity in those findings, the dispute remained one of fact and did not give rise to a substantial question of law under Section 130. The Court further held that, once the penalty against the respondent had been set aside in entirety, there was no existing quantified liability against him, and the Revenue could not rely on the overall investigation value or the importer's separate liability to overcome the monetary threshold fixed for Revenue appeals. The case was also found not to fall within any exception under the Instruction, and the point on limitation was treated as academic once the finding of no liability on merits stood. [Paras 6]

No substantial question of law arose, the monetary limit applied with reference to the respondent's own liability, and the appeal was therefore not admitted and dismissed.

Final Conclusion: The Court declined to admit the Revenue's appeal, holding that the Tribunal's findings exonerating the respondent were factual in nature and disclosed no substantial question of law. It further held that, with no quantified penalty surviving against the respondent, the appeal was barred by the applicable monetary limit under the CBIC Instruction.

Entitlement to re-export the seized imported goods -Conditional re-export pending adjudication. - HELD THAT:- The Court declined to examine the dispute relating to alleged misclassification or misdeclaration. It proceeded on the undisputed position that the goods had remained with the respondents for a prolonged period, samples had already been drawn, and no useful purpose would be served by continued seizure of the goods. In view of the parties' stand before the Court, re-export was directed to be permitted on the petitioner executing a bond for the differential duty payable and furnishing a bank guarantee equivalent to 5% of the re-determined value. [Paras 6, 9, 10]

The respondents were directed to permit re-export of the goods on the petitioner executing the prescribed bond and furnishing the stipulated bank guarantee.

Final Conclusion: The writ petition was disposed of by directing the respondents to permit re-export of the seized goods. The permission was made subject to execution of a bond for the differential duty payable and furnishing of a bank guarantee equivalent to 5% of the re-determined value.

Provisional release of seized goods - Conditions for provisional release - Substitution of bank guarantee by bond. - HELD THAT: - The Court accepted the respondents' submission that the conditions earlier directed by this Court in [2026 (1) TMI 1221 - MADRAS HIGH COURT] should be followed in the present matter as well. Proceeding on that basis, the Court modified the impugned order and directed provisional release on payment of the duty declared by the petitioner, payment of 50% of the differential duty on the value arrived at by the Department, and execution of bonds in place of the bond and bank guarantee originally required. The release was made subject to compliance with those conditions and the petitioner's cooperation in the ongoing investigation. [Paras 6, 7]

The impugned order was modified and the goods were directed to be provisionally released on the substituted conditions, including execution of a bond instead of furnishing a bank guarantee.

Final Conclusion: The writ petition was disposed of by modifying the provisional release conditions contained in the impugned order. The goods were directed to be released on compliance with the substituted conditions, while leaving the investigation and adjudication to proceed in accordance with law.

Mandatory timelines under Customs Brokers Licensing Regulations - Limitation for inquiry report. - HELD THAT:- The Court recorded that there was no dispute as to the relevant dates and that the inquiry report had been made ready 116 days after issuance of the show cause notice. Following the Division Bench decision of this Court in Santon Shipping Services Vs. The Commissioner of Customs [2017 (10) TMI 621 - MADRAS HIGH COURT], the Court held that the timelines prescribed under the Regulations are mandatory. Since the prescribed period under Regulation 17(5) had been exceeded, the impugned order founded on such inquiry could not be sustained. The contrary view cited from the Kerala High Court [2024 (12) TMI 753 - KERALA HIGH COURT], rendered in the context of Regulation 17(1), was not followed. [Paras 3, 6, 7]

The impugned order revoking the licence, forfeiting the security deposit and imposing penalty was set aside.

Final Conclusion: The writ petition was allowed. The Court held that the time limit for submission of the inquiry report under the CBLR, 2018 is mandatory, and since the report was submitted beyond that period, the order against the petitioner could not stand.

Application seeking for provisional release of seized imported goods under Section 110A -HELD THAT:- The Court did not examine the merits of the claim for provisional release. It held that, since the petitioner's application under Section 110A had not been considered and the second respondent had required the petitioner to approach the first respondent, no prejudice would be caused by directing the first respondent to pass orders on the application on merits and in accordance with law. While doing so, the first respondent was directed to take into account the earlier furnishing of bank guarantee and bond by the petitioner. [Paras 5, 6, 8]

The first respondent was directed to pass final orders on the petitioner's application for provisional release on merits and in accordance with law, after considering the bank guarantee and bond already furnished.

Final Conclusion: The writ petition was disposed of without adjudicating the merits of provisional release, by directing the first respondent to decide the pending application under Section 110A within the time fixed by the Court.

Classification of goods - imported activity trackers - classifiable under CTI 8517 6290 or CTI 9029 1090 - Composite goods - Principal function test - Extended period of limitation - Essential Character - General Rules for Interpretation​​​​​​​ -Trade Parlance - Non-compliance with the DGFT labelling requirement - confiscation, redemption fine and penalty.

Classification of activity trackers - HELD THAT: - The Tribunal held that the goods were not mere pedometers or instruments akin to pedometers, since they performed a range of tracking and communication-linked functions beyond approximate measurement of steps or distance. Examining the competing headings, the Tribunal found that the devices tracked vital parameters and were intended to work with the paired application for transmission and receipt of data, expert feedback and related fitness outputs. On that basis, the goods were treated as apparatus covered by sub-heading 851762, and since they did not fall within any specifically enumerated tariff items under that sub-heading, they were classifiable under the residual entry 8517 6290. The contrary view that Bluetooth was merely ancillary and that the goods answered the description of pedometers and the like was rejected. [Paras 9, 10]

Classification under CTI 8517 6290 was upheld and the dropping of proceedings founded on classification under CTI 9029 1090 was set aside.

Extended limitation - Normal period demand - Confiscation and redemption fine - Penalty for import labelling non-compliance - HELD THAT: - The Tribunal found that the dispute as to classification was already within the department's knowledge, the consignments were under customs control and had been examined, and there was ambiguity regarding classification of such wearable devices. In these circumstances, the ingredients necessary to invoke the extended period, such as suppression, wilful misstatement, collusion or fraud, were held absent. Accordingly, only the differential duty with applicable interest for the normal period, reckoned back from the date of the show cause notice, was sustained. The Tribunal further held that the alleged non-compliance with the DGFT notification related to declarations on pre-packaged commodities, which could be complied with before clearance for home consumption, and therefore did not justify penal action. Confiscation, redemption fine and penalty were thus not sustained. [Paras 11]

Demand for the normal period with interest was sustained, but the extended period demand and the proposed confiscation, redemption fine and penalty were disallowed.

Final Conclusion: The Tribunal held that the imported activity trackers/fitness bands were classifiable under CTI 8517 6290. Revenue's appeal was partly allowed by restoring the differential duty with interest only for the normal period, while declining the extended period demand and the proposed confiscation, redemption fine and penalty.

Breach of principles of natural justice - non-supply of relied-upon documents - Transaction value of export goods - Duty reworked on the basis of contemporaneous export data and Fe content - exported iron ore fines to China under Shipping Bill.

Principles of natural justice - Appellate power of remand - HELD THAT: - The Tribunal found it admitted that the CRCL report and contemporaneous export data relied upon by the Department had not been supplied to the appellant, and that the Commissioner (Appeals) had himself accepted such violation. Once that defect was acknowledged, the order could not be sustained on merits. Applying Union of India Vs Umesh Dhaimode [1997 (2) TMI 140 - SC ORDER], the Tribunal held that the appellate authority's power to confirm, modify or annul necessarily includes the power to remand. The impugned order was therefore vitiated by breach of natural justice, and the matter had to go back to the adjudicating authority for fresh decision. [Paras 7, 8, 12]

The impugned order was held unsustainable for breach of natural justice, and the matter was remanded to the adjudicating authority.

