TaxTMI Updates e-Newsletter
Apr 27,2021

Summary order. Notice issued returnable on 14.6.2021; service waived by learned AGP on behalf of State and service by e-mode permitted; matter to be heard with Special Civil Application No.850 of 2017.

Relegation to statutory appellate remedy - principles of natural justice - supply of a reasoned order / reasoned order to enable appeal - appeal to the appellate authority under Section 107 of CGVAT

Relegation to statutory appellate remedy - appeal to the appellate authority under Section 107 of CGVAT - Whether the petitioner may be relegated to the statutory appellate forum instead of the High Court entertaining the writ petition on merits. - HELD THAT: - The Court declined to enter into the merits of the challenge to the summary order and held that the petitioner has an alternate efficacious remedy by way of appeal to the appellate authority within the statutory time. The Court observed that all issues raised before the Court can be agitated before the appellate authority and therefore chose to relegate the petitioner to that remedy rather than adjudicate the substantive controversy in the writ petition. This course was adopted without deciding the merits of the alleged violation of principles of natural justice or the correctness of the demand. [Paras 4]

Petition relegated to the appellate authority; petitioner may raise all contentions before that forum within the prescribed three-month period.

Supply of a reasoned order / reasoned order to enable appeal - principles of natural justice - Whether the adjudicating authority must supply a reasoned order and, if not supplied, whether the Court should direct its production to enable exercise of the statutory appeal. - HELD THAT: - The Court directed that if a reasoned order has not been supplied to the petitioner, the same shall be provided within seven days of receipt of this order and that a copy shall be shared electronically within 24 hours to the e-mail address furnished by the petitioner. The direction was procedural and aimed at enabling the petitioner to avail the statutory appellate remedy; the Court did not adjudicate whether non-supply amounted to a breach of natural justice on the merits. The authority was also cautioned not to take any adverse view of this disposal where the Court, on the ground of alternative remedy, refrained from deciding merits. [Paras 5, 6]

If not already supplied, the reasoned order shall be furnished within seven days and emailed within 24 hours to the petitioner to enable filing of the statutory appeal.

Final Conclusion: Writ petition disposed of by relegation to the statutory appellate forum; the adjudicating authority is directed to supply the reasoned order within seven days and to share it electronically within 24 hours so that the petitioner may pursue the appeal under the statute; the Court did not decide the merits of the challenge.

Detention of vehicle and goods under CGST regime - exercise of quasi-judicial powers in issuing show cause notice and adjudication - construction of petition averments as reply to show cause notice - time-bound adjudication and right to revive proceedings on non-compliance

Detention of vehicle and goods under CGST regime - exercise of quasi-judicial powers in issuing show cause notice and adjudication - Petitioners' challenge to detention and related show cause notice relegated to respondent authority for fresh adjudication; merits not decided by the Court. - HELD THAT: - The Court declined to enter upon the merits of the alleged wrongful detention and issuance of the show cause notice, observing that the matter requires adjudication by the competent authority. The averments in the petition are to be treated as the petitioners' reply to the show cause notice and petitioners may file any additional material electronically. The respondent authority is directed to proceed with adjudication on the basis of the reply and other materials and to keep in mind the relevant case law while adjudicating. A specific timeline was imposed for completion of adjudication, and the petitioners were granted liberty to revive the petitions if the timeline is not complied with. The Court therefore remanded the dispute for fresh consideration and decision by the authority without expressing any view on the substance of the claims.

Matter remitted to the respondent authority for adjudication of the show cause notice treating the petition averments as reply, with liberty to file additional material electronically and with a direction to complete adjudication within the stipulated time, failing which the petitioners may revive these petitions; merits not considered.

Final Conclusion: Writ petitions disposed by relegating the parties to the respondent authority for time bound adjudication of the show cause notice, treating the petition averments as the reply and without the High Court deciding the merits; liberty granted to revive if the timeline is not adhered to.

Summary order. CM application allowed subject to just exceptions; notice issued to respondents who accepted service; respondents to revert with instructions and file a counter-affidavit if they intend to resist; petitioner to transmit case papers to respondents by e-mail; matter listed on 03.05.2021.

IGST on ocean freight - interim relief - entitlement to refund pending higher adjudication - sine die adjournment with liberty to mention

IGST on ocean freight - interim relief - non-requirement to pay pending higher adjudication - Petitioners shall not be required to pay IGST on ocean freight until further orders. - HELD THAT: - The Court observed that Special Leave Petitions concerning the levy of IGST on ocean freight are pending before the Supreme Court and that no interim stay has been granted on the earlier High Court decisions. In view of the pending higher adjudication and after hearing the parties, the Court granted interim protection by directing that the Opposite Parties will not require the Petitioners to pay IGST on ocean freight until further orders. This determination is interlocutory and limited to withholding the demand for payment pending final disposal of the SLPs. [Paras 5]

Interim direction that Petitioners shall not be required to pay IGST on ocean freight until further orders.

Entitlement to refund pending Supreme Court decision - sine die adjournment with liberty to mention - The question of petitioners' entitlement to refund is left open pending final decision of the Special Leave Petitions in the Supreme Court; the writ petitions are adjourned sine die with liberty to mention after disposal of those SLPs. - HELD THAT: - The Court noted that the Special Leave Petitions are listed for hearing in the Supreme Court and that no order has been passed staying the operation of the Gujarat High Court judgments. Consequently, the Court declined to adjudicate the substantive question of entitlement to refund and postponed consideration until the Supreme Court disposes of the SLPs. The writ petitions were therefore adjourned sine die, while preserving the parties' right to mention the matters for listing once the higher authorities have decided the pending SLPs. [Paras 4, 5, 6]

Substantive refund claims reserved for final determination after the Supreme Court disposes of the SLPs; petitions adjourned sine die with liberty to mention.

Final Conclusion: Pending disposal of the Special Leave Petitions in the Supreme Court, the Court directed that Petitioners shall not be required to pay IGST on ocean freight until further orders and reserved the question of entitlement to refund; the writ petitions are adjourned sine die with liberty to the parties to mention them after the SLPs are decided.

Detention, seizure and release of goods and conveyances in transit under Section 129 - Penalty under Section 129(1)(a) versus Section 129(1)(b) - Liability of owner and transporter for payment on release of detained goods - Scope of cross objections in an appeal under Section 107

Scope of cross objections in an appeal under Section 107 - Cross objections raising new grounds beyond the scope of the departmental appeal are not maintainable in the appeal proceedings. - HELD THAT: - The appeal was filed by the department against the penalty portion of the adjudicating authority's order. The respondent's cross objections advanced a fresh plea concerning the requirement to generate E-way Bills for consignments below a specified value, a matter not raised by the appellant. The Appellate Authority held that a respondent in cross objection may only contest matters within the scope of the grounds raised by the appellant under Section 107(1) and the relevant rules; fresh grounds ought to have been pursued by the respondent by filing a separate appeal within the prescribed time. Accordingly the cross objections raising issues outside the departmental appeal were held to be beyond the purview of the present appeal and were not entertained. [Paras 9]

Cross objections that raise fresh grounds not falling within the scope of the departmental appeal are beyond the purview of the appeal and are not to be considered in these proceedings.

Detention, seizure and release of goods and conveyances in transit under Section 129 - Penalty under Section 129(1)(a) versus Section 129(1)(b) - Liability of owner and transporter for payment on release of detained goods - Penalty was to be imposed under Section 129(1)(b), not under Section 129(1)(a), because the owner of the goods did not come forward and the transporter paid for release. - HELD THAT: - Section 129 provides distinct consequences depending on whether the owner of the goods comes forward to pay the tax and penalty (clause (a)) or does not (clause (b)). The record established that the actual owners did not come forward and the transporter effected payment for release. The adjudicating authority had applied clause (a) and imposed a penalty equal to 100% of the tax payable, which is proper only when the owner comes forward. Where the owner does not come forward, clause (b) mandates release on payment of the applicable tax and a penalty equal to fifty per cent of the value of the goods reduced by the tax paid. Applying this statutory scheme to the facts, the Appellate Authority found the penalty as imposed to be incorrect and modified the impugned order accordingly, directing appropriation of amounts already deposited. [Paras 10, 12]

The penalty imposed by the adjudicating authority is modified to the quantum payable under Section 129(1)(b) as the owner did not come forward; amounts already deposited shall be appropriated accordingly.

Final Conclusion: The appeal is allowed in part: the respondent's cross objections that raise fresh grounds outside the scope of the departmental appeal are not entertained, and the impugned order is modified by substituting the penalty under Section 129(1)(b) (applicable where the owner did not come forward) in place of the penalty earlier imposed under Section 129(1)(a); amounts already deposited are to be appropriated in accordance with this modification.

Withholding tax on dividends - Most Favoured Nation clause - self-operational protocol - application of MFN to lower withholding rate - beneficial owner - common interpretation of tax treaties

Most Favoured Nation clause - self-operational protocol - application of MFN to lower withholding rate - common interpretation of tax treaties - Applicability of Clause IV(2) of the protocol (the MFN provision) in the India-Netherlands DTAA and whether it is self operational so as to import a lower dividend withholding rate from a Convention between India and a third State which is a member of the OECD. - HELD THAT: - The protocol to the India-Netherlands Convention forms an integral part of the DTAA and, read plainly, does not require a separate notification to be effective. Clause IV(2) provides that if India, in a Convention with a third State which is a member of the OECD, limits taxation at source on dividends to a rate lower than that in the India-Netherlands Convention, then from the date that the India-third State Convention enters into force the same lower rate shall also apply under the India-Netherlands Convention. The Court held that the parity established by Clause IV(2) operates once the third State is an OECD member and the relevant India-third State Convention is in force; the condition that the third State "is a member of the OECD" describes the state of affairs at the relevant time of claim and not a condition confined to the date when the India-Netherlands DTAA was executed. The Netherlands' own administrative decree interpreting Clause IV(2) to give retroactive effect from the date the third State joined the OECD (as in the India-Slovenia example) is persuasive for the purpose of achieving consistent and equitable allocation of taxing rights. The Court applied the principle of common interpretation of tax treaties and rejected the revenue's contention that additional amendment/notification was necessary to import the benefit. [Paras 15, 16, 17, 18, 19]

Clause IV(2) of the protocol is self operational and, in the circumstances, permits application of the lower withholding rate contained in an India-third State Convention where the third State is a member of the OECD; the Court accepted the Netherlands' interpretation and the principle of common interpretation to import the lower rate.

Withholding tax on dividends - beneficial owner - Validity of the impugned certificates under Section 197 of the Act which fixed withholding at 10% instead of 5% and the appropriate consequential relief. - HELD THAT: - Article 10(2) of the India-Netherlands DTAA permits taxation in India provided the recipient is the beneficial owner and the tax does not exceed 10%. The petitioners were not disputed to be beneficial owners. Having held that Clause IV(2) of the protocol imports a lower 5% participation dividend rate (as applicable under the India-Slovenia Convention from the date Slovenia joined the OECD), the Court concluded that the certificates authorizing deduction at 10% were incorrect. The Court therefore quashed the impugned certificates and directed respondent no.1 to issue fresh certificates under Section 197 reflecting deduction at the rate of 5% in the facts of these cases. [Paras 11, 12, 20, 21]

The impugned certificates dated 16.09.2020 and 04.01.2021 (fixing withholding at 10%) are quashed; respondent no.1 shall issue fresh certificates under Section 197 indicating withholding at 5%.

Final Conclusion: The writ petitions are allowed. The impugned Section 197 certificates fixing TDS at 10% are quashed and respondent no.1 is directed to issue fresh certificates providing for withholding at 5% in the circumstances of these cases, pursuant to the MFN provision in the protocol to the India-Netherlands DTAA and the principle of common interpretation.

Genuine agricultural income versus income from other sources - reassessment pursuant to notice under section 148 and assessment under section 147 - onus on the assessee to prove ownership and bonafides of claimed exempt income - treatment of income admitted in original return but denied in response to reassessment notice - verification and remand for allowance of municipal taxes

Genuine agricultural income versus income from other sources - onus on the assessee to prove ownership and bonafides of claimed exempt income - Whether the agricultural income declared by the assessee could be treated as exempt agricultural income or had to be brought to tax as income from other sources. - HELD THAT: - The Tribunal upheld the Assessing Officer's and CIT(A)'s findings that enquiries addressed to the Tehsildar, the purported purchaser company and the local Income Tax Officer established that the documents filed in support of agricultural income (patta/pass book and income certificate, and company certificate of purchase) were not genuine and that the land was not in the assessee's name. The assessee failed to satisfactorily explain or rebut these enquiry reports and did not take effective action against the person said to have prepared the returns. Given that the assessee himself had declared the agricultural income and bonafides were not proved, the income was rightly characterised and taxed as income from other sources; the Tribunal found no reason to interfere. [Paras 3, 4, 9]

Addition of agricultural income as income from other sources confirmed and appeals on that issue dismissed.

Treatment of income admitted in original return but denied in response to reassessment notice - reassessment pursuant to notice under section 148 and assessment under section 147 - Whether amounts earlier admitted as income from house property and profits and gains from business or profession for A.Y. 2011-12 could be reasserted and brought to tax where the assessee filed a 'nil' return in response to the reassessment notice. - HELD THAT: - The Assessing Officer, on reassessment, relied on the original return and enquiries which established that the assessee had received a residential house as a gift from his father and derived rental income; the assessee did not produce evidence to contradict the Assessing Officer's remand report. The CIT(A) confirmed the additions and the Tribunal found no material to overturn those findings, thereby upholding the correctness of bringing those amounts to tax. [Paras 11, 13]

Additions of income from house property and business/profession for A.Y. 2011-12 confirmed and appellate grounds rejected.

Onus on the assessee to substantiate expenditure claims - Whether disallowance of certain business/professional expenditure (A.Ys 2011-12 to 2014-15) was justified for want of bills and vouchers. - HELD THAT: - The Assessing Officer disallowed expenditure where the assessee failed to produce supporting bills and vouchers; the assessee did not furnish evidence before the CIT(A) nor before the Tribunal. In the absence of supporting documentation the Tribunal sustained the disallowances for the relevant assessment years. [Paras 14]

Disallowances of expenditure as made by the Assessing Officer confirmed.

Verification and remand for allowance of municipal taxes - Whether municipal taxes claimed in computing income from house property for A.Y. 2014-15 should be allowed. - HELD THAT: - The Tribunal treated the claim as a factual matter requiring verification and remitted the issue to the Assessing Officer to verify payment of municipal taxes and allow the claim if found to have been paid. [Paras 15]

Matter remanded to the Assessing Officer for verification and appropriate consequential computation.

Genuine agricultural income versus income from other sources - onus on the assessee to prove ownership and bonafides of claimed exempt income - Whether the appeals of Smt. Talluri Venkata Narayanamma, who claimed agricultural income supported by similar documents, should succeed. - HELD THAT: - The facts and enquiry results in the assessee's case were the same as in the case of Sri Talluri Vijay Rahul: enquiries established lack of ownership and that the patta/pass book was not in the assessee's name. For the same reasons set out in the consolidated decision, the Tribunal found no merit in the appeals and dismissed them. [Paras 18]

Appeals of Smt. Talluri Venkata Narayanamma dismissed.

Final Conclusion: The Tribunal dismissed the appeals of the assessees challenging the recharacterisation of declared agricultural income as income from other sources and upheld disallowances for unsupported business expenditures and additions in respect of house property and business income; the claim for municipal taxes in A.Y. 2014-15 was remanded to the Assessing Officer for verification.

