TaxTMI Updates e-Newsletter
May 02,2024

Opportunity to be heard - natural justice - show cause notice and personal hearing - remand for fresh consideration - conditional remand on interim deposit

Opportunity to be heard - natural justice - show cause notice and personal hearing - Impugned order set aside on the ground that the petitioner was not afforded a reasonable opportunity to contest the tax proposal. - HELD THAT: - The impugned order confirmed the tax proposal solely because the petitioner did not file written objections to the show cause notice or attend a personal hearing. The petitioner asserts that the reporting errors were inadvertent, were rectified in Form GSTR 9 and the ITC was reversed in GSTR 3B (March 2020), and therefore was entitled to an opportunity to contest the proposal on merits. In the interests of justice and in view of the asserted rectification, the Court found that the petitioner should be afforded a further opportunity before the tax proposal is adjudicated, consistent with the principles of natural justice and opportunity to be heard. [Paras 5]

Impugned order dated 27.07.2023 set aside for want of a reasonable opportunity to contest the tax proposal.

Remand for fresh consideration - conditional remand on interim deposit - Matter remanded to the respondent for reconsideration on specified conditions and timelines. - HELD THAT: - The Court remanded the matter for fresh consideration on the condition that the petitioner remit 10% of the disputed tax demand within two weeks and submit a reply to the show cause notice within the same period. Upon receipt of the petitioner's reply and satisfaction that the interim deposit (10%) has been made, the respondent is directed to provide a reasonable opportunity, including a personal hearing, and to pass a fresh order within three months from receipt of the reply. The remand is therefore conditional and limited to reconsideration after compliance with the stated terms. [Paras 6]

Matter remanded to the respondent for reconsideration on the petitioner remitting 10% of the disputed demand and submitting a reply within two weeks; respondent to afford hearing and pass fresh order within three months.

Final Conclusion: Writ petition disposed of by setting aside the impugned order for failure to afford a reasonable opportunity; matter remanded to the respondent for fresh consideration on the petitioner making an interim deposit of 10% and filing a reply within two weeks, with a fresh adjudication to follow within three months.

Requirement of fresh show cause notice when basis of demand is altered - invalidity of order passed on a different basis from the show cause notice - debit to electronic credit ledger and reversal of input tax credit - imposition of tax liability and penalty without fresh opportunity

Requirement of fresh show cause notice when basis of demand is altered - invalidity of order passed on a different basis from the show cause notice - Validity of the impugned order when it imposed a higher tax and penalty on a basis different from the show cause notice without issuing a fresh notice - HELD THAT: - The petitioner was issued an intimation and show cause notice quantifying liability on the basis of alleged sales suppression amounting to a specified sum. The impugned order, however, imposed a materially larger tax liability and an equal penalty by comparing GSTR-3B and GSTR-2A, thereby proceeding on a basis different from that indicated in the show cause notice. The Court held that where the authority intends to modify the tax proposal in light of the assessee's reply or proceed on a different legal or factual basis, it must issue a fresh show cause notice giving the assessee an opportunity to respond to the new case. The impugned order could not be sustained because it altered the basis of demand without providing a fresh notice and opportunity to the petitioner. [Paras 4]

Impugned order set aside; respondent permitted to initiate fresh proceedings by issuing a show cause notice.

Debit to electronic credit ledger and reversal of input tax credit - imposition of tax liability and penalty without fresh opportunity - Legal consequence of reversal/debit of input tax credit in the electronic credit ledger in the context of the impugned proceedings - HELD THAT: - The record shows that the petitioner's electronic credit ledger was debited by a specified amount subsequent to the show cause process. The Court noted this debit as a relevant fact reinforcing the need for reconsideration, since the substantive basis of denial of input tax credit had been contested in the petitioner's reply. In such circumstances, where the denial of credit and ledger debit form part of the impugned outcome yet the foundational basis differs from the notice, the proper course is to set aside the order and allow the authority to examine and prosecute the matter afresh after issuing an appropriate show cause notice. [Paras 2, 4]

Set aside the order insofar as it proceeded without issuing a fresh show cause notice; matter left open for fresh proceedings including any ledger adjustments after fresh notice.

Final Conclusion: Impugned order dated 23.06.2023 is set aside for proceeding on a basis different from the show cause notice; respondent may issue a fresh show cause notice and proceed afresh; petition disposed of accordingly.

Speaking order - cryptic order / non-speaking order - consideration of taxpayer's reply - failure to apply mind - opportunity of personal hearing - re-adjudication on remand - remand for fresh consideration - Section 75(3) of the Central Goods and Services Tax Act, 2017

Cryptic order / non-speaking order - consideration of taxpayer's reply - failure to apply mind - speaking order - re-adjudication on remand - opportunity of personal hearing - Section 75(3) of the Central Goods and Services Tax Act, 2017 - Validity of the impugned order dated 30.12.2023 which confirmed the demand without considering the petitioner's detailed reply and whether the matter should be remitted for fresh adjudication. - HELD THAT: - The Court found that the petitioner had filed a detailed reply to the Show Cause Notice with supporting documents, but the impugned order recorded only that the reply was 'incomplete, not duly supported by adequate documents and unable to clarify the issue' without demonstrating that the Proper Officer applied his mind to the materials submitted. The Court observed that if further particulars were required, the Proper Officer ought to have specifically sought them from the petitioner. For these reasons the impugned order was held to be unsustainable as a non-speaking or cryptic order. The matter was therefore remitted to the Proper Officer for re-adjudication. The petitioner was permitted to file a further reply within 30 days, after which the Proper Officer must give an opportunity of personal hearing and pass a fresh speaking order in accordance with law within the period prescribed under Section 75(3) of the Act. The Court expressly declined to adjudicate the merits of the case, reserving all rights and contentions of the parties. [Paras 6, 7, 8, 9, 10]

Impugned order set aside; Show Cause Notice remitted for re-adjudication with directions to permit further reply within 30 days, grant personal hearing and pass a fresh speaking order within the period under Section 75(3); merits not considered.

Final Conclusion: The petition succeeds; the order dated 30.12.2023 is set aside and the Show Cause Notice is remitted for fresh adjudication in terms of the directions given, with liberty to the petitioner to file further reply and subject to a fresh speaking order being passed within the statutory time.

Computation of period of limitation - exclusion of the day in computing limitation under Section 12 of the Limitation Act - deemed date of filing where order is uploaded on the common portal under Rule 108(3) of the CGST Rules - effect of online uploading of the order on date of filing of appeal - reinstatement of appeal for adjudication on merits

Computation of period of limitation - exclusion of the day in computing limitation under Section 12 of the Limitation Act - effect of online uploading of the order on date of filing of appeal - deemed date of filing where order is uploaded on the common portal under Rule 108(3) of the CGST Rules - Whether the appeal filed on 12.11.2022 was time-barred - HELD THAT: - The Appellate Authority held the appeal barred because the Order-in-Original was not uploaded at the time of online filing and the physical copy was filed only on 29.08.2023, which it treated as the date of filing. The petitioner demonstrated, and the respondents conceded upon re-verification, that the Order-in-Original had been uploaded on the common portal along with the appeal filed online on 12.11.2022. Independently, the Court applied the exclusion rule under Section 12 of the Limitation Act: the day on which the order was pronounced/uploaded (12.08.2022) is excluded and the three-month period therefore commenced on 13.08.2022, making 12.11.2022 the last day for filing. The appeal bearing an online filing date of 12.11.2022 was therefore within time. The Appellate Authority erred in rejecting the appeal as barred by limitation without applying the exclusion principle of Section 12 and without accepting the uploaded record on the portal. [Paras 12, 13, 14, 15, 16]

Appeal was within time; impugned order rejecting the appeal on limitation is set aside and the appeal is restored for adjudication on merits.

Reinstatement of appeal for adjudication on merits - Whether the appeal should be restored and decided on merits - HELD THAT: - The impugned order dismissed the appeal solely on limitation; since the court has found the appeal to be within time, it set aside the impugned order and restored the appeal on the Appellate Authority's record. The Appellate Authority is directed to decide the appeal on merits in accordance with law. Contentions on the substantive refund claim and its admissibility were not examined and remain open for determination by the Appellate Authority. [Paras 16, 19]

Impugned order set aside; appeal restored and remitted to the Appellate Authority for decision on merits.

Final Conclusion: Impugned order dated 18.10.2023 rejecting the appeal as time-barred is set aside; the appeal is restored to the Appellate Authority which is directed to decide it on merits in accordance with law; all rights and contentions reserved.

Rectification application - reconciliation of turnover discrepancies between financial statements and GSTR returns - show cause notice - directions for expeditious disposal of pending tax proceedings - administrative verification of reconciliatory documents

Rectification application - reconciliation of turnover discrepancies between financial statements and GSTR returns - directions for expeditious disposal of pending tax proceedings - Respondent directed to consider and dispose of the petitioner's rectification application, which seeks verification of reconciliatory documents addressing discrepancies between turnover as per financial statements and auto-populated GSTR returns. - HELD THAT: - The writ petition challenged an order in original confirming tax proposals on two discrepancies relating to differences between turnover shown in the petitioner's financial statements and the auto-populated GSTR 2A, and between annual returns in Form GSTR 9 and monthly returns in Form GSTR 3B. The petitioner filed a rectification application enclosing reconciliation statements and supporting documents. The respondent informed the Court that the rectification application had not been uploaded on the portal and undertook that, if uploaded, it would be considered and disposed of within a reasonable time. The High Court, on perusal of the impugned order and the rectification application, observed that the petitioner had placed relevant reconciliatory documents before the authority and that disposal of the rectification application on that basis was appropriate. Exercising supervisory jurisdiction, the Court directed the respondent to consider the rectification application expeditiously and to dispose of it within a specified timeframe, and directed the petitioner to upload the application to facilitate such consideration. [Paras 3, 4, 5]

Rectification application dated 26.02.2024 to be uploaded by the petitioner by 26.04.2024 and to be considered and disposed of by the respondent within two months from receipt of a copy of the order.

Final Conclusion: Writ petition disposed by directing prompt upload and consideration of the rectification application; the authority to dispose of the application within two months; no costs.

Assessment order quashing and remand - remittal for fresh consideration on merits - failure to participate in assessment proceedings - exercise of assessment powers under Section 73 of the TNGST Act, 2017 - recovery from Electronic Credit Ledger - re-credit of 50% to Electronic Credit Ledger as interim equitable relief - corrigendum to DRC-01 - opportunity to file detailed reply and time-bound disposal

Assessment order quashing and remand - failure to participate in assessment proceedings - remittal for fresh consideration on merits - Impugned assessment order dated 20.12.2023 for Assessment Year 2017-18 is quashed and the matter is remitted to the respondents for fresh adjudication on merits. - HELD THAT: - The Court observed that the petitioner did not participate in the DRC-01 proceedings which culminated in the impugned order dated 20.12.2023. Having regard to the non-participation and the fact that a substantial portion of tax was already recovered, the Court set aside the impugned order and remitted the matter to the respondents to decide afresh on merits in accordance with law. The remand is directed to permit the petitioner an opportunity to file a detailed reply and to enable the respondents to reconsider the matter on substantive grounds. [Paras 5]

Impugned order quashed and matter remitted for fresh consideration on merits.