Transaction value of export goods - Ad valorem export duty valuation - Contemporaneous export data - HELD THAT: - Referring to Section 14 and the principle stated in Eicher Tractors Ltd. [2000 (11) TMI 139 - SUPREME COURT], the Tribunal held that transaction value can be rejected only for valid and cogent reasons. In the present case, full sale proceeds had been realised and there was no allegation of relationship, flow back or other material casting doubt on the genuineness of the transaction. The Tribunal further held, following CC vs Sesa Goa [2014 (8) TMI 213 - CESTAT KOLKATA], that where export duty is ad valorem, duty is on value and not on quantity or composition, and therefore moisture and Fe content are not determinative for valuation. Reliance on contemporaneous exports was also found insufficient where the supporting documents were not supplied and similarity in quality, quantity and commercial level was not established. [Paras 9, 10, 11]

The rejection of the declared value was held not to be in accordance with law, and the fresh adjudication on remand was required to proceed on the correct valuation principles.

Final Conclusion: The Tribunal set aside the impugned order and allowed the appeal by remanding the matter to the adjudicating authority. It held that the proceedings stood vitiated for non-supply of relied upon documents and that the declared transaction value could not be rejected except on legally sustainable grounds.

Seeking provisional release of seized goods - non-compliant with the foreign trade and BIS-related requirements - Deemed prohibited goods - imported second-hand Highly Specialized Equipment (HSE) Digital Multi-Function Print and Copying Machines - Scope of discretion under section 110A.

Provisional release of seized goods - HELD THAT: - The Tribunal held that section 110A permits provisional release of seized goods pending adjudication and does not justify an absolute refusal merely because the department alleges that the goods are prohibited or become prohibited by a deeming provision. The impugned goods were not prohibited per se under the Customs Act or Tariff and, at that stage, were only alleged to be prohibited; no competent authority had yet finally determined that status. The Tribunal also found that the authorities had rejected the foreign Chartered Engineer's certificate without specific reasons, while the merits of classification and eligibility as HSE were matters for final adjudication and need not be concluded at the stage of provisional release. In the absence of any demonstrated public interest, health or safety harm, and having regard to the line of decisions permitting release of similar goods, denial of provisional release on the sole ground of alleged prohibition was held unsustainable. [Paras 15, 16, 17, 18]

The imported goods were directed to be released provisionally on payment of applicable duty, execution of bond for the value of the goods, and furnishing of bank guarantee equivalent to 30% of the applicable duty.

Final Conclusion: The Tribunal held that pending adjudication, the goods could not be denied provisional release merely because the department treated them as deemed prohibited for alleged regulatory non-compliance. The appeal was allowed and provisional release was ordered subject to duty payment, bond and bank guarantee.

Invocation of Extended period of limitation - Suppression and wilful misstatement - Revenue neutrality.

Extended period of limitation - HELD THAT: - The Tribunal held that the notice, issued long after the imports, could survive only if suppression, wilful misstatement, collusion or fraud were established. It found that the classification, notification number, serial number and applied IGST rate were all disclosed in the Bill of Entry, and the dispute merely concerned the rate of IGST applicable to the declared classification, which was at best a matter of interpretation and not suppression. The Tribunal further held that the situation was revenue neutral because the appellant, being a trader, was eligible to avail input tax credit of any higher IGST paid on import and had sold the goods on payment of GST. On that basis, and following the cases cited before it, the extended period was held to be unavailable and the demand was held time-barred, without examination of the merits of the IGST rate. [Paras 7, 8, 9, 10]

The demand was held barred by limitation and therefore unsustainable.

Final Conclusion: The Tribunal allowed the appeal and set aside the impugned order. It held that, without entering into the merits of the applicable IGST rate, the demand was barred by limitation since the extended period had been wrongly invoked.

Entitlement to bail, including statutory bail - Prolonged pre-trial incarceration - Delay in commencement of trial - false and fabricated financial statements -applicability of the statutory benefit under Section 479 of the BNSS.

Statutory bail - Prolonged pre-trial incarceration - HELD THAT: - The Court found that although the complaint was of 2019, charges had not yet been framed and, even if the trial commenced shortly, its conclusion would take considerable time. It also noted that out of a large number of accused, several had already been granted bail, that properties of the appellant exceeding the alleged amount siphoned off had been attached, and that the appellant was a first-time offender who had remained in judicial custody for about 3.5 years. Since he had undergone more than one-third of the maximum sentence of 10 years prescribed under Section 447 of the Companies Act, 2013, the Court held that he was entitled to the benefit of statutory bail under Section 479 of the BNSS. [Paras 6, 7, 8]

The order refusing bail was set aside and the appellant was directed to be released on bail on appropriate terms to be fixed by the Trial Court.

Final Conclusion: The Supreme Court allowed the appeal and granted bail to the appellant, holding that the period of custody already undergone, coupled with the delayed progress of the case, attracted the statutory benefit under Section 479 of the BNSS.

Procedural objection not raised at the appropriate stage - Absence of demonstrated prejudice - HELD THAT: - The Court recorded reservations regarding the impugned judgment and order [2025 (12) TMI 888 - DELHI HIGH COURT], but held that such reservations did not warrant interference because the petitioner had not raised the present objection at the earlier stages of the proceedings. The Court further found that no prejudice had been demonstrated as having resulted from the procedural error. In the absence of both a timely objection and any shown prejudice, interference in exercise of power under Article 136 was declined. [Paras 1]

The special leave petition was dismissed, the Court finding no reason to interfere.

Final Conclusion: The Court declined to interfere with the impugned order in exercise of jurisdiction under Article 136, since the procedural objection had not been raised at the appropriate stage and no prejudice was shown. The special leave petition was accordingly dismissed.

Maintainability of appeal in the name of the corporate debtor - Suspended director's locus after appointment of interim resolution professional - Incompetent appeal and curability of defects - limitation prescribed under Section 61(2).

Maintainability of appeal under the Insolvency and Bankruptcy Code - HELD THAT: - The Court held that once the application under Section 9 was admitted and the interim resolution professional was appointed, the management of the affairs of the corporate debtor vested in the interim resolution professional. Consequently, it was not open to the suspended director to file an appeal in the name of the corporate debtor claiming to act as its director and authorised representative. Such an appeal was not a mere procedural defect but an appeal lacking maintainability at inception. The NCLAT therefore erred in treating it as a curable defect and permitting amendment of the cause title and memo of appeal at a much later stage. As the Code prescribes a strict limitation period for appeals, with only a limited condonable period, the belated attempt to convert the incompetent appeal into one by the suspended director could not be accepted. The decisions in Uday Shankar Triyar vs. Ram Kalewar Prasad Singh and another [2005 (11) TMI 436 - SUPREME COURT], Varun Pahwa vs. Renu Chaudhary [2019 (3) TMI 231 - SUPREME COURT] and Innovators Cleantech Pvt. Ltd. vs. Pasari Multi Projects Pvt. Ltd. [2024 (8) TMI 211 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI] were held inapplicable, as they dealt with curable procedural defects and not with an appeal that was contrary to the statutory mandate and inherently non-maintainable. [Paras 9, 10, 11, 12, 13]

The appeal before the NCLAT ought not to have been entertained; the present appeal was accordingly dismissed on that ground without examining the merits of the NCLAT's decision.

Final Conclusion: The Court held that the appeal before the NCLAT, having been instituted in the name of the corporate debtor by a suspended director after appointment of the interim resolution professional, was inherently non-maintainable and not merely defective. The NCLAT could not permit its later conversion into a maintainable appeal beyond the statutory period of limitation, and the appeal was therefore dismissed on that ground alone.

Overriding Effect of the IBC and the Binding Nature of the Resolution Plan - Separate corporate personality of special purpose vehicle - financial mismanagement and diversion of revenues by the technical member - Non-Performing Asset (NPA) by the lending consortium of banks - initiated proceedings under Section 7 of the IBC - Commercial Wisdom - Going Concern - violation of Article 300A of the Constitution of India - Manifest Arbitrariness - Re-litigation and abuse of process.