Deduction under Section 80JJAA - definition of "workman" under Section 2(s) of the Industrial Disputes Act - requirement of 300 days' employment - clarificatory/curative amendment and retrospective application - tax deduction at source under Section 194-C - tax deduction at source under Section 194-I - disallowance under Section 40(a)(ia) - liberal and purposive construction of beneficial tax provisions

Deduction under Section 80JJAA - definition of "workman" under Section 2(s) of the Industrial Disputes Act - requirement of 300 days' employment - clarificatory/curative amendment and retrospective application - liberal and purposive construction of beneficial tax provisions - Whether the assessee is entitled to deduction under Section 80JJAA for employees in the software industry who did not complete 300 days in the previous year but did so by continuity across the previous and succeeding year and whether such employees qualify as "workman" under Section 2(s) ID Act. - HELD THAT: - The Court held that the software professionals engaged by the assessee (so long as they do not discharge supervisory functions) fall within the wide definition of "workman" in Section 2(s) of the Industrial Disputes Act because they perform skilled technical work for hire or reward. The statutory object of Section 80JJAA is to incentivise employment; the requirement of 300 days contemplates continuous employment and need not be read as confined rigidly to a single financial year such that employment begun after a particular date would foreclose the incentive. The Tribunal's interpretation, followed by the CIT(A) and accepted below, that continuity across two financial years satisfying 300 days qualifies for the deduction was held to be tenable. The court also observed that the 2018/2019 amendment clarifying the application of Section 80JJAA operates as an explanatory/clarificatory amendment which may be given retrospective effect to vindicate the legislative purpose and to avoid a narrow construction defeating the incentive; accordingly the assessee's claim for the AY in question is sustainable. [Paras 16]

Software engineers who do not perform supervisory functions are "workmen" under Section 2(s) ID Act; the 300 day requirement may be met by counting continuous employment across the previous and succeeding year, and the assessee is entitled to the deduction under Section 80JJAA.

Tax deduction at source under Section 194-C - tax deduction at source under Section 194-I - disallowance under Section 40(a)(ia) - Whether payments of lease rentals to a lease finance company for motor vehicles used by the assessee's employees attract TDS under Sections 194 C or 194 I and whether disallowance under Section 40(a)(ia) was justified. - HELD THAT: - On the facts the lease finance company only purchased and made vehicles available; it did not perform transport work (carriage of goods or passengers) nor render services such as driving or maintenance - the assessee and its employees bore running and maintenance responsibilities. Consequently the payments were not payments for "carrying out any work" within Section 194 C nor rent for use of machinery/plant attracting Section 194 I. The precedents relied upon by Revenue involved transport contracts and are therefore distinguishable. Because neither Section 194 C nor Section 194 I applied, there was no omission attracting disallowance under Section 40(a)(ia), and the Tribunal's and CIT(A)'s conclusions upholding that view were proper. [Paras 17]

Neither Section 194 C nor Section 194 I is attracted to the lease financing payments for vehicles used by the assessee's employees; therefore disallowance under Section 40(a)(ia) on TDS grounds was not warranted.

Final Conclusion: The appeals were dismissed: the Court held that the software employees qualified as "workman" and the 300 day requirement for Section 80JJAA may be satisfied by continuous employment spanning the previous and succeeding year so as to permit the deduction; and that lease finance payments for vehicles used by the assessee's employees did not attract TDS under Sections 194 C or 194 I, hence Section 40(a)(ia) disallowance was not sustainable.

Full and true disclosure as condition precedent to settlement - rejection of settlement application in limine for non-disclosure - interpretation of Section 245C and Section 245D of the Income-Tax Act - power of the Settlement Commission to reject applications at various stages - clean hands doctrine in settlement proceedings - limited scope of judicial review under Article 226 in settlement matters

Full and true disclosure as condition precedent to settlement - rejection of settlement application in limine for non-disclosure - Whether the Settlement Commission validly rejected the settlement applications on the ground that the applicants had not made full and true disclosure - HELD THAT: - The Court upheld the Settlement Commission's factual finding that the applications did not contain full and true disclosure of income and the manner of its derivation. The Commission's conclusions-based on information from UAE authorities, undisclosed foreign accounts, unexplained transactions and inconsistencies between sworn statements and documents-supported its view that the applications disclosed concealable facts and therefore were not maintainable. The Court observed that where true and full disclosure is not established, the Commission is entitled to reject the application at any stage and to require regular assessment by the Department rather than permit an adhoc settlement. The Court declined to re-appreciate the evidence, noting that the findings of non-disclosure were unambiguous and grounded on material on record. [Paras 7, 11, 12, 21, 22]

The Settlement Commission rightly rejected the settlement applications for failure to make full and true disclosure; that finding is upheld.

Interpretation of Section 245C and Section 245D of the Income-Tax Act - power of the Settlement Commission to reject applications at various stages - Whether Sections 245C and 245D, read conjointly, permit the Settlement Commission to reject an application where full and true disclosure is not established and whether the procedural stages under Section 245D extend the Commission's powers beyond Section 245C - HELD THAT: - The Court held that Section 245D must be read with Section 245C. Section 245C prescribes that an application must contain a full and true disclosure; Section 245D sets out procedural stages for enquiry. Those procedures are to assess compliance with Section 245C and do not empower the Commission to go beyond the scope of the settlement application to conduct a regular assessment. If at any stage the Commission forms the opinion that disclosure is not full and true, it may reject the application. The procedural powers under Section 245D are intended to elicit and verify the truth of the disclosure and are not a licence to usurp the Assessing Officer's powers for reassessment. [Paras 11, 12, 16, 17, 18]

Sections 245C and 245D read together empower the Settlement Commission to reject applications lacking full and true disclosure; the Commission's procedural enquiries are confined to verifying compliance with Section 245C and do not permit reassessment beyond that scope.

Limited scope of judicial review under Article 226 in settlement matters - clean hands doctrine in settlement proceedings - Whether the High Court should interfere with the Settlement Commission's rejection of applications under Article 226 on the facts of these cases - HELD THAT: - The Court reiterated that judicial review under Article 226 in settlement matters is limited and does not extend to reappreciation of disputed factual findings recorded by the Commission. Where the Commission, after due consideration of materials and reports, forms an opinion that the applicant did not come with 'clean hands'-i.e., failed to make full and true disclosure-the High Court will not substitute its view on merits unless there is an error apparent on the face of the record. The Court applied this principle to the present facts, observing that the Commission's findings were specific and supported by material; accordingly, interference was unwarranted. [Paras 8, 9, 21]

The High Court will not interfere under Article 226 with the Commission's factual findings of non-disclosure absent an apparent error; the petitions are not maintainable on merits.

Procedural opportunity to explain additional documents under Section 245D - limits of enquiry under settlement procedure - Whether the petitioner was denied a fair opportunity to explain documents and whether the Commission was obliged to grant further time before rejecting the applications - HELD THAT: - The Court considered the petitioner's contention that one day's time to respond to bank statements and documents was insufficient. It held that procedural opportunities under Section 245D are designed to enable verification of the disclosure made in the settlement application, but such procedures do not entitle an applicant to extend enquiry beyond the scope of the stated disclosures. The record showed that the Commission afforded opportunities and considered reports and additional submissions; nonetheless it formed the view that critical facts remained undisclosed and that deeper investigation was warranted rather than an adhoc settlement. The Court concluded that the question of adequacy of opportunity did not vitiate the Commission's finding of non-disclosure, and the High Court should not reappraise those factual determinations. [Paras 13, 14, 15, 16]

The procedural opportunities afforded were not shown to vitiate the Commission's finding of non-disclosure; no interference is justified.

Final Conclusion: The Settlement Commission's rejection of the applications for failure to make full and true disclosure is upheld; the High Court will not reappraise the Commission's factual findings under Article 226 absent an apparent error. The writ petitions are dismissed.

Violation of principles of natural justice - reliance on unverified material available in public domain - obligation to furnish material relied upon to the party - production of additional evidence before the Tribunal (Rule 29, ITAT Rules) - remand for fresh adjudication by the Tribunal - mechanical/cut-and-paste order and repetition of earlier findings

Violation of principles of natural justice - reliance on unverified material available in public domain - obligation to furnish material relied upon to the party - Whether the Tribunal breached principles of natural justice by relying on internet/public-domain research not placed on record or furnished to the assessee and thereby requiring interference. - HELD THAT: - The Court found that the Tribunal, having undertaken a 'Google study' and summarised functions of the AdWords/Analytics platform, relied on material that was not brought to the notice of the appellant and which did not appear in the Tribunal's record. In light of Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963 and the settled obligation to afford a party an opportunity to meet evidence relied upon, the Bench held that using such unprovided material amounted to a violation of natural justice and fair play. The Court noted that particulars of the external material were not reflected in the Tribunal's order and that the assessee was not afforded an opportunity to rebut the fresh evidence which formed the basis of the Tribunal's conclusions. For these reasons the Court answered the substantial questions in favour of the assessee and set aside the impugned Tribunal order, remanding the matter for fresh adjudication with directions to permit production and confrontation of documents and material before final disposal. [Paras 17, 18, 19, 20, 21]

Tribunal's order set aside on grounds of breach of natural justice; matter remanded to the Tribunal for fresh adjudication and the assessee granted opportunity to file/add documents and to rebut any material relied upon by the Tribunal.

Mechanical/cut-and-paste order and repetition of earlier findings - remand for fresh adjudication by the Tribunal - Whether subsequent Tribunal orders that replicate and rely upon the earlier impugned order also warrant setting aside and remand. - HELD THAT: - The Court observed that a later batch of Tribunal orders materially repeated the reasoning and findings of the earlier impugned order which itself was found to be tainted by reliance on material not furnished to the assessee. Given that the second batch of orders were influenced by the earlier order and contained verbatim or substantially similar passages, the Court concluded that those orders likewise could not stand. The Court therefore set aside the subsequent orders and remanded all connected appeals to the Tribunal for fresh hearing, directing that any material to be relied upon by the Tribunal be made available to both parties before a final order is passed and permitting the filing of additional documents within a specified period. [Paras 31, 32, 34, 35, 36]

Subsequent Tribunal orders set aside and matters remanded for fresh adjudication; parties permitted to file/add documents and the Tribunal directed not to be influenced by the earlier impugned orders and to furnish any material it relies upon to both parties.

Production of additional evidence before the Tribunal (Rule 29, ITAT Rules) - obligation to furnish material relied upon to the party - Scope and application of Rule 29 (production of additional evidence) where the Tribunal itself has procured and relied upon external material. - HELD THAT: - The Court referred to Rule 29 of the ITAT Rules and held that if the Tribunal requires documents or evidence, or if a party was not given sufficient opportunity to adduce evidence, the Tribunal may allow production for reasons to be recorded. Here, the Tribunal relied on external/public-domain material without placing it before the parties or recording reasons in accordance with the Rule; consequently the Court treated the omission as fatal to the Tribunal's exercise and remanded the matters for adjudication in conformity with the Rule and the principles of natural justice. [Paras 18, 19, 20, 22]

Matters remitted to the Tribunal to permit production and confrontation of additional evidence in accordance with Rule 29 and to ensure any material relied upon is disclosed to the parties before final adjudication.

Final Conclusion: The impugned Tribunal orders are set aside for breach of natural justice by reliance on unprovided public-domain material and for mechanical repetition in subsequent orders; appeals allowed and matters remanded to the Income Tax Appellate Tribunal for fresh adjudication in accordance with law, with directions to disclose any material to be relied upon and to permit the parties to file/add documents and rebut such material.

Notice under Section 148 for reopening assessment - obligation to furnish reasons for reopening assessment - requirement to pass a speaking order on objections to reopening - reopening cannot be ordered merely for verification of transactions - escapement of income as justification for reassessment

Obligation to furnish reasons for reopening assessment - requirement to pass a speaking order on objections to reopening - The assessing officer's duty to dispose of the assessee's objections to a notice under Section 148 by passing a speaking order before proceeding with reassessment. - HELD THAT: - The Court applied the binding precedent in GKN Driveshafts that when a notice under Section 148 is issued the assessee, upon receiving reasons, is entitled to file objections and the assessing officer must dispose of those objections by passing a speaking order. In the present case the petitioner had raised a specific objection that the recorded reasons did not indicate escapement of income and that reopening appeared to be for mere verification. The first respondent did not address those objections on merits but only stated that approval had been obtained from the Joint Commissioner. That omission fails the mandate in GKN Driveshafts. Consequently the Court directed that the assessing officer must consider and decide the petitioner's objections by a reasoned, speaking order within four weeks from receipt of this order. The Court refrained from adjudicating the merits of reopening and left the other contentions open for determination by the assessing officer or in subsequent proceedings. [Paras 6, 7]

The assessing officer is directed to dispose of the assessee's objections by passing a speaking order within four weeks; failure to do so renders further proceedings premature.

Reopening cannot be ordered merely for verification of transactions - escapement of income as justification for reassessment - notice under Section 148 for reopening assessment - The correctness of reopening the assessments on the recorded reasons was not finally adjudicated and is remitted for fresh consideration. - HELD THAT: - Although the petition challenged the validity of the notices under Section 148 on the ground that the reasons do not disclose escapement of income and reopening appears to be for verification, the Court did not decide these contentions on merits. Instead, because the assessing officer has not passed a speaking order addressing the objections, the Court withheld interference with the notices and permitted the assessing officer to decide the objections after providing reasons. If the assessing officer rejects the objections by a speaking order, the petitioner is free to approach the Court again. All substantive contentions of the petitioner are therefore left open for adjudication in the speaking order or subsequent litigation. [Paras 7, 8]

Merits of the reopening are remitted for fresh consideration; the notices are not quashed at this stage and the petitioner's substantive contentions remain open.

Final Conclusion: Writ petitions disposed by directing the assessing officer to pass a reasoned speaking order on the petitioner's objections to the notices under Section 148 within four weeks; the Court refrained from quashing the notices and left substantive issues open for determination following that speaking order.

Eligibility for deduction under Section 10B (tax holiday for 100% export-oriented undertaking) - computer software - customized electronic data - processing and management of electronic data - Engineering and Design as notified by the CBDT - CBDT notification dated 26.9.2000 - research and development (R & D) activities - requirement of certificate from regulatory authority not requisite for Section 10B claim - binding effect of coordinate bench decisions and reference to larger bench

Computer software - customized electronic data - processing and management of electronic data - Engineering and Design as notified by the CBDT - eligibility for deduction under Section 10B (tax holiday for 100% export-oriented undertaking) - research and development (R & D) activities - CBDT notification dated 26.9.2000 - Activities of the assessee constitute 'computer software' / customized electronic data and fall within 'Engineering and Design' as notified, hence eligible for deduction under Section 10B. - HELD THAT: - The Court examined the nature of the appellant's activities - receipt of client specifications in electronic form, manipulation/processing by engineers, generation of outputs in electronic form (customized electronic data/CAD files) and export of those outputs. Applying the definitions in Explanation 2 to Section 10B and the Copyright Act notion of computer programme, the Court held that processing and management of electronic data and the development of software programmes/designs fall within the concept of 'computer software'. The CBDT notification dated 26.9.2000, which lists 'Engineering and Design' among services to be treated as customised electronic data, is a clarificatory inclusion intended to bring such IT enabled services within the ambit of Section 10B. The Court observed that R & D activities embedded in engineering and design also fall within the notified category and noted that earlier assessment years of the assessee were accepted by revenue on similar grounds. The Tribunal's insistence on technical certificates from regulatory authorities and its characterization of the assessee merely as a 'research collaborator' without appreciating that the end product exported was customized electronic data was rejected. In consequence, the appellant's exported outputs, being customized electronic data/computer software, satisfy the conditions for deduction under Section 10B. [Paras 32, 36, 40, 49, 52]

The appellant's activities qualify as computer software / customised electronic data within the meaning of Explanation 2 to Section 10B and as 'Engineering and Design' notified by the CBDT; the assessee is entitled to deduction under Section 10B.

Binding effect of coordinate bench decisions and reference to larger bench - CBDT circulars and committee recommendations - Tribunal ought to have followed earlier coordinate bench decisions and, where divergent, referred the matter to a larger bench; reliance on contrary approach was misplaced. - HELD THAT: - The Court noted that earlier decisions and administrative clarifications (including the Rangachari Committee recommendations and CBDT circular clarifying that R & D activities fall within 'Engineering and Design') supported the assessee's claim. Where the ITAT reached a view inconsistent with earlier coordinate-bench orders favorable to the assessee, the Tribunal should have referred the conflicting position to a larger bench rather than apply a fresh, differing interpretation. Having regard to precedent and the clarificatory circulars, the Court held that the Tribunal's divergence was unsustainable. [Paras 36, 46]

The Tribunal's failure to follow or refer departure from earlier coordinate-bench authority was erroneous; earlier authorities and clarifications support the assessee's entitlement.

Final Conclusion: Appeals allowed; questions of law answered in favour of the assessee and against the revenue for AY 2009-2010 (and connected appeals), holding that the exported customized electronic data / software produced by the assessee falls within 'Engineering and Design' as notified and is eligible for deduction under Section 10B; appeals filed by revenue in connected matters dismissed.