Corrigendum to DRC-01 - The impugned order shall stand quashed and shall operate as a corrigendum to the notice issued in DRC-01 dated 28.09.2023. - HELD THAT: - The Court directed that the quashed order be treated as a corrigendum to the earlier DRC-01 proceedings so that the respondents may proceed afresh in accordance with law, giving the petitioner an opportunity to be heard in the revived proceedings. [Paras 6]

Quashed order to be treated as corrigendum to DRC-01 dated 28.09.2023.

Opportunity to file detailed reply and time-bound disposal - Petitioner to file a detailed reply within 45 days; respondents to take up the matter afresh and pass final orders on merit within 45 days thereafter. - HELD THAT: - To effectuate the remand and ensure an expeditious disposal on merits, the Court imposed a time schedule: the petitioner must file a detailed reply within 45 days of receipt of the order and the respondents must conclude consideration and pass final orders on merits within 45 days after receipt of that reply. The petitioner is also directed to file supporting documents to substantiate its case. [Paras 7]

Time-bound directions issued for filing reply and passing fresh orders.

Recovery from Electronic Credit Ledger - re-credit of 50% to Electronic Credit Ledger as interim equitable relief - interim equitable relief to protect liquidity - Respondents directed to re-credit 50% of the tax amount recovered from the petitioner's Electronic Credit Ledger to alleviate liquidity hardship. - HELD THAT: - Noting that a substantial portion of tax was already deducted from the petitioner's Electronic Credit Ledger, the Court afforded interim equitable relief by directing the respondents to re-credit 50% of the amount so that the petitioner is not unduly prejudiced pending fresh adjudication. This direction is ancillary to the remand and intended to protect the petitioner's liquidity. [Paras 8]

Respondents to re-credit 50% of the deducted amount to the petitioner's Electronic Credit Ledger.

Final Conclusion: Writ petition allowed; the impugned assessment order dated 20.12.2023 for AY 2017-18 is quashed and remitted for fresh adjudication; the quashed order shall operate as corrigendum to DRC-01 dated 28.09.2023; directions given for filing of reply, time-bound disposal and re-credit of 50% of the amount deducted to the petitioner's Electronic Credit Ledger.

Failure to consider representation/reply - cryptic order/non-speaking order - requirement of a speaking order - principles of natural justice - opportunity of personal hearing - remand for fresh adjudication - compliance with procedural requirements under Section 73 and Section 75

Failure to consider representation/reply - cryptic order/non-speaking order - requirement of a speaking order - Impugned adjudication is unsustainable because the Proper Officer did not consider the detailed reply and passed a cryptic order. - HELD THAT: - The Court found that the petitioner had filed a detailed reply with supporting documents to the Show Cause Notice, but the impugned order records that no proper reply/explanation was received. This finding demonstrates that the Proper Officer did not apply his mind to the reply on merits. Where a taxpayer furnishes a substantive response, the adjudicating officer must consider it and record reasons; merely stating absence of a proper reply without engaging with the submissions renders the order cryptic and non-speaking. The Court therefore held that the impugned order could not be sustained for lacking requisite consideration and reasoning. [Paras 6]

Impugned order set aside for failure to consider the petitioner's detailed reply and for being cryptic/non-speaking.

Principles of natural justice - opportunity of personal hearing - remand for fresh adjudication - compliance with procedural requirements under Section 73 and Section 75 - Matter remitted for fresh adjudication with directions to afford hearing and to pass a fresh speaking order within the statutory period. - HELD THAT: - The Court observed that if the Proper Officer required further details, specific requisition should have been made; the record does not show any such request. In the interests of observance of principles of natural justice and statutory procedure, the matter is remitted to the Proper Officer. The petitioner is permitted to file an additional reply within 30 days. The Proper Officer must thereafter re-adjudicate the Show Cause Notice after giving an opportunity of personal hearing and pass a fresh speaking order in accordance with law within the time prescribed by Section 75(3). The Court expressly refrained from expressing any view on the merits. [Paras 7, 8, 9, 10]

Proceedings remitted for fresh adjudication; petitioner to file further reply within 30 days; Proper Officer to afford personal hearing and pass a fresh speaking order within the period under Section 75(3).

Final Conclusion: Impugned order dated 31.12.2023 set aside and matter remitted for fresh adjudication; directions given to permit further reply, to afford personal hearing, and to pass a fresh speaking order within the statutory period; Court did not opine on merits.

Cancellation of GST registration for non-payment of collected tax for a continuous period of three months - appeal limitation under Section 107 of the Central Goods and Services Tax Act, 2017 - restoration/revival of GST registration subject to compliance with filing returns and payment of tax, interest and fee - prohibition on adjustment of tax, interest, penalty or fee from un-utilized Input Tax Credit pending departmental scrutiny and approval - direction to administrative authority to modify GSTN portal architecture to enable compliance - availability of writ remedy where appeal is time-barred

Cancellation of GST registration for non-payment of collected tax for a continuous period of three months - appeal limitation under Section 107 of the Central Goods and Services Tax Act, 2017 - availability of writ remedy where appeal is time-barred - Validity of the order cancelling the petitioner's GST registration and of the appellate authority's refusal to entertain the time barred appeal - HELD THAT: - The Court recognised that the cancellation order was premised on non remittance of collected taxes for a continuous period of three months and observed that the appellate authority's refusal to consider the appeal was in view of the language of Section 107. Notwithstanding the appellate authority's inability to condone delay under the statutory appeal provisions, the petitioner should not be left without remedy; on the facts and by following the Court's earlier decision in Suguna Cutpiece, the Court set aside the cancellation order and the order rejecting the appeal and proceeded to provide relief on specified conditions permitting revival of registration upon compliance.

Impugned cancellation order dated 25.08.2023 and the appellate order rejecting the appeal are set aside; revival ordered subject to conditions.

Restoration/revival of GST registration subject to compliance with filing returns and payment of tax, interest and fee - prohibition on adjustment of tax, interest, penalty or fee from un-utilized Input Tax Credit pending departmental scrutiny and approval - direction to administrative authority to modify GSTN portal architecture to enable compliance - Conditions and procedure for revival of the petitioner's GST registration - HELD THAT: - The Court directed that revival be made conditional on the petitioner filing outstanding returns (prior to cancellation and for periods after cancellation), payment of tax dues with interest and payment of the fee for belated filing within 45 days of receipt of the order. The Court expressly prohibited making such payments out of any un utilized or un claimed Input Tax Credit until such ITC is scrutinized and approved by the competent officer; only approved ITC may thereafter be utilized for future tax liabilities. The Court further directed the concerned respondent to instruct GST Network to modify the GST portal architecture to permit filing of returns and payment, to be completed within 30 days, and made revival effective upon payment, interest/penalty/fine and uploading of returns.

Revival of registration ordered on compliance with filing returns and payment of tax, interest and fee; ITC not to be adjusted until departmental scrutiny and approval; GSTN portal changes to be effected.

Final Conclusion: The writ petition is allowed: the cancellation of GST registration and the appellate rejection are set aside; registration is to be restored forthwith on completion of the specified compliance steps (filing returns, payment of tax, interest and fee, and departmental scrutiny/approval of ITC), and administrative steps are directed to enable such compliance.

Invalidity of a cryptic order - failure to consider taxpayer's reply - ex-parte demand - remand for re-adjudication - opportunity of personal hearing - requirement of a speaking order - order under Section 73 of the Central Goods and Services Tax Act, 2017

Failure to consider taxpayer's reply - invalidity of a cryptic order - Impugned adjudication order set aside for being cryptic and not applying mind to the detailed reply filed by the petitioner. - HELD THAT: - The Court found that the Proper Officer recorded only that the taxpayer's reply was "not found to be satisfactory" and proceeded to create a demand ex-parte without consideration of the detailed reply dated 07.11.2023 and supporting documents. The observation that no further explanation was received and hence an ex-parte demand was to be created demonstrates that the officer did not meaningfully evaluate the submissions or seek specific additional information if required. Consequently, the impugned order is vitiated for being non-speaking and for failure to apply mind to the taxpayer's response. [Paras 6]

Impugned order dated 28.12.2023 set aside insofar as it is cryptic and did not consider the taxpayer's reply.

Remand for re-adjudication - opportunity of personal hearing - requirement of a speaking order - ex-parte demand - Matter remitted to the Proper Officer for re-adjudication with directions to allow filing of reply, afford personal hearing and pass a fresh speaking order within the statutory period. - HELD THAT: - The Court directed that the petitioner shall file its reply to the Show Cause Notice within 30 days. Thereafter the Proper Officer is to re-adjudicate after granting an opportunity of personal hearing and to pass a fresh speaking order in accordance with law within the period prescribed under Section 75(3) of the Act. The Court expressly left the merits open and confined its intervention to correcting the procedural and adjudicatory infirmity of the impugned order which produced an ex-parte demand without adequate consideration of submissions. [Paras 8, 9]

Proceedings remitted for fresh adjudication; petitioner to file reply within 30 days and Proper Officer to grant personal hearing and pass a fresh speaking order within the statutory period.

Final Conclusion: Impugned order dated 28.12.2023 is set aside for being cryptic and for failure to consider the taxpayer's detailed reply; matter is remitted for re-adjudication after the petitioner files a reply within 30 days and the Proper Officer affords personal hearing and passes a fresh speaking order within the period prescribed under Section 75(3) of the Act; merits left open.

Cryptic order - remand for re-adjudication - opportunity of personal hearing - speaking order - adjournment discretion under Section 75(5) of the Act - time-bound proceedings under Section 75(3) of the Act

Adjournment discretion under Section 75(5) of the Act - opportunity of personal hearing - Scope and effect of Section 75(5) of the Act in respect of adjournments and entitlement to personal hearing - HELD THAT: - The Court construed Section 75(5) of the Act to mean that the proper officer has the power to grant adjournments-up to three times-if sufficient cause is shown, but such adjournments are discretionary and not a matter of right. Whether sufficient cause exists depends on the facts of each case and the exercise of the officer's discretion. The Court observed that the statutory provision entitles the person chargeable with tax to seek adjournment, but does not oblige the proper officer to grant three adjournments in every case. [Paras 9, 10]

Section 75(5) permits up to three adjournments if sufficient cause is shown; adjournment is discretionary and not an absolute right.