Overriding effect of insolvency law - HELD THAT:- The well-settled principle laid down by the Hon’ble Supreme Court in Bacha F. Guzdar v. Commissioner of Income Tax, Bombay [1954 (10) TMI 2 - SUPREME COURT], that a company is a distinct juristic person separate from its shareholders, assumes significance. The appellant, being merely a shareholder of the corporate debtor, cannot assert an independent or superior right in respect of the project, dehors the corporate entity.

The Court held that the controversy was governed by the statutory scheme of the IBC, whose overriding effect displaced any inconsistent claim founded on the earlier contractual or statutory framework. The approved resolution plan, having been sanctioned by the adjudicating authority, was binding on all stakeholders, including the State and the shareholders of the corporate debtor. The project rights vested in the special purpose vehicle, which alone was party to the lease and development arrangements; hence the appellant, as a shareholder, could not assert an independent right in the project apart from the corporate debtor. The State, in granting consent contemplated by the plan, was only acting as a stakeholder in furtherance of the resolution process and not distributing State largesse afresh. [Paras 15, 16, 17, 18, 19]

The challenge founded on absence of public tender and on an asserted independent right of the appellant in the project was rejected.

Article 300A and insolvency consequences - Derivative shareholder rights - HELD THAT: - It is well settled that upon commencement and culmination of the CIRP under the IBC, the assets of the corporate debtor, including its contractual and leasehold rights, would be dealt with in accordance with an approved resolution plan, which is binding on all stakeholders by virtue of Section 31 read with Section 238 of the IBC. Thus, the resolution process constitutes a “procedure established by law” within the meaning of Article 300A, even if it were to be assumed that the appellant was to be treated as having any right.

The Court held that the appellant had no direct proprietary right in the leasehold property or the project, its interest being merely derivative through shareholding in the corporate debtor. The dilution or extinguishment of that interest followed from insolvency resolution under law and implementation of the approved resolution plan, and was therefore a commercial consequence of the CIRP rather than a compulsory acquisition by the State. Since the resolution process operated under statutory authority, no separate claim for compensation against the State arose. [Paras 20, 21, 22, 23]

No violation of Article 300A was made out.

Modification of resolution plan - Article 14 classification - Commercial discretion in implementation - HELD THAT: - On examining the plan, the Court found that it did not mandate removal of the existing operator and left operational arrangements to the commercial discretion of the successful resolution applicant. Retention of the operator was therefore treated as falling within the framework of the plan and as a measure of commercial prudence to preserve continuity of the undertaking as a going concern. The Court further held that the appellant and the operator were not similarly situated, since the appellant's position as controlling shareholder stood extinguished in insolvency, whereas the operator's post-resolution role was confined to operations under a distinct arrangement. The differential treatment thus rested on a rational distinction linked to continuity and efficient functioning of the project. [Paras 24, 25, 26]

The plea of impermissible modification of the plan and the plea of discrimination under Article 14 were both rejected.

Public procurement in insolvency resolution - Foreign investment policy - Limits of judicial review in economic regulation - HELD THAT: - The Court held that insisting on a fresh tender for assets forming part of the corporate debtor would undermine the time-bound resolution mechanism and defeat the object of the IBC. Selection of the successful resolution applicant through the CIRP was found to be a structured and competitive process recognised by statute, and therefore distinct from an ordinary grant of State largesse. As regards the objection based on the Consolidated FDI Policy, the Court held that compliance with foreign investment norms falls within the domain of specialised statutory and regulatory authorities, and in the absence of ex facie illegality the writ court ought not to undertake adjudication on such economic and regulatory issues. [Paras 27, 28, 29]

The objections based on public procurement norms and alleged FDI policy violation did not warrant interference.

Re-litigation - Abuse of process - Costs - HELD THAT: - The Court held that the basic issue concerning the State's competence to grant consent for change in shareholding notwithstanding the TIDE Act had already been concluded against the appellant in the earlier round and had attained finality. The later decision of the Empowered Committee was viewed only as a consequential step in implementation of the approved resolution plan and not as furnishing a fresh and independent cause of action. In that view, the repeated challenge amounted to abuse of process, and the discretion exercised by the Single Judge in imposing costs was upheld. [Paras 30, 31, 32]

The finding of re-litigation was affirmed and the costs imposed by the Single Judge were sustained.

Final Conclusion: The writ appeal was dismissed. The Court upheld the State's consent granted in furtherance of the approved resolution plan, found no constitutional or legal infirmity in the impugned action, and affirmed the dismissal of the writ petition along with the costs imposed.

Condonation of Delay - Approval of the resolution plan​​​​​​​ - Limitation for insolvency appeals - barred by limitation - Commencement of limitation from date of pronouncement - Sufficient Cause - Self-Contained Statutory Limitation - Outer limit of condonable delay - benefit of exclusion under Section 12(2) of the Limitation Act, 1963.

Limitation for insolvency appeals - HELD THAT: - The Appellate Tribunal held that, for an appeal under the Code, limitation begins to run from the date of pronouncement of the order when the order is pronounced in open court. The date of uploading does not shift the commencement of limitation in such a case. It further held that exclusion on account of time taken for obtaining a certified copy was unavailable where there was nothing to show that the appellants had applied for the certified copy within the limitation period. Since the Code is a self-contained statute and the proviso permits condonation only up to fifteen days beyond the initial period, an appeal filed on the 46th day from pronouncement falls beyond the maximum condonable period and cannot be entertained. [Paras 17, 18]

The applications for condonation of delay were rejected and both appeals were dismissed as barred by limitation.

Final Conclusion: The Appellate Tribunal held that limitation for filing the appeals ran from the date on which the impugned order was pronounced in open court. As the appeals were filed beyond the maximum condonable period, the delay could not be condoned and both appeals were dismissed as time-barred.

Commercial wisdom of committee of creditors - Validity of the approval of resolution plan submitted by the Successful Resolution Applicant (“SRA”) - dismissal of the objections filed by the Dissenting Financial Creditor (“DFC”) and Unsuccessful Resolution Applicant (“URA”) regarding the approved resolution plan - procedural and substantive material irregularities which undermined the integrity of the CIRP - non-compliance in relation to CIRP costs and treatment of EPF dues - violation of Section 30(2)(a) - failure to adjust the NPV scores - Extension of voting lines in corporate insolvency resolution process - Value maximisation - limited judicial review - procedural irregularity - plan finality - approbate and reprobate.

Corporate insolvency resolution process costs - HELD THAT: - The Appellate Tribunal found that the plan itself stated that unpaid CIRP costs were payable at actuals, while also clarifying that any amount beyond the specified cap would be met from the share of secured financial creditors. Since the CoC accepted this arrangement in its commercial wisdom, and the appellant as an unsecured dissenting financial creditor was not adversely affected by any such allocation, no infirmity arose. The objection had in any event become academic because the plan had already been implemented and no unpaid CIRP cost remained. [Paras 15]

The challenge based on alleged non-payment or capping of CIRP costs failed.

Provident fund dues - contingent statutory liability - escrow arrangement - HELD THAT: - The Appellate Tribunal held that the plan specifically set apart an amount from the share of secured financial creditors to meet the EPF liability, pending the outcome of the proceedings concerning that liability. The CoC had considered this treatment in its deliberations and accepted it. The record also showed that the appellant itself had acknowledged that the EPF matter was sub judice, undermining the plea that the liability had already crystallised. Since any deduction on that account would operate only against the secured financial creditors' share, the dissenting financial creditor could not establish prejudice. The allegation that there was a post-facto modification affecting the plan valuation was therefore found to be unfounded. [Paras 20, 21, 22, 23, 24]

The treatment of EPF dues in the approved plan was upheld and did not render the plan defective.