Maintainability of writ under Article 226 - judicial review of Settlement Commission's order for contravention of statute - full and true disclosure requirement for application under Section 245C - limits of Settlement Commission's power vis-a -vis Assessing Officer's power under Section 153A - usurpation of jurisdiction by Settlement Commission

Maintainability of writ under Article 226 - judicial review of Settlement Commission's order for contravention of statute - Whether the writ petition under Article 226 is maintainable to challenge the Settlement Commission's order - HELD THAT: - The Court held that writ jurisdiction under Article 226 is wide and not ousted merely because the Settlement Commission has passed an order. Judicial review in this Court concerns the decision-making process and is available where the Settlement Commission's order is alleged to be contrary to the provisions of the Act or where jurisdictional error is alleged. Accordingly, the contention that writ is per se not maintainable because the Settlement Commission adjudicated facts was rejected. The maintainability must be examined as a mixed question of law and fact, particularly where the question of the Settlement Commission's jurisdiction and conformity with statutory preconditions (notably full and true disclosure under Section 245C) is raised. [Paras 5, 23]

Writ petition is maintainable; the High Court may examine whether the Settlement Commission acted contrary to the Act.

Full and true disclosure requirement for application under Section 245C - limits of Settlement Commission's power vis-a -vis Assessing Officer's power under Section 153A - usurpation of jurisdiction by Settlement Commission - Whether the Settlement Commission exceeded its jurisdiction by settling the case despite lack of full and true disclosure and by effectively usurping the Assessing Officer's power of assessment under Section 153A - HELD THAT: - Section 245C makes 'full and true disclosure' a pre-condition for the Settlement Commission to entertain an application. The Court recorded that the Settlement Commission's own findings showed doubt about completeness of disclosure and recorded additional undisclosed income arising from search/seizure material which had not been disclosed in the application. The Court emphasised that while the Settlement Commission may examine mixed questions of fact and law relevant to entertainability, it cannot exercise the power of making a regular assessment vested in the Assessing Officer under Section 153A. Where material recovered in search indicates substantial undisclosed income and the application does not contain full and true disclosure, the correct course is to permit the Assessing Officer to proceed with assessment rather than allow the Settlement Commission to settle the dispute; permitting otherwise would defeat the statutory scheme. Applying these principles to the facts, the Court found that the Settlement Commission travelled beyond the scope of Sections 245C/245D and adjudicated matters which properly required assessment by the Assessing Officer. [Paras 18, 20, 30, 35, 36]

Settlement Commission exceeded jurisdiction by settling despite absence of full and true disclosure and by encroaching on assessing powers; its order is quashed and Assessing Officer is restored to proceed with assessments.

Final Conclusion: The Settlement Commission's order dated 31.07.2013 is quashed for being beyond jurisdiction; the petitioner-Department is permitted to proceed with regular assessment by the competent assessing authority for the years 2007-2008 to 2013-2014 in accordance with law.

Revision under section 264 - Maintainability of revision where alternate remedy of appeal exists - Interpretation of section 264(4)(a) - Effect of expiry of time for filing appeal on revisional jurisdiction - Rectification under section 154 - Requirement of a speaking and reasoned order

Revision under section 264 - Interpretation of section 264(4)(a) - Effect of expiry of time for filing appeal on revisional jurisdiction - Whether the Principal Commissioner could refuse to entertain the petitioner's revision application under section 264(1) on the ground that an alternate remedy of appeal to the Commissioner (Appeals) existed though the statutory period for filing that appeal had expired. - HELD THAT: - The Court examined the language and purpose of section 264(4)(a) and concluded that the two contingencies in that clause are not cumulatively required to bar revision. Clause (a) contemplates (i) a situation where an appeal lies and has not been made and the time to make such appeal has not expired, and (ii) alternatively, where the assessee has not waived his right of appeal. A plain reading shows that if the time for filing the appeal has expired, the bar in section 264(4)(a) does not operate to prevent revision; waiver is relevant only where the appeal period has not yet expired. In the present case the petitioner had not filed an appeal under section 246A and the 30-day period for filing such appeal had expired before filing the revision application; therefore the statutory bar in section 264(4)(a) against exercise of revisional power was inapplicable. The Revenue's contention that the petitioner could still seek condonation of delay and thereby an effective alternate remedy was rejected as conflating a discretionary remedy with a statutory right: after expiry of the 30-day period there is no automatic right of appeal but only a discretionary application for condonation which cannot be treated as equivalent to an unexpired right of appeal that would bar revision. The Court distinguished Dwarka Nath on its facts where no appeal lay to the Appellate Commissioner. The Court treated the rectification proceedings under section 154 as relevant background but found no allegation of mala fide or fraud that would preclude exercise of revisional power once the appeal period had expired. [Paras 15, 19, 20]

Principal Commissioner erred in rejecting the section 264 application on the ground of an available alternate appeal remedy where the statutory period for filing that appeal had expired; revision under section 264 was maintainable and the impugned order is unsustainable on that ground.

Requirement of a speaking and reasoned order - Rectification under section 154 - Maintainability of revision where alternate remedy of appeal exists - Whether the Principal Commissioner properly applied his mind and gave reasons for rejecting the revision application, particularly having regard to the pending/past rectification application under section 154 and the absence of any allegation of mala fides. - HELD THAT: - The Court held that the Principal Commissioner failed to consider the petitioner's case on merits and dismissed the revision application on a fallacious technical ground without a reasoned examination of the material available on record. Reliance on precedents (including this Court's decision in Universal Packaging and the Delhi High Court's decision in Vijay Gupta) supported the principle that the Commissioner must pass a speaking order applying his mind to whether the assessee was taxable on the impugned receipt and whether the mistake was bona fide and rectifiable. The Court observed that provisions for rectification and revision are intended to benefit the assessee and should not be mechanically used to force resort to appellate remedies where they are no longer available. Given that the rectification application had been rejected and there was no suggestion of fraud or mala fide, the Commissioner should have considered the revision application on merits and passed a reasoned order after affording a hearing. [Paras 16, 17, 21, 23]

Impugned order was non-speaking and bereft of proper consideration; it was set aside and the matter remitted for fresh decision on merits with an opportunity of hearing and for passing a reasoned order.

Final Conclusion: The order dated 12 February 2021 passed by the Principal Commissioner is set aside. The revision application filed under section 264 is restored for fresh disposal; Respondent No.2 is directed to decide it afresh on merits after hearing the petitioner and to pass a reasoned/speaking order in accordance with the Court's observations.

Entertainment of fresh claims on appeal - appellate powers under Section 250(4) of the Income tax Act - remand to the Assessing Officer for verification of claims - admissibility of deduction under Section 80JJAA - allowability and verification of prior period expenses - requirement of revised return for lodging fresh claims

Entertainment of fresh claims on appeal - admissibility of deduction under Section 80JJAA - requirement of revised return for lodging fresh claims - Validity of CIT(A)'s admission and allowance of the assessee's fresh claim under Section 80JJAA despite absence of the claim in the original return and without a revised return. - HELD THAT: - The Tribunal accepted the CIT(A)'s view that an appellate authority can entertain fresh claims. The CIT(A) examined the chartered accountant's report in Form 10DA and detailed particulars of new regular workmen (numbers, dates of joining, period of service and bank particulars) before allowing the deduction. The Assessing Officer had declined to consider the claim solely because it was not in the original or a revised return, relying on Goetze (India) Ltd.; the CIT(A) distinguished that approach and proceeded to verify the material. The High Court held that appellate authorities, exercising powers under Section 250(4), are empowered to call for and examine documents and evidence and, where a claim is otherwise sustainable in law and properly verified on appeal, entertain and decide it notwithstanding absence from the original return. Having found that the CIT(A) had scrupulously verified the material in relation to the Section 80JJAA claim, the Court sustained the CIT(A)'s allowance and set aside the Tribunal's remand insofar as it required fresh inquiry. [Paras 12, 13, 15, 16, 17]

CIT(A)'s admission and allowance of the Section 80JJAA claim is sustained; the Tribunal's remand on this issue is set aside.

Remand to the Assessing Officer for verification of claims - allowability and verification of prior period expenses - appellate powers under Section 250(4) of the Income tax Act - Whether the Tribunal was justified in remanding the prior period expenses claim to the AO for verification despite the CIT(A)'s detailed factual examination and partial allowance. - HELD THAT: - The CIT(A) examined the prior period expenses in detail, disallowing amounts where withholding tax was not deducted and certain items that did not relate to the year in issue, and allowed the remainder after item wise scrutiny. The Tribunal accepted that the CIT(A) could entertain fresh claims but nevertheless remanded the matter to the AO on the ground that the AO had not been given opportunity to examine the evidence. The High Court held that once the appellate authority has received, scrutinised and decided the evidence by applying the law (exercising its powers under Section 250(4)), a remand is unwarranted unless the Tribunal identifies what was deficient or wrong in that examination. The Court found no such deficiency and therefore upheld the CIT(A)'s factual and legal conclusions on prior period expenses and set aside the remand order. [Paras 11, 13, 14, 15, 17]

CIT(A)'s factual scrutiny and partial allowance of prior period expenses is sustained; the Tribunal's remand to the AO for re verification is set aside.

Final Conclusion: The Tribunal's order remanding the assessee's fresh claims (under Section 80JJAA and for prior period expenses) to the Assessing Officer is set aside; the High Court sustains the CIT(A)'s admission and allowance (subject to the adjustments recorded by the CIT(A)), answers the substantial questions of law in favour of the assessee and against the revenue, and disposes of the appeal accordingly.

Reopening of assessment - Change of opinion - Section 147 jurisdiction beyond four years - Failure to disclose fully and truly material facts - Reassessment invalid where issue was decided in original assessment - Requirement of tangible/new material to form belief of escapement of income - Objections disposal and reasonable time to approach Court (Asian Paints principle)

Reopening of assessment - Section 147 jurisdiction beyond four years - Failure to disclose fully and truly material facts - Change of opinion - Reassessment invalid where issue was decided in original assessment - Requirement of tangible/new material to form belief of escapement of income - Objections disposal and reasonable time to approach Court (Asian Paints principle) - Validity of reopening assessment under Section 147/148 and sustainment of reassessment framed beyond four years where the same issue was dealt with in the original assessment - HELD THAT: - The Court examined the reasons recorded for reopening and the material on record and held that jurisdiction under clause (a) of Section 147 beyond four years requires a reason to believe that income has escaped assessment and that such escapement was due to failure to disclose fully and truly material facts. The assessment record demonstrates that the claim under Section 54B was called for and the assessee furnished registered sale deed, agreement of purchase and bank particulars, and the original assessment order records that the AO examined these documents and allowed the deduction save for a small admitted shortfall which was treated separately. No new or tangible material was placed on record to show nondisclosure at the original assessment. The reassessment thus amounted to a review and an impermissible change of opinion by the AO. Reliance on the principles in CIT v. Kelvinator India Ltd and the Full Bench view that reassessment is invalid where the issue was raised and decided in favour of the assessee supports the conclusion. The Court also noted that the revenue did not afford the assessee reasonable time after disposal of objections as directed in Asian Paints, but the determinative defect was absence of new material justifying reopening. For these reasons the impugned notice and consequential assessment were without jurisdiction and liable to be quashed. [Paras 14, 15, 16, 17, 18]

Reopening and reassessment beyond four years quashed as a mere change of opinion in absence of any new/tangible material showing failure to disclose fully and truly material facts; impugned notice dated 31.03.2019 and assessment order dated 29.08.2019 set aside.

Final Conclusion: Writ allowed; the notice under Section 148 dated 31.03.2019 and the assessment order dated 29.08.2019 are quashed and set aside for want of jurisdiction as the reassessment constituted an impermissible change of opinion in absence of any new material justifying reopening.

Section 40(a)(ia) of the Income-tax Act - disallowance for non-deduction/non-payment of TDS - retrospective operation of Finance Act, 2010 amendment - curative proviso / remedial amendment - hardship to deductors in the last month of the previous year

Section 40(a)(ia) of the Income-tax Act - retrospective operation of Finance Act, 2010 amendment - disallowance for non-deduction/non-payment of TDS - Allowability of deduction for transport charges in respect of which TDS was deducted and paid after the close of the previous year but within the extended time permitted by the amendment effected by Finance Act, 2010, in Assessment Year 2005-06. - HELD THAT: - The High Court followed the binding decision of the Supreme Court in Commissioner of Income Tax, Kolkata v. Calcutta Export Company and applied its reasoning to the present facts. The Supreme Court held that the amendment made by Finance Act, 2010 is curative in nature, intended to remove unintended hardships caused by the original provision and the earlier 2008 amendment, and therefore should be given retrospective effect from the date when section 40(a)(ia) was inserted (with effect from Assessment Year 2005-06). The Court emphasised that the legislative purpose was to secure TDS compliance and to mitigate disproportionate consequences for taxpayers who had substantially complied with TDS obligations, particularly in cases involving deductions made in the last month of the previous year. Applying that ratio, the Tribunal's conclusion in favour of the assessee was correct and the disallowance under section 40(a)(ia) could not stand for AY 2005-06 where the conditions recognised by the remedial amendment were met.

The disallowance under section 40(a)(ia) in respect of transport charges for Assessment Year 2005-06 is not sustained; the Tribunal's order allowing the deduction is upheld.

Final Conclusion: The Tax Case Appeal is dismissed; the substantial questions of law are decided against the revenue and in favour of the assessee in light of the Supreme Court's ruling that the Finance Act, 2010 amendment to section 40(a)(ia) is curative and operates retrospectively from Assessment Year 2005-06.

Re-assessment under Section 148 of the Income Tax Act, 1961 - reference to the Settlement Commission under Section 245F(2) and stay of proceedings - proceedings before the Settlement Commission proceeded under Section 245D - cancellation of registration under Section 12AA of the Income Tax Act, 1961 - escapement of income under Explanation 2 clause (c) to Section 147 of the Income Tax Act, 1961

Reference to the Settlement Commission under Section 245F(2) and stay of proceedings - re-assessment under Section 148 of the Income Tax Act, 1961 - Whether the reassessment notice dated 06.02.2021 for Assessment Year 2014-15 could be acted upon notwithstanding the pending reference to the Settlement Commission and the stay of its proceedings. - HELD THAT: - The Court recorded that the assessment for the said year was already under reference to the Settlement Commission in terms of Section 245F(2) and that proceedings before the Settlement Commission had been stayed by the Supreme Court. In view of those pending proceedings and the stay, the issuance and operation of a fresh reassessment notice at this stage did not appear justified. On this prima facie consideration the Court restrained the respondents from proceeding with the impugned notice and ordered that the reassessment notice dated 06.02.2021 shall remain stayed, while permitting the respondents opportunity to file a detailed counter-affidavit within four weeks.

Impugned reassessment notice dated 06.02.2021 for AY 2014-15 stayed; respondents given four weeks to file counter-affidavit and matter listed along with connected writ petitions.

Cancellation of registration under Section 12AA of the Income Tax Act, 1961 - escapement of income under Explanation 2 clause (c) to Section 147 of the Income Tax Act, 1961 - Whether the cancellation of the trust's registration under Section 12AA and the consequent contention of escapement of income justified the impugned reassessment notice. - HELD THAT: - The Court noted that the order cancelling registration under Section 12AA dated 20.03.2019 was itself the subject of a pending writ petition before the Court and that there was no interim order in that writ. The respondents relied on the cancellation and the contention that exemption claimed under Section 11 amounted to escapement of income within Explanation 2 clause (c) to Section 147. The Court did not decide this contention on merits; instead it observed the existence of the parallel challenge to the cancellation and directed the respondents to file a detailed counter-affidavit so that these contentions may be examined. Thus the legal question as to the effect of the Section 12AA cancellation on the validity of the reassessment notice was left for further consideration after filing of the counter and listing with the connected writ petitions.

Contention based on cancellation under Section 12AA and alleged escapement of income not adjudicated on merits; left for fresh consideration after counter-affidavit and listing.

Final Conclusion: On prima facie consideration the High Court stayed the reassessment notice dated 06.02.2021 for Assessment Year 2014-15 because the assessment was already under reference to the Settlement Commission (with its proceedings stayed by the Supreme Court) and because the cancellation of registration under Section 12AA was the subject of a pending writ; respondents were granted four weeks to file a detailed counter-affidavit and the matter was listed with connected writ petitions.

