TaxTMI Updates e-Newsletter
Apr 29,2022

Stay of recovery of Goods and Services Tax on royalty and District Mineral Fund - whether royalty is a tax or consideration for supply under GST - interim protection pending reference to a larger Constitution Bench - power to proceed with assessment despite stay on recovery

Stay of recovery of Goods and Services Tax on royalty and District Mineral Fund - whether royalty is a tax or consideration for supply under GST - interim protection pending reference to a larger Constitution Bench - power to proceed with assessment despite stay on recovery - Interim stay on recovery of GST levied on royalty and District Mineral Fund (DMF) in respect of mining leases granted to the petitioners. - HELD THAT: - The Court examined rival contentions whether royalty constitutes a tax (relying on the 7-Judge decision that royalty is a tax) or whether it falls within 'consideration' for supply under the GST statute and noted that the 7-Judge view is the subject-matter of a reference to a 9-Judge Constitution Bench. In view of that pending reference and following the approach in the Apex Court's interim order in M/s Lakhwinder Singh, the Court found that petitioners were entitled to interim protection. Consequently, the Court stayed recovery of GST on royalty/DMF from the petitioners until further orders. The order expressly permitted the Revenue to continue and complete assessment proceedings notwithstanding the stay on recovery. [Paras 8, 9]

Stay of recovery of GST on royalty and DMF granted until further orders; Revenue permitted to conduct and complete assessment proceedings.

Interim protection on levy of service tax on royalty and DMF - application of earlier interim order - Continuation or extension of interim protection in respect of levy of service tax on royalty/DMF in specified writ petitions by applying the Court's earlier order dated 02.03.2021. - HELD THAT: - Certain writ petitions challenged levy of service tax on royalty/DMF and previously obtained interim protection by this Court in W.P.(T) No. 3878 of 2020 dated 02.03.2021. The Court held that similar interim protection would be extended to the listed petitions challenging service tax on royalty/DMF and that the earlier interim order shall govern those cases. [Paras 3, 9]

Interim order dated 02.03.2021 granting protection against levy of service tax on royalty/DMF is held to govern the specified writ petitions; similar interim protection extended.

Final Conclusion: Interim reliefs granted: (i) stay on recovery of GST on royalty and DMF in respect of the petitioners until further orders while permitting completion of assessment proceedings; and (ii) extension/application of this Court's earlier interim protection dated 02.03.2021 to specified petitions challenging service tax on royalty/DMF. Matters listed for further hearing with directions for filing counter-affidavits and rejoinders.

Cancellation of GST registration - Show cause notice for cancellation - Suspension of registration pending show cause - Quashing of administrative order for vagueness - Restoration of registration - Proceeding strictly in accordance with law and judicial precedent

Show cause notice for cancellation - Cancellation of GST registration - Quashing of administrative order for vagueness - Validity of the show cause notices dated 15.06.2021 and 28.07.2021 and the order dated 10.08.2021 cancelling the petitioner's GST registration. - HELD THAT: - The Court found the show cause notices and the impugned cancellation order to be vague. Having considered the material and the petitioner's submissions, and in light of the Court's recent decision in Aggarwal Dyeing and Printing Works (referred to), the writ petition succeeds. The impugned show cause notices and the cancellation order were quashed and set aside, and the petitioner's registration was restored. The Court recorded that no substantive action had been taken pursuant to the first notice and noted the deficiencies in the subsequent proceedings, justifying interference by writ. [Paras 7, 8]

The show cause notices dated 15.06.2021 and 28.07.2021 and the cancellation order dated 10.08.2021 are quashed and set aside; the registration is restored.

Restoration of registration - Proceeding strictly in accordance with law and judicial precedent - Whether the department may take further action after quashing and restoration, and the terms on which further proceedings may be initiated. - HELD THAT: - The Court permitted the department to proceed further only if it does so strictly in accordance with law and keeping in mind the observations made in the Court's recent pronouncement in Aggarwal Dyeing and Printing Works. The direction is protective of the petitioner's restored status and requires that any future action comply with the legal standards and procedural safeguards indicated by this Court. [Paras 8]

The department may, if it so desires, initiate further proceedings only in strict conformity with law and the observations in Aggarwal Dyeing and Printing Works.

Final Conclusion: Writ allowed; impugned show cause notices and cancellation order quashed, registration restored, and further departmental action permitted only in strict conformity with law and the Court's recent observations in Aggarwal Dyeing and Printing Works; direct service permitted.

Summary order. Notice issued to respondents returnable on 20.04.2022; Court invited respondent to furnish correct amount payable under Section 129(3) for possible provisional release of goods on deposit of the penalty and listed matter for early hearing.

Right to obtain copies of statements recorded during investigation - Duty to record reasons for denial of information during investigation - Prejudice to investigation as a valid ground to withhold copies - Reconsideration by proper officer untrammelled by appellate or judicial observations

Duty to record reasons for denial of information during investigation - Right to obtain copies of statements recorded during investigation - Ext.P10 denying copies of statements recorded in the course of investigation was liable to be set aside for failure to state adequate reasons. - HELD THAT: - The order refusing issuance of the copies merely stated 'cannot be considered' and contained no contemporaneous reasons explaining how disclosure would prejudice the investigation. The counter affidavit filed subsequently asserted that disclosure would be prejudicial under the statutory scheme, but the court held that an affidavit cannot supplement or enlarge reasons not given in the order at the time it was issued, relying on the principles in Commissioner of Police, Bombay v. Gordhandas Bhanji and Mohinder Singh Gill v. Chief Election Commissioner, New Delhi . For these reasons the impugned order was quashed and set aside and the matter was remitted for fresh consideration.

Ext.P10 set aside for want of adequate reasons; applicants' requests must be re considered afresh.

Prejudice to investigation as a valid ground to withhold copies - Reconsideration by proper officer untrammelled by appellate or judicial observations - The proper officer was directed to re consider the applications for copies of statements independently, without being influenced by the Single Judge's ancillary observations, and having regard to the present stage of the investigation. - HELD THAT: - Although the Single Judge quashed the order for want of reasons, some observations in the impugned judgment were regarded as potentially prejudicial to the appellants. The court therefore directed that the first respondent must independently examine the requests in accordance with the statutory provisions, assessing whether disclosure would prejudice the investigation at the current stage, and then pass a fresh reasoned order. The re consideration must be untrammelled by the earlier judicial observations and must record contemporaneous reasons if denial is considered necessary.

Applications to be decided afresh by the first respondent, recording reasons and taking into account the present stage of the investigation; prior judicial observations not to influence the decision.

Final Conclusion: The impugned refusal is quashed and the matters are remitted for fresh, independent, reasoned consideration by the proper officer, who shall take into account whether disclosure would presently prejudice the investigation and shall pass final orders accordingly.

Admissibility of Advance Ruling - First proviso to Section 98(2) of the CGST Act, 2017 - Pending or decided question in ongoing proceedings - Effect of concurrent audit proceedings on admission

Admissibility of Advance Ruling - First proviso to Section 98(2) of the CGST Act, 2017 - Pending or decided question in ongoing proceedings - Effect of concurrent audit proceedings on admission - Application for advance ruling rejected as inadmissible under the first proviso to Section 98(2) of the CGST Act, 2017 because identical questions were already pending and decided in audit proceedings in the case of the applicant. - HELD THAT: - The Authority examined whether the questions raised in the applicant's ARA-01 were (i) pending or decided in any proceedings, (ii) in the case of the applicant, and (iii) under the Act. The record showed that GST audit proceedings for the applicant covering the period 01.07.2017 to 31.03.2020 had been initiated and that the audit report recorded that the applicant had agreed to the objections and had paid the applicable tax with interest and penalty. The Authority found that the issues in the advance ruling application were the same as those taken up and decided in the audit proceedings. Consequently, the conditions of the first proviso to Section 98(2) were satisfied and the application was held to be not admissible for consideration by the Authority. [Paras 8, 9, 10, 11]

Application rejected as inadmissible under the first proviso to Section 98(2) of the CGST Act, 2017.

Final Conclusion: The Authority refused to admit the applicant's advance ruling petition because the identical questions were already the subject of audit proceedings in the applicant's case for the period 01.07.2017 to 31.03.2020; the application is therefore rejected as inadmissible under the first proviso to Section 98(2) of the CGST Act, 2017.

Export of services - place of supply - Authority for Advance Ruling jurisdiction - questions specified in Section 97(2) - determination of liability to pay tax on goods or services - advance ruling under State GST Act deemed applicable to CGST Act

Authority for Advance Ruling jurisdiction - place of supply - export of services - questions specified in Section 97(2) - determination of liability to pay tax on goods or services - Whether the Authority for Advance Ruling may determine the place of supply and thereby decide if the consultancy services to ADB qualify as export of services - HELD THAT: - The Authority examined the scope of advance rulings under the State GST Act and the CGST Act and observed that the Authority is a creature of the State Act and its rulings are confined to matters specified in Section 97(2). The determinative questions enumerated in Section 97(2)(a)-(g) define and limit the Authority's jurisdiction. The term 'shall' in Section 97(2) is construed as mandatory, excluding questions not specified therein. The determination of the 'place of supply' is not expressly included in the clauses (a) to (g) and therefore falls outside the matters on which an advance ruling can be given by this Authority. Reliance on a Kerala High Court decision was considered inapposite on facts and the question framed in that case differed from the present question. Prior Karnataka AAR/AAAR precedents were noted which similarly refrained from answering place of supply questions for lack of jurisdiction. Because the question whether the services qualify as export of services depends on the place of supply (which the Authority cannot determine), the Authority concluded it cannot answer the applicant's primary question. [Paras 12, 13, 14, 15]

The Authority lacks jurisdiction to determine the place of supply and hence cannot decide whether the consultancy services to ADB qualify as export of services; the application for advance ruling is rejected.

Final Conclusion: The application for advance ruling is rejected because the Authority cannot determine the place of supply (a question not falling within the matters enumerated in Section 97(2)), and therefore cannot rule on whether the consultancy services to ADB constitute export of services.

Computer Software - Supply of goods - Supply of services - Pre-developed / pre-designed software - Application Software - Classification under tariff heading 8523 - Concessional rate under Notification No.45/2017 - Explanatory Notes to the Scheme of Classification of Services

Computer Software - Supply of goods - Pre-developed / pre-designed software - Application Software - Classification under tariff heading 8523 - Explanatory Notes to the Scheme of Classification of Services - Whether the software licenses supplied by the applicant qualify as 'Computer Software' constituting supply of goods and are classifiable under Chapter Heading 8523 80 20. - HELD THAT: - The Authority found that the software supplied by the applicant is pre-developed / pre-designed and made available through encryption keys, and cannot be used without being loaded on a computer or the supplied equipment and activated. Having these attributes, the software satisfies the characteristics necessary to be treated as 'goods' rather than a pure service. The Explanatory Notes to the Scheme of Classification of Services exclude limited end-user licences as part of packaged software from the service classification (SAC 997331), supporting treatment of such packaged software as goods. Applying these principles, the Authority concluded that the supplies qualify as 'Computer Software', more specifically as application software, and are classifiable under tariff heading 8523 80 20. [Paras 11, 17]

The software licences supplied by the applicant qualify to be treated as Computer Software resulting in supply of goods and are classifiable under Chapter Heading 8523 80 20.

Concessional rate under Notification No.45/2017 - Computer Software - Supply of goods - Whether Notifications No.45/2017-Central Tax (Rate) and related notifications are applicable to the applicant's supply of software to the institutions listed in the notification. - HELD THAT: - The Authority examined Notification No.45/2017 which grants concessional GST rates on specified goods, including computer software, when supplied to listed public funded research institutions subject to the conditions in column (4) of the notification (certificates from specified officers and a head-of-institution certification that goods are for research purposes). Given the Authority's conclusion that the applicant's supply is of 'computer software' (goods) and on the material before it showing supply to a public funded research institution under the administrative control of DRDO with the requisite certificate, the Authority held that the concessional rate under the cited notifications is applicable to such supplies, subject to fulfillment of the notification's conditions at the time of supply. [Paras 12, 16, 17]

The benefits of Notification No.45/2017-Central Tax (Rate) and the related notifications dated 14.11.2017 are applicable to the computer software supplied by the applicant to the institutions specified in the notifications, subject to fulfillment of the conditions therein.

Final Conclusion: The Authority ruled that the applicant's software licences are 'Computer Software' constituting supply of goods (classifiable under 8523 80 20) and that the concessional GST benefits under Notification No.45/2017 and the related notifications dated 14.11.2017 apply to such supplies to the listed institutions, subject to the notifications' prescribed conditions.