E-voting timeline - material irregularity - approbation and reprobation - HELD THAT: - The Appellate Tribunal read the order extending CIRP as fixing the outer completion date of the process while indicating that voting should be exercised by an earlier date so that the process could be completed within that limit. Since the voting process was completed within the outer CIRP deadline, the extension of voting up to 23.05.2025 was not treated as a material irregularity rendering the process ultra vires. The RP had also repeatedly cautioned the CoC about the consequences of extending the voting window. Further, all resolution applicants were aware of the extensions and none objected at the relevant time; having participated in the process, they could not later challenge it after the result went against them. [Paras 27, 28, 29, 30]

The objection founded on extension of e-voting was rejected.

Clarificatory communication - post-submission modification - equal opportunity to resolution applicants - HELD THAT: - The Appellate Tribunal found that clarifications had not been sought from the successful resolution applicant alone, but from other prospective applicants as well. Those communications were treated as clarificatory and not as altering the final plan value or permitting a fresh modification of the plans. Since equal opportunity had been afforded to the applicants, including the appellant who itself furnished clarifications without protest, the later allegation of selective or non-transparent engagement was held to be an afterthought. The minority dissenting financial creditor also could not show any resulting prejudice when the secured financial creditors constituting the overwhelming majority had no objection. [Paras 33]

The plea of procedural illegality arising from private or selective clarifications was not accepted.

Negotiation process under request for resolution plan - swiss challenge mechanism - judicial review of approved resolution plan - HELD THAT: - The Appellate Tribunal held that the record showed a transparent negotiation process in which multiple rounds were conducted and all applicants were allowed to submit their revised offers before the final cut-off date. Requests made thereafter for revision of offers or a Swiss Challenge mechanism amounted to attempts at post-submission modification and were rightly not entertained. Under the terms of the RFRP, the CoC retained discretion to approve a plan on evaluation criteria or any other criterion as per its commercial wisdom, and was not bound to select the highest bidder or highest scorer. The unsuccessful applicants, having participated in the process without objection, could not subsequently assail it.

Hon’ble Supreme Court in the matter of K. Sashidhar Vs Indian Overseas Bank and Ors. [2019 (2) TMI 1043 - SUPREME COURT] in which the Hon’ble Supreme Court had held that the discretion of the Adjudicating Authority in dealing with a resolution plan which has been approved by the CoC with requisite voting-share is circumscribed by Section 31 of the IBC and is limited to scrutinising whether the plan as approved by CoC meets the requirements specified in Section 30(2) of the IBC. It is now settled law that Adjudicating Authority has limited jurisdiction in the matter of approval of resolution plan and the scope of interference with the decision of CoC approving the resolution plan is minimal. The interference with the commercial wisdom of the CoC is permissible only when the plan is not in compliance with Section 30(2) and Section 31 of IBC.

Present is not a case, where any submission is made that resolution plan submitted by SRA is non- compliant of Section 30(2). The Adjudicating Authority at para 54 of the impugned order has also satisfied itself that the instant resolution plan meets requirements of Section 30(2) of the IBC and the relevant CIRP Regulations and hence proceeded to approve the plan. We find no infirmity in the impugned order approving the plan and find no merit in the objections raised by the Appellants to the plan. [Paras 36, 37, 38, 39, 40]

The challenge to the approval of the successful resolution plan on the grounds of non-adoption of Swiss Challenge, rejection of rival plans, and alleged impropriety in CoC decision-making failed.

Final Conclusion: The Appellate Tribunal upheld the approval of the successful resolution applicant's plan, holding that no material procedural irregularity or statutory non-compliance had been established. All six appeals were dismissed.

Maintainability of application under Section 9 - initiation of CIRP - Pre-existing dispute - Operational debt recoverable from the corporate debtor - Profit-sharing arrangement - Operation and management agreement - liability on the Corporate Debtor to pay any service fee.

Pre-existing dispute - Plausible contention - HELD THAT: - The Appellate Tribunal held that a pre-existing dispute can be brought to the notice of the Adjudicating Authority even in the reply to the Section 9 application, notwithstanding absence of a reply to the demand notice, provided the dispute existed prior to receipt of that notice. In the present case, the corporate debtor had already issued its own demand notice and filed a Section 9 proceeding against the appellant before the appellant issued its demand notice. The termination agreement and the balance settlement arrangement also showed subsisting disputes as to liability between the parties.

Hon’ble Supreme Court in “Mobilox Innovations (P) Ltd. vs. Kirusa Software (P) Ltd [2017 (9) TMI 1270 - SUPREME COURT]” where the Hon’ble Supreme Court has clearly laid down that the Adjudicating Authority at the stage of admitting Section 9 application has to only see whether there is plausible contention which requires further investigation and that the “dispute” is not a patently feeble legal argument or an assertion of fact unsupported by evidence.

Applying the test that the Adjudicating Authority is only required to see whether there is a real and plausible contention and not a spurious defence, the Tribunal held that the dispute was genuine and sufficient to reject the application. [Paras 7, 8, 10, 11, 26]

The rejection of the Section 9 application on the ground of pre-existing dispute was upheld.

Operational debt - Profit-sharing arrangement - Service fees - HELD THAT: - On a reading of the agreement as a whole, the Tribunal found that the operator was obligated to pay usage fees to the owner for use of the plant and machinery, while the so-called service fee payable to the operator was only the profit remaining from plant operations after deduction of usage fees and expenses. The arrangement, therefore, did not impose an independent financial liability on the corporate debtor to pay for goods supplied or services rendered within the meaning of operational debt. The termination agreement further stipulated that liabilities pertaining to the contractual period were to be borne and settled by the operator and that no additional consideration would be due from the other party. The Tribunal also concurred with the finding that the balance confirmation emails, lacking disclosure of the sender and not bearing stamp or signature, could not be treated as acknowledgment of debt. [Paras 15, 16, 17, 18, 24]

It was held that no debt was due from the corporate debtor to the appellant that could found a Section 9 proceeding.

Final Conclusion: The appeal was dismissed. The Appellate Tribunal affirmed that the Section 9 application was liable to be rejected both because a genuine pre-existing dispute existed prior to the demand notice and because the contractual arrangement did not give rise to any operational debt payable by the corporate debtor.

Condonation of delay - 112 day's delay in re-filing of Company Appeal - Sufficient cause - Due diligence in curing defects - failed to demonstrate due diligence and promptitude on their part clearly reflected negligence in prosecuting the appeal.

Condonation of delay in re-filing - Sufficient cause - Due diligence in curing defects - HELD THAT: - The Tribunal held that in considering delay in re-filing, the determinative test is the existence of a sufficient and satisfactory cause, and in insolvency matters that standard must be applied bearing in mind the Code's requirement of expeditious and time-bound adjudication. Routine explanations such as re-pagination, restructuring of the paper book, compilation of annexures, rescanning, and internal retrieval of records do not by themselves justify prolonged delay unless supported by material particulars showing that the causes were beyond the applicant's control. In the present case, no defect sheet was produced, no specific Registry objections were disclosed, no date-wise chronology of steps taken to cure the defects was furnished, and no supporting material was placed to show when documents were sought, traced, rescanned, typed, or recompiled. The plea that some original records were in Mumbai or not readily traceable was treated as a generalized assertion of logistical inconvenience and not an exceptional circumstance warranting exercise of discretion. The reliance on CA Ramachandra Dallaram Choudhary vs. Adani Infrastructure & Developers Pvt. Ltd [2025 (5) TMI 1844 - SC ORDER] was found unhelpful because that decision itself was stated not to operate as a precedent and delay must be examined on the facts of each case. [Paras 8, 9, 10]

The application for condonation of delay in re-filing was rejected, and as a consequence the memo of appeal was also rejected.

Final Conclusion: The Tribunal declined to condone the 112 days' delay in re-filing, holding that the explanation offered was general, unsupported by particulars, and did not establish any circumstance beyond the appellant's control. The delay condonation application was rejected and, consequentially, the appeal itself was rejected.

Vicarious liability of company and its managing director - contravention under Section 3(b) - customs differential -exoneration as sleeping directors - Imposition of penalty.