Reopening of assessment under Section 147 - Reason to believe - Processing under Section 143(1) not amounting to scrutiny assessment - Borrowed satisfaction - Affidavit explanation of recorded reasons without introducing new grounds - Validity of sanction under Section 151

Reopening of assessment under Section 147 - Reason to believe - Processing under Section 143(1) not amounting to scrutiny assessment - Whether the Assessing Officer had sufficient 'reason to believe' to reopen assessment for A.Y. 2012-13. - HELD THAT: - The Court reviewed the recorded reasons which referred to information received from the investigation wing that the assessee sold shares of Karma Ispat Ltd. (a penny stock) and claimed long term capital gain. The Court held that where the original return was only processed under Section 143(1) (and not subjected to scrutiny assessment under Section 143(3)), the proviso to Section 147 does not apply and the AO is not required to produce fresh tangible material beyond examination of the return and accompanying documents to form a 'reason to believe'. Relying on settled precedent, the Court explained that 'reason' means cause or justification and that the AO's formation of belief is an administrative act which need not satisfy standards of final adjudication. On the facts, the AO independently examined the information regarding penny stock transactions, observed that price rise lacked supporting fundamentals and that the scrip was used for accommodation entries, and thereby had cause to believe that claimed LTCG may have escaped assessment. The Court also noted it cannot, at the notice stage, probe adequacy or sufficiency of materials underlying the belief. [Paras 15, 16, 21, 23]

The reopening under Section 147 was sustained as the AO had a sufficient reason to believe that income chargeable to tax had escaped assessment.

Borrowed satisfaction - Affidavit explanation of recorded reasons without introducing new grounds - Whether the reasons recorded for reopening were vitiated by being mere borrowed satisfaction or by impermissible supplementation through the revenue's affidavit. - HELD THAT: - The Court examined the recorded reasons and the affidavit filed by the revenue. It applied the principle that a tax officer's affidavit may be used to explain, elaborate or clarify the reasons recorded but cannot introduce new grounds or materials which are not found expressly or by implication in the recorded reasons. The Court found that the affidavit did not introduce new grounds but only clarified the nature of the investigative information (identification of syndicates, usage of Karma Ispat Ltd. for accommodation entries) and that the AO had applied his independent mind to the information. Consequently, the contention that the reopening was based on borrowed satisfaction or that the revenue impermissibly improved the recorded reasons by affidavit was rejected. [Paras 18, 19, 24]

The recorded reasons were not vitiated by borrowed satisfaction and the affidavit only clarified, without introducing new grounds; therefore the objection failed.

Validity of sanction under Section 151 - Whether the reopening was invalid for want of prior sanction under Section 151 where more than four years had lapsed. - HELD THAT: - The Court noted that sanction required under Section 151 (where more than four years have lapsed) had been given by the competent authority and a copy of the approval was provided to the assessee at the stage of disposal of objections. The Court concluded that the authorities concerned had applied their mind before granting approval and expressed satisfaction with the recorded reasons for reopening. Accordingly, the lack-of-sanction contention was rejected. [Paras 9, 25]

Sanction under Section 151 was validly obtained and the reopening was not rendered invalid for want of prior approval.

Final Conclusion: On the material before the Assessing Officer, including investigative information relating to penny-stock transactions and the AO's independent application of mind, there was a sufficient reason to believe that income chargeable to tax had escaped assessment for A.Y. 2012-13; objections that the reopening was based on borrowed satisfaction, impermissibly supplemented by affidavit, or void for want of sanction were rejected and the writ petition was dismissed.

Power to transfer cases under Section 127 - jurisdiction of the Assessing Officer - requirement of reasonable opportunity of hearing and recording reasons for transfer - effective and coordinated investigation as a valid ground for transfer - no vested right of an assessee to choose his Assessing Officer - e assessment (ITBA) constraints on assessment by JCIT / Addl. CIT - transfer of cases selected under Section 133A with impounded material to Central Charges (CBDT instruction)

Power to transfer cases under Section 127 - requirement of reasonable opportunity of hearing and recording reasons for transfer - effective and coordinated investigation as a valid ground for transfer - Validity of the impugned transfer order passed under Section 127(2) of the Act - HELD THAT: - The Court examined Section 127 and its procedural safeguards and noted that the power to transfer cases must be exercised for public purpose, not arbitrarily, and after adherence to natural justice. The authority's duty under clause (a) of sub section (2) is to record reasons and give the assessee a reasonable opportunity of hearing before passing the transfer order. The court reviewed the impugned order which recorded impounded incriminating material from survey and explained the need for coordinated investigation; it also recorded that objections were considered. Precedents establish that where reasons are bona fide and not arbitrary, judicial interference is limited. Applying these principles, the Court found no legal infirmity in the exercise of power under Section 127(2) and declined to quash the order. [Paras 24, 25, 26, 27, 33]

Impugned transfer order under Section 127(2) is lawful and will not be set aside.

Effective and coordinated investigation as a valid ground for transfer - transfer of cases selected under Section 133A with impounded material to Central Charges (CBDT instruction) - Whether centralization/transfer was impermissible because the action was only a survey under Section 133A (and not a search under Section 132) - HELD THAT: - The petitioner's submission that centralization is appropriate only for search cases was considered and rejected. The Court observed that transfer for effective and coordinated investigation may arise in circumstances other than search operations. The CBDT instruction (clause 2(vi)) directing transfer of cases selected under Section 133A having impounded material to Central Charges was noted and the impounded material found during survey was relied upon by the authority as a basis for centralization. The Court held that these factors legitimate centralization even where the factual origin was a survey. [Paras 9, 31, 32, 33]

Centralization/transfer pursuant to survey with impounded material was permissible; transfer is not confined only to search cases.

Jurisdiction of the Assessing Officer - no vested right of an assessee to choose his Assessing Officer - e assessment (ITBA) constraints on assessment by JCIT / Addl. CIT - Whether prior assignment to the JCIT, Gandhidham (by order dated 02.04.2019) precluded subsequent transfer to DCIT, Rajkot and whether system limitations (ITBA) justified transfer - HELD THAT: - The Court considered the contention that an earlier order assigning the cases to JCIT, Gandhidham barred subsequent transfer. It held that an earlier administrative assignment does not preclude review or re assignment where administrative/operational considerations and sufficient material justify transfer. The impugned order noted that JCIT could not undertake assessment functions on the ITBA platform (no PAN acquisition/notice issuance functionality) and relied on that operational constraint as a reason for centralization. Given the absence of a vested right to a particular AO and the recorded operational difficulties, the Court found no illegality in the subsequent transfer. [Paras 16, 18, 32, 33]

Earlier administrative assignment did not bar review and transfer; ITBA operational constraints constitute a permissible administrative consideration supporting transfer.

Requirement of reasonable opportunity of hearing and recording reasons for transfer - effective and coordinated investigation as a valid ground for transfer - Whether the assessee's allegations of prejudice, inconvenience and breach of Articles 14 and 19(1)(g) justified quashing the transfer order - HELD THAT: - The Court acknowledged that transfer to a far place may cause inconvenience but reiterated that an assessee has no right to choose the AO; reasons for transfer must be weighty to offset inconvenience. The impugned order recorded reasons and dealt with objections; it also explained that e assessments reduce practical prejudice as communications, notices and uploads occur electronically. Precedents were cited that courts will not interfere unless transfer is arbitrary, perverse or mala fide. Applying these principles, the Court found the objections insufficient to vitiate the transfer order. [Paras 12, 26, 27, 33]

Claims of prejudice and constitutional violation do not warrant quashing the transfer order; objections were considered and inadequately weighty to upset the transfer.

Final Conclusion: The writ petition and connected matters are dismissed. The impugned order of transfer under Section 127(2) is upheld and the interim relief stands vacated.

Power to direct central investigative agencies - maintainability of applications by official liquidator under section 290(n) of the Companies Act, 2013 - injunctive or restitutive orders pending criminal investigation

Power to direct central investigative agencies - Tribunal's competence to direct the Central Bureau of Investigation to investigate the alleged fraud. - HELD THAT: - The Tribunal held that it is confined to the powers conferred by the Companies Act, 2013 and therefore cannot issue directions to the CBI to investigate a matter. Although the application identified prima facie fraud and an investigation by police authorities was already underway with arrests and seized documents, the Tribunal concluded that directing the CBI is beyond its statutory jurisdiction under the Companies Act. Consequently, a request for a direction to the CBI was refused as outside the Tribunal's powers. [Paras 9, 10]

Direction upon the CBI to investigate was refused because the Tribunal lacks the statutory power to direct the CBI.

Maintainability of applications by official liquidator under section 290(n) of the Companies Act, 2013 - Whether the application brought by the Official Liquidator under section 290(n) was maintainable. - HELD THAT: - The Tribunal examined the scope of section 290(n), which authorises the liquidator to apply to the Tribunal for orders or directions necessary for winding up. The present petition sought directions for criminal investigation and refund of monies, matters which do not seek orders necessary for winding up. On that basis the Tribunal found the present application was not maintainable under section 290(n) and dismissed it on that ground. [Paras 11, 13]

Application under section 290(n) was held not maintainable and dismissed.

Injunctive or restitutive orders pending criminal investigation - Whether the Tribunal should direct the Respondent bank to refund the invested amount. - HELD THAT: - Noting that a criminal investigation was in progress (including arrests and recovery of incriminating documents) and that the subject-matter of the refund claim was the subject of that investigation, the Tribunal declined to order restitution against the bank. The Tribunal observed that since investigation and related proceedings are underway, it would not be appropriate to grant the prayer for refund in the present application. [Paras 8, 12]

Prayer for direction to the bank to refund the money was declined as it was the subject of an ongoing investigation.

Final Conclusion: The application by the Official Liquidator was dismissed as not maintainable: the Tribunal cannot direct the CBI to investigate, the petition did not fall within the scope of section 290(n) of the Companies Act, 2013, and no direction was issued for refund as the matter is the subject of an ongoing criminal investigation; parties remain free to approach appropriate forums for investigation by the CBI or other relief.

Prima facie case - framing of charge - criminal breach of trust - cheating - money circulation scheme - application of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 - Protection of Depositors Interest Act, 2005 - cognizance and role of Competent Authority - relevance of SEBI/NCLT/SAT orders at the stage of framing charge

Prima facie case - framing of charge - criminal breach of trust - cheating - relevance of SEBI/NCLT/SAT orders at the stage of framing charge - Framing of charges under offences of criminal breach of trust and cheating against the applicants was legally justified on prima facie material - HELD THAT: - Having examined the charge-sheets and witness statements the Court found evidence that the applicants, as directors, received money from investors and promoted schemes promising higher returns, and witnesses stated they were cheated. The SEBI order of 12.07.2013 noting illegal collections is part of the charge-sheet and supports the prosecution case; subsequent orders and litigation (SEBI final order, NCLT, SAT, Supreme Court stay) are not placed on the charge-sheet and therefore could not be treated at the framing stage. The Court held that allegations of dishonest intention cannot be discarded at this stage and that the acts alleged are covered by the definition of criminal breach of trust and cheating (Sections 405/415 IPC), so the trial Court was justified in framing charges based on the available prima facie material. [Paras 18]

Charges for criminal breach of trust and cheating were rightly framed as there is a prima facie case against the applicants.

Money circulation scheme - application of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 - framing of charge - Activity of the company prima facie fell within the definition of a money circulation scheme and charges under the Act, 1978 were properly framed - HELD THAT: - Applying the test in State of West Bengal v. Swapan Kumar Guha, the Court observed that a money circulation scheme requires a systematic programme of action with reciprocal promises dependent on events or contingencies related to enrolment of members. The bond/certificate issued by the company promised payment of a higher maturity amount and the promotional activity of selling such certificates indicated a scheme within Section 2(c). On the material before it, the Court concluded there was sufficient evidence to treat the alleged activity as covered by Section 2(c) and consequently to frame charges under Section 3 read with Section 4 of the Act, 1978. [Paras 21, 22]

Prima facie the company's activity falls within a 'money circulation scheme' and framing of charges under the Act, 1978 was justified.

Protection of Depositors Interest Act, 2005 - cognizance and role of Competent Authority - framing of charge - prima facie case - Filing of FIR and framing of charge under Section 10 of the Protection of Depositors Interest Act, 2005 did not require a prior report of the Competent Authority and prima facie case existed for such charge - HELD THAT: - The Court examined the statutory scheme and observed that Section 13 of the Act empowers the Special Court to take cognizance and that no procedure for filing complaints is prescribed in the Act, implying applicability of Cr.P.C. procedures. Consequently, a report of the Competent Authority is not a condition precedent for lodging an FIR or framing charge. On the material before it the Court found evidence that depositors were defrauded and therefore that there was a prima facie case to frame charges under Section 10 of the Act, 2005. [Paras 23]

Absence of a Competent Authority report is not fatal; prima facie case existed to frame charge under the Act, 2005.

Final Conclusion: After considering the charge-sheets, witness statements and material placed before it, the High Court held that there was sufficient prima facie evidence to justify framing of charges against the applicants for criminal breach of trust and cheating (IPC), for offences under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978, and under the Protection of Depositors Interest Act, 2005; accordingly the revision petitions were dismissed and the trial Court's order framing charges was upheld.

Operational debt and default - initiation of Corporate Insolvency Resolution Process under Section 9 - service of statutory demand notice under Section 8 - limitation for filing Section 9 application - pecuniary jurisdiction of the Adjudicating Authority - appointment of Interim Resolution Professional - moratorium under Section 14 - payment of security to Interim Resolution Professional

Operational debt and default - service of statutory demand notice under Section 8 - The Operational Creditor proved existence of an operational debt and default by the Corporate Debtor and that no dispute was brought to its notice in response to the statutory demand. - HELD THAT: - The Operational Creditor produced invoices and a ledger extract evidencing the principal and interest claimed. A statutory demand in Form 3/4 was sent and received by the Corporate Debtor, and an affidavit under Section 9(3)(b) stated there was no reply or pending dispute. The Corporate Debtor did not appear at successive hearings. On these materials the Tribunal found the debt to be an operational debt and that the Corporate Debtor had committed default in repayment. [Paras 3, 5, 9, 10]

Existence of operational debt and default established; no dispute shown in response to the demand.

Limitation for filing Section 9 application - The Section 9 application was within the period of limitation. - HELD THAT: - The invoices relied upon were issued in April and June 2017 and the application was filed on 16.12.2019. The Tribunal considered these dates and the ledger extract filed by the Operational Creditor and concluded that the petition falls within the limitation period for instituting a Section 9 application. [Paras 9]

Section 9 application held to be filed within limitation.

Pecuniary jurisdiction of the Adjudicating Authority - The Tribunal had pecuniary jurisdiction to entertain the application. - HELD THAT: - The pecuniary jurisdictional threshold was enhanced from Rs. 1 lakh to Rs. 1 crore effective 24.03.2020, but the present application was filed on 16.12.2019. The Tribunal therefore found that it had jurisdiction to hear the petition filed prior to the enhancement. [Paras 11]

Adjudicating Authority possessed pecuniary jurisdiction over the petition as filed.

Initiation of Corporate Insolvency Resolution Process under Section 9 - appointment of Interim Resolution Professional - The petition under Section 9(5) was admitted and an Interim Resolution Professional was appointed. - HELD THAT: - Applying the findings that an operational debt existed, default had occurred, no dispute was shown and the petition was within limitation and within its pecuniary jurisdiction, the Tribunal admitted the Section 9 petition under Section 9(5) of the Code. The Tribunal, noting that the Operational Creditor had not proposed an IRP, appointed an Interim Resolution Professional from the list furnished by the IBBI subject to disclosure and disciplinary checks. [Paras 12, 16]

Application admitted under Section 9(5); Interim Resolution Professional appointed subject to required disclosures and absence of pending disciplinary proceedings.

Moratorium under Section 14 - Moratorium under Section 14 was directed to follow from the date of the admission order and its scope and duration were specified. - HELD THAT: - Consequent to admission of the Section 9 application, the Tribunal applied the moratorium provisions, restraining institution or continuation of suits or proceedings, transfer or disposal of assets, enforcement of security interests and recovery of property by lessors, while noting statutory exceptions and the provisions preserving supply of essential goods and services. The Tribunal also recorded the duration principle that the moratorium continues until completion of the CIRP unless terminated earlier by approval of a resolution plan or liquidation order. [Paras 12, 13, 14]

Moratorium under Section 14 directed with its statutory scope and duration.