Condonation of delay under Section 107 CGST Act, 2017 - Limitation for filing appeal to Appellate Authority and one month condonation ceiling - Effect of Supreme Court orders excluding period 15.03.2020 to 02.10.2021 for computation of limitation - Power of Appellate Authority to entertain belated appeals only within the statutory one month extension

Condonation of delay under Section 107 CGST Act, 2017 - Limitation for filing appeal to Appellate Authority and one month condonation ceiling - Effect of Supreme Court orders excluding period 15.03.2020 to 02.10.2021 for computation of limitation - Timeliness of the appeal and whether the delay in filing could be condoned - HELD THAT: - The appellant filed the appeal on 17.11.2021 against the order dated 21.11.2019. Section 107(1) prescribes filing within three months and Section 107(4) permits condonation by the Appellate Authority for a further period of one month if sufficient cause is shown. The Supreme Court excluded the period 15.03.2020 to 02.10.2021 for computation of limitation and directed restoration of the balance period thereafter; CBIC clarified applicability of that order to appeals under quasi judicial GST provisions. Applying these directions, the Authority examined the dates and found that the appeal was filed beyond the three month period and also after the maximum one month condonation permissible under Section 107(4). The appellant did not furnish any sufficient cause to justify the extended delay. Reliance was placed on precedent holding that the appellate authority cannot condone delay beyond the statutory one month limit. Consequently the appeal could not be entertained on account of limitation and was not decided on merits. [Paras 7, 10, 11, 12]

Appeal rejected as barred by limitation; delay beyond the three months and the further one month condonation period could not be condoned and the appeal was dismissed without adjudication on merits.

Final Conclusion: The appeal was dismissed on the sole ground of limitation: having been filed beyond the three month period and after the maximum one month condonation permitted under Section 107(4), and in absence of sufficient cause, the Appellate Authority refused to entertain the appeal and did not decide the merits.

Condonation of delay by appellate authority in view of extension of limitation on account of COVID-19 - compliance with Rule 23 proviso requiring furnishing of returns and payment of dues before filing revocation - power of proper officer to revoke or reject revocation of cancellation after verification - appellate authority directing reconsideration and verification rather than deciding revocation on merits

Condonation of delay by appellate authority in view of extension of limitation on account of COVID-19 - Whether the delay in filing the appeals is to be condoned in view of the Supreme Court orders and CBIC clarification extending limitation during the COVID-19 period. - HELD THAT: - The appellate authority found that the appeals at serial numbers 1, 2 and 4 were filed beyond the three month period prescribed by Section 107(1). The authority applied the Supreme Court's orders excluding the period 15.03.2020 to 02.10.2021 from computation of limitation and noted the CBIC Circular clarifying applicability of that extension to filing appeals under GST. In view of these orders and the appellants' pleaded difficulties due to the pandemic, the authority was inclined to condone the delay and proceeded to decide the matters on merits. [Paras 7, 8, 9]

Delay in filing the appeals is condoned in view of the Supreme Court orders and the CBIC clarification, and the appeals are admitted for adjudication on merits.

Compliance with Rule 23 proviso requiring furnishing of returns and payment of dues before filing revocation - power of proper officer to revoke or reject revocation of cancellation after verification - appellate authority directing reconsideration and verification rather than deciding revocation on merits - Whether the cancellations of registration should be set aside and revocation considered where the appellants have filed returns up to the date of cancellation and paid pending dues. - HELD THAT: - The authority examined Rule 23 of the CGST Rules and the CBIC Circular explaining that where registration is cancelled for failure to furnish returns, an application for revocation cannot be filed unless such returns are furnished and amounts due are paid. The appellants had since filed returns up to the date of cancellation and deposited pending dues. The appellate authority held that this amounted to substantial compliance with the proviso to Rule 23, and therefore the registrations could be considered for revocation. However, instead of deciding revocation itself, the authority directed the proper officer to reconsider the revocation applications, to verify payment particulars of tax, late fee, interest, penalty and the status of returns, and then pass appropriate orders under the statutory scheme. [Paras 10, 11, 12, 13]

Appeals allowed to the extent that the proper officer is directed to consider the appellants' revocation applications afresh after due verification of returns and payments; revocation to be decided by the proper officer in accordance with law.

Final Conclusion: Delay in filing the appeals is condoned in view of the Supreme Court orders and CBIC clarification; since the appellants have filed returns up to the date of cancellation and paid dues, the appeals are allowed to the extent that the proper officer is directed to verify the compliance and reconsider the applications for revocation of cancellation of registration.

Deductibility of provident fund contributions under Explanation 2 to section 36(1)(va) read with section 43B - prospective application of statutory amendment - payment within the due date of filing return under section 139(1) - effect of delayed payment under the Provident Fund/ESIC enactments vis-a -vis income-tax deduction - precedential value of earlier judicial decisions on retrospective versus prospective operation of amendment

Deductibility of provident fund contributions under Explanation 2 to section 36(1)(va) read with section 43B - payment within the due date of filing return under section 139(1) - prospective application of statutory amendment - Deletion of disallowance under section 36(1)(va) in respect of employee's provident fund contribution paid after PF/ESIC due date but before the due date for filing the return of income. - HELD THAT: - The Tribunal examined whether the employer could claim deduction for employee's contribution to PF/ESIC where payment to the statutory authority was made after the due date under the PF/ESIC Acts but before the due date for filing the return of income. Relying on judicial authorities treating the amended statutory provision as prospective and on decisions which hold that payments made within the due date for filing return are entitled to benefit, the Tribunal found that the assessing officer's disallowance under section 36(1)(va) was not justified. The Tribunal followed the line of precedent holding that the amendment (as reflected in Explanation 2 read with the relevant provisions) does not operate retrospectively to deny deduction where payment was made before the return-filing due date, and therefore the deduction must be allowed.

The disallowance of the claimed deduction was deleted and the issue decided in favour of the assessee.

Final Conclusion: The appeal is allowed; the disallowance made by the Assessing Officer for delayed payment of employee's contribution to PF/ESIC is deleted for A.Y. 2017-18, and the remaining grounds were not adjudicated as the main issue has been decided in favour of the assessee.

Principle of natural justice - mandatoriness of personal hearing under Section 144B(7)(vii) - discretionary 'may' to be construed as command where civil consequences follow - invalidity of classification distinguishing questions of fact and law by administrative circular - quashing of assessment and penalty orders and remand for fresh decision after personal hearing

Principle of natural justice - mandatoriness of personal hearing under Section 144B(7)(vii) - discretionary 'may' to be construed as command where civil consequences follow - Impugned assessment orders passed under Section 147 read with Section 144B of the Income Tax Act are violative of the principle of natural justice for failure to grant personal hearing as required by Section 144B(7)(vii). - HELD THAT: - The Court applied the principle that where a quasi judicial authority exercises a discretion with civil consequences, the expression 'may' in the provision conferring that discretion must be construed as imposing a duty to afford a reasonable opportunity of personal hearing. Reliance was placed on this Court's earlier decision holding that the requirement of giving an assessee a reasonable opportunity of personal hearing under Section 144B(7)(vii) is mandatory. The assessment orders dated 28th and 31st March, 2022 were found to have been passed without granting the petitioner the requested opportunity of personal hearing, thereby violating the doctrine of audi alteram partem and Section 144B(7)(vii). The court further noted that availability of an appellate remedy does not preclude writ jurisdiction where there has been a breach of natural justice. [Paras 2, 6, 7, 8]

Assessment orders for the stated assessment years are violative of natural justice and Section 144B(7)(vii) and are set aside.

Invalidity of classification distinguishing questions of fact and law by administrative circular - quashing of assessment and penalty orders and remand for fresh decision after personal hearing - The administrative classification separating matters into disputed questions of fact and questions of law for denying personal hearing is unsustainable; the impugned assessment orders, demand notices and penalty notices are quashed and the matters remanded for fresh consideration after affording personal hearing. - HELD THAT: - The Court held that the Circular's attempt to distinguish between disputes of fact and law for the purpose of dispensing with personal hearing was not legally sustainable in light of the mandatory nature of the hearing requirement. Consequent upon finding a breach of natural justice, the Court quashed the assessment orders, demand and penalty notices and remanded the matters to the respondents to pass fresh orders in accordance with law after giving the petitioner an opportunity of personal hearing. The rights and contentions of the parties were left open for fresh adjudication. [Paras 6, 7, 9]

Impugned orders, demand and penalty notices quashed; matters remanded for de novo consideration after personal hearing.

Final Conclusion: Writ petitions allowed: assessment orders, demand notices and penalty notices for AY 2014 15 to 2017 18 quashed for breach of natural justice; matters remanded to respondents for fresh decision in accordance with law after granting the petitioner a personal hearing; rights and contentions of parties left open.

Protective assessment - revision under Section 154 - settlement under Vivad Se Vishwas Scheme, 2020 - double taxation / excess payment of tax - refund and adjustment of tax paid - department's duty not to collect tax not due - no limitation for refund under Section 237

Protective assessment - revision under Section 154 - settlement under Vivad Se Vishwas Scheme, 2020 - refund and adjustment of tax paid - double taxation / excess payment of tax - Whether deletion of the protective addition in the Assessment Year 2014-2015 and consequent adjustment or refund of tax paid for Assessment Year 2011-2012 is mandatory in view of the petitioners having settled the dispute for Assessment Year 2011-2012 under the Vivad Se Vishwas Scheme, 2020 - HELD THAT: - The Court found that the petitioners had settled their dispute for Assessment Year 2011-2012 under the Vivad Se Vishwas Scheme, 2020 and had paid the tax for that year. The same amounts had been treated as income and taxed again on a protective basis for Assessment Year 2014-2015, resulting in an excess payment. Applying the established principle that the revenue must not collect tax which is not due, and having regard to a recent order in similarly placed writ petitions (W.P.Nos.15762 & 15763 of 2021) where the court directed deletion of protective additions and refund/adjustment, the Court held that the petitioners cannot be taxed twice on the same income. The absence of a limitation for refund under Section 237 was noted as supporting the claim for refund/adjustment. The respondents' reliance on the proposition that returns once acted upon cannot be revised was rejected as not preventing relief where tax has effectively been paid for the earlier year pursuant to VSV settlement, producing excess payment for the later year. Accordingly the petitioners were entitled to correction under Section 154 and consequential refund or adjustment with interest. [Paras 13, 15]

Writ petitions allowed; respondents directed to delete the protective addition for AY 2014-2015 and to ascertain and refund or adjust the excess tax paid for AY 2014-2015 (in consequence of settlement for AY 2011-2012) with interest, in terms of the operative order relied upon.

Final Conclusion: The Writ Petitions were allowed. In view of settlement under the Vivad Se Vishwas Scheme, 2020 for AY 2011-2012, the protective additions in AY 2014-2015 were ordered deleted and the respondents directed to adjust or refund the excess tax paid for AY 2014-2015 with interest; no costs.

Application for release of seized assets under Section 132B - Mandatory time limit of 120 days for release under proviso to Section 132B(1)(i) - Assessing Officer's duty to decide an application within the statutory period - Adjustment of seized assets against existing liabilities where source is explained

Application for release of seized assets under Section 132B - Mandatory time limit of 120 days for release under proviso to Section 132B(1)(i) - Assessing Officer's duty to decide an application within the statutory period - Direction to release diamonds seized during search as statutory time-limit for decision under Section 132B(1)(i) expired and no decision was communicated - HELD THAT: - The court held that the further proviso to clause (i) of sub-section (1) of Section 132B prescribes a mandatory 120-day time-limit from the date of the last authorisation for search within which assets referred to in the first proviso must be released. If a person applies within the prescribed time and explains the nature and source of acquisition, the Assessing Officer may adjust the asset against existing liabilities and release the remaining portion with requisite prior approval. The proviso creating the 120-day limit is not directory and cannot be read down so as to permit indefinite retention. Reliance was placed on earlier decisions of this Court emphasising that failure to decide or communicate a decision within the prescribed period makes continued retention impermissible. Applying these principles to the facts, because the statutory period expired (120 days from the search authorisation) and no decision was taken or communicated on the applicant's requests under Section 132B(1)(i), the Court directed release of the seized diamonds while noting that any assessment proceedings against the employee or the proprietor may continue in accordance with law. [Paras 23, 24, 25, 26]

Writ allowed; respondents directed to hand over the seized diamonds to the writ applicant within four weeks, without prejudice to continuing assessment proceedings.

Final Conclusion: The High Court allowed the writ, holding the 120-day limit under the proviso to Section 132B(1)(i) to be mandatory and directing release of the seized diamonds to the applicant within four weeks, while permitting any consequential assessment proceedings to continue.