Vicarious liability of directors - HELD THAT: - The Tribunal maintained the finding of contravention against the appellant company. It also held that the Managing Director could not be exonerated from liability in view of his position in the company. However, the other two appellants were accepted to be sleeping directors, not managing the day-to-day affairs of the company, and not having signed any document at the time of import of the consignments or thereafter. On that basis, they were held not liable for the alleged contravention under Section 3(b) read with Section 42 of FEMA. [Paras 5, 6]

Liability was sustained against the company and its Managing Director, but Janak Khajuria and Varun Khajuria were exonerated.

Quantum of penalty - HELD THAT: - The Tribunal held that Section 13(1) of FEMA prescribes only the maximum limit of penalty and does not fix either a mandatory or minimum amount, so the quantum of penalty remains a matter of judicial discretion. Taking into account the mitigating circumstances noted by it, including the amount already deposited by the appellants by way of FDRs pursuant to the pre-deposit order, the Tribunal found the penalty imposed on the company and its Managing Director to be liable to reduction to the extent of the amount already so deposited along with accrued interest. [Paras 7, 8]

The penalty on M/s. Vipin Print Services Pvt. Ltd. and Vipin Kumar Khajuria was reduced to the extent of the pre-deposit already made by them along with accrued interest.

Final Conclusion: The appeals of the company and its Managing Director were partly allowed by reducing the penalty to the extent of the pre-deposit already made. The appeals of Janak Khajuria and Varun Khajuria were allowed, and they were exonerated from the alleged contravention.

Subsistence of non-bailable warrant under the Fugitive Economic Offenders Act - refusal to return to India to face prosecution - Prima Facie Belief - Monetary threshold for scheduled offence - Reasons to believe - Wilful attempt to evade tax under the Black Money Act.

Whether the requirement of a pending warrant under Section 2(1)(f) is satisfied if the NBW dated 31.10.2019 was already executed when the Appellant was arrested in London on 08.07.2021 - HELD THAT: - The Court held that the existence of a warrant of arrest is a jurisdictional prerequisite under the Act, but the statute requires only that a warrant has been issued. Arrest in a foreign jurisdiction for extradition does not amount to full execution of the warrant in the sense contemplated by the Act, because the object of the warrant is to secure the accused's production before the Indian court that issued it. Since the appellant was not produced before that court and continued to remain abroad while resisting return, the warrant had not attained legal finality and remained unsatisfied. Accepting the contention that the warrant stood exhausted merely because of foreign arrest and bail would defeat the purpose of the Act and create an escape route for persons who successfully delay or resist extradition. [Paras 119, 120, 121, 122, 123]

The challenge to the validity and continued existence of the non-bailable warrant was rejected.

Whether the mandatory monetary threshold of Rs. 100 crores, as prescribed under Section 2(1)(f) read with Section 2(1)(m) FEO Act was lawfully and sufficiently established to sustain the declaration of the Petitioner as a Fugitive Economic Offender? - HELD THAT: - Section 2(1)(f) defines a “Fugitive Economic Offender” as a person against whom a warrant has been issued in relation to a Scheduled Offence and who has left India, so as to avoid criminal prosecution or is a person who being abroad, refuses to return to India to face criminal prosecution. Section 2(1)(m) defines the “Scheduled Offence” as an offence specified in the Schedule, if the total value involved in such offence or offences is Rs. 100 crores or more. Unless this threshold is crossed, the Court cannot entertain an Application under Section 4 of the Act, let alone issue notice under Section 10 or make a declaration under Section 12.

The final Assessment Order dated 23.03.2020 which established that the value of the scheduled offence was far in excess of Rs. 100 crores. This Order validated and fortified the prima facie belief that the Respondent already held at the time of filing. This Order assessed the total undisclosed foreign income and assets at Rs. 655,62,15,670/- i.e. approximately Rs. 655 crores; imposed tax thereon @ 30% under Section 3 of the Black Money Act, quantifying the tax liability at Rs. 196,68,64,700 i.e. approximately Rs.196 crores. To this must be added the penalty and interest imposable under the Act, which would only enhance the figure. The aggregate of tax, penalty and interest, therefore crossed the statutory threshold of Rs. 100 crores.

The fact that the figures were variable during the course of proceedings does not detract from this conclusion that the law here does not demand that an arithmetic consistency be maintained at every stage; it merely requires that the final authoritative determination cross the threshold of Rs. 100 crores. And that determination of a figure of Rs.196 crores in tax alone, is done as per this standard.

The Court distinguished between mere non-disclosure under Section 50 of the Black Money Act and wilful attempt to evade tax under Section 51, holding that prosecution under Section 51 is not dependent on prior completion of assessment because assessment and prosecution may proceed simultaneously. It held that, at the stage of filing the application under the Fugitive Economic Offenders Act, the authority was only required to have rational and tangible material for forming reasons to believe, not conclusive proof. The material before the authority comprised the prosecution complaint, the Income Tax Department's communication, the annexures detailing foreign and domestic assets, the statement of the chartered accountant, and the appellant's own statements. Though the valuation figures varied during different stages, the Court accepted that the underlying assets remained the same and that the subsequent assessment order quantified undisclosed foreign income and assets at about Rs. 655 crores and tax liability at about Rs. 196 crores, thereby placing the statutory threshold beyond dispute. The variable figures were therefore treated as reflecting the tentative nature of valuation during investigation and not as undermining the legality of the declaration. [Paras 151, 152, 153, 155, 157]

The Court upheld the finding that the scheduled offence crossed the statutory threshold and that the application under the Fugitive Economic Offenders Act was founded on sufficient reasons to believe.

Final Conclusion: The appeal was dismissed. The Court upheld the declaration of the appellant as a fugitive economic offender, holding that the non-bailable warrant continued to subsist for the purposes of the Act and that the material on record validly established the statutory monetary threshold.

Provisional attachment - Attachment of property of equivalent value - Joint ownership and extent of attachment - recipient of proceeds of crime - money laundering -tainted property - manipulation by issuance of fraudulent performance certificates.

Joint ownership and extent of attachment - Non-accused co-owner - HELD THAT:- The Tribunal found that the argument that the property of Ms. Poonam Aggarwal had been attached was contrary to the record. The respondent had specifically clarified, and the impugned order also reflected, that the attachment was confined to the amount representing the alleged proceeds of crime attributable to Shri Anil Kumar Aggarwal and did not extend to her share. Since the attached amount was within the value of his share in the jointly held property, no independent grievance survived to the co-owner spouse on the footing that her property had been proceeded against. [Paras 22, 23, 26]

No interference was warranted on the plea that the property of the non-accused spouse had been attached.

Attachment of property of equivalent value - Dissipated proceeds of crime - HELD THAT: - The Tribunal held that where the alleged proceeds of crime were no longer available with the appellants, attachment could validly be made of property of equivalent value. On that reasoning, the source of funds for purchase of the attached property and the fact that it had been acquired prior to the commission of the scheduled offence were held to be irrelevant. Relying on Dilbag Singh @ Dilbag Sandhu Vs. Union of India & Ors. [2024 (11) TMI 833 - PUNJAB AND HARYANA HIGH COURT] the Tribunal accepted that the expression relating to the value of such property permits attachment of equivalent value property where the original proceeds are untraceable or have vanished. On the material referred to in the impugned order and the respondent's rejoinder, the Tribunal found sufficient basis for treating the property in question as attached only in substitution for dissipated proceeds of crime retained by Shri Anil Kumar Aggarwal, and likewise found no ground to disturb the attachment concerning M/s NKG Infrastructure Ltd. [Paras 24, 25, 27, 28, 29]

The attachment of equivalent value property was upheld and the challenge based on prior purchase and disclosed source was rejected.

Final Conclusion: The Tribunal upheld the confirmation of the provisional attachment order. It held that the attachment was confined to the accused co-owner's share and that equivalent value property could be attached where the proceeds of crime had been dissipated or were unavailable; accordingly, all the appeals were dismissed.

Entitlement to place additional documents on record at the appellate stage - without giving reasons ensuring necessity for taking additional documents on record -Due diligence for production of additional documents.