Payment of security to Interim Resolution Professional - The Operational Creditor was directed to pay security to the Interim Resolution Professional to meet expenses of the CIRP. - HELD THAT: - The Tribunal directed the Operational Creditor to deposit a specified sum with the Interim Resolution Professional upon her filing the necessary declaration under the Code, to enable performance of functions in accordance with the IBBI Regulations. [Paras 15]

Operational Creditor directed to pay security to the Interim Resolution Professional to meet out CIRP expenses.

Final Conclusion: The Section 9 petition filed by the Operational Creditor is admitted; the Corporate Insolvency Resolution Process is initiated, an Interim Resolution Professional is appointed subject to required disclosures, the moratorium under Section 14 is directed to follow, and the Operational Creditor is directed to furnish the prescribed security to the Interim Resolution Professional; the Registry is directed to communicate the order to relevant parties and IBBI.

Duties of Resolution Professional to manage the corporate debtor as a going concern - preservation and protection of assets under Section 25 of the Insolvency and Bankruptcy Code - jurisdiction under Section 60(5)(c) of the Insolvency and Bankruptcy Code to entertain questions arising out of or in relation to insolvency resolution proceedings - claims under Section 60(5)(b) as right to payment or remedy for breach - release of goods belonging to third parties held by the corporate debtor - equitable refund and interest as remedy for non-performance of contract - first right of refusal in post-admission lease/continuation arrangements - CIRP costs and their priority in the insolvency waterfall - doctrine of unconscionability and abuse of dominant position in CIRP transactions

Jurisdiction under Section 60(5)(c) of the Insolvency and Bankruptcy Code to entertain questions arising out of or in relation to insolvency resolution proceedings - claims under Section 60(5)(b) as right to payment or remedy for breach - Whether the Adjudicating Authority has jurisdiction under Section 60(5)(c) (and/or 60(5)(b)) of the Code to entertain and grant the reliefs claimed by the applicant arising from termination of MoU and non performance of the lease entered into during CIRP. - HELD THAT: - The Tribunal held that disputes which arise out of or in relation to the insolvency resolution process fall within the jurisdiction conferred by Section 60(5)(c), and claims for payment or remedies for breach fall within the wide definition of "claim" under Section 3(6) and thus within Section 60(5)(b). The court analysed the nature of the grievances - termination of a pre CIRP MoU, non performance of a lease executed during CIRP, retention of goods belonging to a third party and the demand/receipt of monies by the RP - and concluded these matters arose in relation to the CIRP and involved CIRP costs/arrangements. The Tribunal relied on the Code's objectives (including balancing stakeholders and maximisation of value) and precedent recognising limited judicial review of CoC/RP decisions to hold that the Authority had jurisdiction to adjudicate and grant appropriate reliefs, including directions for return of money and goods or continuation/renewal of arrangements under supervision of the RP/new RP. [Paras 25, 26]

The Authority has jurisdiction under Section 60(5)(c) (and Section 60(5)(b) for claims) to entertain and decide the applicant's grievance and to grant remedies including refund and release of goods or directions to continue/renew arrangements.

Duties of Resolution Professional to manage the corporate debtor as a going concern - preservation and protection of assets under Section 25 of the Insolvency and Bankruptcy Code - doctrine of unconscionability and abuse of dominant position in CIRP transactions - Whether the Resolution Professional breached duties in the conduct of CIRP by failing to preserve assets, by coercively extracting payments and by obstructing the applicant's operation of the plant. - HELD THAT: - On the material before it the Tribunal found multiple deficiencies in the RP's conduct: inadequate communication to CoC about operational status, acceptance of payments from the applicant for periods when the plant was non operational, failure to take demonstrable steps to protect assets (including absence of FIR/insurance steps despite alleged theft), and a termination of earlier arrangements without adequate justification. The Tribunal observed that the RP's conduct, with the tacit approval of the CoC, amounted to coercion/undue influence or abuse of a dominant position to extract monies from the applicant and failed to discharge obligations under Sections 17, 18, 20 and 25. The Bench, however, refrained from further adverse observations because a replacement RP had been appointed in related proceedings. [Paras 20, 21, 23, 24]

The Tribunal concluded that the RP failed in his duties to manage the corporate debtor as a going concern and to preserve/protect assets, and that the conduct amounted to misuse of position; ancillary adverse observations were limited because a new RP had been appointed.

Release of goods belonging to third parties held by the corporate debtor - equitable refund and interest as remedy for non-performance of contract - first right of refusal in post-admission lease/continuation arrangements - What reliefs should be granted to the applicant for the RP's non performance and retention of the applicant's goods? - HELD THAT: - Balancing the findings on jurisdiction and RP's conduct, the Tribunal directed immediate release of all goods belonging to the applicant that were held by the corporate debtor. The new RP was directed to examine the possibility of running the plant on lease or by another arrangement with the applicant, granting the applicant a first right of refusal; commercial terms to be mutually agreed. If the applicant refuses such an arrangement, the Tribunal directed refund of the amount paid by the applicant, with interest at 7% per annum from date of receipt until payment. The Tribunal treated the sums received as relating to CIRP costs/interim finance and within its power to order reimbursement; it also left open enforcement steps and permitted the applicant to return to the Authority in case of delay or non compliance. [Paras 27, 29]

Immediate release of the applicant's goods; the new RP to explore lease/arrangement with applicant with first right of refusal; if applicant declines, refund of the paid amount with interest at 7% p.a.; applicant may approach the Authority for enforcement.

Final Conclusion: The application is allowed. The Tribunal found it had jurisdiction under Section 60(5) of the Code to adjudicate the dispute, found the erstwhile RP's conduct deficient in preserving assets and managing the debtor as a going concern, ordered immediate release of the applicant's goods, directed the new RP to give the applicant first right of refusal to run the plant (commercial terms to be mutually agreed), and in default of such arrangement ordered refund of monies paid with interest at 7% p.a.; liberty was given to the applicant to approach the Authority for enforcement of directions.

Applicability of the moratorium under section 14(1) of the Insolvency and Bankruptcy Code, 2016 - prohibition on institution or continuation of proceedings against the corporate debtor - supremacy of the Insolvency and Bankruptcy Code under section 238 - exception for writ jurisdiction of the High Courts and Supreme Court

Applicability of the moratorium under section 14(1) of the Insolvency and Bankruptcy Code, 2016 - prohibition on institution or continuation of proceedings against the corporate debtor - Moratorium under section 14(1) applies to certificate proceedings initiated against the corporate debtor and restrains further action thereunder during the moratorium. - HELD THAT: - The Tribunal noted that section 14(1) declares a moratorium from the insolvency commencement date prohibiting, inter alia, the institution of suits or continuation of pending suits or proceedings against the corporate debtor, including execution of any judgment, decree or order by any authority. Applying this provision, the Tribunal held that proceedings of whatever nature pending before any Court, Tribunal or Authority are covered by the moratorium. The Tribunal observed that the only carve out is the writ jurisdiction of the High Courts and the Supreme Court. In view of the ongoing CIRP and the moratorium having kicked in on the date of admission of the company petition, the Tribunal found it appropriate to restrain the District Certificate Officer from proceeding further with the Certificate Case until the moratorium under section 14(1) ceases to operate. [Paras 6, 7, 9]

The Certificate Case proceedings are restrained until the moratorium under section 14(1) of the IBC ends.

Supremacy of the Insolvency and Bankruptcy Code under section 238 - exception for writ jurisdiction of the High Courts and Supreme Court - Section 238 establishes that the Code will have effect notwithstanding inconsistencies in other laws, reinforcing the applicability of the moratorium to proceedings before other authorities; writ jurisdiction remains an exception. - HELD THAT: - Relying on section 238, the Tribunal emphasised that the provisions of the Insolvency and Bankruptcy Code override inconsistent provisions of other laws for the time being in force. Consequently, authorities such as the District Certificate Officer are bound by the moratorium imposed under the Code. However, the Tribunal recorded that the moratorium does not impinge upon the writ jurisdiction of High Courts and the Supreme Court, which remains outside the prohibition. [Paras 7, 8]

The IBC's provisions prevail over inconsistent laws; the moratorium therefore binds non writ authorities, subject only to the writ jurisdiction exception.

Final Conclusion: Interim relief granted restraining the District Certificate Officer from proceeding further with the Certificate Case against the corporate debtor until the moratorium under section 14(1) of the Insolvency and Bankruptcy Code, 2016 ceases to operate; parties directed to file replies and matter listed for further hearing.

Ownership of assets in the liquidation estate - entitlement of successful auction purchaser to removed goods sold in e-auction - presumption by the Liquidator that goods found on corporate debtor's premises belong to the corporate debtor until proved otherwise - requirement of distinct documentary or physical identification to establish ownership of goods - liquidator's duty to undertake due diligence before taking or permitting dispossession

Entitlement of successful auction purchaser to removed goods sold in e-auction - ownership of assets in the liquidation estate - Whether the successful auction purchaser was entitled to remove the aluminium scrap alleged to be included in Block 2 of the auction sale. - HELD THAT: - The auction notice and the e-auction documents described Block 2 as including miscellaneous scrap materials lying in the yard outside different shops; that description was present in the tender document and repeated in the clarification dated 16.01.2020. However, the aluminium scrap in dispute was lying inside various shops/godowns and the ownership of that scrap could not be conclusively established from the materials on record. The successful auction purchaser therefore could not be shown to have a right to take away scrap which did not clearly form part of the auctioned assets. On this basis the application by the purchaser seeking declarations and reliefs to remove the scrap was unsustainable and dismissed. [Paras 23, 24, 25, 26]

The successful auction purchaser is not entitled at this stage to remove the aluminium scrap inside the various shops; the purchaser's I.A. is dismissed.

Requirement of distinct documentary or physical identification to establish ownership of goods - presumption by the Liquidator that goods found on corporate debtor's premises belong to the corporate debtor until proved otherwise - Whether Rishabraj Logistics Limited had established ownership of the aluminium scrap such as to entitle it to remove the goods or to prevent their sale. - HELD THAT: - Documents relied upon by Rishabraj Logistics (invoices and alleged agreements/addenda) did not conclusively identify the scrap in question. Although invoices contained container/seal/BL identifiers, Rishabraj failed at this stage to establish that the goods presently on site were the same imported goods. The alleged tenancy/rental paperwork did not demonstrate transfer of ownership (no rent, only reimbursement of incidental expenses). In these circumstances, ownership could not be conclusively determined and the Liquidator was entitled to treat the scrap as part of the liquidation estate until ownership was proved otherwise. [Paras 21, 24]

Rishabraj Logistics Limited has not established ownership; the scrap shall be deemed part of the liquidation estate until ownership is conclusively proved.

Liquidator's duty to undertake due diligence before taking or permitting dispossession - presumption by the Liquidator that goods found on corporate debtor's premises belong to the corporate debtor until proved otherwise - Whether the Liquidator's application for directions to remove or secure the scrap and for assistance should be granted, and what further steps the Liquidator must take. - HELD THAT: - Because ownership was not conclusively established, the Tribunal could not direct third parties to remove the scrap nor order its release. The Tribunal held that the aluminium scrap shall be deemed part of the liquidation estate until proven otherwise, dismissed the Liquidator's immediate prayers for removal, and directed the Liquidator to conduct further due diligence to establish ownership before filing further applications. [Paras 27, 28]

The Liquidator's prayers for directions to remove the scrap are dismissed; the Liquidator must undertake further due diligence to ascertain ownership before taking further steps.

Final Conclusion: The applications by the purchaser and by the Liquidator are dismissed: the successful auction purchaser has no present right to remove the disputed aluminium scrap; Rishabraj Logistics has not proved ownership; the scrap is to be treated as part of the liquidation estate until ownership is conclusively established and the Liquidator is directed to undertake further due diligence.

CENVAT credit as concession not a vested right - Time-bar for availing CENVAT credit under Rule 6(1) of the CENVAT Credit Rules, 2017 - Conversion of CENVAT credit into input tax credit and necessity of TRAN-1 - Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - treatment of pre-deposit - Authority of the Designated Committee under SVLDRS to determine and record estimates in Form SVLDRS-2/SVLDRS-3

Time-bar for availing CENVAT credit under Rule 6(1) of the CENVAT Credit Rules, 2017 - CENVAT credit as concession not a vested right - Claimed CENVAT credit of Rs. 4,15,14,081/- could not be treated as a valid pre-deposit under the SVLDRS because it was time barred and thus not eligible for appropriation. - HELD THAT: - The Court held that the invoices relied upon related to years well beyond the one year period permitted by Rule 6(1) of the CENVAT Credit Rules, 2017 and therefore the claim to CENVAT credit had lapsed. The judgment emphasises that CENVAT credit is a concession and not a vested right, and must be availed within the time limits and conditions prescribed by the CENVAT Credit Rules and transitional provisions (including filing of TRAN 1 where relevant). The Single Judge's direction to treat the claimed CENVAT credit as pre deposit under the Scheme failed to consider the statutory time bar and the replacement regime effective from 1.7.2017; accordingly the claim could not be appropriated as a pre deposit under SVLDRS. [Paras 24, 25, 28, 30, 33]

The respondent was not entitled to have the claimed CENVAT credit treated as pre deposit under the Scheme because the claim was time barred under Rule 6(1) of the CENVAT Credit Rules, 2017 and thus inadmissible.

Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - treatment of pre-deposit - Authority of the Designated Committee under SVLDRS to determine and record estimates in Form SVLDRS-2/SVLDRS-3 - The Designated Committee's estimate and consequent Form SVLDRS-3 reflecting disallowance of the claimed CENVAT credit was legally sustainable and the Single Judge erred in directing modification of SVLDRS-3 to give credit for the time barred CENVAT claim. - HELD THAT: - The Court found that the Designated Committee acted within the scope of the Scheme in estimating the amount payable after disallowing the claimed CENVAT credit which was inadmissible under the CENVAT rules. The Single Judge's order to accept the declaration as final and to issue a modified SVLDRS 3 giving credit for the disputed amount was contrary to the statutory limitation on the credit claim and to the Committee's function of determining admissible pre deposits under the Scheme. Given that the respondent had been afforded opportunity of hearing and that the claim was legally unsustainable, interference with the Committee's order was unwarranted. [Paras 26, 31, 33]

The Designated Committee's action in disallowing the time barred CENVAT credit in Form SVLDRS 3 is upheld and the Single Judge's direction to modify SVLDRS 3 is set aside.

Final Conclusion: Writ appeal allowed. The Single Judge's order directing modification of Form SVLDRS 3 and acceptance of the claimed CENVAT credit as pre deposit is set aside; the disputed CENVAT credit was time barred under Rule 6(1) of the CENVAT Credit Rules, 2017 and the Designated Committee's estimate disallowing that credit stands upheld.

Liability for service tax on free services and warranty labour - Cenvat Credit Rules, 2004 - reversal under Rule 6(3)(i) - notional entries and separate profit centre accounting - VAT at point of sale and exclusion of dealer margin from service tax - binding effect of final departmental orders and Commissioner (Appeals) decisions

Liability for service tax on free services and warranty labour - Cenvat Credit Rules, 2004 - reversal under Rule 6(3)(i) - Whether the appellant was liable to reverse Cenvat credit (and thereby liable for service tax) on free services and warranty labour provided without consideration under Rule 6(3)(i) of the Cenvat Credit Rules, 2004. - HELD THAT: - The Tribunal examined the Department's contention that free service and warranty labour constituted taxable services requiring reversal of credit under Rule 6(3)(i). The appellant's case, accepted by the Tribunal, was that such services were rendered without consideration, that any amounts appearing in the service centre accounts were by way of notional entries under a 'separate profit centre' mechanism, and that the corresponding costs/income were settled in head office books and reflected in the product's sale price. The Tribunal relied on earlier final orders of the Department and decisions of the Commissioner (Appeals) in identical matters which held that no service tax is leviable on free services and that amounts representing dealer margin (already subject to sales tax/VAT at sale) cannot be subjected to service tax. Noting that those orders had attained finality and that the Department had itself dropped similar demands, the Tribunal found that confirmation of the demand under Rule 6(3)(i) was not sustainable. The Tribunal therefore accepted the appellant's submissions that no taxable consideration was received for the free/warranty services and that reversal under Rule 6(3)(i) was not warranted on the facts and consistent departmental decisions.

Demand confirmed under Rule 6(3)(i) reversed and the appeal allowed; the confirmed demand of Rs. 23,725/- set aside.