Right to reasonable opportunity of hearing before transfer under Section 127 - Requirement of recording reasons and communicating them for transfer orders - Transfer under Section 127(2) without hearing and non-communication vitiates the transfer and consequential proceedings - Section 127 transfer entails quasi judicial elements and is subject to Article 14 - Limited scope of the 'useless/empty formality' theory - Quashing of consequential assessment passed pursuant to invalid transfer

Right to reasonable opportunity of hearing before transfer under Section 127 - Requirement of recording reasons and communicating them for transfer orders - Validity of the transfer order passed under Section 127(2) in the absence of issuance of a show cause notice assigning reasons and non communication of the transfer order to the assessee - HELD THAT: - The Court held that Section 127(1) and (2) require, as preconditions to validly transfer a case, (i) giving the assessee a reasonable opportunity of being heard wherever possible and (ii) recording reasons for transfer. An effective opportunity requires that the assessee be informed broadly of the grounds/facts forming the basis for the proposed transfer so as to enable meaningful representation; the reasons recorded must be relevant and germane. Non communication of reasons or failure to afford a hearing cannot be cured by post hoc averments in affidavits or by reasons merely appearing on file. Reliance was placed on Supreme Court authority that recording and communicating reasons is not a mere formality and is intended to permit judicial scrutiny and prevent arbitrary action. The Court rejected the Revenue's contention that administrative exigency or the implementation of faceless assessment guidelines obviated the requirement of prior notice and communication of reasons under Section 127(2). [Paras 21, 23, 24, 31, 45]

The transfer order dated 08.07.2021 was held invalid for want of the mandatory steps of assigning reasons and affording a hearing; the impugned transfer is quashed and set aside.

Section 127 transfer entails quasi judicial elements and is subject to Article 14 - Limited scope of the 'useless/empty formality' theory - Whether the power to transfer under Section 127 is purely administrative (so as to permit omission of hearing/reasons) and whether the 'empty formality' doctrine saves the transfer - HELD THAT: - The Court held that the requirement of hearing and recording reasons imbues the power under Section 127 with quasi judicial content; even if described as administrative, such transfers must satisfy Article 14 and be supported by reasons which are not absurd or arbitrary. The 'empty formality' or 'useless formality' principle is acknowledged as a limited exception in narrowly defined circumstances (for example, emergency, express statutory exclusion, prejudice to public interest, impracticability, or where the defect would make no difference to outcome). The Court found no basis to invoke that exception here merely because of administrative convenience or the Faceless Assessment Scheme; the exception is not to be applied on mere asking. [Paras 30, 31, 41, 44]

Section 127 transfers are not free from the requirements of hearing and reasons; the 'empty formality' theory does not validate the impugned transfer in the facts of this case.

Quashing of consequential assessment passed pursuant to invalid transfer - Consequences of invalidating the transfer on the assessment framed by the Transferee Assessing Officer - HELD THAT: - Because the transfer under Section 127(2) was held invalid for want of reasons and opportunity of hearing, all consequential proceedings taken pursuant to that transfer were vitiated. The Transferee Assessing Officer had framed the assessment for AY 2018 19 after assuming jurisdiction under the impugned transfer; the Court concluded that the assessment order was rendered without jurisdiction and therefore must be quashed along with the transfer. The Court granted leave to the Revenue to initiate fresh transfer proceedings in accordance with law by first issuing a show cause notice assigning reasons and affording hearing before passing any final order. [Paras 20, 48, 49, 51]

The assessment order dated 28.09.2021 (AY 2018 19) passed by the Transferee Assessing Officer stands quashed and set aside; Revenue granted liberty to initiate fresh transfer proceedings in compliance with Section 127.

Final Conclusion: Writ allowed: the transfer order dated 08.07.2021 under Section 127(2) was quashed for failure to record and communicate reasons and to afford a reasonable opportunity of hearing; the consequential assessment order for AY 2018 19 was also quashed. Revenue is at liberty to initiate fresh transfer proceedings after issuing a show cause notice assigning reasons and affording hearing, and thereafter pass a reasoned order in accordance with law.

Set off of accumulated losses on amalgamation - Section 72A of the Income Tax Act and its applicability in mergers sanctioned by BIFR/SICA - effect of sanction by BIFR under Section 32(2) of the SICA - financial non-viability / sickness as condition for carry forward and set-off - power of the Commissioner under Section 263 to revise assessments

Set off of accumulated losses on amalgamation - Section 72A of the Income Tax Act and its applicability in mergers sanctioned by BIFR/SICA - financial non-viability / sickness as condition for carry forward and set-off - Assessee entitled to set off loss of the company merged with it (loss pertaining to assessment year 2003-04) in the assessment year 2006-2007 pursuant to amalgamation sanctioned by BIFR. - HELD THAT: - The Court followed the earlier Division Bench decision in the assessee's own case and the Supreme Court authorities which establish that where a scheme of amalgamation of a sick industrial company is sanctioned by the BIFR under the SICA, the conditions required by Section 72A are treated as satisfied. Section 32(2) of the SICA makes the power to apply Section 72A operate through the BIFR without the need for a separate recommendation by the specified authority; sanction by the BIFR therefore implies that the amalgamating company was financially non-viable (sick) and that the amalgamation was in public interest, permitting the amalgamated company to carry forward and set off accumulated losses. Applying those principles to the facts, the Tribunal's denial of set-off was not upheld and the substantial question was answered in favour of the assessee. [Paras 3, 5]

Set off of the merged company's loss allowed; substantial question answered in favour of the assessee.

Effect of sanction by BIFR under Section 32(2) of the SICA - Section 72A of the Income Tax Act and its applicability in mergers sanctioned by BIFR/SICA - power of the Commissioner under Section 263 to revise assessments - Approval or communication by the Nodal Authority / Director General and reliefs under the statutory scheme (including declaration under Section 72A as effected through BIFR sanction) validate entitlement to reliefs and preclude revisional disallowance under Section 263 in the circumstances. - HELD THAT: - The Court noted that the admitted substantial question concerning grant of reliefs and concessions under the statutory mechanism was resolved by reference to the binding approach in the earlier Division Bench judgment and to the Supreme Court precedents. A BIFR sanction under SICA is dispositive for invoking Section 72A benefits; where those conditions are thus met, treating the claim as allowable is consistent with the law and the assessing authority's contrary approach could not be sustained. The Court therefore answered the question favourably to the assessee. The judgment also records that analogous challenges were unsuccessful before the Supreme Court (SLP dismissed), reinforcing the conclusion. [Paras 3, 5]

Grant of reliefs/concessions in consequence of BIFR sanction upheld; set-off and related reliefs permitted.

Final Conclusion: The substantial questions of law are answered in favour of the assessee and against the Revenue; the tax case appeal is allowed. No costs.

Allowability of employee's contribution to provident fund - payment before due date of filing return allows deduction - section 36(1)(va) of the Act - prospective operation of amendment by Finance Act, 2021 - due date of filing return vs statutory due date for provident fund payment - Ghatge Patil Transports Ltd. - Alom Extrusions

Allowability of employee's contribution to provident fund - payment before due date of filing return allows deduction - section 36(1)(va) of the Act - due date of filing return vs statutory due date for provident fund payment - prospective operation of amendment by Finance Act, 2021 - Ghatge Patil Transports Ltd. - Deletion of disallowance under section 36(1)(va) in respect of delayed payment of employees' provident fund contribution where payment was made before the due date of filing the return of income but after the statutory due date under the PF law. - HELD THAT: - The Tribunal found on the record that the employees' contribution to provident fund was paid after the due date prescribed under the relevant provident fund statute but before the due date for filing the return of income for AY 2019-20. Relying on the jurisdictional High Court decision in Ghatge Patil Transports Ltd. and the Supreme Court principle applied therein, and on coordinate-bench decisions treating the Finance Act, 2021 amendment as prospective, the Tribunal held that such payments are allowable for deduction under section 36(1)(va) when made on or before the due date of filing the return. The Tribunal therefore directed the Assessing Officer to delete the disallowance made under section 36(1)(va). [Paras 8, 9, 10, 11]

Ground allowed; disallowance under section 36(1)(va) deleted in respect of the employees' contribution paid before the due date of filing the return of income.

Appeal not pressed - Ground challenging addition as being outside the scope of section 143(1) not pressed by the assessee. - HELD THAT: - The Tribunal recorded that the second ground raised in the assessee's appeal was not pressed at the hearing and therefore no adjudication on merits was called for. [Paras 12]

Ground dismissed as not pressed.

Final Conclusion: The appeal is partly allowed: the disallowance under section 36(1)(va) in respect of employees' provident fund contribution paid before the due date of filing the return for AY 2019-20 is deleted; the second ground was dismissed as not pressed.

Rejection of books of account under Section 145(3) and estimation of income - Treatment of rent as business expense - Deemed dividend under Section 2(22)(e) - Set-off and carry forward of brought forward losses - Opportunity of being heard / ex parte disposal

Rejection of books of account under Section 145(3) and estimation of income - Treatment of rent as business expense - Ld. CIT(A) and AO were justified in rejecting the assessee's books of account under Section 145(3) and estimating business income; the disallowance of the rent claimed was upheld. - HELD THAT: - The AO found defects and anomalies in the assessee's books and proposed rejection under Section 145(3), estimating income on the lines of the preceding year. The assessee failed to supply satisfactory explanations or requested details, creditor reconciliations, or evidentiary support for the payments treated as rent. The CIT(A) concurred that the books were not correct and complete and therefore confirmed the estimation. No material was placed before the Tribunal to rebut the concurrent findings of the AO and CIT(A). Regarding the debit of rent, the AO observed that given the nature of the assessee's business there was no need to incur such rent and noted absence of TDS evidence or supporting documents; the assessee did not produce any evidence before the CIT(A) or the Tribunal to substantiate the claim. In view of the lack of supporting material and the concurrence of the lower authorities, the Tribunal declined to interfere with the estimation and the disallowance of the rent. [Paras 5]

Ground No. 3 rejected; addition and rent disallowance upheld.

Deemed dividend under Section 2(22)(e) - The addition treating amounts received from Universal Buildwell Pvt. Ltd. as deemed dividend under Section 2(22)(e) was confirmed. - HELD THAT: - The AO treated advances/receipts of Rs. 92,42,739/- from Universal Buildwell Pvt. Ltd. as deemed dividend on the basis that the companies were under common management with common shareholders and directors. The assessee contended the amounts were business exigency payments or reimbursements and not loans or advances, but furnished details only for a part of the sum (about Rs. 12.36 lakh) and offered no satisfactory explanation or documentation for the balance. The CIT(A) noted the commonality of management and shareholding and the absence of adequate explanation for the bulk of the amount, and accordingly confirmed the AO's conclusion that the receipts were chargeable as deemed dividend under Section 2(22)(e). The Tribunal, finding no new material to displace the concurrent findings, endorsed the conclusion. [Paras 6]

Ground No. 4 dismissed; addition as deemed dividend under Section 2(22)(e) upheld.

Set-off and carry forward of brought forward losses - The question of entitlement to set-off and carry forward of brought forward losses was not finally adjudicated by the CIT(A); the matter was directed to the AO for verification and determination as per law. - HELD THAT: - The AO had not recorded reasons for denial of set-off and carry forward of brought forward losses. The CIT(A) did not affirm a denial; instead, in paragraph 6 of the appellate order the CIT(A) directed the AO to verify the records and determine the brought forward losses in accordance with law. Consequently the point remains subject to verification and determination by the assessing authority rather than being finally decided on merits by the appellate authority or the Tribunal. [Paras 7]

Ground No. 5 not upheld or decided on merits by CIT(A); remitted to the AO for verification and determination.

Opportunity of being heard / ex parte disposal - The appeal was heard and decided ex parte after repeated service attempts; general grounds alleging lack of reasonable opportunity were not accepted. - HELD THAT: - Multiple notices were issued to the assessee for hearing, and on the last occasion the notice was returned with remark 'left'; the assessee remained untraceable and did not appear before the Tribunal. The Tribunal proceeded to decide the appeal ex parte after hearing the Departmental Representative. Grounds 1 and 2, which raised general objections including alleged denial of reasonable opportunity, were characterised as general in nature and not supported by material; consequently they were rejected. [Paras 3, 4]

Grounds 1 and 2 dismissed as general; appeal adjudicated ex parte.

Final Conclusion: The assessee's appeal is dismissed; concurrent findings upholding rejection of books and estimation of income and the addition as deemed dividend are affirmed, while the question of set-off/carry forward of brought forward losses is remitted to the Assessing Officer for verification and determination in accordance with law.