Additional evidence at appellate stage - HELD THAT: - The Tribunal found that the application misstated the earlier order by asserting that the Tribunal had directed filing of the relied upon documents, whereas the record showed only that counsel intended to file an application for additional documents. On merits, the application disclosed no reason for producing additional evidence at the appellate stage, did not state the relevance of the documents, and did not explain why they could not be produced before the Adjudicating Authority despite due diligence. Applying the conditions governing reception of additional evidence in appeal, the Tribunal held that none of the recognised grounds had been made out. [Paras 4, 5, 7, 8]

The application for taking additional documents on record was dismissed as devoid of merit.

Final Conclusion: The Tribunal rejected the appellants' application to place additional documents on record. It held that the application was contrary to the record and failed to satisfy the requirements for reception of additional evidence in appeal.

Taxability of outbound tour operator services - concept of taxable territory -statutory definition of 'Tour Operator Service' under Section 65(105)(n) of the Finance Act, 1994 - Extended period of limitation - Penalty in interpretational disputes - Suppression of Fact - Bona Fide Belief.

Whether outbound international tours service provided to Indian tourist by the appellant as a tour operator is leviable to service tax under the category of ‘Tour Operator Service’ as defined under Section 65(105)(n) of the Finance Act, 1994 - HELD THAT:- The Tribunal held that the controversy stood governed by the Larger Bench view in Cox & Kings India Ltd. [2023 (10) TMI 1388 - CESTAT MUMBAI - LB], which clarified that for the period prior to the negative list regime, determination of taxable territory was not the governing test for such disputes and, so long as the service provider and the recipient were in India, the service was taxable. Applying that principle, the Tribunal rejected the plea that outbound tours became non-taxable merely because the travel was undertaken outside India or because the service was claimed to have been used outside India. It further held that contrary decisions of a Bench of lesser strength could not prevail over the Larger Bench ruling. [Paras 8]

The service tax demand on outbound tour operator services was sustained on merits.

Interpretational dispute - Normal period of limitation - Penalty - HELD THAT: - The Tribunal found that the dispute turned on interpretation of law and that conflicting views had led to a reference to the Larger Bench. In that situation, suppression of facts could not be invoked to sustain the extended period. On the same reasoning, penalty was held to be unwarranted. [Paras 8, 9]

The demand was confined to the normal period with interest, and the penalty was set aside.

Final Conclusion: The Tribunal held that outbound tours arranged by the appellant for Indian tourists during the relevant period were taxable as Tour Operator Service. However, treating the dispute as one of legal interpretation, it restricted the demand to the normal period with interest and deleted the penalty.

Service tax on mobilization advances - Point of taxation for advances - Interest on delayed payment of service tax - definition of the term taxable service under clause 105 of Section 65 of the Finance Act, 1994 - Penalty for non-payment on advances.

Whether the mobilization advance received by the appellant can be subjected to Service Tax during the period prior to 01.03.2011 or otherwise. - HELD THAT: - The Tribunal held that the mobilization advances were received under the contract as advances adjustable against subsequent RA bills and formed part of a running account. The appellant had discharged service tax when the services were actually provided and bills were raised, and had also paid the amount demanded. The Tribunal found that a statutory provision deeming receipt of advance itself as the taxable point came only with the introduction of the Point of Taxation Rules, 2011 with effect from 01.03.2011, and that prior thereto there was no such provision requiring service tax to be paid in one go on mere receipt of mobilization advance. Consequently, while the tax already paid was treated as correctly paid in the regular course, the demand could not be sustained as a basis for further recovery, and penalty was held to be unsustainable. [Paras 8, 9, 11]

No further service tax could be recovered on the mobilization advances, and the penalty under Section 78 was set aside.

Interest on delayed payment of service tax - HELD THAT:- Having held that, during the material period, service tax was not payable merely on receipt of mobilization advance, the Tribunal found that the demand of interest on that basis was not sustainable. At the same time, it clarified that if, on verification of the actual dates of payment against the due dates applicable under the then existing provisions, any delay in discharge of service tax on the billed services was found, interest would be payable to that limited extent. Since that factual position was not clear from the record, the matter required verification only for re-quantification of interest, if any. [Paras 9, 11]

The interest demand was not sustainable on the basis adopted in the order, and the matter was remanded only for verification and re-quantification of interest, if any, for actual delay under the extant provisions.

Final Conclusion: The appeal was partly allowed. The Tribunal held that, prior to 01.03.2011, mobilization advances were not taxable merely on receipt, sustained no further recovery of service tax already paid, set aside the penalty, and remanded the matter only for limited verification and re-quantification of interest, if any, payable for actual delay under the applicable provisions.

Pre-notice payment and closure of proceedings - Voluntary Payment Before Show Cause Notice - Absence of suppression or intent to evade - Reverse Charge Mechanism - Bonafide Belief -Imposition of penalty - presence of reasonable cause.

Section 73(3) closure of proceedings - HELD THAT: - The Tribunal found that the entire tax and interest had been paid much before issuance of the show cause notice and were appropriated in the impugned order itself, leaving no further demand. It held that the payments had been recorded in the books of account and the relevant facts had been disclosed to the department during the audit process, which continued over a considerable period. In that background, the case fell within the scope of closure of proceedings under section 73(3), and the adjudicating authority was not justified in invoking section 73(4), since there was nothing on record to show any deliberate attempt to withhold tax with intent to evade. The Tribunal also noted that taxability of such arrangements involving reimbursement of salary and expenses of deputed personnel was the subject of litigation during the relevant period, which supported the appellant's bona fide belief. On that factual foundation, it further held that, in any event, the penalties were liable to be waived under section 80 as reasonable cause for non-payment existed during the material time. [Paras 8, 9, 10]

The appellant was entitled to the benefit of section 73(3), the contrary reliance on section 73(4) was held to be incorrect, and the penalties imposed under sections 78 and 77 were set aside.

Final Conclusion: The appeal was partly allowed. While the tax and interest already appropriated were left undisturbed, the penalties under sections 78 and 77 were held unsustainable and were set aside.

Entitlement for the benefit of Notification No. 01/2006-ST - Reversal of Cenvat credit - demand under construction service - Valuation mechanism under Rule 2A(ii) - Construction of an office-cum-commercial complex and residential complex on the land owned by Government - Valuation of works contract service - excess availment of cenvat credit - Imposition of Penalty.

Reversal of Cenvat credit as non-availment for exemption - HELD THAT: - The Tribunal held that once the credit availed on input services was reversed along with interest and the same was intimated to the department, such reversal amounted to non-availment of Cenvat credit for the purpose of the notification condition. On that basis, the appellant remained entitled to the abatement under Notification No.01/2006-ST for the period up to June, 2012, and the service tax already paid by taking that benefit under works contract service was sufficient. Consequently, the demand under construction service for the period prior to 01.07.2012 was held unsustainable. [Paras 6]

The demand for the period up to June, 2012 was set aside.

Valuation of works contract service - Abatement under Rule 2A(ii) - HELD THAT: - The Tribunal accepted that even if the appellant was not entitled to Notification No.26/2012-ST on the ground stated by the department, the activity being construction with materials was assessable under Rule 2A(ii) of the Service Tax (Determination of Value) Rules, 2006 as amended. Under that scheme, the appellant was required to pay tax on 40% of the total value received. Since the differential service tax along with interest had already been paid and intimated to the department, no further demand under construction service for the post-2012 period could be sustained. [Paras 7]

The post-2012 construction service demand was held unsustainable.

Excess Cenvat credit reversed with interest - HELD THAT: - The Tribunal found that the excess credit alleged to have been utilised had already been paid back by the appellant along with interest and the department had been informed of the reversal. In those circumstances, the demand seeking denial and recovery of that credit could not survive. [Paras 8]

The demand relating to excess Cenvat credit was set aside.