Final Conclusion: The Tribunal allowed the appeal, setting aside the demand under Rule 6(3)(i) of the Cenvat Credit Rules, 2004 in respect of free service and warranty labour on the ground that no taxable consideration was received and in view of identical departmental and appellate decisions which had attained finality.

Priority of secured creditor over Crown debt/excise dues - liability of successor-in-interest for excise dues - proviso to section 11 of the Central Excise Act concerning transfer or disposal of business - auction purchaser of mere landed assets not liable for excise dues arising from manufacture - effect of DRT/RDDB Act sale confirmation on statutory liabilities

Priority of secured creditor over Crown debt/excise dues - auction purchaser of mere landed assets not liable for excise dues arising from manufacture - Whether an auction purchaser of land (purchased pursuant to RDDB Act proceedings before the DRT) is liable to pay excise duty dues of the erstwhile owner. - HELD THAT: - The Court held that a secured creditor's priority is superior to Crown debts/excise dues and that an auction purchaser who acquires only land (and not the entire unit or business) cannot be fastened with the excise liabilities of the erstwhile owner. The decision relies on the Supreme Court's reasoning in Rana Girders and the principles explained in SICOM and related authorities that (i) excise dues arise from manufacture and are not charges arising out of land or building or plant and machinery per se, and (ii) a purchaser becomes liable for such statutory dues only if the entire unit/business is purchased as a going concern or if a statute specifically creates a first charge. Applying those principles, the Court found that the petitioner purchased only the landed asset by DRT auction and did not become a successor of the borrower's business; therefore excise liabilities could not be imposed on the petitioner. [Paras 27, 28, 31, 32, 33]

Petitioner, having purchased only the land and not the business, is not liable to pay excise duty dues of the erstwhile owner.

Proviso to section 11 of the Central Excise Act concerning transfer or disposal of business - effect of DRT/RDDB Act sale confirmation on statutory liabilities - Whether the proviso to section 11 of the Central Excise Act applies to the petitioner's purchase so as to render the petitioner liable for excise dues. - HELD THAT: - The Court examined the proviso to section 11 which permits attachment and sale of excisable goods in the custody or possession of a successor when there is a transfer or disposal of business or change in ownership of the business. The Court accepted the reasoning in Gharkul Industries that the proviso contemplates transfer or disposal of a business or trade and does not apply to mere transfer of assets. On the facts, the petitioner acquired only landed assets by way of a DRT auction and did not acquire the business or trade of the borrower. Consequently, the proviso to section 11 is not attracted and cannot be invoked to fasten excise liability on the petitioner. [Paras 29, 30, 31, 33]

Proviso to section 11 is not attracted as the petitioner purchased only assets (land) and not the business; therefore the proviso cannot render the petitioner liable for excise dues.

Effect of DRT/RDDB Act sale confirmation on statutory liabilities - auction purchaser of mere landed assets not liable for excise dues arising from manufacture - Whether the impugned notices by the Central Excise Department seeking recovery of excise dues from the petitioner ought to be quashed. - HELD THAT: - Having concluded that the petitioner is not liable for the excise dues because it purchased only land and not the entire business, and that the proviso to section 11 does not apply, the Court found the department's notices demanding excise dues from the petitioner to be without legal foundation. The Court also distinguished decisions relied upon by the Revenue (including a Nagpur Bench decision) on the ground that they did not consider the Supreme Court's authority in Rana Girders or post-date statutory amendments creating first-charge provisions. In consequence, the impugned notices were held to be liable to be set aside and any recovery from the petitioner directed to be refunded. [Paras 32, 33, 34, 36, 37]

Impugned notices demanding excise dues from the petitioner are quashed and set aside; any recovery from the petitioner is to be refunded.

Final Conclusion: Writ petition allowed. The notices issued by the Central Excise Department seeking recovery of excise dues from the auction purchaser (petitioner) are quashed and set aside because the petitioner purchased only the land (and not the entire business) in DRT/RDDB Act proceedings and, on the authorities relied upon, cannot be made liable for the erstwhile owner's excise liabilities; any recovery made from the petitioner is to be refunded.

Compounded Levy Scheme - liability under scheme despite cessation of production - option to pay under Rule 96ZP(3) versus payment on actual production - laches / delay in seeking judicial relief

Compounded Levy Scheme - liability under scheme despite cessation of production - Whether the petitioner, having opted for the Compounded Levy Scheme, was liable to pay excise duty for the whole year despite cessation of production on 26.04.1999. - HELD THAT: - The Court held that the petitioner had voluntarily opted for the Compounded Levy Scheme and was bound by its terms and conditions. The Supreme Court observations in Bhuwalka Steel (paras 45-47) addressed the broader question of whether an assessee may switch from lump-sum monthly payment to duty on actual production, but did not deal with the specific terms of the Compounded Levy Scheme as applied to the petitioner. The High Court found that the Apex Court had referred certain questions to a larger Bench and had not granted relief that would displace the contractual/ statutory consequences of the petitioner's prior election under the Scheme. In these circumstances, and in view of the admitted closure of the production unit from 26.04.1999 coupled with the petitioner's earlier election to pay under the Scheme, the petitioner remained liable to pay duty for the entire year in accordance with the Scheme as framed under the Act and Rules. [Paras 12, 13]

Petitioner liable to pay excise duty for the whole year in accordance with the Compounded Levy Scheme; Supreme Court pronouncements cited did not nullify the petitioner's liability under the Scheme.

Laches / delay in seeking judicial relief - Whether the writ petition was barred by delay and laches. - HELD THAT: - The Court recorded that the impugned order dated 28.07.2011 had been communicated, that appellate and tribunal proceedings showed the petitioner's address and participation, and that the present writ petition was filed after a lapse of about seven and a half years. Having found that notice and orders were delivered or affixed in conformity with procedure and that the petition was belated, the Court concluded that the writ petitions were barred by laches and delay. [Paras 8, 13]

Writ petitions dismissed as barred by laches for undue delay in filing.

Final Conclusion: Writ petitions dismissed both on merits-petitioner bound by the Compounded Levy Scheme and liable to pay duty for the year-and on the ground of laches for inordinate delay in approaching the Court.

Deposit as condition for continuation of proceedings - dismissal for non-compliance with court direction - expeditious disposal of appeals on compliance

Deposit as condition for continuation of proceedings - dismissal for non-compliance with court direction - Direction to the respondent to deposit an additional sum within a specified period and consequence of non-deposit - HELD THAT: - Having considered the peculiar facts and circumstances, the Court directed the respondent to deposit a further sum of money within four weeks. The Court made it clear that failure to comply with the deposit direction within the stipulated time would attract the consequence that the appeals pending before the Appellate Authority shall stand dismissed. The direction operates as a condition precedent for the continuation of the appellate proceedings and the sanction for non-compliance is dismissal of the appeals.

Respondent directed to deposit the specified sum within four weeks; non-deposit will result in dismissal of the appeals pending before the Appellate Authority.

Expeditious disposal of appeals on compliance - Obligation on the Appellate Authority to endeavour expeditious disposal of the appeals upon compliance with the deposit direction - HELD THAT: - The Court provided that if the respondent deposits the directed sum within the stipulated time, the Appellate Authority shall endeavour to dispose of the appeals as early as possible and preferably within four weeks of the deposit. This places an obligation on the Appellate Authority to prioritise and seek prompt adjudication of the matters once the condition of deposit is satisfied.

If the directed sum is deposited within the stipulated period, the Appellate Authority shall endeavour to dispose of the appeals preferably within four weeks of such deposit.

Final Conclusion: Special Leave Petitions disposed of on terms: respondent to deposit the directed sum within four weeks; failure to deposit will lead to dismissal of the appeals, whereas deposit will obligate the Appellate Authority to endeavour expeditious disposal of the appeals.

Quashing of demand notices - compliance with judicial directions - adjustment of claimed refund by tax authority - contempt for non-compliance with court order - laches / procrastination in seeking judicial remedy - liberty to place judicial precedent on record

Quashing of demand notices - compliance with judicial directions - adjustment of claimed refund by tax authority - The petitioner's challenge to the demand notices was not finally adjudicated; the court recorded that the respondents issued the impugned demand notices instead of complying with earlier directions and that the refund had been adjusted by the respondents. - HELD THAT: - The court noted the earlier order dated 25.09.2017 directing production of C-Forms and consequent issuance and payment of the refund subject to certain conditions. Rather than executing those directions, the respondents issued demand notices dated 13.04.2018 and 18.04.2018. The record further indicates the respondents adjusted the refund claimed by the petitioner. The court did not grant the substantive relief of quashing the demand notices at this stage and confined itself to recording these factual and procedural findings. [Paras 2, 3, 4]

Recorded that respondents issued demand notices instead of complying with earlier directions and that the refund was adjusted; substantive challenge to the demand notices not decided.

Contempt for non-compliance with court order - laches / procrastination in seeking judicial remedy - The petitioner had not pursued contempt proceedings for alleged violation of the earlier order and the petitioner's delay in instituting the present writ petition was noted. - HELD THAT: - The court observed that the petitioner, although granted liberty earlier, did not file a contempt petition despite an earlier disposal of a miscellaneous application giving liberty to do so. The present writ was instituted after a significant lapse of time, and the court observed prima facie that the petitioner appeared guilty of procrastination. This factual finding was recorded as material to the conduct of the petitioner but did not result in dismissal of the writ at this stage. [Paras 4, 5, 6]

Recorded absence of contempt proceedings and prima facie procrastination by the petitioner; no final adverse order on merits solely on that ground.

Liberty to place judicial precedent on record - Petitioner granted liberty to place on record a coordinate-bench judgment relied upon and to serve a copy on the respondents. - HELD THAT: - Counsel for the petitioner sought permission to rely upon a judgment of a coordinate Bench. The court granted liberty to place that judgment on record and directed that a copy be served on the respondents' counsel. This procedural accommodation was allowed without prejudging the substantive issues raised in the writ petition. [Paras 7]

Liberty granted to place the coordinate-bench judgment on record and to serve it on the respondents.

Listing for further hearing - The matter was listed for further consideration on a specified date. - HELD THAT: - After recording the factual findings and granting the procedural liberty sought, the court listed the matter for hearing on 25.05.2021. No final adjudication on merits was pronounced at this stage. [Paras 8]

Matter listed for hearing on 25.05.2021.

Final Conclusion: The court permitted the miscellaneous application, recorded that respondents had issued demand notices instead of complying with earlier directions and that the refund was adjusted, noted absence of contempt proceedings and prima facie procrastination by the petitioner, granted liberty to place a coordinate-bench judgment on record (to be served on respondents), and listed the writ petition for further hearing on 25.05.2021.

Exemption under Industrial Policy Resolution, 1996 - eligibility certificate issued by the District Industries Center - separate taxable commodity / same goods cannot be taxed more than once - classification under Section 14 of the CST Act - competence of sales tax authorities to go behind eligibility certificate

Separate taxable commodity / same goods cannot be taxed more than once - classification under Section 14 of the CST Act - exemption under Industrial Policy Resolution, 1996 - Whether M.S. Wires and M.S. Rods are different commodities for the purpose of claiming exemption for the Assessment Year 1997-98 and whether the Tribunal was justified in denying exemption. - HELD THAT: - The Court examined the competing Supreme Court decisions in Telengana Steel Industries and the later three-Judge Bench decision in K.A.K. Anwar and Co., holding that the larger Bench in K.A.K. Anwar and Co. prevails over the earlier two-Judge decision. The three-Judge Bench made clear that being listed together under a sub-heading (Section 14 of the CST Act) does not convert distinct goods into the same commodity and that different goods can be taxed separately, subject to the constitutional principle that the same goods cannot be taxed more than once. Applying these principles, the Court held that the determinative question for AY 1997-98 was whether the petitioner satisfied the conditions of the DIC eligibility certificate issued under IPR, 1996 entitling it to exemption on M.S. Wires produced from M.S. Rods. The Court also relied on precedents (including Vadilal Chemicals Ltd.) that the sales tax authorities could not, under the State Act, ignore or go behind an eligibility certificate issued by the Department of Industries and Commerce when deciding entitlement for the period in question. The Court rejected the Tribunal's exclusive reliance on Telengana Steel Industries and its attempt to distinguish the larger Bench authority, finding that the Tribunal erred in doing so and that for AY 1997-98 the petitioner was entitled to the exemption in terms of the DIC certificate if conditions were fulfilled. [Paras 15, 16, 17, 20, 23]

M.S. Wires and M.S. Rods are to be treated as different commodities for the purposes of the DIC-granted exemption for AY 1997-98; the Tribunal was not justified in holding that the petitioner was not entitled to exemption.

Eligibility certificate issued by the District Industries Center - competence of sales tax authorities to go behind eligibility certificate - Whether the consequential addition of the purchase value of M.S. Rods to the gross turnover and taxable turnover in the assessment for AY 1997-98 is sustainable. - HELD THAT: - Having held that the petitioner was entitled to exemption for AY 1997-98 in terms of the DIC certificate, the Court concluded that the assessment addition which treated purchase value of M.S. Rods as part of gross and taxable turnover - thereby denying the exemption - could not be justified. The Court emphasized that tax liability for each assessment year must be determined according to the law and entitlement prevailing in that year and that subsequent change of stance by the assessee for later years cannot defeat a valid entitlement for the year in question. Consequently, the orders of the assessing and appellate authorities making the addition were set aside. [Paras 21, 23]

The consequential addition of the purchase value of M.S. Rods to gross and taxable turnover in the assessment for AY 1997-98 is not sustainable and is set aside.

Final Conclusion: The revision is allowed; the orders of the Sales Tax Officer, the Assistant Commissioner, and the Tribunal are set aside in respect of Assessment Year 1997-98, holding that the petitioner is entitled to the exemption under the DIC certificate and that the addition of the purchase value of M.S. Rods to turnover is unjustified; deposited amounts are to be refunded in accordance with law.

Remand versus appellate adjudication - duty of last fact-finding authority to verify records - quashing of non-speaking remand - sale in the course of import

Remand versus appellate adjudication - duty of last fact-finding authority to verify records - quashing of non-speaking remand - Whether the tribunal was justified in remitting the matter to the Assessing Authority without adjudicating the controversy on merits after the first appellate authority had already examined the transactions and recorded findings. - HELD THAT: - The High Court found that the first appellate authority had adjudicated the controversy on merits. As the tribunal is the final fact-finding forum on the appeal, it was obliged to examine the documents on record and give a finding on law and facts rather than remitting the matter without deciding the appeal. Reliance was placed upon the principle in CHOLAMANDALAM MS GENERAL INSURANCE AND CO. VS. ASSISTANT / DEPUTY COMMISSIONER OF INCOME TAX that a last fact-finding authority must verify records and decide the matter on merits. The court held that the impugned remand was unnecessary, prolonged litigation unduly and was therefore liable to be quashed. Consequently the tribunal's order of remand dated 20.08.2018 was set aside and the matter was directed to be decided on merits by the tribunal afresh within a specified short timeframe.

Impugned order of remand dated 20.08.2018 quashed; matter remitted to the tribunal to be decided afresh on merits within three months from appearance of the parties.

Final Conclusion: The petition is partly allowed: the tribunal's remand is quashed and the appeal is directed to be decided on merits by the tribunal afresh within three months; other substantial questions of law were left unanswered as unnecessary in view of this conclusion.

Levy of value added tax on entire sales turnover - Output tax, input tax and net tax - Input tax credit/absence of input tax where supplier is exempt - Exclusion of exempt supplier's turnover for determining taxable turnover

Levy of value added tax on entire sales turnover - Output tax, input tax and net tax - Tax is leviable on the entire sales turnover collected by the petitioner for the period in question. - HELD THAT: - The Court examined Section 10 which defines output tax, input tax and net tax and observed that net tax payable is output tax less input tax. Input tax is available only where tax has been paid or is payable on the sale to the dealer. In the present case the petitioner purchased liquor from a supplier (KSBCL) who is exempt from VAT; consequently the petitioner had no input tax credit. Because there was no input tax to set off, the petitioner could not limit its liability to tax on only the value added by it. The statutory scheme contemplates payment of net tax (output less input) and where input is nil the whole collected turnover is the output tax base. [Paras 6, 7]

Answered against the petitioner: tax is leviable on the entire sales turnover as there was no input tax to be deducted.