Cryptic order - remand for re-adjudication - speaking order - time-bound proceedings under Section 75(3) of the Act - Validity of the impugned ex-parte order dated 19.12.2023 and appropriate remedy - HELD THAT: - The Court found the impugned order to be cryptic and noted that the petitioner's requests for time to file a detailed reply and for personal hearing had not been given effect. In view of the lack of a speaking order and the need to afford the petitioner an opportunity to reply and be heard, the Court set aside the impugned order and remitted the Show Cause Notice to the proper officer for re-adjudication. The petitioner was directed to file a reply within 30 days and the proper officer was directed to re-adjudicate after granting personal hearing and to pass a fresh speaking order in accordance with law and within the period prescribed under Section 75(3) of the Act. The Court expressly refrained from considering the merits of the dispute. [Paras 11, 12, 13]

Impugned order set aside as cryptic; Show Cause Notice remitted for fresh adjudication after the petitioner files a reply and is afforded personal hearing; proper officer to pass a fresh speaking order within the time prescribed under Section 75(3).

Final Conclusion: The High Court set aside the ex-parte order of 19.12.2023 as cryptic, observed that adjournments under Section 75(5) are discretionary (up to three if sufficient cause is shown), and remitted the Show Cause Notice for fresh adjudication after the petitioner files a reply and is afforded personal hearing; a fresh speaking order is to be passed within the statutory time under Section 75(3).

Extinguishment of pre-transfer liabilities by NCLT order - binding effect of an approved resolution plan / liquidation transfer - fresh slate / clean slate principle for purchaser under insolvency proceedings - overriding effect of the Insolvency and Bankruptcy Code - non-continuation of proceedings against the corporate debtor post-transfer - proceedings under Section 73 of the SGST/CGST Act against a liquidated corporate debtor

Extinguishment of pre-transfer liabilities by NCLT order - fresh slate / clean slate principle for purchaser under insolvency proceedings - proceedings under Section 73 of the SGST/CGST Act against a liquidated corporate debtor - binding effect of an approved resolution plan / liquidation transfer - Validity of orders issued under Section 73 of the SGST/CGST Act against the petitioners after an NCLT order extinguishing pre-transfer liabilities - HELD THAT: - The Court held that the NCLT order granted in the liquidation proceedings declared that, from the Transfer Date, all claims and liabilities of any Government authority in respect of periods prior to the Transfer Date stood permanently extinguished and that proceedings, investigations or actions in relation to such pre-transfer liabilities shall not be continued against the corporate debtor or the purchaser. Reliance was placed on the binding effect of an approved insolvency/transfer regime as explained by the Supreme Court in Ghanashyam Mishra and Sons Private Limited v. Edelweiss Asset Reconstruction Company Limited, which emphasises that after approval of a resolution/transfer framework a successful purchaser must start on a fresh slate and cannot be saddled with unforeseen claims. The Court noted that the respondents conceded the liquidation and acquisition facts and did not dispute that pre-transfer liabilities stood extinguished. Applying these principles and the NCLT directions, the Court concluded that issuance of notices and passing of orders under Section 73, seeking to proceed against the corporate debtor/purchaser in respect of pre-transfer liabilities, was without jurisdiction and unsustainable. The Court also considered the High Court decision in KRBL Limited as supportive of the clean-slate principle where governmental charge or claim was held unenforceable post-transfer. [Paras 8, 9, 11]

Orders passed under Section 73 impugned in the writ petitions are without jurisdiction and are set aside/quashed.

Final Conclusion: Writ petitions allowed; the tax proceedings/orders impugned under Section 73 were quashed as they sought to pursue liabilities extinguished by the NCLT transfer order, and there is no order as to costs.

Garnishee order - appealability of adjudication orders - liberty to file statutory appeal despite delay - pre-deposit and payment of costs as condition for entertainment of appeal - stay of garnishee order pending disposal of appeal - inordinate delay and exceptional circumstances

Garnishee order - appealability of adjudication orders - liberty to file statutory appeal despite delay - Whether writ relief should be granted against the impugned garnishee orders which arise from adjudication orders that are appealable under the statute. - HELD THAT: - The Court refused to grant substantive writ relief against the impugned garnishee orders because those orders flow from adjudication orders that are amenable to statutory appeal. Given that the statutory right of appeal exists, the High Court declined to interfere by writ and instead permitted the petitioner to pursue the available appellate remedy. The petitioners had approached the Court with a delay of over a year and after the statutory period for filing appeals had expired; the Court treated that delay as inordinate but, in view of the exceptional facts referenced, granted limited relief by allowing the filing of appeals subject to conditions. [Paras 3, 7, 8]

Writ relief declined; petitioners given liberty to file appeals against the adjudication orders in accordance with law.

Pre-deposit and payment of costs as condition for entertainment of appeal - stay of garnishee order pending disposal of appeal - inordinate delay and exceptional circumstances - Conditions on which the appellate authority will entertain the belated appeals and the interim effect on the garnishee orders. - HELD THAT: - The Court directed that the petitioner may file the statutory appeals within two weeks of complying with relevant statutory formalities, provided that in each appeal the petitioner makes the requisite pre-deposit and pays a cost of Rs. 1 lakh to the WBGST authority as recompense for the inordinate delay in approaching the writ court. If these conditions are fulfilled within the stipulated time, the appellate authority is to admit and decide the appeals on their merits, and the impugned garnishee orders shall be stayed until disposal of those appeals. The Court emphasised that the indulgence was granted because of exceptional facts and circumstances, not as a general waiver of limitation. [Paras 7, 8]

Belated appeals permitted subject to pre-deposit, payment of costs, and compliance with statutory formalities; garnishee orders stayed pending disposal of the appeals.

Final Conclusion: Writ petitions dismissed; petitioners granted conditional liberty to file belated statutory appeals subject to pre-deposit, payment of costs and statutory formalities, and the impugned garnishee orders are stayed pending disposal of those appeals.

Scope of exemption under Notification No. 12/2017 - entry 41 - ownership/control test for government-owned entity - advance ruling authority to decide all relevant conditions - remand for fresh adjudication - strict interpretation of exemption notifications

Scope of exemption under Notification No. 12/2017 - entry 41 - ownership/control test for government-owned entity - Whether the WBAAR's Advance Ruling properly adjudicated all conditions for exemption under entry 41 of Notification No. 12/2017 and whether SMPK qualifies as an entity with 20% or more government ownership - HELD THAT: - The Appellate Authority found that the WBAAR's order addressed only a single condition of entry 41 - namely whether SMPK can be treated as an entity having 20% or more ownership by the Central Government - and did not document findings on the other conditions necessary to determine eligibility under the notification (tenure of lease, nature of property, status of service recipient, and other qualifying requirements). The Authority observed that a more comprehensive adjudication by the WBAAR was warranted and that, in appropriate cases, remand for fresh consideration is a just and proper remedy where the lower authority has not adjudicated all relevant aspects. The Authority noted precedent and practice of remand by appellate bodies and recorded that it will not decide the merits on ownership or exemption but requires the WBAAR to examine and decide all conditions afresh. [Paras 10]

WBAAR order set aside and the matter remanded to the WBAAR for fresh decision after considering all aspects of eligibility under entry 41 of Notification No. 12/2017; merits not decided by this Authority.

Final Conclusion: The Advance Ruling dated 20.12.2023 is set aside and the matter is remanded to the West Bengal Authority for Advance Ruling for fresh decision after full consideration of all conditions of entry 41 of Notification No. 12/2017; no decision on the merits of exemption or ownership was rendered by this Authority.

Composite supply - Principal supply - Goods Transport Agency - In relation to - Forward Charge Mechanism

Goods Transport Agency - Composite supply - Principal supply - In relation to - Whether the applicant's bundled services (transportation, packing, loading, unloading and unpacking) fall under the definition of Goods Transport Agency - HELD THAT: - The Authority examined whether the bundle of services constitutes a composite supply and whether such composite supply falls within the entry for services of a Goods Transport Agency. A composite supply requires two or more taxable supplies that are naturally bundled and supplied in conjunction, one being the principal supply. The Authority relied on the statutory illustration and applicable judicial guidance that illustrations form part of the statute and that a composite supply must be assessed on an "as is where is" basis and possess attributes such as a single price or elements being integral to an overall supply. The notification entry covers "services in relation to transport of goods by road," and the expression "in relation to" requires a direct and immediate link with the contract for transport. Consequently, where the contract is in substance for transport together with packing, loading, unloading and unpacking of the same goods entrusted by the customer, those ancillary services are covered by the GTA entry and treated as part of the composite supply with transportation as the principal supply. Conversely, if the transport service and the other services relate to different goods (i.e., lack the requisite direct and immediate link), they do not fall under the GTA entry as a single composite supply. [Paras 7, 8]

The activity is covered by Goods Transport Agency if the agreement is for transport together with packing, loading, unloading and unpacking of the same goods; it is not covered if the transport and other services relate to different goods.

Final Conclusion: The Authority ruled that the applicant's bundled services will be treated as GTA services when the contract is, in substance, for transport and the ancillary packing/loading/unloading/unpacking of the same goods; where the services concern different goods, they will not qualify as GTA.

Classification of goods - classification under Harmonized System of Nomenclature (HSN) - applicability of goods and services tax rate - advance ruling admissibility

Classification of goods - classification under Harmonized System of Nomenclature (HSN) - Supply of disposable paper cups manufactured by the applicant is classifiable under HSN 4823 40 00 (Trays, dishes, plates, cups and the like, of paper or paperboard). - HELD THAT: - The Authority examined the nature and composition of the product manufactured by the applicant, noting that disposable paper cups are made of paper or paperboard often with an inner polyethylene coating and fall within Chapter 48 which deals with articles of paper and paperboard. Tariff item 4823 includes 'Trays, dishes, plates, cups and the like, of paper or paperboard', and the product description and manufacturing process align with sub heading 4823 40 00 rather than the HSN code propounded by the applicant. The Authority also observed discrepancies in the invoice provided by the applicant, which was not issued by the applicant and used an unrelated HSN code, diminishing reliance on that document for classification. For these reasons the Authority held that the correct classification is HSN 4823 40 00. [Paras 4]

Disposable paper cups manufactured by the applicant are classifiable under HSN 4823 40 00.

Applicability of goods and services tax rate - classification under Harmonized System of Nomenclature (HSN) - Supply of disposable paper cups as manufactured by the applicant attracts tax at 18% pursuant to entry relating to goods falling under Tariff item 4823 in Schedule III of the relevant notifications. - HELD THAT: - Having determined that the product falls within Tariff item 4823 (specifically HSN 4823 40 00), the Authority referred to Schedule III of Notification No. 1/2017 Central Tax (Rate) and the corresponding State notification which specify that items described under that entry attract tax at 18%. The Authority therefore rejected the applicant's contention of a lower rate and the revenue's submission that 18% applies was accepted on the basis of the correct classification and the applicable tariff entry. [Paras 4]

The supply of the applicant's disposable paper cups is taxable at 18%.