Renting of immovable property service - Penalty - HELD THAT: - The Tribunal recorded that, on the overall computation, the appellant had paid the total service tax payable on works contract service as well as on renting of immovable property service. Having set aside the substantive demands in the case, the Tribunal further held that, in the facts and circumstances, no penalty was imposable on the appellant. [Paras 9, 10, 11]

The remaining demand was not sustained and the penalties were deleted.

Final Conclusion: The Tribunal set aside the confirmed service tax and Cenvat credit demands and held that the appellant was entitled to the benefit of the applicable valuation and exemption treatment upon reversal of credit and payment of differential tax with interest. The penalties were also held to be not imposable, and the appeal was allowed.

Service tax payable on construction of residential complexes - Works contract service - claiming exemption on 70% under Notification No.12/2003-ST - Applicability of service tax under the category of ‘Renting of Immovable Property service’ for fit-outs renting - Mutual exclusivity of VAT and service tax.

Whether the service tax is attracted in case of construction of residential complexes by the appellant which are in the nature of ‘Works Contract Service’ for the period from 01.04.2006 to 31.03.2008 - HELD THAT:- The Tribunal held that a composite contract in the nature of a works contract could not be subjected to service tax before 01.06.2007, since that taxable entry came into force only from that date. For the period from 01.06.2007 to 31.03.2008 also, the demand was held unsustainable because the consistent view of the Tribunal, following the CBEC circular and earlier decisions MODI VENTURES [2020 (3) TMI 1481 - CESTAT HYDERABAD], M. SRINAGESH HEGDE [2024 (1) TMI 301 - CESTAT BANGALORE] was that no service tax could be charged on residential complex services rendered prior to 01.07.2010 in such circumstances. [Paras 7, 8]

The demand relating to construction of residential complexes for the period 01.04.2006 to 31.03.2008 was set aside.

Renting of immovable property - HELD THAT: - The Tribunal found that the issue stood covered by precedent in the case of Khivraj Techpark Pvt. Ltd., which has been subsequently followed in the assessee’s own case KHIVRAJ TECHPARK PRIVATE LIMITED [2023 (11) TMI 825 - CESTAT CHENNAI], holding that where the premises and the fit-outs were leased under separate agreements, consideration received for renting movable items such as fit-outs could not be brought within renting of immovable property. Since VAT had been discharged on the leasing of those movable goods, the same consideration could not again be subjected to service tax under the immovable property entry. [Paras 9]

The demand on fit-out rentals for the period June 2007 to March 2008 was also set aside.

Final Conclusion: The Tribunal held that no service tax was payable on the appellant's construction activity for the disputed period and that fit-out rentals under separate agreements could not be taxed as renting of immovable property service. The impugned order was set aside and the appeal was allowed with consequential relief.

CENVAT credit on jointly addressed invoices - common input services - invocation of the extended period of limitation - Penalty for suppression.

CENVAT credit on jointly addressed invoices - HELD THAT: - The Tribunal held that the invoices covered services rendered against all four entities, each of which was separately registered with the Service Tax Department. It found no provision in the Cenvat Credit Rules, 2004 permitting one entity to avail the entire credit first and thereafter cross-charge the others. On that reasoning, credit relatable to jointly addressed invoices for renting, security, housekeeping and xerox services could not be solely taken by the appellant. [Paras 6, 7]

The demand on inadmissible credit was sustained only to the extent falling within the normal period, with applicable interest.

Extended period of limitation - Disclosure in ST-3 returns - HELD THAT: - The Tribunal recorded that the appellant had been regularly filing ST-3 returns showing the cenvat credit availed and utilised, and there was no concealment, suppression or misdeclaration of facts. Since the notice arose only from audit objection, the Tribunal, following Raghuvar (India) Ltd. Vs. CCE [2023 (1) TMI 932 - CESTAT NEW DELHI], held that the extended period could not be sustained. [Paras 6]

Recovery was confined to the normal period of limitation.

Penalty for suppression - HELD THAT: - As the Tribunal found that the credit availment had been disclosed in the statutory returns and that the case arose from audit objection without suppression or misdeclaration, the foundation for penalty alleging suppression failed. The penalty could not therefore survive. [Paras 6, 7]

The penalty imposed on the appellant was set aside.

Final Conclusion: The Tribunal held that the appellant was not entitled to avail the entire cenvat credit on invoices jointly raised on four separately registered entities and upheld the demand only for the normal period with interest. The extended period was rejected, the penalty was set aside, and the matter was remanded only for recomputation of the demand for the normal period and applicable interest.

Refund claim - barred by limitation under Section 11B - suppression of production and clandestine removal of excisable goods - Character of payment during investigation - Refund limitation under appellate order - Relevant date under Section 11B - Cross-objections and refund limitation.

Whether the amounts paid by the appellant during investigation and subsequent stages are to be treated as “duty” or as “deposit under protest” - HELD THAT: - The decisions relied upon by the Department in Rachna Art Prints Pvt. Ltd. vs CCE [2020 (3) TMI 150 - CESTAT AHMEDABAD], and Citizen Metalloys Ltd. vs CCE [2021 (8) TMI 72 - CESTAT AHMEDABAD] support the proposition that once amounts are appropriated against confirmed demand and the liability attains a stage of determination, such amounts assume the character of duty and are governed by the provisions of Section 11B. The ratio of these decisions is that upon crystallization of liability, the nature of payment changes from deposit to duty.

The Tribunal held that payments made before issuance of show cause notice may initially be in the nature of deposits since liability is not yet crystallised. However, once adjudication was completed and those amounts were appropriated towards the confirmed liability in the Order-in-Original, they lost the character of deposits and assumed the character of duty. The later reduction of demand in appeal did not convert the appropriated amounts back into deposits; it only gave rise to a claim for refund of the excess, to be examined under Section 11B. [Paras 9]

The appropriated amounts were held to be duty, and the appellant's contention that they continued as deposits under protest was rejected.

Whether the refund claim is barred by limitation under Section 11B and consequently whether the appellant is entitled to refund. - HELD THAT: - The Tribunal applied Explanation (B)(ec) to Section 11B and held that where refund becomes due as a consequence of an appellate order, limitation begins from the date of that order itself. Since the Order-in-Appeal had already reduced the demand and created an enforceable right to seek refund, the statutory period could not be postponed merely because the Department later filed an appeal. The pendency of that appeal did not suspend or extend limitation. The Tribunal further held that the appellant's cross-objections were only defensive and contingent on the Department's appeal; as they were not independently adjudicated on merits, they did not create a fresh cause of action or shift the relevant date. The decisions of Mahanagar Telephone Nigam Ltd. vs CST, Delhi [2016 (12) TMI 1276 - CESTAT NEW DELHI], West Coast Paper Mills Ltd. vs CCE [2004 (2) TMI 344 - SUPREME COURT], cited by the appellant on finality of dispute and non-applicability of limitation were distinguished on facts. [Paras 10, 11]

The refund claim, having been filed beyond one year from the Order-in-Appeal, was held time-barred under Section 11B.

Final Conclusion: The Tribunal upheld the rejection of the refund claim. It held that the amounts, once appropriated in adjudication, assumed the character of duty and that the refund claim filed beyond one year from the favourable Order-in-Appeal was barred by limitation under Section 11B.

Applicability of Rule 6(3) of the CENVAT Credit Rules - Non-maintenance of any separate records, bifurcating usage of inputs and input services for manufacture of excisable goods and for generation of electricity - Electricity generated from bagasse - common inputs and input services - manufacture of excisable goods and generation of electricity.

Rule 6(3) of the CENVAT Credit Rules - HELD THAT: - The issue arising out of the present dispute regarding payment of amount of 6% in terms of Rule 6(3) of the Rules of 2004, shall not be applicable in case of generation of electricity and wheeling out the same to M/s MSEDCL. The order dated 17.11.2021 passed by the Commissioner of GST, Aurangabad, has been accepted by the Committee of Chief Commissioners in their meeting held on 11.02.2022. Since, no appeal was preferred against the said order dated 17.11.2021, the matter arising out of the present dispute regarding payment of amount under Rule 6 (3) ibid has attained finality and cannot be agitated further. In view of the fact that the issue arising out of the present dispute, is no more open for any debate, in view of the adjudication order dated 17.11.2021 passed in the case of M/s Vaidyanath SSK Ltd. & others., we are of the view that different interpretation cannot be placed at this juncture, for deciding the present appeals differently.