Deduction under 80G vis-a -vis 80GGA - rectification under section 154 and scope of fresh claims in rectification proceedings - verification of donee's approval for entitlement to 80G deduction - power of the Appellate Tribunal to admit grounds otherwise than by revised return

Verification of donee's approval for entitlement to 80G deduction - deduction under 80G vis-a -vis 80GGA - rectification under section 154 and scope of fresh claims in rectification proceedings - Assessee's claim for deduction of the donation under 80G was remitted to the Assessing Officer for verification of the validity of the donee's approval and consideration in accordance with law. - HELD THAT: - The Assessing Officer treated the 80G claim as a fresh claim in rectification proceedings and rejected it on the ground that the assessee had not filed a revised return and had previously claimed deduction under 80GGA; reliance was placed on the Goetze India Ltd. decision. The CIT(A) affirmed rejection additionally recording that the donee's approval appeared to have expired before the donation date. The Tribunal noted that Goetze does not oust the ITAT's power to admit grounds otherwise than by a revised return and that the determinative question is factual: whether the donee's approval was valid on the date of donation. As the validity of the approval requires verification of documentary records, the Tribunal remitted the matter to the Assessing Officer to examine the documentary evidence regarding the donee's approval. The Tribunal directed that if the approval is found valid the assessee's claim be considered in accordance with law, and if the approval had expired the claim would fail. The Tribunal accordingly allowed the appeal by remitting the issue for verification. [Paras 7, 8]

Appeal allowed; issue remitted to the Assessing Officer to verify the validity of the donee's approval and to decide the claim for deduction under 80G in accordance with law; if approval is valid the claim to be considered, if expired the claim fails.

Final Conclusion: The Tribunal allowed the appeal and remitted the question of entitlement to deduction under 80G to the Assessing Officer for verification of the donee's approval; the Assessing Officer is to admit the claim if the approval was valid on the donation date and reject it if the approval had expired.

Fees for included services - make available - ancillary and subsidiary - royalty - managerial services excluded - memorandum to the Treaty - factors for ancillary and subsidiary

Fees for included services - ancillary and subsidiary - managerial services excluded - memorandum to the Treaty - factors for ancillary and subsidiary - Whether amounts received for providing support services qualify as "fees for included services" under Article 12(4)(a) of the India-US DTAA or are excluded as managerial services - HELD THAT: - The Tribunal held that Article 12(4) applies only to payments made in consideration for the rendering of technical or consultancy services; managerial services are not covered. The FAA erred in treating receipts characterised as managerial services as falling within paragraph 4(a) by relying on the memorandum examples without a finding that the services were technical or consultancy in nature. The Tribunal examined the contractual matrix and factual indicators relied upon by the FAA (predominant purpose, customary provision, insubstantiality of service fee, single contract, related parties) and found they were not satisfied: services were wide-ranging and described as managerial; there were separate service and licence agreements (effective dates not co terminous); no cogent evidence showed the services were customarily ancillary to trademark licences or were insubstantial relative to royalties. Because there was no categorical finding that the services were technical or consultancy services, the classification of the support services as FIS under Article 12(4)(a) was unsustainable and was reversed. [Paras 7, 8, 9]

The addition treating support services as FIS under Article 12(4)(a) was set aside and the finding of the FAA reversed.

Fees for included services - make available - reimbursement of expenses - Whether reimbursement of training expenses amounts to FIS under Article 12(4)(b) because they "make available" technical knowledge, experience, skill or know how - HELD THAT: - The Tribunal found the FAA's conclusion that the onboarding/training made available skill was not supported by cogent reasoning or evidence of transfer of technical knowledge, processes or technical plans. The trainings were orientation/onboarding for newly recruited consultants (familiarisation with job profile, business model, policies and procedures) and the receipts were reimbursements of actual costs (travel, boarding, lodging) charged on a cost to cost basis. There was no showing of a transfer of technology or that the programmes imparted technical know how such as would satisfy the "make available" requirement of Article 12(4)(b). Thus the FAA's taxation of the identified training reimbursements as FIS was unsustainable and reversed. [Paras 12, 13]

The addition treating reimbursement of training expenses as FIS under Article 12(4)(b) was set aside and the FAA's finding reversed.

Final Conclusion: Both grounds raised by the assessee were sustained: the Tribunal reversed the CIT(A)'s classification of the support services and the training cost reimbursements as "fees for included services" under Article 12 of the India-US DTAA, and allowed the appeals for AY 2013-14 and AY 2014-15.

Treatment of CAM charges as rent - deduction of tax at source under section 194I - deduction of tax at source under section 194C - time bar under section 201(3) - assessee in default under section 201(1) - interest under section 201(1A)

Time bar under section 201(3) - assessee in default under section 201(1) - Whether the order dated 18.02.2020 passed under section 201(1) deeming the assessee an assessee in default for AY 2013 14 and 2014 15 was barred by limitation under section 201(3). - HELD THAT: - The Tribunal examined the dates of filing of statements under section 200 and the statutory timeline in clause (i) of section 201(3) as it stood prior to subsequent amendments. As the assessee had filed the statements under section 200 within the prescribed time, the two year limitation prescribed by clause (i) of section 201(3) governed the time for issuance of an order under section 201(1). Applying that two year period, the order dated 18.02.2020 fell beyond the limitation period for AY 2013 14 and AY 2014 15. Consequently the order of the AO under section 201(1)/201(1A) was quashed as time barred. [Paras 11]

Order dated 18.02.2020 under section 201(1)/201(1A) is barred by limitation and is quashed for AY 2013 14 and AY 2014 15.

Treatment of CAM charges as rent - deduction of tax at source under section 194I - deduction of tax at source under section 194C - Whether common area maintenance (CAM) charges payable under the lease agreement are rent taxable under section 194I or contractual payments taxable under section 194C. - HELD THAT: - The Tribunal analysed the lease agreement (noting separate clauses for rent and maintenance) and applied the definition of "rent" in section 194I. Clause 9 of the lease clarified that CAM charges are payments for services such as electricity, water, security and lift maintenance and are not payments for use of land, building or equipment. Following the reasoning of the Delhi Tribunal in Connaught Plaza Restaurants (and similar precedents), the Tribunal held that CAM charges are contractual payments for maintenance services and therefore fall within the scope of section 194C rather than section 194I. The fact that rent and CAM charges were collected under a single agreement did not alter the character of the CAM payments; tax deduction must follow the true nature of the payment and the statutory rates applicable thereto. [Paras 16, 17]

CAM charges are contractual maintenance payments liable to TDS under section 194C at the rate applicable thereunder; they do not constitute rent under section 194I.

Interest under section 201(1A) - assessee in default under section 201(1) - Whether interest charged under section 201(1A) survives after the order under section 201(1) is quashed and CAM charges are held liable to TDS under section 194C. - HELD THAT: - The interest under section 201(1A) was consequential upon the AO's order under section 201(1). Having quashed the deeming order as time barred and, on merits, holding that the assessee was not an assessee in default because CAM charges were correctly subjected to TDS under section 194C, the interest charged became infructuous and did not require separate adjudication. [Paras 18]

Interest under section 201(1A) is rendered infructuous and stood dismissed as consequential on the quashing of the primary order.

Final Conclusion: Appeals allowed: the order of the AO dated 18.02.2020 under sections 201(1)/201(1A) is quashed as time barred for AY 2013 14 and 2014 15; on the merits CAM charges are maintenance contractual payments taxable under section 194C and not rent under section 194I for AY 2013 14 to 2017 18; consequential interest under section 201(1A) is rendered infructuous.

Treatment of cash deposits as unexplained income under section 69A of the Income-tax Act - cash sales evidenced by sales register and VAT returns - addition cannot be made where sales are accepted as revenue receipt - onus on Revenue to prove that sales records are fictitious or bogus

Treatment of cash deposits as unexplained income under section 69A of the Income-tax Act - cash sales evidenced by sales register and VAT returns - onus on Revenue to prove that sales records are fictitious or bogus - addition cannot be made where sales are accepted as revenue receipt - Validity of addition made under section 69A on cash deposits during the demonetisation period - HELD THAT: - The Tribunal examined whether cash deposits made during the demonetisation period could be treated as unexplained income under section 69A. The assessee produced cash register entries showing date, voucher number, counterparty and amount, the sales register, audited accounts, and VAT returns reflecting payment of VAT for the relevant period. The Revenue did not bring any material to show that the cash sales particulars were fictitious or that the VAT returns had been rejected by the appropriate authority. Purchases corresponding to the sales were not disallowed and the assessee had a single, undisputed source of income. The Tribunal placed reliance on earlier coordinate decisions holding that where sales are accepted as revenue receipts, they cannot be recharacterised and added as unexplained income. In absence of contrary evidence from the Department to impugn the genuineness of the sales records, the addition under section 69A was unsustainable and was liable to be deleted. [Paras 7, 8]

Addition of Rs. 34,99,500 made on account of cash deposits during the demonetisation period is deleted and the appeal is allowed.

Final Conclusion: The Tribunal allowed the appeal, deleting the addition made under section 69A in respect of cash deposits during the demonetisation period, on the basis that the assessee had produced cogent sales records and VAT returns and the Revenue failed to demonstrate that those records were fictitious.

Addition by way of adjustment and intimation under section 143(1) on debatable and controversial issues - retrospective amendment cannot be invoked to sustain an intimation under section 143(1) - employees' contribution to Provident Fund and ESI - deductibility where deposited after statutory due date but before filing under section 139(1) - prospective effect of Finance Act, 2021 amendments to section 36(1)(va) and section 43B - binding precedent of the jurisdictional High Court

Addition by way of adjustment and intimation under section 143(1) on debatable and controversial issues - employees' contribution to Provident Fund and ESI - deductibility where deposited after statutory due date but before filing under section 139(1) - binding precedent of the jurisdictional High Court - Whether the additions made by intimation under section 143(1), disallowing employees' contributions to Provident Fund and ESI paid after statutory due dates but before filing the return, are sustainable. - HELD THAT: - The Tribunal found that the payments in question were made after the stipulated statutory dates under Provident Fund/ESI laws but before the due date for filing the return under section 139(1); this fact is not in dispute. At the time of the intimation dated 31.10.2019, the amendments introduced by Finance Act, 2021 were not in force, and binding decisions of the jurisdictional High Court favourable to the assessee were available. The Tribunal held that making adjustments under section 143(1) on a debatable and controversial question - including where reliance would require invoking a retrospective amendment - is beyond the scope of section 143(1). Relying on earlier decisions that restrict the scope of summary intimation under section 143(1), the Tribunal concluded that the additions made by the CPC/intimation dated 31.10.2019 were unfair, unjust and bad in law and that the Commissioner (Appeals) erred in confirming them.

The addition of Rs. 1,71,75,434 made by way of adjustment/intimation under section 143(1) is set aside and the Assessing Officer is directed to delete the addition.

Prospective effect of Finance Act, 2021 amendments to section 36(1)(va) and section 43B - retrospective amendment cannot be invoked to sustain an intimation under section 143(1) - Whether the Finance Act, 2021 amendments to section 36(1)(va) and section 43B apply retrospectively or prospectively for periods prior to 01.04.2021. - HELD THAT: - The Tribunal observed that the question of retrospectivity or prospectivity of the Finance Act, 2021 amendments is debatable and that various Benches of the ITAT have taken a view favourable to the assessee that the amendments operate prospectively from 01.04.2021. However, having allowed the appeal on the ground that summary intimation under section 143(1) cannot be based on debatable or retrospective grounds, the Tribunal expressly refrained from deciding the substantive question of retrospective versus prospective operation of the 2021 amendments, treating that issue as academic in the light of its decision to delete the addition.

The question whether the Finance Act, 2021 amendments are retrospective or prospective is not decided and is left open.

Final Conclusion: The appeal is partly allowed: the Tribunal sets aside the addition of Rs. 1,71,75,434 made by intimation/adjustment under section 143(1) and directs deletion of the addition; the issue of whether the Finance Act, 2021 amendments are prospective or retrospective is left undecided.