Final Conclusion: The Authority admitted the application in respect of classification and rate questions, ruled that the disposable paper cups manufactured by the applicant are classifiable under HSN 4823 40 00, and held that such supplies attract tax at 18%.

Reopening of assessment under section 148/147 - Effect of resolution plan and "clean slate" principle under the Insolvency and Bankruptcy Code - Binding nature of an approved resolution plan on governmental authorities - Use of reassessment proceedings for collection of evidence against ex-promoters and third parties

Reopening of assessment under section 148/147 - Binding nature of an approved resolution plan on governmental authorities - Validity of issuance of notice under section 148 of the Income-tax Act and consequent reassessment for a period prior to the closing date of an approved resolution plan - HELD THAT: - The Court accepted the principle that an approved resolution plan under the Code is binding on the corporate debtor and governmental authorities and that the Code overrides inconsistent provisions of other laws. Where the resolution plan treats pre-closing date statutory dues as fully discharged and the plan has attained finality, initiation of reassessment proceedings under section 148 read with section 147 against the company for periods prior to the closing date is contrary to the Code and the resolution plan and therefore invalid. The Court further relied on the conclusion that section 148/147 relates to escaped income and cannot be applied so as to defeat the effect of an approved resolution plan which purports to settle pre-closing dues. [Paras 8, 11]

Notice under section 148 and consequent reassessment for pre-closing periods were held invalid and contrary to the binding effect of the resolution plan.

Use of reassessment proceedings for collection of evidence against ex-promoters and third parties - Reopening of assessment under section 148/147 - Whether section 148/147 may be used to collect evidence in respect of ex-promoters or third parties when the company has an approved resolution plan - HELD THAT: - The Court held that the scope of section 148/147 is confined to reassessment where income chargeable to tax has escaped assessment. It is not appropriate to employ section 148 as a device to collect evidence against ex-promoters or third parties, because separate statutory mechanisms (for example, section 133(6)) exist for gathering such evidence and because using reassessment against the company would be futile where the present management is not privy to pre-closing facts. Consequently, proceedings initiated under section 148/147 for the ostensible purpose of third-party fact-finding cannot stand. [Paras 8, 11]

Section 148/147 cannot be used as a conduit to collect evidence against ex-promoters or third parties; such use renders reassessment proceedings impermissible.

Effect of resolution plan and "clean slate" principle under the Insolvency and Bankruptcy Code - Binding nature of an approved resolution plan on governmental authorities - Whether governmental authorities retain coercive remedies against the corporate debtor for pre-closing period dues once a resolution plan has become final - HELD THAT: - Relying on the binding force of an approved resolution plan and precedent acknowledging that pre-approval dues stand extinguished, the Court observed that recovery proceedings against the corporate debtor for pre-closing period dues are precluded. The Court nevertheless clarified that the revenue is not foreclosed from pursuing lawful actions against erstwhile directors, promoters or other third parties by following appropriate legal avenues; however, such actions cannot be effected by initiating reassessment under section 148/147 against the corporate debtor. [Paras 3, 11, 13]

Approved resolution plan's effect is to preclude coercive recovery against the corporate debtor for pre-closing dues; revenue may pursue remedies against ex-promoters/third parties by lawful means but not by reassessment against the company.

Reopening of assessment under section 148/147 - Relief granted in the present proceedings - HELD THAT: - Applying the principles above, the Court quashed and set aside the notice issued under section 148, the order rejecting objections, the assessment order passed under section 144 read with section 147, and the penalty notice issued in relation to the assessment year specified. The Court endorsed the petitioner's undertaking (in the reproduced order) to withdraw the appeal against the assessment order and recorded that the revenue may proceed in accordance with law if it chooses to take other steps. [Paras 11, 12, 13, 14]

The impugned notice, assessment, objection rejection and penalty notice were quashed and set aside; rights and contentions of parties left open and revenue permitted to act in accordance with law.

Final Conclusion: The High Court applied the binding effect of an approved resolution plan under the Insolvency and Bankruptcy Code to hold reassessment proceedings under section 148/147 invalid for periods prior to the closing date; it further held that section 148/147 cannot be used to collect evidence against ex-promoters or third parties and quashed the impugned notices and orders while leaving open the revenue's right to pursue appropriate legal remedies against third parties.

Deduction under section 80P(1) - 80P(2)(a)(i) - banking as an eligible activity - co-operative society - co-operative bank as defined in the Banking Regulation Act, 1949 adopted for section 80P - acceptance of deposits from non-members - bye laws read with the Kerala Co operative Societies Act, 1969 - extent of deduction (quantum) where entire income arises from business of banking

Deduction under section 80P(1) - 80P(2)(a)(i) - banking as an eligible activity - co-operative bank as defined in the Banking Regulation Act, 1949 adopted for section 80P - bye laws read with the Kerala Co operative Societies Act, 1969 - Whether the assessee is eligible for deduction under section 80P(1) read with section 80P(2)(a)(i), and the quantum thereof, having regard to whether it is a co operative bank under the Banking Regulation Act, 1949, as applied with the Kerala Act and its bye laws. - HELD THAT: - The Tribunal held that the determinative question is whether the assessee is a co operative bank as defined in the Banking Regulation Act, 1949, the definition of which is adopted for the purposes of section 80P. The Kerala Act permits a society, by its bye laws, to accept deposits from and lend to non members; accordingly, a society registered as a Primary Agricultural Credit Society may nonetheless carry on the business of banking and fall to be examined under the BRA definition. Being engaged in banking per se does not preclude a claim under section 80P(2)(a)(i); the claim succeeds unless the society qualifies as a co operative bank in terms that trigger the disqualification in section 80P(4). The bye laws, in conjunction with the Kerala Act and the BRA, are therefore material to determining eligibility and the extent of deduction. As the certified full bye laws were not on the record, the Tribunal set aside the revenue orders and remitted the matter to the Assessing Officer to determine, on the basis of the bye laws read with the Kerala Act and the BRA, whether the assessee is a co operative bank and, accordingly, the quantum of deduction-clarifying that where the assessee is a co operative bank whose entire income arises from the business of banking, the deduction would be in full.

Revenue orders set aside and matter remitted to the Assessing Officer to decide eligibility for and quantum of deduction under section 80P(1) r/w 80P(2)(a)(i) on the basis of the assessee's bye laws read with the Kerala Act and the Banking Regulation Act, 1949.

Final Conclusion: Appeal allowed for statistical purposes by setting aside the assessing and appellate orders and remanding the question of entitlement to deduction under section 80P(1) r/w 80P(2)(a)(i), and its quantum, to the Assessing Officer for decision on the basis of the bye laws, the Kerala Co operative Societies Act and the Banking Regulation Act, 1949.

Deduction under section 80P(1) read with section 80P(2)(a)(i) - co-operative bank - business of banking - acceptance of deposits from non-members - bye-laws - Explanation to section 80P(4)

Co-operative bank - Explanation to section 80P(4) - bye-laws - Whether the assessee is a 'co-operative bank' within the meaning of the Explanation to section 80P(4), such that it would be excluded from entitlement to deduction under section 80P. - HELD THAT: - The Tribunal held that the question whether the assessee is a 'co-operative bank' must be determined on the basis of its bye-laws. The assessee's bye-laws are not on record and were not considered by the Revenue. The matter is restored to the Assessing Officer for examination of the bye-laws and for making an issue-specific finding on whether the assessee falls within the definition of a 'co-operative bank' under the Explanation to section 80P(4). No final adjudication on this question was undertaken by the Tribunal; the AO is to decide after affording the assessee opportunity of hearing. [Paras 3]

Restored to the Assessing Officer for determination, after perusal of bye-laws, whether the assessee is a 'co-operative bank' as per the Explanation to section 80P(4).

Business of banking - acceptance of deposits from non-members - deduction under section 80P(1) read with section 80P(2)(a)(i) - bye-laws - Whether the assessee is 'in the business of banking' and thus entitled to deduction under section 80P(1) read with section 80P(2)(a)(i), particularly where its bye-laws permit acceptance of deposits from non-members. - HELD THAT: - Applying the principle reiterated from the Apex Court's decision referenced in the order, the Tribunal explained that where a society's bye-laws permit acceptance of deposits from non-members, the society is in the business of banking notwithstanding member-area restrictions which apply only to members. Consequently, income from provision of credit to non-members would be eligible for deduction under section 80P(2)(a)(i). Because the assessee's bye-laws were not placed on record, the Tribunal remanded the matter to the Assessing Officer to examine the bye-laws, afford the assessee a hearing, and make specific findings on whether the bye-laws permit acceptance of deposits from non-members and whether, on that basis, the assessee is in the business of banking. The Tribunal further clarified that deduction under section 80P shall be allowed only if the assessee is not a 'co-operative bank' as per the Explanation to section 80P(4) and, if the bye-laws permit deposits from non-members, the deduction may extend to profit attributable to banking business (including credits to non-members). [Paras 3]

Restored to the Assessing Officer for determination, after perusal of bye-laws and hearing, whether the bye-laws permit acceptance of deposits from non-members and accordingly whether the assessee is in the business of banking and entitled to deduction under section 80P(1) read with section 80P(2)(a)(i); deduction to be allowed only if the assessee is not a 'co-operative bank' under the Explanation to section 80P(4).

Final Conclusion: Appeal allowed in part by restoring the matter to the Assessing Officer for examination of the assessee's bye-laws and for fresh, issue-specific findings on (i) whether the assessee is a 'co-operative bank' under the Explanation to section 80P(4) and (ii) whether its bye-laws permit acceptance of deposits from non-members thereby making it 'in the business of banking' and entitling it to deduction under section 80P(1) read with section 80P(2)(a)(i).

Banking - accepting deposits from public - primary agricultural credit society - co-operative society - deduction under section 80P(1) r/w 80P(2)(a)(i) - co-operative bank - primary co-operative bank - strict construction of exclusion in section 80P(4)

Primary agricultural credit society - co-operative society - banking - accepting deposits from public - deduction under section 80P(1) r/w 80P(2)(a)(i) - Whether the assessee, though registered as a PACS, is to be treated as not being a PACS for the purposes of s.80P and whether that affects its entitlement to deduction under s.80P(1) r/w s.80P(2)(a)(i). - HELD THAT: - The Tribunal found on the material before it that the assessee's bye-laws authorise acceptance of deposits from members and non-members, which amounts to accepting deposits from the public. The assessee's income arises predominantly from lending that is not principally for agricultural purposes; on that basis the assessee is not a PACS for the purposes of s.80P. However, being in the business of banking does not ipso facto deny the claim under s.80P(1) r/w s.80P(2)(a)(i), since the statutory scheme expressly contemplates income derived from the business of banking for the purpose of s.80P. The Tribunal therefore concluded that the characterisation as not-a-PACS is established on the record but that this fact alone does not determine entitlement to the deduction under s.80P(1) r/w s.80P(2)(a)(i). [Paras 5]

The assessee is not a primary agricultural credit society for the purposes of s.80P, and its lending profile demonstrates it is in the business of banking, but that fact alone does not finally determine its entitlement to deduction under s.80P(1) r/w s.80P(2)(a)(i).