The confirmation of demands under Rule 6(3) was held unsustainable and the impugned order was set aside.

Final Conclusion: The Tribunal held that no amount under Rule 6(3) was payable on the surplus electricity generated and sold to MSEDCL during the disputed period. The impugned appellate order sustaining the demands was therefore set aside and the appeals were allowed.

Legality, rationality and tenability of the Reassessment Order passed by the Assessing Authority invoking power under Section 10 of the OET Act - barred by limitation - belated communications - Jurisdictional Defect - Acceptance of self-assessment return - absence of Audit Visit Report contemplated under Section 9B read with Rule 11 - Intelligence Report vis-a-vis the self-assessment returns - Change of Opinion - Scope of reassessment on appellate order - Expression “mutatis mutandis” - Supplementing statutory notice by affidavit - imposition of penalty invoking sub-section (2) of Section 10 .

After disposal of the revision, the Joint Commissioner of Sales Tax issued a fresh Notice dated 08.09.2023 in Form E-32 “for assessment on tax in case of escaped turnover or under assessment” omitting the reason for reassessment contained in the earlier Notice dated 24.04.2023 in Form E-32. - Admitting the fact that the decision in ECMAS Resins Pvt. Ltd. [2022 (8) TMI 637 - ORISSA HIGH COURT] has attained finality, the Joint Commissioner of Sales Tax proceeded to finalise the assessment apparently under sub-section (1) and sub-section (2), but not under sub-section (3), of Section 10 vide Order dated 12.07.2024 by overturning objection as to said assessment being barred by limitation

Reassessment limitation - Acceptance of self-assessment return - HELD THAT: - The Court held that for the relevant tax periods, the end of the year was 31.03.2006 and, on the pre-amendment law, notice for reassessment had to be served within five years therefrom. That period had already expired before the 2012 amendment substituting seven years came into force, and the amendment was treated as prospective. The notices issued in 2023 were therefore ex facie time-barred. The Court further held that a reassessment under Section 10(1) could be triggered only after formal communication of acceptance of the self-assessment returns. The alleged acceptance conveyed only on 31.03.2023, long after the returns were filed and after the earlier audit assessment had been set aside, was found to be a mechanical attempt to overcome the statutory defect and did not establish any valid prior acceptance. [Paras 6, 7]

The notices issued in 2023 and the reassessment made thereon under Section 10(1)/(2) were without jurisdiction as being barred by limitation.

Scope of reassessment on appellate order - Statutory procedure to be followed - HELD THAT: - The Court found that the first notice dated 24.04.2023 proceeded on the premise that the earlier order was erroneous or prejudicial to revenue in the light of a judgment and the appellate order, thereby invoking the field of Section 10(3). However, the Revenue admitted in its counter affidavit that the impugned reassessment was not under Section 10(3). The Court also held that an appellate order of the authority could not be treated as a judgment or order of a Court or Tribunal for the purpose of Section 10(3). The subsequent notice dated 08.09.2023 omitted the earlier foundation altogether and introduced a different basis, showing that the earlier proceeding stood abandoned. As both notices could not co-exist on the same subject-matter, the reassessment could not be supported on the footing of the first notice. [Paras 6, 7]

The notice founded on Section 10(3) was invalid, and the reassessment could not be sustained by shifting from that basis to a fresh notice under Section 10(1).

Applicability of mutatis mutandis - Supplementing statutory notice by affidavit - HELD THAT: - The Court rejected the stand taken in the counter affidavit that the case fell under Section 49(2) of the OVAT Act read with Rule 34 of the OET Rules. It held that where the OET Act and Rule 15D specifically provide the substantive power and procedure for reassessment, the residuary adoption clause in Rule 34 for matters not specified cannot be used to import another statute's reassessment limitation or jurisdictional framework. The Court further held that the validity of the notices had to be tested on the reasons stated in them and not on a new case later set up in affidavit. Since the notices themselves proceeded under Section 10 of the OET Act, the Revenue was not permitted to improve or alter their legal basis during writ proceedings. [Paras 8]

The reliance on Rule 34 and Section 49(2) of the OVAT Act was untenable, and the reassessment notices could not be sustained on grounds not contained in the notices themselves.

Final Conclusion: The Intelligence Report being utilised in the course of Audit Assessment under Section 9C treating the said report to be Audit Visit Report is contrary to what is laid down in Bhusan Power and Steel Ltd. Vrs. State of Odisha and Others [2011 (12) TMI 495 - ORISSA HIGH COURT]

The Appellate Authority having set aside the Audit Assessment in the light of said judgment in Bhusan Power and Steel Ltd. Vrs. State of Odisha and Others, directed for taking out appropriate proceeding in accordance with law, which obviously would mean reassessment under Section 10 of the OET Act.

The imposition of penalty invoking sub-section (2) of Section 10 of the OET Act in the Assessment dated 12.07.2024 would suggest that the Assessing Authority had exercised power under Section 10(1), but not under sub-section (3) thereto. This aspect is made clear by the stance taken by the opposite parties in their counter affidavit. As by the date the Notice in Form E-32 prescribed under Rule 15D for the purpose of reassessment under Section 10 (Annexure-6) was issued on 24.04.2023 five years, or seven years as amended, from the end of the year to the tax period(s) expired, the provisions of Section 10(1) could not have been invoked.

In view of Indian Oil Adani Ventures Limited Vrs. State of Odisha, [2025 (11) TMI 1018 - ORISSA HIGH COURT] since Appellate Order cannot be comprehended within the meaning of Section 10(3) of the OET Act, the Assessing Authority rightly abandoned the Notice dated 24.04.2023.

The fresh Notice dated 08.09.2023 in Form E-32 for the purpose of reassessment under Section 10(1) (Annexure-8) is also time-barred and it could not be issued on change of opinion as the reason assigned in Annexure-6 has been substituted/reviewed. Having shown communication of acceptance of self-assessment returns for the tax periods 01.04.2005 to 28.02.2006 by Letter dated 31.03.2023, no reason is placed on record to indicate as to why it took such a long period for communication since 2006, which clearly demonstrates that such fact of acceptance of self-assessment returns did not exist at all.

Relying on Rule 34 of the OET Rules to exercise power under Section 10(3) by adhering to provisions of Section 49(2) of the OVAT Act is untenable inasmuch as substantive provisions are available in the OET Act and the Rules framed thereunder. In present context does not fall within the ken of expression “for any other matters not specified under these Rules” contained in Rule 34.

Though not relevant in the present context in view of the discussions made above, it may be analysed that the Appellate Order being passed on 16.07.2019, the statutory Notices in Annexures-6 and 8 being issued in the year 2023, i.e., 24.04.2023 and 08.09.2023, the same are barred by period stipulated in Section 10(3) of the OET Act. Section 10(3) of the OET Act having specified “three years” for invoking jurisdiction to reassess in the light of judgment or order which attained finality, there is no scope to import period of “five years” specified in Section 49(2). However, the stance taken by the opposite parties is repelled in view of Indian Oil Adani Ventures Limited Vrs. State of Odisha, and discussions made supra on inapplicability of Rule 34 to the instant case.

With the aforesaid factual matrix, given legal perspective and reasons mentioned hitherto, the Notice in Form E-32, dated 24.04.2023 (Annexure-6) and the Notice in Form E-32, dated 08.09.2023 (Annexure-8) are quashed and consequential Assessment Order dated 12.07.2024 (Annexure-9) is hereby set aside.

The writ petition stands allowed and pending Interlocutory Application(s), if any, is also disposed of, but in the circumstances there shall be no order as to costs.