Penalty under section 271(1)(c) - concealment of income - furnishing inaccurate particulars of income - deeming provision of section 50C - bonafide belief / bona fide mistake as defence to penalty - mere claim not sustainable in law does not amount to furnishing inaccurate particulars

Penalty under section 271(1)(c) - deeming provision of section 50C - furnishing inaccurate particulars of income - mere claim not sustainable in law does not amount to furnishing inaccurate particulars - bonafide belief / bona fide mistake as defence to penalty - Whether penalty under section 271(1)(c) is sustainable for alleged concealment or furnishing of inaccurate particulars where addition arises from valuation under section 50C while the assessee declared actual sale consideration in the return. - HELD THAT: - The Tribunal held that an increase in value for capital gains purposes by adopting the deemed value under section 50C in preference to the sale consideration recorded in the deed does not, by itself, demonstrate concealment of particulars or furnishing of inaccurate particulars by the assessee where the return disclosed the actual sale consideration. Relying on the principle that a mere claim made in the return which is not acceptable to the Revenue does not amount to furnishing inaccurate particulars, the Tribunal applied the reasoning in the cited Supreme Court authority that there must be a finding that details supplied in the return are incorrect, erroneous or false to attract penalty under section 271(1)(c). The Tribunal recorded that no evidence was brought on record to show that the assessee received consideration over and above the sale deed amount or that particulars furnished were incorrect; the variation arose from a deeming valuation. In these circumstances, and taking into account that the addition stemmed from the departmental adoption of stamp valuation under section 50C rather than any misstatement by the assessee, the penalty could not be sustained. The Tribunal therefore deleted the penalty levied by the Assessing Officer. [Paras 9, 10, 11]

Penalty under section 271(1)(c) deleted; appeal allowed.

Final Conclusion: The Tribunal set aside the penalty imposed under section 271(1)(c) for AY 2012-13, holding that additions made by applying the deemed value under section 50C to assess capital gains did not amount to concealment or furnishing of inaccurate particulars where the assessee had declared the actual sale consideration; the appeal is allowed.

Proportionate disallowance of interest where part of borrowed funds diverted to non-business purpose - proportionate disallowance under section 36(1)(iii) of the Income-tax Act, 1961 - deemed dividend by virtue of loans/advances under section 2(22)(e) of the Income-tax Act, 1961 - tax audit report as evidence of classification of transaction as loan - application of pro rata principle to disallow interest

Proportionate disallowance of interest where part of borrowed funds diverted to non-business purpose - proportionate disallowance under section 36(1)(iii) of the Income-tax Act, 1961 - application of pro rata principle to disallow interest - Allowance of interest expenditure: whether interest of Rs. 22,24,357/- (proportionate out of total interest paid) disallowable as attributable to loan funds not used for business purpose - HELD THAT: - The assessing officer found that out of total borrowed funds of Rs. 12.19 crore approx., Rs. 3.35 crore approx. (about 27%) were not applied exclusively for the assessee's business, and disallowed interest on a pro rata basis from the total interest outgo. The CIT(A) examined the record, observed that the assessee failed to lead cogent evidence to show exclusive business application of the entire loan funds and upheld the AO's pro rata disallowance. The Tribunal, after considering the material on record and noting absence of any contrary evidence or explanation from the assessee, found no error in treating the identified portion of the loan as diverted to non-business purpose and in disallowing the corresponding proportionate interest under the established pro rata approach. The Tribunal therefore affirmed the concurrent finding that the interest in question was not allowable as business expenditure. [Paras 7]

Grounds 1 and 2 dismissed; proportionate disallowance of interest of Rs. 22,24,357/- confirmed and allowed in favour of Revenue.

Deemed dividend by virtue of loans/advances under section 2(22)(e) of the Income-tax Act, 1961 - tax audit report as evidence of classification of transaction as loan - Whether unsecured loan of Rs. 39,34,639/- received from M/s. K.C. Kapadia and Sons (P) Ltd. is exigible to tax as deemed dividend under section 2(22)(e) - HELD THAT: - The tax audit report recorded the transaction as an unsecured loan from the company. Two partners of the firm together held at least 20% of the company's equity/voting power, bringing the transaction within the scope of section 2(22)(e). The assessee contended the entries represented current account transactions, but did not place factual evidence to rebut the TAR classification or to distinguish relevant authorities. The CIT(A) found the deeming provision attracted on the factual matrix and confirmed the addition. The Tribunal, noting absence of any contrary material from the assessee and the concurrence of the CIT(A)'s reasoning, affirmed that the amount fell within the ambit of deemed dividend under section 2(22)(e). [Paras 9]

Ground 3 dismissed; addition of Rs. 39,34,639/- as deemed dividend under section 2(22)(e) confirmed in favour of Revenue.

Final Conclusion: The Tribunal affirmed the CIT(A)'s concurrent findings on the proportionate disallowance of interest and the addition under section 2(22)(e); the assessee's appeal is dismissed.

Classification of imported product as Liquid Paraffin versus Light Diesel Oil - laboratory analysis and evidentiary weight of CRCL report - release of detained vessel on furnishing of undertaking - continuation of statutory inquiry notwithstanding interim release - security by bond and bank guarantee pending adjudication

Laboratory analysis and evidentiary weight of CRCL report - classification of imported product as Liquid Paraffin versus Light Diesel Oil - CRCL retest report concluded that each tested sample is Liquid Paraffin and meets the requirements of Paraffinic Diesel Fuel as per DIN EN 15940:2019 and is other than Light Diesel Oil. - HELD THAT: - The Court has taken on record the CRCL report dated 8.4.2022, which records that each of the four remnant samples is a clear colourless oily liquid composed mainly of mineral hydrocarbon oil (mineral oil content >70% by wt.), lists the measured parameters and expressly states that each sample is 'liquid paraffin' and is other than Light Diesel Oil and Automotive Diesel Fuel. The report was produced pursuant to the Court's earlier direction for retesting and the Court accepted the report into the record. The Court, however, did not convert this recording into a final adjudication on classification for all purposes; it recorded the laboratory conclusion and placed it on the file as the outcome of the retest. [Paras 5]

CRCL retest report taken on record stating the samples are Liquid Paraffin; the report so records the laboratory conclusion.

Release of detained vessel on furnishing of undertaking - security by bond and bank guarantee pending adjudication - The detained vessel was ordered to be released on the writ applicants furnishing an appropriate undertaking to cooperate in the inquiry; the inquiry to continue and existing bond and bank guarantee to remain in place. - HELD THAT: - Having placed on record two laboratory reports and noting that the goods have been released to the importer on bond with a bank guarantee in place, the Court held that further detention of the vessel should not be permitted. The Court directed the Commissioner (Customs), Kandla, to release the vessel after obtaining an undertaking from the vessel owners that they will cooperate in the ongoing inquiry. The order preserves the continuity of the statutory inquiry and the financial securities already furnished by the importer, while securing the vessel owner's cooperation through the undertaking. [Paras 8, 9]

Vessel to be released after the writ applicants furnish the prescribed undertaking; inquiry to continue and securities to remain.

Continuation of statutory inquiry notwithstanding interim release - classification of imported product as Liquid Paraffin versus Light Diesel Oil - Further inquiry by the DRI is permitted; the DRI may pursue additional testing or other modes of inquiry notwithstanding the CRCL report having been taken on record. - HELD THAT: - Although the Court recorded the CRCL's conclusion, it expressly declined to foreclose the DRI from pursuing the matter further. The DRI informed the Court that it wished to further examine the issue because CRCL had not undertaken certain Indian Standard parameter tests which the DRI considered material. The Court refused to obstruct any further lawful inquiry by the DRI and left open the possibility of additional tests or steps in accordance with law while preventing continued detention of the vessel. [Paras 6, 7]

DRI permitted to continue its inquiry and, if warranted, undertake further tests or proceedings in accordance with law.

Final Conclusion: The CRCL retest report concluding the samples are Liquid Paraffin was taken on record; the Commissioner (Customs) is directed to release the detained vessel upon receipt of an undertaking from the vessel owners to cooperate, the statutory inquiry may continue and the existing bond and bank guarantee remain in place.

Entitlement to ROSCTL benefit - inadvertent clerical error in shipping bill - beneficial scheme doctrine - application of MEIS precedents to other FTP schemes - availability of writ remedy notwithstanding alternative review remedy

Entitlement to ROSCTL benefit - inadvertent clerical error in shipping bill - beneficial scheme doctrine - Whether the petitioner, though having inadvertently selected the wrong scheme code while filing the Shipping Bill, is entitled to the ROSCTL benefit and relief by writ directing grant of the benefit. - HELD THAT: - The petitioner exported goods and, while filing Shipping Bill No.2523603 on 30.04.2020, inadvertently chose the wrong scheme option ('NO' - scheme code 19) instead of 'YES' (scheme code 06) for claiming ROSCTL. The petitioner promptly communicated the mistake to the authority and obtained a certificate from the Assistant Commissioner of Customs indicating entitlement to ROSCTL. The court observed that ROSCTL is a scheme under the Foreign Trade Policy intended to promote exports and is a beneficial measure. The Court held that the reasoning in earlier decisions concerning the MEIS scheme is applicable to ROSCTL insofar as those decisions recognize that exporters who are otherwise entitled should not be deprived of benefits on account of inadvertent clerical errors in export documentation. Having regard to these facts and the beneficial object of the scheme, the writ petition was allowed and the respondents were directed to grant the ROSCTL benefit in terms of the Foreign Trade Policy within six weeks.

Writ allowed; respondents 2 and 3 directed to grant ROSCTL benefit to the petitioner in terms of the Foreign Trade Policy within six weeks.

Application of MEIS precedents to other FTP schemes - availability of writ remedy notwithstanding alternative review remedy - Whether precedents on MEIS apply to ROSCTL and whether the existence of a review remedy before the DGFT Policy Relaxation Committee precluded entertaining the writ petition. - HELD THAT: - The Court accepted the petitioner's submission that precedents decided in the context of MEIS are applicable to ROSCTL because both are export promotion schemes under the Foreign Trade Policy and share the same beneficial purpose. Although the respondents submitted that an alternate remedy by way of review under paragraph 2.58 of the Foreign Trade Policy was available, the Court nonetheless exercised writ jurisdiction and granted relief, treating the alternate remedy as not a bar in the facts of the case where entitlement was conceded and the error was inadvertent and promptly rectified at the departmental level.

MEIS precedents held applicable to ROSCTL; availability of a departmental review remedy did not preclude exercise of writ jurisdiction in the present facts.

Final Conclusion: The writ petition was allowed: the Court directed respondents 2 and 3 to grant the ROSCTL benefit to the petitioner in terms of the Foreign Trade Policy within six weeks, treating the inadvertent selection of an incorrect scheme code as excusable in the circumstances and applying the principles laid down in MEIS jurisprudence to ROSCTL.

Proper officer - Reassessment under Section 28(4) of the Customs Act - Power to recover duties which have escaped assessment - Validity of show cause notices issued by DRI officers - Doctrine that reassessment must be by the assessing officer or his successor - Binding effect of Supreme Court precedent

Proper officer - Validity of show cause notices issued by DRI officers - Reassessment under Section 28(4) of the Customs Act - Doctrine that reassessment must be by the assessing officer or his successor - Whether show cause notices under Section 28(4) issued by officers of the Directorate of Revenue Intelligence (DRI) are valid and maintainable where the assessing/clearing officer had earlier assessed and cleared the goods - HELD THAT: - The High Court applied the ratio of the Supreme Court in M/s. Canon India Pvt. Ltd. and subsequent appellate authority decisions to conclude that Section 28(4) confers the power of reassessment and recovery only on "the proper officer" - meaning the customs officer who carried out the original assessment or his successor in office or an officer specifically assigned the assessment function. Where a DRI officer, who was not the officer that assessed and cleared the goods (and who was not shown to be specifically entrusted under Section 6 as the Central Government must do), issues a show cause notice under Section 28(4), such proceedings lack jurisdiction. The Court noted that the petitioners' consignments had been assessed and cleared by customs officers and the DRI-initiated reassessment proceedings were therefore vulnerable under the binding Supreme Court precedent. The Court declined to re examine the correctness of Canon India in light of other notifications or submissions that the respondents said had not been placed before the Supreme Court, holding that a subordinate court cannot ignore a binding decision of the Apex Court. The Court, therefore, quashed the impugned show cause notices issued by the DRI without entering into merits of individual classification disputes, while leaving open the Revenue's right to initiate proceedings on merits by the proper authority if permissible in law and subject to the outcome of the review pending before the Supreme Court. [Paras 11, 14, 21]

All impugned show cause notices issued by the DRI under Section 28(4) are quashed as invalid for lack of jurisdiction; petitions allowed, subject to the outcome of the review pending before the Supreme Court and without precluding the Revenue from initiating proceedings by a proper authority.

Final Conclusion: The High Court followed the Supreme Court's ratio in M/s. Canon India Pvt. Ltd., held that show cause notices under Section 28(4) issued by DRI officers (not being the assessing officer or his successor or otherwise validly entrusted) are without jurisdiction, quashed the impugned notices in these petitions and allowed the petitions, while observing the Revenue remains free to proceed on merits through the proper authority and the decision is subject to the outcome of the review pending before the Supreme Court.