Co-operative bank - primary co-operative bank - strict construction of exclusion in section 80P(4) - byelaws permitting admission of other co-operative societies as members - Whether the assessee falls within the definition of a 'co-operative bank' (including as a 'primary co-operative bank') under the Banking Regulation Act, as adopted for the purposes of s.80P(4), and thereby is excluded from the exemption under s.80P(1). - HELD THAT: - The Tribunal noted that the definition of 'co-operative bank' in the BRA (as adopted for s.80P(4)) must be strictly satisfied to attract the exclusion from s.80P. A determinative factual and legal question arises from the bye-laws' provision regarding admission of other co-operative societies as members (a criterion in the definition of 'primary co-operative bank'). The first appellate authority did not record a finding on this specific contention. The paper-book did not contain an authenticated English translation of the bye-laws; hence material relevant to whether the assessee meets the statutory tests for a 'co-operative bank' remains to be examined. The Tribunal therefore restored the matter to the Assessing Officer to hear the assessee, examine the authenticated bye-laws and other material, verify facts as required, and issue a definite finding on whether the assessee is a 'co-operative bank' under the BRA, construing the exclusion in s.80P(4) strictly, and determine entitlement to s.80P(1) accordingly. [Paras 5]

Remitted to the Assessing Officer for fresh examination and definite finding on whether the assessee is a 'co-operative bank' within the BRA definition (including the test about admission of other co-operative societies as members), and for consequent determination of entitlement to exemption under s.80P(1).

Final Conclusion: The Tribunal held that the assessee is not a PACS for the purposes of s.80P given its lending and deposit-taking activities, but remitted the crucial question whether it is a 'co-operative bank' under the BRA (and thus excluded from s.80P(1) by s.80P(4)) to the Assessing Officer for fresh examination and a definite finding; appeals allowed for statistical purposes.

Treatment of alleged bogus purchases as unexplained income under Section 68 - addition on account of non-genuine purchases - matching of purchases and sales and gross profit test to determine genuineness - reliance on precedent for restricting addition to differential gross profit

Treatment of alleged bogus purchases as unexplained income under Section 68 - matching of purchases and sales and gross profit test to determine genuineness - reliance on precedent for restricting addition to differential gross profit - Whether the addition of the entirety of alleged purchases of Rs.1,15,86,557/- from two tainted parties could be sustained where corresponding sales, invoices, banking payments and stock records were produced and gross profit on such transactions matched the assessee's regular gross profit. - HELD THAT: - The Tribunal recorded that the assessee, a trader in MS tubes and pipes, produced purchase invoices, corresponding sales invoices, banking evidence of payments and stock records showing 1,89,475 kgs purchased from the two identified parties and sold for an aggregate amount giving a gross profit of 5.096%. The assessee's gross profit on other regular transactions was 5.407%. Applying the principle in Mohmd. Haji Adam & Company , where sales are not disputed and there is no discrepancy between purchases and sales shown, any addition should be confined to the extent necessary to bring the gross profit on the impugned transactions into parity with genuine transactions. On the material placed, the differential gross profit works out to 0.3% of the alleged purchases, which the Tribunal found to be minuscule. Having regard to the correspondence of quantities, invoices, bank channels and the near identical gross profit ratios, the Tribunal concluded that the wholesale 100% addition was not warranted and it was reasonable to delete the addition in the circumstances. [Paras 9, 10]

The addition of Rs.1,15,86,557/- made by treating the purchases as non-genuine is deleted; the appeal is allowed.

Final Conclusion: The Tribunal allowed the appeal for A.Y. 2011-12, deleting the 100% addition made on account of alleged bogus purchases after applying the gross profit parity test and finding only a negligible differential which did not justify the impugned addition.

Claim of long-term capital gains exemption u/s 10(38) - right to rectify omission / file revised return to claim exemption - principles of natural justice - right to cross-examine adverse witnesses - inadmissibility of survey-obtained admissions - reliance on statements of third-party entry providers for additions under Sections 68 and 69 - gross delay of 309 days in filing the special leave petition

High Court [2023 (2) TMI 392 - ORISSA HIGH COURT] dismissed the Revenue's appeals, holding that the ITAT correctly affirmed the CIT(A)'s findings on the assessee's entitlement to the Section 10(38) exemption and on the invalidity of additions founded on untested statements of third parties; no substantial question of law arose requiring interference.

HELD THAT:- The explanation offered is not sufficient in law to condone the delay. Hence, the application seeking condonation of delay is dismissed. Consequently, the special leave petition is also dismissed keeping open the question of law, if any.

Interim stay - prima facie case - balance of convenience - irreparable hardship - financial stringency - pre-deposit condition - exercise of discretion - office memorandum not mandatory

Interim stay - prima facie case - balance of convenience - irreparable hardship - financial stringency - pre-deposit condition - office memorandum not mandatory - exercise of discretion - Validity of the appellate authority's order granting stay subject to payment of 20% of disputed tax and whether the stay application was considered in accordance with classical interim relief principles - HELD THAT: - The appellate authority's order recorded consideration of grounds and the assessing officer's report but did not examine whether the petitioner had made out a prima facie case. The petitioner had represented limited resources and potential inability to provide public services if required to make the pre-deposit; while that representation did not, by itself, constitute evidentiary proof of financial stringency, it required consideration. The office memorandum relied upon does not make payment of 20% mandatory, and therefore the impugned order could not be treated as compelled by that memorandum. Because the stay was granted in the exercise of discretion, the court's role is not to substitute its view but to ensure classical interim principles - prima facie case, balance of convenience and irreparable harm (including financial stringency) - are applied. In view of these omissions, the order deserved interference and a fresh decision applying the stated principles. The petitioner is permitted to file additional affidavit and supporting documents within two weeks for the appellate authority's reconsideration; the appellate authority remains free to exercise its discretion in accordance with law. [Paras 5, 6, 7]

Impugned order set aside and the stay application remanded to the appellate authority for reconsideration afresh applying the classical interim relief principles; petitioner may file additional affidavit/supporting documents within two weeks.

Final Conclusion: The writ petition is allowed to the extent that the impugned stay order is set aside and remitted for fresh consideration by the appellate authority in accordance with the classical principles of prima facie case, balance of convenience and irreparable hardship (including financial stringency); petitioner may file additional material within two weeks; no costs.

Power of revision under Section 263 of the Income Tax Act - maintainability of writ petition where alternate remedy under Section 253(1)(c) of the Income Tax Act exists - scrutiny assessment under Section 143(3) of the Income Tax Act - assessment order passed under Section 144 read with revision under Section 263 and Section 144B - declaration and compliance under Pradhan Mantri Garib Kalyan Yojana (PMGKYS) 2016

Maintainability of writ petition where alternate remedy under Section 253(1)(c) of the Income Tax Act exists - laches and delay in approaching the High Court - Maintainability of the writ petition in view of the alternate statutory remedy and delay - HELD THAT: - The Court held that the petitioner had an alternate remedy by way of statutory appeal before the Appellate Tribunal under Section 253(1)(c) of the Income Tax Act and that the writ had been filed belatedly. The matter involved disputed questions of fact which were more appropriately ventilated before the appellate forum, and therefore the High Court declined to entertain the writ petition on merits. The petitioner was given liberty to pursue the statutory appeal within a limited period. The Court also observed that delay and laches weighed against entertaining the writ as an alternative to the statutory remedy. [Paras 4, 5, 6, 7, 11]

Writ petition not entertained on merits; petitioner granted liberty to file statutory appeal before the Appellate Tribunal under Section 253(1)(c) within 45 days.

Power of revision under Section 263 of the Income Tax Act - scrutiny assessment under Section 143(3) of the Income Tax Act - declaration and compliance under Pradhan Mantri Garib Kalyan Yojana (PMGKYS) 2016 - Whether invocation of revision under Section 263 was impermissible merely because petitioner had complied with the assessment order by depositing amounts under PMGKYS and paid differential tax - HELD THAT: - The Court rejected the submission that compliance with the assessment order or payment under PMGKYS precluded invocation of the revisional power under Section 263. It noted that the earlier scrutiny assessment passed under Section 143(3) is a distinct exercise and does not bar the revenue from invoking revision if the assessment is found to be erroneous and prejudicial to the revenue. The factual background, including the survey and the declarations/payments under PMGKYS, informed the issuance of the show cause notice and the subsequent revision proceedings, and these factual disputes were held to be matters for the appellate forum rather than a basis for quashing the revisional order in writ jurisdiction. [Paras 3, 4, 9, 10, 11]

Challenge to exercise of revisional power under Section 263 on the ground of prior compliance dismissed; s143(3) scrutiny assessment not a bar to s263 revision where the assessment is found erroneous and prejudicial to revenue.

Assessment order passed under Section 144 read with revision under Section 263 and Section 144B - liberty to file appeal and to seek stay of impugned orders - Reliefs and directions consequent to dismissal of the writ petition - HELD THAT: - The Court disposed of the writ petition while providing procedural reliefs: the petitioner was permitted to file the statutory appeal against the revisional order and, insofar as the subsequent assessment order dated 24.03.2023 passed under Section 144 read with Section 263 and Section 144B is concerned, the petitioner was granted liberty to prefer an appeal against that assessment within the time prescribed and to seek stay of the operation of the impugned and assessment orders by filing appropriate applications along with the proposed appeals. The Court closed the petition without entertaining substantive adjudication of the disputed factual and legal contentions. [Paras 11, 12]

Petitioner granted liberty to file statutory appeals within the time specified and to seek stay applications; writ petition disposed of without costs.

Final Conclusion: Writ petition dismissed for want of merit and on account of alternate remedy; petitioner given liberty to file statutory appeals against the revisional order and the subsequent assessment, and to move for stay applications, the appeal against the revisional order to be filed within 45 days.