Input tax credit/absence of input tax where supplier is exempt - Exclusion of exempt supplier's turnover for determining taxable turnover - The petitioner is not entitled to deduction under Rule 3 (or to claim input tax) in respect of purchases from an exempt supplier for the period adjudicated. - HELD THAT: - The Court noted that the petitioner contended entitlement to exclusion/deduction under Rule 3(2)(f) as the supplier (KSBCL) is a CL-11 licence holder and exempt. The Court held that since the supplier's sales were not taxable and the petitioner did not pay tax on purchases, there was no input tax recorded in the petitioner's hands as contemplated by Section 10 and related provisions. The statutory scheme requires a tax invoice or payment of tax to claim input; absent input tax, the petitioner cannot claim deduction and cannot confine tax liability to mere value addition. [Paras 6, 7]

Answered against the petitioner: no entitlement to deduction/input tax for purchases from the exempt supplier for 2014-15.

Final Conclusion: The substantial questions are answered against the petitioner. The petition is dismissed: tax for 2014-15 was rightly levied on the entire turnover collected by the dealer because there was no input tax available to set off.

Disallowance of input tax credit - liability of selling dealer and consequence for purchasing dealer - genuineness and correctness of input tax credit claim - burden of proof under Section 70 of the KVAT Act - consequential interest and penalty under the Act - precedential effect of a Division Bench decision

Disallowance of input tax credit - liability of selling dealer and consequence for purchasing dealer - Tribunal's setting aside of disallowance of input tax credit where some selling dealers were deregistered or had failed to discharge tax liability. - HELD THAT: - The Tribunal allowed the assessee's appeal and held that input tax credit cannot be denied to the purchasing dealer merely because the selling dealer failed to discharge tax liability or had been deregistered. The High Court examined the Tribunal's order and noted that the Tribunal expressly relied upon and followed the Division Bench decision in STRP No.171/2016 & STRP Nos.313-316/2016 (dated 07.12.2016). Having regard to that binding precedent, the substantial question whether disallowance could be sustained in the hands of the purchaser on account of the selling dealer's default was held to be answered by the earlier Division Bench ruling, and the Tribunal's conclusion was affirmed by application of that precedent. [Paras 7]

Answered against the petitioner; the Tribunal was justified in setting aside the disallowance of input tax credit.

Genuineness and correctness of input tax credit claim - burden of proof under Section 70 of the KVAT Act - precedential effect of a Division Bench decision - Whether the Tribunal was correct in setting aside the disallowance despite the assessee's alleged failure to discharge the burden under Section 70 of the KVAT Act. - HELD THAT: - The Tribunal found that the assessee had discharged the burden cast under Section 70 to prove the genuineness of the transactions; the High Court observed that the Tribunal's view was taken in reliance upon the Division Bench decision in STRP No.171/2016 & STRP Nos.313-316/2016. Applying that precedent, the Court concluded that the substantial question regarding the assessee's burden under Section 70 was covered by the earlier decision and therefore resolved in favour of the assessee. No separate interference with the Tribunal's factual-conclusion was warranted in view of the controlling authority. [Paras 7, 8]

Answered against the petitioner; the Tribunal was correct in setting aside the disallowance on the basis that the assessee had discharged the burden under Section 70.

Final Conclusion: The petition is dismissed; the substantial questions of law are answered against the State and in favour of the assessee, the Tribunal's order being governed by the Division Bench decision in STRP No.171/2016 & STRP Nos.313-316/2016.

Adjustment/appropriation of refunds against liabilities under an amnesty scheme - entitlement to refund pursuant to quashment of assessment orders - set-off of amounts due to and from the State - application of the principle in N.C. Mukherjee regarding adjustment of mutual dues

Adjustment/appropriation of refunds against liabilities under an amnesty scheme - entitlement to refund pursuant to quashment of assessment orders - set-off of amounts due to and from the State - Whether amounts found payable by the assessee under the Amnesty Scheme 2020 can be appropriated from refunds due to the assessee pursuant to quashment of assessment orders for the years 2006-07, 2007-08, 2013-14 and 2016-17. - HELD THAT: - The Court held that adjustment of refund amounts due to an assessee towards amounts found payable by the assessee under the Amnesty Scheme does not offend the Scheme and is permissible. The decision relies on this Court's prior reasoning that where an assessee has an undisputed entitlement to refunds (orders quashing assessments having not been appealed by the department), those refunds may be appropriated to meet amounts required to be paid under the Scheme as a simple adjustment towards the payment obligation. The Court also relied on the established principle, as applied in Gandhi Sons and based on N.C. Mukherjee, that where mutual dues exist between the State and an assessee the assessing authority must adjust amounts due to the assessee against amounts due from the assessee and recover only the balance, thereby supporting appropriation in the present factual matrix. In consequence, non-adjustment by the respondents could not be justified and the respondents were directed to consider the petitioner's representation for appropriation in light of these ratios. [Paras 6, 7, 8]

Respondents are directed to consider and effect appropriation of amounts due to the petitioner by way of refund towards the petitioner's liability under the Amnesty Scheme 2020, and thereafter release any balance, within two months in accordance with the cited ratios.

Final Conclusion: Writ petition allowed; respondents directed to consider the petitioner's representation for adjustment of refunds due (years 2006-07, 2007-08, 2013-14 and 2016-17) against liabilities under the Amnesty Scheme 2020 in accordance with the Court's cited precedents and to act within two months.

Revaluation of immovable property - continuity of valuation for succeeding assessment years - application of CBDT Circular No.3 dated 28.09.1957 to valuation - remand for de novo consideration - verification of existence of movable assets - admission and remand of question of exemption

Revaluation of immovable property - continuity of valuation for succeeding assessment years - application of CBDT Circular No.3 dated 28.09.1957 to valuation - Revaluation of the Banjara Hills and Madhapur immovable properties is to be reconsidered by the Assessing Officer in the light of CBDT Circular No.3 dated 28.09.1957 and, where applicable, the valuation fixed in A.Y.2002-03 is to be continued for the next two succeeding assessment years unless special overriding reasons justify revision. - HELD THAT: - The Tribunal noted that the CBDT Circular prescribes that valuation once fixed need not be disturbed for the two succeeding assessments except for special overriding reasons (for example, substantial improvements). The Circular permits adoption of municipal or comparable capital values and allows revaluation by the assessee with evidence. Applying that guidance, the Tribunal directed that the Assessing Officer must reconsider the revaluation of the Banjara Hills and Madhapur properties and, if the value was properly fixed in A.Y.2002-03, the same value should be adopted for the two succeeding years unless there are lawful grounds for substantial revision. The matter is remitted to the AO for de novo consideration in accordance with the Circular and law, with opportunity to lead evidence where relevant. [Paras 7]

Revaluation remanded to the Assessing Officer for fresh consideration in accordance with CBDT Circular No.3 dated 28.09.1957; values fixed in A.Y.2002-03 to be adopted for the next two years unless justified revision exists.

Admission and remand of question of exemption - chargeability of wealth tax - The assessee's additional ground regarding exemption of the Madhapur plot from wealth tax is admitted and remitted to the Assessing Officer for consideration in accordance with law. - HELD THAT: - The Tribunal admitted the additional ground asserting that the Madhapur plot is exempt under the relevant provision and held that the question had not been resolved by the authorities below. Rather than deciding the exemption on the record before it, the Tribunal remitted the issue to the AO for fresh consideration in accordance with law so that the factual and legal aspects can be examined with opportunity to the assessee to produce evidence and submissions. [Paras 7]

Additional ground on Madhapur plot exemption admitted and remanded to the Assessing Officer for consideration in accordance with law.

Verification of existence of movable assets - addition for movable properties - The Assessing Officer is directed to verify whether the movable assets existed during the relevant financial years and to refrain from making additions where the assets did not exist. - HELD THAT: - The Tribunal observed that the AO had taken values of movable properties from earlier years despite their non-existence during the relevant year. It directed the AO to verify the actual existence of the movable assets in the relevant year and, upon such verification, to withdraw any addition if the assets did not exist. The direction requires factual verification by the AO before any addition is sustained. [Paras 8]

AO to verify existence of movable assets for the relevant year and make additions only if assets are shown to have existed.

Remand for de novo consideration - Both appeals for A.Y.2003-04 and A.Y.2004-05 are remanded to the Assessing Officer for de novo consideration in accordance with law, with the assessee to be given a fair opportunity of hearing. - HELD THAT: - Having found that valuation and exemption issues require fresh consideration under the CBDT Circular and that verification of movable assets is necessary, the Tribunal remitted the matters to the AO for fresh adjudication. The remand covers reconsideration of immovable property valuations, adjudication of the admitted exemption ground, and factual verification of movable assets, all to be decided afresh in accordance with law and after affording the assessee an opportunity to be heard. [Paras 9]

Assessee's appeals remanded to the Assessing Officer for de novo consideration; appeals treated as allowed for statistical purposes.

Final Conclusion: The Tribunal remitted the matters in respect of valuation of immovable properties, admissibility of the exemption claim for the Madhapur plot, and existence of movable assets to the Assessing Officer for fresh consideration in accordance with CBDT Circular No.3 dated 28.09.1957 and law, affording the assessee a fair opportunity of hearing; the appeals are treated as allowed for statistical purposes.

Condonation of delay - Determination of ownership and year of acquisition - Remand for fresh consideration - Wealth assessment based on market value adopted from TN Reginet - Admission of asset in an earlier year's return and its effect on subsequent assessments - Opportunity of being heard and fresh determination by Assessing Officer

Condonation of delay - Delay of three days in filing the appeals was condoned. - HELD THAT: - The appellant, a non-resident, explained absence from India during the prescribed filing period and the delay was held to be not willful and beyond her control. In the interests of justice the Tribunal exercised discretion to condone the short delay after hearing the parties. [Paras 2]

Delay of three days in filing the appeals condoned.

Determination of ownership and year of acquisition - Admission of asset in an earlier year's return and its effect on subsequent assessments - Wealth assessment based on market value adopted from TN Reginet - Remand for fresh consideration - Opportunity of being heard and fresh determination by Assessing Officer - Whether the assessee was owner of the impugned land in the period relevant to AY 2008-09 or from AY 2009-10 and the consequent correctness of the AO's adoption of 0.80 acres valued as per TN Reginet required fresh examination and was remitted to the AO. - HELD THAT: - The record shows the assessee purchased the land by deed dated 03.10.2008 and maintains that the extant is 0.40 acres, whereas the Assessing Officer treated ownership as 0.80 acres by relying on admitted values and TN Reginet market value, thereby determining net wealth for the contested years. The assessee says the value was inadvertently admitted in the earlier year's return when filing returns in response to notices issued under section 17B. Documents including the sale deed and encumbrance certificates were placed on record. The Tribunal found that the precise question of the year of acquisition and the correct extant of land ownership is unresolved on the material before it and therefore directed that the matter be remitted to the Assessing Officer for fresh examination. The AO is to afford the assessee adequate opportunity, consider the relevant material and determine the issues in accordance with law. [Paras 6]

Issue of year of acquisition, extant of land and consequential valuation remitted to the Assessing Officer for fresh examination after affording opportunity to the assessee.

Appeals disposed as allowed for statistical purposes - Final disposal of the appeals for record after remand. - HELD THAT: - Following the remand for fresh examination on the determinative ownership and year-of-acquisition issue, the Tribunal recorded its direction and for procedural purposes treated the appeals as allowed for statistical disposal. [Paras 7]

Appeals treated as allowed for statistical purposes.

Final Conclusion: The Tribunal condoned the short delay in filing the appeals, remitted the disputed question of year of acquisition, extant of land and consequent valuation (including assessment based on TN Reginet) to the Assessing Officer for fresh adjudication after giving the assessee an opportunity, and treated the appeals as allowed for statistical purposes.

Availability and allocation of COVID hospital beds - allocation of medical oxygen - diversion of industrial oxygen for medical use - implementation of court orders and contempt - establishment and operationalisation of PSA oxygen plants - priority customs clearance for medical imports - priority ICMR clearances for RT-PCR laboratories - streamlining of RT-PCR test result upload requirements - ramp up of manufacture and distribution of essential COVID drugs - powers under the Patents Act to ensure medicinal supply (including compulsory licensing) - efficient utilisation of vaccines to prevent wastage

Availability and allocation of COVID hospital beds - Adequacy and further allocation of COVID beds by Central Government in the NCT of Delhi and requirement for detailed disclosure. - HELD THAT: - The Central Government's affidavit sets out beds made available in Central hospitals and additional planned beds, and the Court directed the Central Government to review and increase allocation of beds in view of present surge where case-load exceeds last year's peak. The affidavit must provide a complete break-up (ICU/Non ICU; with/without oxygen; with/without ventilator) and the GNCTD affidavit was ordered to be filed by the specified deadline. The Court required the Central Government to report on bed allocation on the next hearing date and expressly directed urgent consideration to allocate more beds given the higher present demand. [Paras 5, 6, 7, 8, 9]

Central Government to review and increase bed allocation for COVID patients in Delhi, furnish detailed bed break-up, and report compliance on the next date.

Allocation of medical oxygen - diversion of industrial oxygen for medical use - Immediate implementation of diversion of industrial oxygen for medical use, dynamic daily allocation review, and urgency of supply to hospitals running out of oxygen. - HELD THAT: - The Court found the medical oxygen situation in Delhi alarming and noted that allocations were being made on expert formulae but that present needs exceed allocations. The DPIIT's contemplated diversion of industrial oxygen must be implemented forthwith; the Court rejected the deferred implementation date and directed immediate action to prevent loss of life. The Central Government was directed to review allocations dynamically (day to day) for efficient utilisation and to consider measures to secure diversion from industries (including Steel and Petro Chemical) through stakeholder consultations so that sufficient oxygen is available for medical needs. [Paras 13, 14, 16, 18, 19]

Central Government to implement diversion of industrial oxygen immediately, review and allocate oxygen daily, hold stakeholder consultations, and supply hospitals running out of oxygen without delay.

Implementation of court orders and contempt - Non compliance by M/s INOX with earlier order and issuance of contempt notice. - HELD THAT: - M/s INOX was found not to have complied with the Court's direction dated 19.04.2021 to honor its contract to supply specified quantum of oxygen to GNCTD/Delhi hospitals. The Court directed issuance of a notice of contempt returnable on the listed date, service by email, and personal presence of the Managing Director/Owner of M/s INOX; it also directed the Chief Secretary of Uttar Pradesh to remain present and be served notice. [Paras 12, 20]

Notice of contempt to be issued to M/s INOX returnable on the next date; personal attendance of its Managing Director/Owner and presence of Uttar Pradesh Chief Secretary were directed.

Establishment and operationalisation of PSA oxygen plants - Expedite installation and operationalisation of sanctioned PSA oxygen plants in Delhi hospitals and ensure remaining hospitals provide site clearances. - HELD THAT: - The Central Government had sanctioned PSA plants for Delhi; only one is operational and some hospitals have not provided site clearance. The Court directed respondents to ensure that hospitals which have not acted respond immediately and that installations proceed so that promised equipment becomes functional within the stated timeframe, with compliance to be reported on the next date. [Paras 15]

Respondents to ensure remaining PSA plant installations proceed immediately and report compliance on the next hearing.

Priority customs clearance for medical imports - Medical equipment and machines imported for COVID response to be cleared by Customs at top priority. - HELD THAT: - The Court recognised that RT PCR and other medical equipment are imported and that routine Customs handling can delay availability. It directed the Central Government to issue directions so that such medical machines, equipment and medicines are cleared and handled at top priority at Customs ports to expedite their availability for the COVID response. [Paras 21]

Central Government to direct priority Customs clearance for imported medical equipment and medicines necessary for COVID response.

Priority ICMR clearances for RT-PCR laboratories - streamlining of RT-PCR test result upload requirements - ICMR to prioritise clearances for setting up/expanding RT PCR labs and Central Government/ICMR to simplify online data upload form to reduce delays. - HELD THAT: - The Court directed ICMR to give top priority to clearances for entrepreneurs/doctors seeking to set up or expand RT PCR facilities while maintaining standards. It also directed the Central Government and ICMR to review and reduce onerous data upload requirements which cause time consuming delays (forms taking about 15 minutes) as these act as a bottleneck in timely test report preparation. [Paras 22, 23]

ICMR to prioritise lab clearances; Central Government and ICMR to streamline the test result upload form and procedures to eliminate avoidable delays.