Classification of goods - Aluminium plates, sheets vs Aluminium structures/parts prepared for use in structures - Tariff Heading 7606 1200 - Tariff Heading 7610 9030 - Finality of administrative orders - Principles of Judicial Discipline - Distinguishing precedents on facts - Use of HSN Explanatory Notes and sample inspection in classification

Classification of goods - Aluminium plates, sheets vs Aluminium structures/parts prepared for use in structures - Tariff Heading 7606 1200 - Tariff Heading 7610 9030 - Use of HSN Explanatory Notes and sample inspection in classification - Impugned goods are classifiable under CTH 7606 1200 and not under CTH 7610 9030. - HELD THAT: - The Tribunal examined the nature and use of the imported items and the relevant chapter headings. The goods are aluminium plates/sheets generally used for cladding surfaces and are not structures or parts of structures prepared for use in construction. The appellants produced sample plates and relied on HSN Explanatory Notes and prior decisions (including ICP Ltd.) where identical items were held to fall under 7606. The decision in D & M Building Products was examined and distinguished on facts because those items were prepared for use in structures after import, whereas the present goods are simple plates for cladding. Having regard to the product's form and use, the Tribunal found no reason to displace the classification under 7606 1200 and accepted the appellants' submissions and supporting materials. [Paras 4]

Classification under CTH 7606 1200 is upheld and the goods are not classifiable under CTH 7610 9030.

Finality of administrative orders - Principles of Judicial Discipline - Distinguishing precedents on facts - The department cannot re-agitate the same classification issue where earlier Commissioner (Appeals) orders have attained finality. - HELD THAT: - The Tribunal noted that Commissioner (A), Chennai had on multiple occasions decided in favour of the appellants and that the Department's appeal to CESTAT was dismissed for delay; there is no record of any successful appeal against those Commissioner (A) orders. In these circumstances the Commissioner (A)'s order has attained finality, and it is not open to the Department to repeatedly press the same classification issue. The Tribunal therefore applied principles of finality and judicial discipline to preclude reconsideration adverse to the appellants on the same facts. [Paras 4]

Department's attempt to reopen the settled classification is barred; the prior Commissioner (A) order has attained finality.

Final Conclusion: Appeal allowed; impugned imports held classifiable under CTH 7606 1200. Department's re-agitation of the identical classification issue is precluded by finality of earlier Commissioner (A) orders; consequential relief granted, if any.

Jurisdiction to continue pending labour proceedings after liquidation commencement date - bar on institution of fresh suits under Section 33(5) of the Code - continuation of proceedings during moratorium under Section 14 - distribution of liquidation proceeds in order of priority under Section 53 - workmen's dues for twenty-four months preceding liquidation commencement date - overriding effect of the Insolvency and Bankruptcy Code under Section 238

Jurisdiction to continue pending labour proceedings after liquidation commencement date - bar on institution of fresh suits under Section 33(5) of the Code - continuation of proceedings during moratorium under Section 14 - Whether the Controlling Authority under the Minimum Wages Act could proceed with and pass Ext.P3 after the NCLT's liquidation order dated 15.01.2018 - HELD THAT: - The court observed that moratorium under Section 14(1)(a) operates only from the commencement of CIRP (10.07.2017) until the liquidation order (15.01.2018). Once the NCLT passed the liquidation order, Section 33(5) bars institution of fresh suits or proceedings against the corporate debtor but does not prohibit continuance of suits or proceedings already instituted prior to liquidation. The claim under the Minimum Wages Act was filed in 2012 and thus predates the CIRP and the liquidation order; summons were issued and the petitioner entered appearance and filed a written statement before the Controlling Authority. Therefore, the Controlling Authority was within powers to proceed and pass Ext.P3 during the liquidation process as it related to a proceeding instituted prior to liquidation commencement date. [Paras 9]

Controlling Authority had jurisdiction to continue and decide the pending minimum wages claim and to pass Ext.P3 during liquidation.

Distribution of liquidation proceeds in order of priority under Section 53 - workmen's dues for twenty-four months preceding liquidation commencement date - overriding effect of the Insolvency and Bankruptcy Code under Section 238 - Whether amounts adjudicated by the Controlling Authority for periods prior to twenty-four months preceding the liquidation commencement date can be paid and how they are to be dealt with vis-a -vis Section 53 of the Code - HELD THAT: - The court held that Section 53 prescribes the order of priority for distribution of proceeds from sale of liquidation assets, giving a preferential ranking to workmen's dues for the twenty-four months preceding liquidation commencement date, but this does not prevent adjudication or payment of dues falling outside that preferential 24 month window. Such dues remain debts that must be satisfied in accordance with the priority scheme set out in Section 53, with any amounts falling outside the prioritized categories to be met under the residual class ('any remaining debts and dues'). Further, Section 238 gives the Code overriding effect over inconsistent enactments; accordingly, amounts adjudicated under the Minimum Wages Act must be distributed from liquidation assets in the order of priority established by Section 53. The court also noted there was no bar under Section 38 to receive the claim or for the liquidator to effect distribution in accordance with the Code until final completion of distribution. [Paras 10, 12, 13, 14]

Dues adjudicated by the Controlling Authority, including those prior to the 24 month preferential period, are payable but must be distributed from liquidation assets in accordance with the priority scheme of Section 53 and subject to the overriding effect of the Code.

Final Conclusion: Writ petition dismissed. Ext.P3 upheld; petitioner directed to deposit the amount ordered in Ext.P3 within 30 days and the sums shall be paid by the liquidator in the order of priority prescribed by Section 53 of the Insolvency and Bankruptcy Code.

Admissibility of Section 9 application under the Insolvency and Bankruptcy Code, 2016 - Collusion to initiate corporate insolvency resolution process - Forgery or fabrication of invoices / bogus bills - Relevance of pre-existing correspondence and documentary evidence to prove debt - Irrelevance of small monetary quantum to admissibility

Admissibility of Section 9 application under the Insolvency and Bankruptcy Code, 2016 - Forgery or fabrication of invoices / bogus bills - Relevance of pre-existing correspondence and documentary evidence to prove debt - Whether the Adjudicating Authority was justified in dismissing the Section 9 application on the finding that the bill was forged/collusive and therefore the petition was collusive and liable to be dismissed. - HELD THAT: - The Tribunal upheld the Adjudicating Authority's factual conclusion that, on the material before it, the Operational Creditor failed to establish that supply of building material and a genuine debt had existed. The Adjudicating Authority relied upon the sequence of events, absence of any prior correspondence between the parties about supply or demand, the single bill being unendorsed by any authorised representative of the Corporate Debtor, and the absence of a GST number on the bill. These facts supported the conclusion that the bill appeared to be fabricated and that there was active collusion between the parties to initiate CIRP. The Appellate Tribunal found no reason to take a different view, noting that the earlier decision relied upon by the appellant was fact-specific to that case and did not govern the present facts. The Tribunal held that there was sufficient material to infer collusion and that dismissal of the petition on that basis was justified. [Paras 6, 9]

The Adjudicating Authority's dismissal of the Section 9 application on findings of a forged/bogus bill and collusion is upheld.

Irrelevance of small monetary quantum to admissibility - Admissibility of Section 9 application under the Insolvency and Bankruptcy Code, 2016 - Whether the small amount claimed vitiated the Adjudicating Authority's finding of collusion or affected admissibility of the application. - HELD THAT: - The Tribunal accepted the appellant's submission that small quantum alone does not automatically establish collusion or justify dismissal. However, it held that quantum is only one factor and is not determinative. On the facts of this case, the Adjudicating Authority did not rely on quantum alone but on the overall sequence of events and documentary deficiencies to conclude collusion. Therefore, the small amount did not negate the finding of collusion when considered together with the other material before the Adjudicating Authority. [Paras 7, 8]

The small quantum of the claim does not by itself justify dismissal, but here it did not undermine the Adjudicating Authority's collusion finding based on the totality of evidence.

Final Conclusion: The Appeal is dismissed; the Tribunal affirms the Adjudicating Authority's finding that the Section 9 petition was collusive based on sequence of events and documentary deficiencies (including absence of prior correspondence and GST details), and therefore the petition was rightly dismissed.

Termination of agency on principal's insolvency - Power of attorney holder not competent to file proceedings under Section 7 - Authority of authorised officer after initiation of CIRP - Financial debt and sham/collusive/avoidance transactions under Section 5(8) - Requirement of 'debt' and 'default' for initiation under Section 7 - Approbation and reprobation / estoppel by election

Termination of agency on principal's insolvency - Power of attorney holder not competent to file proceedings under Section 7 - Authority of authorised officer after initiation of CIRP - Present petition not filed by a duly authorised officer of the financial creditor and therefore not maintainable - HELD THAT: - The Tribunal held that an agency (and thus any power of attorney) terminates upon the principal being adjudicated insolvent. DHFL underwent CIRP and an Administrator was appointed; consequently the earlier Power of Attorney and subsequent authorisations based on it stood terminated. Subsequent ratification by the Administrator and later by the successful resolution applicant did not validate acts done by the erstwhile authorised officers for the purpose of instituting Section 7 proceedings. The petition was filed by persons who lacked valid authority to prosecute the petition on behalf of the financial creditor after initiation of DHFL's insolvency process. [Paras 10, 11, 13, 14, 15]

Presented petition was not filed by a duly authorised officer of the financial creditor and is not maintainable on that ground

Financial debt and sham/collusive/avoidance transactions under Section 5(8) - Requirement of 'debt' and 'default' for initiation under Section 7 - Approbation and reprobation / estoppel by election - Petitioner failed to establish that the amounts claimed constituted a 'financial debt' (disbursal against consideration for time value of money) and that default supporting initiation under Section 7 existed - HELD THAT: - The Tribunal found on record that the same transactions were the subject-matter of an avoidance application alleging fraudulent and collusive transfers and that the CoC and resolution plan had ascribed negligible value to those avoidance transactions, indicating they were not bona fide loans. Applying the principles in Phoenix Arc and related authorities, the Tribunal held that sham or collusive transactions do not amount to financial debt under Section 5(8) because there was no genuine disbursal against consideration for the time value of money. Further, the petitioner, having pursued an avoidance application characterising the transactions as fraudulent, could not consistently assert in the Section 7 petition that they were valid financial debt (doctrine of approbation and reprobation). On these concurrent grounds the Tribunal concluded the petitioner did not establish the essential 'debt' and 'default' required for admission under Section 7. [Paras 18, 20, 21, 24, 28]

Claimed amounts do not qualify as financial debt and default in respect thereof is not established for triggering CIRP

Requirement of 'debt' and 'default' for initiation under Section 7 - Relief - the Section 7 petition was dismissed - HELD THAT: - In consequence of the findings that the petition was not filed by a duly authorised officer and that the claimed amounts did not constitute a financial debt, the Tribunal dismissed the Section 7 petition. Ancillary interlocutory applications were rendered infructuous and no costs were awarded. [Paras 29, 30, 31]

Section 7 petition dismissed; related interlocutory applications stand infructuous

Final Conclusion: The petition under Section 7 was dismissed as not maintainable because it was not filed by a duly authorised officer of the financial creditor and the petitioner failed to establish that the impugned transactions constituted a financial debt (being alleged sham/avoidance transactions); consequential interlocutory applications were rendered infructuous.

Interim protection from coercive recovery - restoration application before the appellate forum - pre-deposit condition for interim stay - recovery by freezing bank accounts under recovery provisions

Interim protection from coercive recovery - restoration application before the appellate forum - pre-deposit condition for interim stay - Interim protection from coercive action granted until the date the restoration application is taken up by the appellate authority. - HELD THAT: - Petitioner filed a writ seeking protection from coercive recovery steps until the restoration application ST/MA(ROA)/75051/2017 is taken up by the CESTAT. The appeal had been dismissed for default and an earlier interim protection had been granted by the CESTAT on deposit of 10% of CENVAT credit, for which a challan was produced. Respondent does not deny that the restoration application is pending and that the matter is scheduled before the Division Bench on 23.05.2022. A departmental reminder for recovery and a warning of possible freezing of bank accounts was issued. In the limited scope of the petition and without adjudicating merits, the Court found it appropriate to protect the petitioner from coercive steps until the restoration petition is taken up on 23.05.2022, directing communication of this order to the appellate registry and requiring the petitioner to serve a copy upon the Deputy/Assistant Registrar, CESTAT, Kolkata within one week. The interim protection ceases to operate on 23.05.2022. [Paras 2, 3, 4, 5]

Interim protection from coercive recovery is granted until 23.05.2022, subject to communication to the CESTAT and service by the petitioner; the court did not go into merits.

Final Conclusion: Writ petition disposed of by granting interim protection against coercive recovery steps until 23.05.2022 pending disposal of the restoration application; no adjudication on merits.