Disallowance under section 69A read with section 115BBE as unexplained cash - treatment of demonetisation-period cash deposits as unexplained money - entries in books of account as evidence of source of cash - principle in Lalchand Bhagat Ambica Ram - acceptance of books cannot be partial

Disallowance under section 69A read with section 115BBE as unexplained cash - entries in books of account as evidence of source of cash - principle in Lalchand Bhagat Ambica Ram - acceptance of books cannot be partial - treatment of demonetisation-period cash deposits as unexplained money - Disallowance of Rs. 65,49,189 as unexplained cash deposited during the demonetisation period was not sustainable. - HELD THAT: - The Assessing Officer treated cash deposits during 09.11.2016 to 31.12.2016 as unexplained and made addition under section 69A read with section 115BBE, relying on comparative cash-deposit figures. The amounts so relied on were derived from the assessee's profit and loss statements and tables which had been verified and accompanied by an independent auditor's report. The Tribunal applied the ratio of Lalchand Bhagat Ambica Ram, holding that where entries in the books of account are accepted as genuine, it is impermissible to accept those books in part and reject them in respect of the balance sum without evidence permitting such partial rejection. On the facts, having treated the books as genuine, the Assessing Officer and the CIT(A) could not treat the corresponding cash deposits as unexplained money; consequently the addition was legally unsustainable. The impugned assessments were therefore set aside. [Paras 8, 9, 10]

Addition under section 69A read with section 115BBE relating to demonetisation-period cash deposits deleted and the impugned orders set aside.

Final Conclusion: Appeal allowed; both impugned orders set aside and the addition deleted.

Limitation under Section 275(1)(c) - Initiation of penalty proceedings - Penalty under Section 271C - Reference by Assessing Officer to JCIT (TDS) - Independent nature of penalty proceedings

Limitation under Section 275(1)(c) - Initiation of penalty proceedings - Reference by Assessing Officer to JCIT (TDS) - Penalty under Section 271C - Penalty under section 271C held barred by limitation under section 275(1)(c). - HELD THAT: - The Tribunal identified two alternative limitation cut-offs under section 275(1)(c): (i) the end of the financial year in which the quantum proceedings were completed, and (ii) six months from the month in which the penalty proceedings were initiated, with the later date applying. The determinative question was the meaning of "the month in which penalty proceedings were initiated" - whether initiation occurred when the Assessing Officer referred the matter to the JCIT (TDS) or when the JCIT (TDS) issued the first show cause notice. Relying on the decision of the Jurisdictional High Court in PCIT vs. JKD Capital & Finlease Ltd. (which emphasises the independence of certain penalty proceedings and recognises initiation by reference from the AO), the Tribunal held that the initiation date for limitation purposes was the date of the AO's reference to the JCIT (TDS). Applying that principle to the facts, the Tribunal found that the JCIT (TDS) passed the penalty order after the applicable limitation period had expired and therefore the penalty order was time barred. Because the penalty was deleted on limitation grounds, the Tribunal did not decide the assessee's separate merits challenges to the levy of penalty. [Paras 4, 5]

Penalty levied under section 271C is barred by limitation under section 275(1)(c) and is deleted; appeal allowed.

Final Conclusion: Following the High Court precedent on initiation and limitation, the Tribunal held the penalty order under section 271C to be time barred under section 275(1)(c) and deleted the penalty; the assessee's appeal is allowed.

Jurisdictional requirement of issuing notice under Section 143(2) before finalising reassessment proceedings - reassessment under Section 147 quashed for jurisdictional defect - admission of additional legal grounds in appeal in light of National Thermal Power Co. Ltd.

Jurisdictional requirement of issuing notice under Section 143(2) before finalising reassessment proceedings - reassessment under Section 147 quashed for jurisdictional defect - Validity of reassessment completed without issuance of notice under Section 143(2) after issuance of notice under Section 148 - HELD THAT: - The Tribunal examined whether the Assessing Officer was obliged to issue a fresh notice under Section 143(2) in the reassessment proceedings initiated by notice under Section 148. Reliance was placed on the decision of the Hon'ble High Court in Pr. CIT v. M/s Paramount Biotech Industries Ltd., which held that issuance of notice under Section 143(2) is a jurisdictional requirement and goes to the root of validity of reassessment under Sections 147/148. The Tribunal noted that the Assessing Officer did not place on record any notice under Section 143(2) issued after the notice under Section 148; the only 143(2) notice produced related to the original assessment. Applying the principle that the AO must, if required, examine the return and, where satisfied, issue a Section 143(2) notice before finalising reassessment, the Tribunal found a jurisdictional defect. In consequence, the reassessment order dated 20.12.2016 under Section 147 was held invalid and was quashed. As the reassessment was quashed on this ground, the Tribunal refrained from adjudicating other (additional and regular) grounds as they became academic. [Paras 4]

Reassessment proceedings under Section 147/148 quashed for failure to issue mandatory notice under Section 143(2); appeal allowed.

Final Conclusion: The Tribunal allowed the assessee's appeal, quashed the reassessment proceedings for AY 2012-13 on the ground that no notice under Section 143(2) was issued in the reassessment, and set aside the orders of the lower authorities; other grounds were left undecided as academic.

Foreign Tax Credit - Form 67 - directory nature of procedural requirement - relief under tax treaty and section 90 - rectification under section 154

Foreign Tax Credit - Form 67 - directory nature of procedural requirement - relief under tax treaty and section 90 - Assessee's claim for Foreign Tax Credit was not liable to be denied solely because Form 67 was filed after the due date for filing the return under section 139(1). - HELD THAT: - The Tribunal found as a clinching factual matter that the assessee had submitted Form 67 on 05.02.2021 and that the CPC's processing had not occurred prior to that submission. Relying on the settled position in Duraiswamy Kumaraswamy, the Tribunal held that Rule 128 prescribing Form 67 is directory and not mandatory; consequently, belated filing of Form 67, where it was filed before CPC processing, could not justify denial of the Foreign Tax Credit or denial of relief under section 90. The Tribunal accordingly accepted the assessee's substantive grievance in principle and directed the CPC, Bangalore, to re-compute the assessment afresh giving effect to the Foreign Tax Credit as per law. [Paras 3]

Assessee's Foreign Tax Credit claim allowed in principle; CPC directed to finalize computation afresh.

Final Conclusion: The appeal is allowed in part: the Tribunal held that belated filing of Form 67 is a procedural/directory defect and cannot, by itself, justify denial of the Foreign Tax Credit under section 90; the CPC, Bangalore is directed to re-compute the assessment giving effect to the credit.

Exemption under section 80P(2)(a)(i) - classification of interest on bank deposits as business income of a cooperative credit society - distinction between a cooperative society and a banking company (absence of RBI licence) - judicial conflict on attribution of investment income to core business activities

Exemption under section 80P(2)(a)(i) - classification of interest on bank deposits as business income of a cooperative credit society - distinction between a cooperative society and a banking company (absence of RBI licence) - judicial conflict on attribution of investment income to core business activities - Eligibility of deduction under section 80P(2)(a)(i) in respect of interest income earned by the cooperative credit society from deposits with cooperative/scheduled banks - HELD THAT: - The Tribunal examined whether interest and dividend income earned on deposits constitutes income from the regular course of the appellant's business and therefore eligible for deduction under section 80P(2)(a)(i). It is an admitted fact that the assessee is a cooperative credit society engaged in providing credit facilities and does not hold an RBI banking licence. The Bench relied on precedents holding that a cooperative credit society without a banking licence falls within the ambit of section 80P(2)(a)(i) and that interest income on deposits with banks may partake the character of business income. Noting a divergence of judicial opinion in various High Courts on whether income from surplus investments in short-term deposits is attributable to society activities, the Tribunal followed the view of coordinate benches and certain High Courts which treat such interest as attributable to the society's business and hence eligible for exemption. Applying that reasoning, the Tribunal concluded that the interest income in dispute is eligible for deduction under section 80P(2)(a)(i) and therefore directed that the exemption be allowed, setting aside the contrary disallowance by the Assessing Officer and the restriction imposed by NFAC. [Paras 7, 8]

The interest income from deposits with cooperative/scheduled banks is eligible for deduction under section 80P(2)(a)(i); the orders disallowing such exemption are vacated and the Assessing Officer is directed to allow the exemption.

Final Conclusion: The appeal is allowed; the Tribunal directs grant of exemption under section 80P(2)(a)(i) in respect of the interest income in dispute for Assessment Year 2020-21 and sets aside the orders of the lower authorities.

Addition under section 69A of the Income-tax Act representing unexplained cash deposits - explanation of source by adducing bank withdrawal records - burden of proof on the revenue to show withdrawn cash was utilised elsewhere or not available - credibility of cash withdrawal-deposit nexus

Addition under section 69A of the Income-tax Act representing unexplained cash deposits - explanation of source by adducing bank withdrawal records - burden of proof on the revenue to show withdrawn cash was utilised elsewhere or not available - Whether the addition of Rs. 75,98,000 made as unexplained cash deposits is sustainable where the assessee produced bank withdrawal records showing cash in hand from prior withdrawals - HELD THAT: - The Tribunal examined the material showing date-wise cash withdrawals by the assessee and her late husband during assessment years falling within 2018-19 to 2021-22 and the deposits made in the year under consideration. The factual finding was that cash withdrawals amounting to Rs. 81,06,500 (not disputed by the authorities) exceeded the cash deposits of Rs. 75,98,000. Applying the settled principle that once an assessee furnishes contemporaneous bank withdrawal particulars explaining the source of cash, the onus shifts to the revenue to produce material demonstrating that the withdrawn cash was expended elsewhere or was not available for deposit, the Tribunal held that the revenue failed to discharge that burden. The authorities below had doubted the plausibility of retaining withdrawn cash and later depositing it, but the Tribunal found no material to rebut the declared source or to show diversion of the withdrawn sums. On this basis the Tribunal concluded that the deposits were explained by the available cash withdrawals and the addition under the impugned assessment could not be sustained. [Paras 12, 13, 15]

Addition of Rs. 75,98,000 as unexplained cash deposits set aside and assessment and appellate orders reversed.

Final Conclusion: The appeal is allowed; the Tribunal set aside the assessment order and the CIT(A)'s order, holding that the cash deposits were satisfactorily explained by prior bank withdrawals and that the revenue failed to show the withdrawn cash was utilised elsewhere.

Revision under Section 263-erroneous and prejudicial to the interests of Revenue - Principles of natural justice-opportunity of being heard mandatory in revisionary proceedings - Assessment Officer's quasi judicial conclusion-plausibility of inquiry and scope of AO's inquiry - Treatment of unexplained cash under Section 69A read with Section 115BBE

Principles of natural justice-opportunity of being heard mandatory in revisionary proceedings - Revision under Section 263-erroneous and prejudicial to the interests of Revenue - Validity of the revisional directions setting aside the assessment to enquire into source of jewellery found in search - HELD THAT: - The revisional proceedings were initiated by way of show cause notices which exclusively challenged the AO's acceptance of the explanation for cash; there was no mention of the jewellery issue in the show cause notice or its reminder. The Pr.CIT, without confronting the assessee with any allegation or giving an opportunity to meet the case on jewellery, set aside the assessment and directed inquiries. The Court held that Section 263 expressly requires that the assessee be given an opportunity of being heard before exercise of revisional power and that depriving the assessee of that opportunity as to jewellery amounted to a breach of the principles of natural justice. Consequentially the directions in respect of jewellery were ultra vires and liable to be quashed. [Paras 14, 15, 18]

Revisional directions in respect of jewellery are set aside and quashed for want of opportunity; the revisional order on this count is unsustainable.