Ramp up of manufacture and distribution of essential COVID drugs - powers under the Patents Act to ensure medicinal supply (including compulsory licensing) - Immediate measures to ramp up production and dynamic distribution of Remdesivir and other essential drugs, and the Central Government's readiness to invoke Patents Act powers if voluntary measures fail. - HELD THAT: - The affidavit showed large supplies of Remdesivir and steps to increase production capacity; the Court directed the Central Government to review distribution daily based on need. For other essential drugs reportedly in short supply, the Court directed the Government to reach out to manufacturers/patent holders/licensees to ramp up production and grant voluntary licences. The Court recognised statutory powers (Sections 84, 92, 100 of the Patents Act) as available and held that if voluntary measures do not suffice, the Government/Controller should not hesitate to invoke those powers while ensuring fair compensation to patent holders; urgent action and reporting was ordered. [Paras 25, 26, 27, 28]

Central Government to dynamically allocate Remdesivir, press manufacturers to ramp up production and voluntary licensing, and invoke Patents Act powers if necessary, reporting progress on the next date.

Efficient utilisation of vaccines to prevent wastage - Prevent avoidable vaccine wastage by enabling use of residual doses for eligible volunteers aged 18-44 and modifying the CO-WIN application to facilitate such utilisation. - HELD THAT: - The Court noted reported large vaccine wastage attributable to age category restrictions and the need to avoid wasting any dose. It suggested that Governments devise mechanisms (for example, registration of volunteers aged 18-44) who could be called upon to take residual doses after clinic hours, as practised elsewhere. The Court directed modification of the CO WIN application and urgent consideration of measures to ensure full utilisation of vaccine vials and to prevent waste. [Paras 29]

Central and State Governments to devise and implement measures (including CO WIN modifications) to utilise residual vaccine doses and prevent wastage, and report status on the next date.

Final Conclusion: The Court recorded exigent deficiencies in bed, oxygen, drug, testing and vaccine management for COVID 19 in the NCT of Delhi and directed immediate and specific remedial measures: increase and detail bed allocations; implement diversion and dynamic allocation of medical oxygen without delay; proceed with PSA installations; prioritise Customs and ICMR clearances and streamline data procedures; urgently ramp up production and equitable distribution of essential drugs (with Patents Act powers available if voluntary steps fail); curb hoarding; prevent vaccine wastage by utilising residual doses; and issued a contempt notice to M/s INOX for non compliance, with all actions to be reported on the next listed date.

Party autonomy in arbitration - seat of arbitration as juridical seat (seat v. venue) - foreign award under the New York Convention - mutual exclusivity of Part I and Part II of the Arbitration and Conciliation Act, 1996 - definition of "foreign award" in section 44 - public policy under section 23 of the Indian Contract Act, 1872 - Exception 1 to section 28 of the Indian Contract Act (arbitration exception) - patent illegality under section 34(2A) - enforcement of foreign awards under sections 47 and 49 - closest and most real connection test (determination of seat only where seat is unclear) - jurisdictional allocation under section 10 of the Commercial Courts Act, 2015

Seat of arbitration as juridical seat (seat v. venue) - closest and most real connection test (determination of seat only where seat is unclear) - Whether Zurich was the seat of the arbitration in the present dispute and whether hearings in Mumbai converted the seat into Mumbai. - HELD THAT: - Clause 6 of the settlement agreement expressly provided that disputes "shall be referred to and finally resolved by Arbitration in Zurich" under ICC Rules. The arbitral tribunal by Procedural Order No.3 and in the final award consistently held the seat to be Zurich while designating Mumbai only as the convenient venue for hearings. The closest-connection test applies only when the seat is unclear or when the clause designates a venue rather than a seat (as in Enercon); it does not displace an express choice of seat by the parties or a tribunal determination accepted by the parties. On the facts the parties and the tribunal treated Zurich as the juridical seat and Mumbai as venue, and that determination governs the applicable curial law.

Zurich is the seat of arbitration; holding hearings in Mumbai did not change the seat into Mumbai.

Foreign award under the New York Convention - definition of "foreign award" in section 44 - enforcement of foreign awards under sections 47 and 49 - Whether an award made in Zurich between two Indian companies is a "foreign award" under Part II and enforceable in India under the Arbitration Act, 1996. - HELD THAT: - Section 44 (modelled on the New York Convention) defines a foreign award by reference to where the award is made and the Convention's applicability, not by the nationality or domicile of the parties. The Court identified the four ingredients of section 44 (commercial character under Indian law; agreement in writing to which the Convention applies; disputes between "persons"; award made in a Convention territory). All ingredients were satisfied on the facts (commercial dispute, written arbitration agreement, parties being persons, seat in Switzerland). International instruments and authoritative commentaries support the territorial focus of the Convention and that nationality of parties is irrelevant to designation of an award as foreign. Thus a foreign-seated award in a New York Convention State qualifies as a "foreign award" irrespective of both parties being Indian.

The Zurich award is a "foreign award" under section 44 and is enforceable under Part II of the Arbitration Act, subject to the limited defences in Part II.

Mutual exclusivity of Part I and Part II of the Arbitration and Conciliation Act, 1996 - party autonomy in arbitration - Whether Part I of the Arbitration Act applies to an arbitration seated outside India and whether Part I and Part II may be applied concurrently. - HELD THAT: - The Act's scheme adopts territoriality: Part I applies where the place of arbitration is in India; Part II governs enforcement of foreign awards. The Court reiterated BALCO and related authority holding that the two Parts are mutually exclusive and that Part I cannot be extended to foreign-seated arbitrations. The proviso to section 2(2) does not bridge the two Parts beyond specified, limited interim-relief exceptions. Party autonomy permits parties to choose curial law and seat; where the seat is outside India and the award meets section 44 criteria, Part II exclusively governs enforcement and recognition in India.

Part I does not apply to a foreign-seated arbitration; Part II exclusively governs foreign awards and their enforcement in India.

Public policy under section 23 of the Indian Contract Act, 1872 - Exception 1 to section 28 of the Indian Contract Act (arbitration exception) - patent illegality under section 34(2A) - Whether two Indian parties designating a foreign seat offend Indian public policy or sections 23/28 thereby rendering the agreement or award unenforceable in India. - HELD THAT: - Exception 1 to section 28 expressly preserves agreements to refer disputes to arbitration and was treated as removing the objection that merely selecting foreign arbitrators or a foreign seat is void as opposed to public policy. The doctrine of public policy is to be invoked only in clear and indisputable cases of harm to the public. The Court held that party autonomy and precedent (Atlas and subsequent authorities) support permitting two Indian parties to choose a foreign seat; any attempt to circumvent fundamental Indian policy can be met by resisting enforcement under Part II (section 48) or by challenging an award in the seat-state courts. Section 28(1)(a) and section 34(2A) apply to arbitrations seated in India and do not prohibit parties from agreeing a foreign seat; the lex causae and choice of law and conflict rules of the seat-state will govern substantive application where appropriate.

Choice of a foreign seat by two Indian parties does not ipso facto violate sections 23 or 28 or Indian public policy; enforcement can still be resisted under Part II where an award is contrary to India's fundamental policy.

Patent illegality under section 34(2A) - enforcement of foreign awards under sections 47 and 49 - Effect of choosing a foreign seat on availability of setting aside and enforcement remedies under Indian law (section 34(2A) and section 48). - HELD THAT: - When parties choose a foreign seat they accept that remedies to challenge the award will be governed primarily by the curial law of that seat (providing an additional 'bite' to challenge), and enforcement in India will then be subject to the defences in Part II (including public policy under section 48). Section 34(2A) (patent illegality) applies to awards under Part I (awards made in India) and does not import an expanded Indian setting-aside regime to foreign awards. The Court balanced party autonomy against public policy, holding that allowing foreign-seated arbitration does not deprive India of protection: manifest circumvention of fundamental Indian policy can be resisted on enforcement under section 48.

Parties choosing a foreign seat accept foreign challenge mechanisms; Indian courts retain the power to refuse enforcement under Part II (including section 48) where enforcement would contravene fundamental Indian policy.

Party autonomy in arbitration - Whether party autonomy permits parties (both Indian) to select fora, procedures and curial law, including foreign seats and multi-tier/arbitral appellate arrangements. - HELD THAT: - The Court endorsed the primacy of party autonomy as the guiding principle of arbitration law and accepted decisions upholding freedom to choose seat, procedural rules and substantive law. Prior authorities recognising two-tier arbitration and choice of curial law were followed; absent a clear inconsistency with mandatory law or fundamental public policy, contractual arrangements on forum and procedure are to be respected. The Court rejected arguments that two-tier or foreign-seat arrangements are ipso facto contrary to public policy.

Party autonomy extends to choice of foreign seat, curial law and procedural arrangements (including two-tier mechanisms) unless it violates clear and fundamental public policy.

Jurisdictional allocation under section 10 of the Commercial Courts Act, 2015 - enforcement of foreign awards under sections 47 and 49 - Whether section 10 of the Commercial Courts Act ousts the High Court's role under the explanation to section 47 of the Arbitration Act for enforcement of foreign awards (i.e., whether district Commercial Courts have jurisdiction in enforcement of foreign awards). - HELD THAT: - Interpreting "international commercial arbitration" in section 10 requires context: when applications arise under Part II for enforcement of foreign awards, the explanation to section 47 (which designates the High Court) operates and there is no conflict with section 10 because that provision, properly read, contemplates international arbitrations with seat in India (Part I) as well as international arbitrations seated outside India (Part II) but enforcement of foreign awards under Part II is to be brought before the High Court. The Commercial Courts Act is procedural and general; the Arbitration Act is the special code for arbitration matters. Harmonious construction yields that enforcement of foreign awards lies in the High Court; section 10 does not transfer such enforcement to district Commercial Courts.

There is no conflict: enforcement of foreign awards under Part II is to be pursued in the High Court; section 10 of the Commercial Courts Act does not oust the High Court's jurisdiction under section 47.

Section 9 interim relief (maintainability) - Whether the respondent's application under section 9 of the Arbitration Act (seeking interim measures) was maintainable despite the seat being outside India. - HELD THAT: - The Court held that the proviso to section 2(2) does allow Indian courts to grant interim relief with respect to assets situated in India even where the arbitration is seated abroad; the view of the Gujarat High Court that the respondent's section 9 application was non-maintainable by reason of an improper reading of "international commercial arbitration" was incorrect. Given the territorial and limited scope of the proviso and settled precedent, the respondent's section 9 application is maintainable.

The respondent's section 9 application was maintainable; the High Court's contrary finding is set aside.

Final Conclusion: The appeal is disposed of by upholding the Gujarat High Court's judgment that the Zurich-seated ICC award was a foreign award under Part II and enforceable in India subject to Part II defences, affirming the parties' and tribunal's designation of Zurich as the juridical seat (Mumbai being only venue), confirming the mutual exclusivity of Part I and Part II, vindicating party autonomy to choose a foreign seat absent clear and fundamental public policy breach, rejecting the proposition that sections 23/28 automatically bar two Indian parties from agreeing a foreign seat, and setting aside the High Court's finding that the respondent's section 9 application was non-maintainable (section 9 applications in respect of Indian-situated assets remain maintainable).

Bar on taking cognizance for offences affecting administration of justice (Section 195(1)(b)(i), CrPC) - fabrication and giving of false evidence during investigation (Section 193, IPC; Explanation 2) - distinction between offences committed "in relation to" proceedings in court and offences in respect of documents produced in court - investigating agency's competence to lodge complaint prior to production of evidence before trial court - requirement of a reasonably close nexus with court proceedings for application of Section 195(1)(b)

Bar on taking cognizance for offences affecting administration of justice (Section 195(1)(b)(i), CrPC) - fabrication and giving of false evidence during investigation (Section 193, IPC; Explanation 2) - investigating agency's competence to lodge complaint prior to production of evidence before trial court - Section 195(1)(b)(i), CrPC does not bar prosecution by an investigative agency under Section 193, IPC for false evidence fabricated during investigation where the agency lodges complaint or registers the case prior to commencement of proceedings and production of such evidence before the trial court. - HELD THAT: - The Court held that the object of Section 195(1)(b) is to restrict frivolous private prosecutions and to reserve to courts the discretion to complain where offences have a close nexus with ongoing court proceedings. However, where fabrication of evidence is detected at the investigative stage before the matter is placed before a court, the investigating agency - being the directly aggrieved authority and best placed to verify and prove the falsification - may register the offence under Section 193, IPC without waiting for a written complaint by the trial court. The presence of the phrase "in relation to" in Section 195(1)(b)(i) does not create a blanket bar; the provision applies only where the offence has a direct or reasonably close nexus with proceedings before a court such that the court can, by reference to its records, decide the expediency of prosecution. Requiring the trial court to first make a written complaint in every case of fabrication detected during investigation would be impracticable and could frustrate timely investigation and prosecution of offences that impede public interest and state prosecutions. The Court therefore declined to extend the protective ambit of Section 195(1)(b)(i) to preclude investigating agencies from taking action in such circumstances. [Paras 6, 17, 22, 24]

Prosecution by the investigating agency under Section 193, IPC for false evidence fabricated during investigation is not barred by Section 195(1)(b)(i), CrPC provided the agency lodges complaint or registers the case before the evidence is produced in court.

Deeming of investigation as a "stage of a judicial proceeding" (Explanation 2 to Section 193, IPC) - difference between a "stage of a judicial proceeding" and a "proceeding in any court" for Section 195(1)(b)(i), CrPC - requirement of direct nexus with court proceedings for application of Section 195(1)(b)(i) - An investigation deemed to be a "stage of a judicial proceeding" under Explanation 2 to Section 193, IPC is not automatically equivalent to a "proceeding in any court" for the purposes of Section 195(1)(b)(i), CrPC; therefore fabrication of evidence before an investigating agency does not, by that fact alone, attract the court's exclusive right to make complaint under Section 195(1)(b)(i). - HELD THAT: - The Court explained that Explanation 2 to Section 193 expands the reach of Section 193 to include investigations as stages of judicial proceedings but does not convert every investigation into a proceeding before a court for the purpose of Section 195(1)(b)(i). The protective mechanism of Section 195(1)(b)(i) is aimed at offences that directly affect administration of justice by a court and where the court can, from its records, judge the expediency of prosecution. Where false evidence is produced to mislead investigators prior to any court exercising jurisdiction or taking cognizance, the investigation lacks the requisite direct nexus to a court proceeding; hence the mandatory complaint procedure under Section 195(1)(b)(i) is not triggered merely because the act occurred during an investigatory "stage." Decisions treating certain statutory inquiries as equivalent to court proceedings were distinguished on the ground that the authorities in those statutes were expressly deemed to be courts. [Paras 20, 22, 24]

Explanation 2 to Section 193, IPC does not by itself render an investigation a "proceeding in any court" under Section 195(1)(b)(i), CrPC; the bar under Section 195(1)(b)(i) applies only where the offence has a direct and reasonably close nexus with proceedings before a court.

Application of precedents interpreting Section 195(1)(b)(ii) to Section 195(1)(b)(i) - distinction between offences in respect of documents produced in court and offences committed in relation to proceedings - requirement of reasonably close nexus with court proceedings - Precedents construing Section 195(1)(b)(ii) (notably Sachida Nand Singh and Iqbal Singh Marwah) are instructive but do not have blanket application to Section 195(1)(b)(i); Section 195(1)(b)(i) may apply to fabrications made outside court only when there is a reasonably close nexus to proceedings (for example where parties to proceedings fabricate evidence to mislead the court). - HELD THAT: - The Court surveyed the jurisprudence on Section 195(1)(b)(ii) and the Constitution Bench's approach in Iqbal Singh Marwah, emphasizing that those decisions adopted a narrow reading of the bar to avoid impracticality and injustice. It recognized the semantic difference introduced by the phrase "in relation to" in clause (i) and agreed that clause (i) can cover offences committed outside the court if the false evidence was fabricated by persons who are, or become, parties and intended to mislead the court in its proceedings. However, such application requires the requisite close nexus; absent that nexus (as where fabrication is aimed at misleading investigators before any court involvement), the protection of Section 195(1)(b)(i) should not be invoked to defeat prosecution by the investigating agency. [Paras 7, 10, 15, 24]

Iqbal Singh Marwah and related precedents do not automatically extend to all cases under Section 195(1)(b)(i); clause (i) applies to out of court fabrications only when there is a direct, reasonably close nexus with proceedings before a court.

Final Conclusion: Appeals dismissed on law and on merits; the Court upheld convictions and sentences subject to set off for time served, directed surrender within two weeks if not already in custody, and ordered release/adjustment of fines as recorded in the judgment.