Refund of service tax on one-time upfront amount for grant of long-term lease by State Government industrial development corporation - exemption consequent to Notification No.41/2016 and amendment by Finance Act, 2017 - timely filing of refund claim under Section 104 of the Finance Act, 2017 - admissibility of documentary proof of payment (invoices/challans) at appellate stage - bench precedent as binding on identical issues

Refund of service tax on one-time upfront amount for grant of long-term lease by State Government industrial development corporation - exemption consequent to Notification No.41/2016 and amendment by Finance Act, 2017 - timely filing of refund claim under Section 104 of the Finance Act, 2017 - Appellants are entitled to refund of service tax paid on one-time upfront amounts for long-term leases granted by the State Government industrial development corporation for the period 01.06.2007 to 21.09.2016, subject to timely filing of claim. - HELD THAT: - The Bench held that Notification No.41/2016 and the amendment introduced by Finance Act, 2017 operate to exempt the one-time upfront amounts paid for long-term leases by industrial units from service tax for the period 01.06.2007 to 21.09.2016 and that Section 104(2) provided a six-month window for filing refund claims after the Finance Act came into force. The appellants filed refund claims within the statutory period. The Tribunal relied on earlier decisions of the same Bench (including Comfort Night Linen Products and Metrolite Roofing Pvt. Ltd. cases) where identical claims were allowed, and found those precedents determinative. Applying that reasoning to the present appeals, the Tribunal concluded on merits that the refunds were due.

Refunds were allowed on merits and impugned orders set aside.

Admissibility of documentary proof of payment (invoices/challans) at appellate stage - bench precedent as binding on identical issues - Rejection of refund claims for non-production of invoices at the adjudicating stage was not justified where invoices, challans and a certificate from KINFRA showing payment of service tax and non-availability of credit were produced before or during the appellate proceedings. - HELD THAT: - The Tribunal examined the procedural contention that requisite documents under the provisions made applicable by Section 83 could only be furnished at the adjudicating stage. It noted that the appellants produced invoices, challans and a certificate from KINFRA evidencing payment of service tax and non-availment of credit during the pendency of the appeals. Relying on prior orders of this Bench which dealt with the same procedural question, the Tribunal held that the production of such documents at the appellate stage satisfied the requirement to prove payment and there was no justification to reject the refund claims on that ground.

Impugned findings rejecting refunds for non-production of documents were set aside and appeals allowed.

Final Conclusion: The Tribunal allowed all the appeals, set aside the impugned orders and directed grant of refunds of service tax paid on one-time upfront lease amounts for the period 01.06.2007 to 21.09.2016, holding that timely refund claims and production of invoices/challans and certificate from KINFRA during appellate proceedings established entitlement.

Priority of charge on secured assets - effect of SARFAESI Act sale on third party or statutory claims - operation of first charge claimed under the VAT law - entitlement to recover dues from original borrower - compulsory registration of sale deed in favour of purchaser under SARFAESI sale

Priority of charge on secured assets - operation of first charge claimed under the VAT law - effect of SARFAESI Act sale on third party or statutory claims - The State cannot claim a first charge over the property sold in auction under SARFAESI by virtue of Section 48 of the GVAT Act; the bank's charge/priority prevails. - HELD THAT: - The Court held that what the petitioner purchased in the auction was a secured asset under the SARFAESI Act and, accordingly, the State cannot claim preference over that subject property for recovery of VAT dues from the original borrower. The Court relied upon earlier decisions of this Court, including Kalupur Commercial Co operative Bank Ltd. (and Bank of India v. State of Gujarat), which concluded that the first priority over secured assets vests in the bank (by virtue of SARFAESI remedies) and that the State's claim under the VAT statute does not override that priority. The Court recorded that any excess realisation, if any, may be adjusted towards the State's dues and clarified that the respondents cannot proceed against purchasers of properties sold under SARFAESI; however recovery from the original borrower in accordance with law remains open to the State. [Paras 7, 9, 10]

Writ allowed: declared that the State has no first charge on the subject property by virtue of Section 48 of the GVAT Act and the bank's priority under SARFAESI prevails; adjustment of any excess towards State dues and State may proceed only against the original borrower.

Compulsory registration of sale deed in favour of purchaser under SARFAESI sale - registration in accordance with the Registration Act - Direction to the Sub Registrar to register the sale deed executed by the State Bank of India in favour of the writ applicant. - HELD THAT: - Having declared that the State cannot claim a first charge over the property and that the purchaser under the SARFAESI sale is protected, the Court directed the Sub Registrar to register the sale deed executed by the bank in favour of the petitioner in accordance with the Registration Act. The direction responds to the Sub Registrar's earlier refusal to register due to the State's claim and requires registration to be carried out at the earliest. [Paras 10]

Sub Registrar directed to register the sale deed in favour of the petitioner in accordance with law.

Final Conclusion: The writ petition is allowed: the State cannot assert a first charge over the property sold under SARFAESI and the bank's priority stands; the Sub Registrar is directed to register the sale deed executed in favour of the petitioner; the State remains free to pursue recovery from the original borrower in accordance with law.

Pre-deposit requirement - dismissal for non-compliance of pre-deposit order - opportunity to produce documents/proofs - hearing on merits - quashing and setting aside tribunal order

Dismissal for non-compliance of pre-deposit order - opportunity to produce documents/proofs - Whether the Tribunal's dismissal of the second appeals for want of compliance with its pre-deposit order could be sustained when the appellant had not produced challans and counsel sought time to produce documents. - HELD THAT: - The High Court did not answer the substantial questions of law formulated at admission because the appellant, through counsel, offered immediate compliance by tendering the pre-deposit fixed by the Assessing Officer. In view of that offer, the Court quashed and set aside the Tribunal's order which had dismissed the appeals for non-compliance. The Court thereby remedied the consequence of the Tribunal's dismissal by permitting the appellant to make the pre-deposit and securing an opportunity to have the appeals adjudicated on merits by the First Appellate Authority. The Court's disposition avoids determination of whether the Tribunal erred in refusing further opportunity because the appellant undertook to comply with the pre-deposit requirement. [Paras 4, 5]

Impugned Tribunal order dated 4.9.2018 quashed and set aside; appellant directed to deposit the pre-deposit amounts within two weeks to enable further hearing.

Pre-deposit requirement - hearing on merits - quashing and setting aside tribunal order - Effect of compliance with the pre-deposit obligation on continuation of appellate proceedings and duty of the First Appellate Authority. - HELD THAT: - The Court directed the appellant to deposit the amounts fixed (pre-deposit) with the First Appellate Authority within two weeks. Upon such deposit, the First Appellate Authority is mandated to hear the appeals on merits and dispose of them in accordance with law. The High Court's order restores the appellant's right to substantive adjudication by conditioning continuation of the appeal on the specified pre-deposit and by setting aside the Tribunal's dismissal which had precluded a merits hearing. [Paras 4, 5]

Appellant to deposit the specified pre-deposit amounts within two weeks; on deposit the First Appellate Authority to hear and decide the appeals on merits.

Final Conclusion: The Tribunal's order dismissing the second appeals for non-compliance with the pre-deposit direction is quashed and set aside; the appellant is directed to make the pre-deposit within two weeks and, upon such deposit, the First Appellate Authority shall proceed to hear and decide the appeals on merits.

Mandatory statutory pre-deposit - pre-deposit as part of tax liability - effect of NCLAT approved resolution plan on pre existing tax claims - extinguishment of claims by operation of an approved resolution plan - refund of excess tax paid and entitlement to interest - burden of proof in refund claims under the tax statute

Mandatory statutory pre-deposit - pre-deposit as part of tax liability - refund of excess tax paid and entitlement to interest - Whether the Tax Board erred in rejecting the petitioner's claim for refund (with interest) of amounts deposited as mandatory statutory pre-deposit with appeals that became infructuous after acceptance of the resolution plan. - HELD THAT: - The Court held that the statutory pre-deposit paid with the appeals represented a proportion of the tax liability assessed against the original corporate debtor. Once the NCLAT approved the petitioner's resolution plan and limited the Department's admitted claim to the quantified sum, all other pre existing liabilities stood extinguished under the resolution plan. The Tax Board's conclusion that refund would be payable only if appeals were accepted on merits overlooked that the appeals became infructuous because the Department itself, following the resolution process, disposed of liabilities beyond the admitted claim. Consequently any amounts deposited in excess of the liability finally fixed by the NCLAT must be reimbursed. The court relied on the statutory refund regime and principles governing the effect of an approved resolution plan to conclude that retention of amounts beyond the admitted claim would amount to unjust enrichment and was contrary to the Resolution Plan's effect.

The Tax Board's rejection of the refund applications was set aside and the pre-deposit amounts deposited with the appeals are to be reimbursed to the petitioner with interest.

Effect of NCLAT approved resolution plan on pre existing tax claims - extinguishment of claims by operation of an approved resolution plan - burden of proof in refund claims under the tax statute - Whether, after the NCLAT fixed the Department's admitted claim, the burden to show that pre-deposits were outside the scope of the claim lay on the petitioner or on the Department. - HELD THAT: - Although Section 53(5) places on the claimant the burden to prove incidence of tax or payment, the Court found that the resolution proceedings and the NCLAT's determination of the Department's claim operate to fix the total liability. Where the Department filed and prosecuted a claim before the NCLAT and the NCLAT adjudicated and limited that claim, it follows that any amounts retained by the Department in excess of that adjudicated claim cannot be treated as survivals of pre-existing liability without the Department showing otherwise. The Court held that the petitioner discharged its burden by producing the Resolution Plan and the NCLAT's order; if the Department alleges that pre-deposits were separable from the claim decided in insolvency, the onus to establish that position is on the Department.

The extinguishment effected by the approved resolution plan shifts the evidentiary burden such that retention of amounts beyond the NCLAT admitted claim cannot be sustained unless the Department proves those amounts were outside the resolution proceedings.

Final Conclusion: The revisions are allowed. The consolidated order of the Tax Board is set aside insofar as it refused refund of the pre deposit amounts; the amounts deposited as mandatory pre deposit shall be reimbursed to the petitioner with interest at the applicable rate within three months.

Refund claim - interest on delayed refund - interest under Section 42 of the DVAT Act - principle of unjust enrichment - direction to decide refund claim expeditiously - decision in accordance with law, rules and regulations

Refund claim - interest on delayed refund - interest under Section 42 of the DVAT Act - principle of unjust enrichment - direction to decide refund claim expeditiously - decision in accordance with law, rules and regulations - Claim for refund of Rs. 13,15,968/- for the 4th quarter of the Assessment Year 2013-14 and entitlement to interest thereon - HELD THAT: - The Court directed the concerned respondents to decide the petitioner's refund claim for Rs. 13,15,968/- for the 4th quarter of Assessment Year 2013-14 along with interest as claimed. The respondents are to decide the claim in accordance with applicable law, rules, regulations and government policies, and having regard to the principle of unjust enrichment as propounded by the Supreme Court in Mafatlal Industries Ltd. & Ors. v. Union of India & Ors. The decision is to be taken expeditiously and preferably within eight weeks from receipt of a copy of the order. The Court recorded no substantive finding on the quantum or legal entitlement itself but remitted the matter to the respondents for adjudication in conformity with legal principles and applicable statutory provisions, including consideration of interest under Section 42 of the DVAT Act. [Paras 6, 7]

Respondents directed to decide the refund claim for the 4th quarter of Assessment Year 2013-14 along with interest, in accordance with law and the principle of unjust enrichment, preferably within eight weeks.

Final Conclusion: Writ petition disposed with direction to the respondents to adjudicate the refund claim for Rs. 13,15,968/- for the 4th quarter of Assessment Year 2013-14 and interest, in accordance with law, rules and government policy and keeping in mind the principle of unjust enrichment; decision to be taken expeditiously and preferably within eight weeks.

Assignment of debt as conveyance - power of attorney chargeable as conveyance - single instrument rule against splitting stamp duty - statutory authority to sell under the Securitisation Act - effect of executive notification reducing stamp duty - deemed transfer of rights under Section 5 of the Securitisation Act, 2002

Power of attorney chargeable as conveyance - statutory authority to sell under the Securitisation Act - Whether the reference in Schedule 3 to an irrevocable power of attorney in the Assignment Agreement rendered the instrument chargeable to duty under Article 45(f) as a PoA authorising sale of immovable property. - HELD THAT: - The document presented and registered was a single Assignment Agreement which contained, in clause 11.12, a provision that the assignor would execute an irrevocable PoA substantially in the form set out in Schedule 3. There was no separate, independent instrument of PoA executed contemporaneously. The power to sell secured assets in this case flowed from the statutory scheme: the appellant, an Asset Reconstruction Company, acquired the bank's financial assets and, under Section 5 read with the definition of secured creditor, succeeds to the bank's rights including enforcement of security. Thus the alleged authority to sell did not arise from an independent PoA attracting Article 45(f) but from the assignment and the statutory rights under the Securitisation Act. The High Court's treatment of the Schedule-3 PoA as an independent instrument chargeable under Article 45(f) was therefore incorrect. [Paras 8, 9, 11, 12]

The instrument is not chargeable under Article 45(f) on the ground that the Schedule-3 form constituted an independent PoA authorising sale; the power to sell derived from the assignment and statutory rights under the Securitisation Act.