Assessment Officer's quasi judicial conclusion-plausibility of inquiry and scope of AO's inquiry - Treatment of unexplained cash under Section 69A read with Section 115BBE - Revision under Section 263-erroneous and prejudicial to the interests of Revenue - Validity of the revisional direction to treat cash found in search as unexplained and to direct AO to make additions under Section 69A read with Section 115BBE - HELD THAT: - The Pr.CIT faulted the AO for allegedly accepting the assessee's explanation for cash without adequate inquiry and directed addition of the cash found. On review of the record the Tribunal found that (a) the AO had issued specific inquiries and accepted a plausible explanation after considering opening cash balances declared in returns filed under section 153A, (b) substantial facts supporting the explanation (including an undisputed earlier admitted closing balance for F.Y. 2016-17) existed and had attained finality, and (c) the Pr.CIT proceeded hurriedly at the fag end of limitation giving effectively no opportunity to the assessee to deal with the revisional allegations. The Court held that where the AO's conclusion is plausible and the statutory requirement of opportunity in revision has not been met, invoking Section 263 to substitute the AO's conclusion and direct additions was impermissible. Accordingly the directions to make additions under Section 69A read with Section 115BBE were set aside and the assessment order restored. [Paras 13, 15, 16, 17]

Direction to make additions on account of cash found and to revise the assessment is quashed; AO's assessment is restored.

Revision under Section 263-erroneous and prejudicial to the interests of Revenue - Assessment Officer's quasi judicial conclusion-plausibility of inquiry and scope of AO's inquiry - Validity of identical revisional directions for Assessment Years 2017-18 and 2018-19 altering opening/closing cash balances - HELD THAT: - The revisional directions for AYs 2017-18 and 2018-19 mirror the defects identified in the 2019-20 revisional order: absence of error justifying exercise of Section 263, lack of adequate opportunity, and substitution of the AO's plausible findings. In view of the reasoning adopted in relation to AY 2019-20, the Tribunal found the revisional actions for AYs 2017-18 and 2018-19 unsustainable and set aside those directions. [Paras 21, 22, 23]

Revisional directions in ITA Nos.1533/Del/2023 and 1534/Del/2023 (AYs 2017-18 and 2018-19) are set aside and quashed.

Final Conclusion: The revisional order passed by the Pr.CIT under Section 263 is set aside and quashed in respect of AYs 2019-20, 2017-18 and 2018-19; directions to the AO to make additions on account of cash and to re-open inquiries on jewellery are quashed and the Assessing Officer's assessment is restored in the relevant respects.

Relevancy of statements under section 138B of the Customs Act, 1962 - Denial of opportunity to cross-examine expert/chemical examiner - Admissibility of laboratory test reports in departmental proceedings - Reliance on statements and test reports to sustain confiscation and penalty

Relevancy of statements under section 138B of the Customs Act, 1962 - Statements recorded by customs officers (RUD-4 to RUD-9) were inadmissible for proving the case because the procedure prescribed in section 138B was not followed. - HELD THAT: - The Tribunal accepted that statements made and signed before customs officers are subject to the conditions in section 138B. The impugned order relied upon six statements (RUD-4 to RUD-9) without putting them through the process envisaged by section 138B. In the absence of the statutory procedure, those statements are not relevant to prove the case in departmental proceedings and therefore cannot form the basis for confiscation or penalty. [Paras 10, 11, 14]

All six statements relied upon in the show-cause notice are rendered irrelevant for lack of compliance with section 138B and cannot sustain the impugned order.

Denial of opportunity to cross-examine expert/chemical examiner - Admissibility of laboratory test reports in departmental proceedings - Denial of the appellants' request to cross-examine the chemical examiner rendered the CRCL test report inadmissible for proving that the consignment was urea. - HELD THAT: - The CRCL test report (RUD-2) was the principal document asserting that the sampled consignment was urea rather than the declared product. The appellant sought to cross-examine the chemical examiner who conducted the test. The Commissioner refused that opportunity. The Tribunal held that, having denied cross-examination, the test report could not be relied upon to prove the departmental case. With both the statements and the test report excluded, there remained no evidence to sustain confiscation, investigation directions or the penalties imposed. [Paras 12, 13, 14]

The CRCL test report is rendered irrelevant for want of cross-examination and cannot support the findings of the impugned order.

Final Conclusion: All three appeals are allowed; the impugned order dated 23.11.2011 is set aside insofar as it pertains to Shri Manish Singhal, Shri Dinesh Bharadwaj and Shri Ravinder Pal Jindal because the statements and the laboratory test report relied upon by the Commissioner were held inadmissible.

Classification of goods under Customs Tariff - residual classification as 'other' - common parlance test - expert opinion not decisive for tariff classification - reassessment under section 28 - self-assessment appealability - classification to be determined by tariff and nature of goods, not by beneficial rate or notifications

Classification of goods under Customs Tariff - residual classification as 'other' - common parlance test - expert opinion not decisive for tariff classification - Imported 'Accordion springs' are classifiable under CTI 7320 90 90 as 'other' springs and not under CTI 7320 10 11 as leaf springs. - HELD THAT: - The Tribunal examined the nature and use of the imported goods and the relevant tariff headings. Accordion springs are formed by bending a flat piece of metal into a zig-zag pattern and are used in clutch plates, not as suspension leaf springs. The WCO explanatory notes at the six digit level do not treat accordion springs as leaf springs and examples in the notes are illustrative only and do not exclude other uses. Helical springs are distinct and not in issue. Where a particular good does not fall within the specific sub headings (leaf springs or helical springs), it must be classified under the residual 'other' category. Classification must follow the tariff and the common parlance under which the goods are sold (here, sold and described as 'Accordion springs'), and cannot be fixed by expert reports, past self assessments, or by reference to which heading may be more beneficial in duty terms. An expert's opinion on nature may inform facts but does not supplant the statutory/quasi judicial classification process. Applying these principles, the Tribunal held that the goods fall under the residual sub heading 7320 90 and, as they are not coil springs for railways or spring pins, under CTI 7320 90 90. [Paras 15, 16, 17, 18, 19]

The goods are correctly classified under CTI 7320 90 90 as 'other' springs; classification under CTI 7320 10 11 is rejected.

Final Conclusion: The appeal is dismissed; the impugned order confirming duty, interest and penalty is upheld.

Amendment of Shipping Bill under Section 149 - appeal to Commissioner (Appeals) - maintainability - decision of Commissioner of Customs - appealability - proper officer - assignment of functions by CBIC Notification No.26/2022-Cus.(N.T.) dated 31.03.2022

Appeal to Commissioner (Appeals) - maintainability - decision of Commissioner of Customs - appealability - Whether the appeal before the Commissioner (Appeals) against the rejection of request to amend/convert Shipping Bills was maintainable. - HELD THAT: - The Tribunal examined the communication dated 09.06.2022 and found that although signed by the Assistant Commissioner of Customs, it conveyed the administrative view of the Commissioner of Customs rejecting the request for conversion of Shipping Bills. The statutory scheme and the Notification dated 31.03.2022 (assigning functions to designated officers and permitting exercise of such functions by officers above them in rank) were considered. On the facts, the decision to refuse amendment was taken by the Commissioner of Customs and not by an officer lower in rank. Under the statutory appeal provision relied upon by the Commissioner (Appeals), an order passed by an officer lower in rank than a Commissioner of Customs alone may be appealed to the Commissioner (Appeals); an order of the Commissioner himself is not within the jurisdiction of the First Appellate Authority. Because the impugned refusal emanated from the Commissioner of Customs, the Commissioner (Appeals) lacked jurisdiction to entertain the appeal. [Paras 3, 4, 5, 6]

Appeal before the Commissioner (Appeals) was not maintainable and the impugned order rejecting the appeal was upheld.

Final Conclusion: The Tribunal upheld the Commissioner (Appeals)'s conclusion that it had no jurisdiction to entertain the appeal because the refusal to amend/convert the Shipping Bills was the decision of the Commissioner of Customs; the appellant's appeal is dismissed.

Reasonable belief for seizure under Section 110(1) - confiscation under Section 111(b) and (d) requiring corroborative evidence of foreign origin - presumption under Section 123 and burden of proof in gold seizures - evidentiary value of retracted statements - penalty under Section 112(b)(ii) in absence of smuggled goods

Reasonable belief for seizure under Section 110(1) - confiscation under Section 111(b) and (d) requiring corroborative evidence of foreign origin - presumption under Section 123 and burden of proof in gold seizures - Sufficiency of material on record to form a 'reasonable belief' that the seized gold bars/pieces were smuggled into India without payment of customs duty and applicability of Section 123. - HELD THAT: - The Tribunal examined whether the seizing officers had the requisite 'reasonable belief' at the time of seizure. The seized gold bore no foreign marking and assay results showed purities of 995.2, 995.1 and 995.0 mille, which the Tribunal found not to be the standard foreign purity (999.9 mille). Applying precedent on town seizures and the statutory scheme, the Tribunal held that reasonable belief requires definite corroborative material or information so as to justify presumption under Section 123. In the absence of any disclosed or other corroborative evidence establishing foreign origin or illicit importation, the record did not support the requisite reasonable belief and therefore Section 123 could not be invoked. [Paras 12]

The evidences on record are not sufficient to establish a 'reasonable belief' that the gold bars/pieces were smuggled into India; Section 123 is not applicable.

Evidentiary value of retracted statements - confiscation under Section 111(b) and (d) requiring corroborative evidence of foreign origin - Whether the appellant's retracted statements could be relied upon to confiscate the gold in the absence of independent corroboration. - HELD THAT: - The appellant had given handwritten statements admitting receipt of the gold for transportation but later retracted those statements at personal hearing. The Tribunal observed that the adjudicating authority's confiscation rested mainly on those statements without independent corroborative evidence of foreign origin or smuggling. Reliance solely on retracted statements, in the absence of other supporting material demonstrating illicit importation or foreign origin, was held unsustainable. The Tribunal applied the approach of earlier decisions which refused confiscation where no evidence other than the passenger's statement linked the goods to foreign importation. [Paras 10, 11, 12]

Retracted statements cannot sustain confiscation of the gold in the absence of independent corroborative evidence.