Assignment of debt as conveyance - single instrument rule against splitting stamp duty - effect of executive notification reducing stamp duty - Whether, having accepted and collected duty on the Assignment Agreement as a conveyance under Article 20(a) (with the benefit of Government notifications reducing and capping duty), the Revenue could separately demand additional stamp duty under Article 45(f). - HELD THAT: - Once the Assignment Agreement was adjudicated and charged to duty as a conveyance under Article 20(a), and the reduced/capped duty pursuant to the Gujarat Government notifications under Section 9(a) was accepted and collected (with the appellant having paid the assessed duty), the Revenue cannot split the single instrument and subject it again to duty under a different head merely because the instrument contained an incidental PoA format or because the notifications reduced the duty. Taxing provisions and machinery must be applied consistently; acceptance of the instrument under the charging provision and collection of duty precludes a second demand on the same instrument under Article 45(f). The High Court did not consider the effect of the notifications and the bar on re taxing the same instrument. [Paras 13, 14, 15, 16]

The demand under Article 45(f) is unsustainable where the single instrument was charged, assessed and duty collected as a conveyance under Article 20(a) with the benefit of the notifications; the instrument cannot be re taxed by splitting it.

Final Conclusion: The appeal is allowed; the Full Bench's opinion and the demand for additional stamp duty are set aside, and the demand made by the Chief Controlling Revenue Authority is quashed. No order as to costs.

Recovery of fine/compensation from estate on death - Interim compensation under Section 143A - Section 70 IPC - death not to discharge property from liability - Section 421 CrPC - warrant for levy of fine - Application of Sections 63-70 IPC via General Clauses Act - Dependence of interim compensation on outcome of trial

Recovery of fine/compensation from estate on death - Section 70 IPC - death not to discharge property from liability - Section 421 CrPC - warrant for levy of fine - Application of Sections 63-70 IPC via General Clauses Act - Compensation directed upon conclusion of proceedings under Section 138 is recoverable from the estate of a deceased accused. - HELD THAT: - Sections 63-70 IPC apply to fines imposed under other enactments by operation of Section 25 of the General Clauses Act; Section 70 IPC provides that death does not discharge property from liability and unpaid fines may be levied within prescribed periods. Read with Section 421 CrPC (procedure for levy of fines) and Section 431 CrPC (money payable recoverable as a fine), a compensation or fine adjudicated in the course of proceedings under Section 138 can affect the property of the accused and, consequently, the legal heirs who inherit the estate are liable to repay the fine or compensation when recovery proceedings are undertaken. The court therefore holds that compensation awarded under Section 138 can be recovered from the estate of a deceased accused. [Paras 21, 22, 24, 29]

Compensation awarded upon conclusion of a Section 138 proceeding is recoverable from the estate of the deceased accused and the legal heirs may be made liable in recovery proceedings under the CrPC.

Interim compensation under Section 143A - Dependence of interim compensation on outcome of trial - Repayment obligation under Section 143A(4) - Interim compensation awarded under Section 143A cannot be recovered from the estate of an accused who dies before conclusion of the trial. - HELD THAT: - Section 143A authorises interim compensation but pairs that power with subsection (4), which requires repayment if the drawer is ultimately acquitted; subsection (6) further adjusts final penalties by amounts paid as interim compensation. The interim order is dependent on the trial's outcome and does not create a crystallised, final right in favour of the complainant. Where the accused dies before trial conclusion there is no scope to adjudicate guilt or innocence and the interim order, being ancillary to a subsisting trial, ceases to subsist. Consequently an interim compensation awarded under Section 143A cannot be executed against the deceased's estate. [Paras 35, 36, 37, 38]

An interim compensation under Section 143A, awarded prior to trial conclusion, is not recoverable from the estate of an accused who dies before the trial is concluded.

Final Conclusion: The revisional application is dismissed. The Court holds that (a) compensation awarded in proceedings under Section 138 is recoverable from the estate of a deceased accused, but (b) an interim compensation under Section 143A paid before conclusion of trial cannot be recovered from the estate of an accused who dies before trial ends.

Compounding of offences under negotiable instruments law - Section 138 Negotiable Instruments Act acquittal on compromise - Deposit of compounding fee with State Legal Services Authority - Requirement to deposit 15% of cheque amount as costs - Exercise of revisional jurisdiction under Sections 397 and 401 Cr.P.C.

Compounding of offences under negotiable instruments law - Section 138 Negotiable Instruments Act acquittal on compromise - Deposit of compounding fee with State Legal Services Authority - Requirement to deposit 15% of cheque amount as costs - Application for compounding the offence under section 138 of the Negotiable Instruments Act and consequent acquittal subject to payment of compounding fee. - HELD THAT: - The parties filed a joint application before the High Court stating that they had amicably compromised the matter and produced affidavits and acknowledgments of payment. The Registrar (Judicial-II) verified the compromise, reporting that it was voluntary and without coercion and that the complainant had no objection to acquittal. Relying on the principle in Damodardas S. Prabhu v. Sayed Babalal H and M.P. State Legal Services Authority v. Prateek Jain and others, the Court recorded that compounding in such cases is to be permitted subject to deposit of costs/compounding fee with the State Legal Services Authority. The Court accordingly allowed the parties' prayer for compounding on condition that the applicant deposit 15% of the cheque amount as compounding fee with the State Legal Services Authority within the stipulated period, and ordered that the impugned conviction and sentence be set aside and the applicant be acquitted upon compliance with the condition.

Revision allowed and impugned judgment set aside; applicant to be acquitted of the offence under section 138 N.I. Act on deposit of 15% of the cheque amount with the State Legal Services Authority within the time directed.

Final Conclusion: The criminal revision is allowed on terms: the conviction and sentence recorded by the trial and appellate courts are set aside and the accused is acquitted of the offence under section 138 of the Negotiable Instruments Act provided he deposits 15% of the cheque amount as compounding fee with the State Legal Services Authority within the time directed.

Quashment under Section 482 of the Code of Criminal Procedure - offences under Section 138 of the Negotiable Instruments Act - vicarious liability under Section 141 of the Negotiable Instruments Act - strict construction of penal/vicarious liability provisions - inherent powers of the High Court to prevent abuse of process - use/adjustment of amounts lying in escrow to offset cheque liability - criminal proceedings under the N.I. Act are not a substitute for civil recovery

Quashment under Section 482 of the Code of Criminal Procedure - offences under Section 138 of the Negotiable Instruments Act - use/adjustment of amounts lying in escrow to offset cheque liability - criminal proceedings under the N.I. Act are not a substitute for civil recovery - Whether complaint proceedings under Section 138 of the Negotiable Instruments Act could be quashed under the inherent jurisdiction of the High Court where the company offered to adjust the cheque amounts from sums already held by the complainant in escrow and no separate recovery proceedings were pending. - HELD THAT: - The High Court found that the cheques were issued in relation to inter-corporate deposits and that no other recovery proceedings by the respondent were shown to be pending. The Court reiterated the principle that proceedings under the N.I. Act are not a recovery suit and must not be used as a weapon for civil recovery. Given the offer by the petitioners to adjust the cheque amounts from the monies already in respondent's possession (which the Supreme Court had earlier directed to be refunded but which remained with the respondent and had accrued interest), the Court held the offer to be reasonable in the interest of finality and to prevent abuse of process. The Court relied on the authority that the court may direct settlement in the interest of justice and exercised its inherent powers under Section 482 to resolve the dispute rather than relegating the parties to prolonged litigation. On this basis the Court quashed the complaint proceedings and directed adjustment of the cheque amounts from the escrow along with specified compensation and costs. [Paras 9, 10, 11, 21, 22]

Complaint proceedings under Section 138 were quashed and the total cheque amounts were to be adjusted from the amount lying in escrow with further directions for compensation and costs.

Vicarious liability under Section 141 of the Negotiable Instruments Act - strict construction of penal/vicarious liability provisions - Whether the averments in the complaint satisfy the requirements of Section 141 of the Negotiable Instruments Act to fasten vicarious liability on the individual directors. - HELD THAT: - The Court examined the complaint's averments against authoritative dicta that vicarious liability under Section 141 is penal in nature and must be strictly construed. It noted the settled law requiring specific averments showing how and in what manner a director was in charge of and responsible for the conduct of the company's business at the relevant time. Applying those principles to the complaint, the Court found that the allegations as to petitioners No.2 and 3 were not sufficient to meet the statutory requirement. However, the Court observed that despite this prima facie insufficiency, the petitions were being allowed on the broader ground of settlement and adjustment from escrow funds rather than on the sole basis of deficiency in averments. [Paras 12, 13, 20]

The complaint's averments as to the individual directors were insufficient to satisfy Section 141's requirements, although the proceedings were quashed on the basis of adjustment/settlement rather than solely on that ground.

Inherent powers of the High Court to prevent abuse of process - quashment under Section 482 of the Code of Criminal Procedure - Whether the High Court should remit the offer for settlement to the trial court or may itself exercise its inherent jurisdiction under Section 482 to accept the proposal and quash proceedings. - HELD THAT: - The Court rejected the respondent's contention that the matter ought to be relegated to the trial court for consideration of the settlement offer, noting the exceptionally prolonged litigation and the absence of other recovery proceedings. Observing that the High Court's inherent power under Section 482 is available to prevent abuse and to secure the ends of justice, the Court held it proper to exercise that power directly to resolve the dispute and accept the adjustment proposal rather than remitting the matter. [Paras 11, 21]

The High Court may exercise its inherent jurisdiction under Section 482 to accept the settlement/adjustment proposal and quash the proceedings without relegating the parties to the trial court.

Final Conclusion: The petitions under Section 482 CrPC are allowed. All complaint proceedings arising from the bounced cheques under Section 138 of the Negotiable Instruments Act are quashed. The respondent is directed to permit adjustment of the cheque amounts from the monies lying in its escrow account; additionally Rs. 50 lakh as compensation and Rs. 20 lakh as litigation costs are to be adjusted, and the petitioners are discharged of legal liability under the cheques.

Offence under Section 138 of the Negotiable Instruments Act - presumption under Section 139 of the Negotiable Instruments Act and Section 118 - onus on the accused to rebut presumption by preponderance of probabilities or by leading defence evidence - proof by documentary evidence - cheque, bank memo, return memo and statutory notice - appreciation of evidence and concurrent findings of fact

Offence under Section 138 of the Negotiable Instruments Act - presumption under Section 139 of the Negotiable Instruments Act and Section 118 - proof by documentary evidence - cheque, bank memo, return memo and statutory notice - onus on the accused to rebut presumption by preponderance of probabilities or by leading defence evidence - Whether the conviction under Section 138 of the Negotiable Instruments Act was legally sustainable - HELD THAT: - The trial court recorded that Ex.P1 (the cheque) belonged to the accused and the accused admitted his signature thereon; Ex.P3 showed dishonour and Ex.P4 was the statutory demand notice which was served. On these documents and the complainant's evidence the presumption under Section 139 (read with Section 118) of the Negotiable Instruments Act arose in favour of the complainant. The accused had two routes to rebut the presumption - by adducing material in cross-examination to show the complainant's case was not probable, or by leading defence evidence. The accused gave evidence as DW1 but his defence - alleging loss/misuse of cheques and that he had informed the bank to stop payment - was inconsistent, unsupported by documentary proof or bank manager evidence, and did not give dates or particulars; the accused even admitted the signature on the cheque. The courts below examined these matters, applied the principles in Rangappa and related decisions, found the defence improbable and held that the accused failed to discharge the burden shifted upon him. The appellate court's confirmation of conviction was a concurrence on facts and appreciation of evidence, not vitiated by perversity or illegality. [Paras 13, 14, 15, 16, 17]

Conviction under Section 138 of the Negotiable Instruments Act was upheld as the presumption under Section 139/118 stood unrebutted and the defence was found improbable.

Final Conclusion: Criminal revision dismissed; the judgment of conviction and sentence dated 28.06.2019 confirmed and the appellate judgment dated 23.03.2021 upheld; trial court records are returned and deposit transmitted to trial court for payment to the complainant after verification.