Penalty under Section 112(b)(ii) in absence of smuggled goods - confiscation under Section 111(b) and (d) requiring corroborative evidence of foreign origin - Sustainability of penalty under Section 112(b)(ii) when the goods are not established to be smuggled. - HELD THAT: - Section 112(b) prescribes penalty where a person is dealing with goods which are prohibited or liable for confiscation. Having concluded that material on record did not establish the gold as smuggled or prohibited goods, and noting the appellant's unrefuted claim that the gold was domestically purchased by his father, the Tribunal found no basis to impose penalty under Section 112(b)(ii). The absence of evidence to counter the appellant's claim meant the statutory preconditions for penalty were not satisfied. [Paras 12]

Penalty imposed under Section 112(b)(ii) is not sustainable.

Final Conclusion: The appeal is allowed; the impugned order of confiscation and penalty is set aside on the ground that the record did not support a reasonable belief of smuggling, Section 123 does not apply, retracted statements alone could not sustain confiscation, and the penalty under Section 112(b)(ii) is unsustainable.

Classification and tariff re-classification - Customs valuation - rejection under Valuation Rule 12 and redetermination under Rule 9 - Confiscation under section 111(d), 111(m) and 111(o) - Option to redeem confiscated goods under section 125 - Penalty under section 112(a)(i) - Penalty under section 114AA - requirement of knowledge or intent

Classification and tariff re-classification - Rejection of the classification of imported 'Thorn' under CTI 76020010 and re-classification under CTI 76020090 - HELD THAT: - The Tribunal recorded that there is no dispute about the rejection of the importer's classification and that the appellant had incorrectly classified Thorn under 76020010 instead of 76020090. The appellant's claim of innocent mistake did not alter the factual finding that Thorn falls under 76020090. The re-classification by the adjudicating authority was therefore upheld. [Paras 17]

Re-classification under CTI 76020090 upheld.

Customs valuation - rejection under Valuation Rule 12 and redetermination under Rule 9 - Rejection of the declared transaction value under Valuation Rule 12 and re-determination of assessable value under Valuation Rule 9 - HELD THAT: - The Tribunal noted the importer had, by letter dated 29.12.2020, accepted the proposed re-determined value and waived a personal hearing and speaking order. Even though the department later issued an SCN and proceeded on valuation, the Additional Commissioner applied the Valuation Rules sequentially, found that Rules 4-7 and 8 were inapplicable, and correctly applied Rule 9 as the residual method using the Directorate General of Valuation's methodology based on aluminium content and LME prices. The Tribunal found the method followed to be correct and declined to interfere with the re-determined value. [Paras 18, 19, 21, 23, 24]

Rejection under Rule 12 and re-determination under Rule 9 sustained.

Confiscation under section 111(d), 111(m) and 111(o) - Whether the imported Thorn was rightly confiscated under sections 111(d), 111(m) and 111(o), and whether absolute confiscation was appropriate or redemption should be allowed - HELD THAT: - The Tribunal analysed the three clauses. It held that imports of Thorn were restricted under the FTP and, absent a DGFT licence, the import violated the prohibition in FTP and thus attracted confiscation under section 111(d). Section 111(o) similarly applied because Thorn's import was subject to a condition (licence) which was not fulfilled. However, section 111(m) - which targets goods not corresponding in value or particular with the entry - does not extend to mere differences in classification or valuation arising from reassessment; an incorrect 8 digit classification or a re-determined value does not by itself render goods liable under 111(m). On the question of absolute confiscation versus redemption under section 125, the Tribunal examined whether Thorn was hazardous and found no evidence of hazard; noting the importer was a manufacturer with requisite State Pollution Control Board registration, the Tribunal exercised discretion to permit redemption on payment of a fine and duties, applying section 125 in the factual matrix. [Paras 35, 36, 37, 39, 40]

Confiscation sustained under sections 111(d) and 111(o); confiscation under section 111(m) set aside; redemption under section 125 allowed on payment of fine and duties.

Penalty under section 112(a)(i) - Validity and quantum of penalty imposed on the importer and on the partner under section 112(a)(i) - HELD THAT: - Section 112(a)(i) penalises acts rendering goods liable to confiscation where a prohibition is in force. The Tribunal found that the importer imported Thorn without the required licence, bringing it within section 112(a)(i). The adjudicating authority's exercise of discretion to impose a penalty (not exceeding value of goods) was permissible; the penalty of the chosen quantum on the importer was within statutory limits and was held to be just and proper in the factual matrix. As to the partner, the Tribunal found insufficient justification to impose penalty on Shri Jain under section 112(a)(i) and set aside the penalty imposed on him. [Paras 41, 42, 43, 44]

Penalty under section 112(a)(i) on the importer sustained; penalty under section 112(a)(i) on Shri Jain set aside.

Penalty under section 114AA - requirement of knowledge or intent - Sustainability of penalties under section 114AA imposed on the importer and Shri Jain - HELD THAT: - Section 114AA penalises knowingly or intentionally making, signing or using false or incorrect declarations or documents in material particulars. The Tribunal found no evidence that either the importer or Shri Jain made any false or incorrect declaration with knowledge or intent; the errors were held to be erroneous classification and a declared transaction value that was subsequently re-determined. Absent mens rea, penalties under section 114AA could not be sustained and were set aside for both appellants. [Paras 45, 46]

Penalties under section 114AA on both the importer and Shri Jain set aside.

Final Conclusion: The appeals are partly allowed: classification re determination and valuation under Rule 9 are upheld; confiscation is sustained only under sections 111(d) and 111(o) (111(m) disallowed) but redemption under section 125 is permitted on payment of the specified fine and applicable duties; penalty under section 112(a)(i) on the importer is sustained while the penalty on the partner is set aside; penalties under section 114AA on both appellants are set aside; consequential benefits to the appellants granted as applicable.

Re-determination of assessable value - concessional rate of BCD - burden of proof on revenue - reliance on internet values and uncorroborated e-mail - penalties under Sections114A & 114AA of the Customs Act, 1962

Re-determination of assessable value - reliance on internet values and uncorroborated e-mail - concessional rate of BCD - burden of proof on revenue - Validity of the revenue's re-determination of the assessable value of the imported car and demand of differential duty - HELD THAT: - The Tribunal concluded that the Original Authority's fixation of a higher assessable value rested on internet-derived rates and reliance on a statement of a third party which had been retracted; the First Appellate Authority itself did not accept the Original Authority's value, reduced it and directed re-determination, a direction which the revenue did not challenge. The invoices relied upon by the revenue were inconsistent (different cars, mismatched dates) and the department produced no corroborative documentary evidence of any undisclosed flow of consideration above the declared value. Where revenue alleges under-valuation, it bears the onus to prove it by reliable evidence; that burden was not discharged here. Because the First Appellate Authority found the vehicle to be new (accepted by the revenue) the concessionary BCD rate would apply if value were properly established, but the departmental material was insufficient to justify the differential duty. The impugned order sustaining differential duty therefore lacked merit and was set aside. [Paras 5, 6, 7, 8, 9]

Re-determination by the revenue and the demand of differential duty were unsustainable; the impugned order is set aside and the appeal allowed.

Penalties under Sections114A & 114AA of the Customs Act, 1962 - burden of proof on revenue - Liability of the appellant to penalties under Sections114A & 114AA of the Customs Act, 1962 - HELD THAT: - Penalties were imposed alongside the differential duty in the order under challenge. The Tribunal held that, in the absence of reliable evidence establishing under-valuation or undisclosed consideration, the departmental case failed. Since the foundational finding justifying differential duty was not supported by adequate proof, the concomitant penalties could not be sustained. The adjudicatory findings relied on uncorroborated material and inconsistent invoices, and therefore the penalties stood on the same infirm footing as the duty demand. [Paras 9]

Penalties imposed under Sections114A and 114AA could not be sustained and fall with the setting aside of the impugned order.

Final Conclusion: The Tribunal allowed the appeal, set aside the impugned order, held that the revenue failed to prove under-valuation or undisclosed consideration and therefore the demand of differential duty and the penalties could not be sustained; consequential benefits shall follow as per law.

Extension of time for performance of a resolution plan is not a modification of the resolution plan - contravention of the resolution plan - liquidation under Section 33(3) of the Insolvency and Bankruptcy Code, 2016 - commercial decision of the Committee of Creditors - duty to implead affected parties and disclose subsequent material events

Extension of time for performance of a resolution plan is not a modification of the resolution plan - commercial decision of the Committee of Creditors - Whether the CoC's decision to grant further time to the Successful Resolution Applicant amounted to a prohibited modification of the approved Resolution Plan - HELD THAT: - The Tribunal held that the Adjudicating Authority's reasoning - that the CoC's decision not to liquidate would lead to modification of the approved Resolution Plan and was therefore impermissible - was unsustainable. The Court observed that extension of time for payment granted by Financial Creditors is a commercial decision of the CoC and, as a matter of law, does not constitute modification of the Resolution Plan. Reliance was placed on earlier appellate precedents of this Tribunal which treated grants of time to comply with financial obligations as permissible and not tantamount to plan modification. Consequentially, the Adjudicating Authority erred in treating the CoC's decision as a forbidden modification and interfering with the commercial decision of the CoC. [Paras 28, 31, 32]

Extension of time granted by the Financial Creditors does not constitute modification of the approved Resolution Plan; the Adjudicating Authority was wrong to invalidate the CoC's commercial decision on that basis.

Contravention of the resolution plan - duty to implead affected parties and disclose subsequent material events - liquidation under Section 33(3) of the Insolvency and Bankruptcy Code, 2016 - Whether the IA for liquidation filed by Respondent No.1 was maintainable where the Applicant did not implead the SRA, CoC or RP and failed to place subsequent CoC resolution before the Adjudicating Authority - HELD THAT: - The Tribunal found that IA No.2767 of 2022 alleged contravention by the SRA but did not implead the SRA against whom contravention was claimed; nor did it secure notice to or a reply from the CoC whose majority decision (08.07.2022) it attacked. Moreover, Respondent No.1, having participated in the subsequent CoC meeting of 02.12.2022 where an extension was approved by a majority, did not disclose that event to the Adjudicating Authority. The Tribunal held that filing a Section 33(3) petition without impleading the affected parties and concealing or omitting material subsequent events was improper. The Adjudicating Authority's allowance of the IA in those circumstances was therefore erroneous. [Paras 21, 22, 25, 26]

IA No.2767 of 2022 was not properly brought and the Adjudicating Authority erred in admitting and granting liquidation relief without impleading affected parties or considering the subsequent CoC resolution.

Liquidation under Section 33(3) of the Insolvency and Bankruptcy Code, 2016 - commercial decision of the Committee of Creditors - Appropriate remedy where the Adjudicating Authority directed liquidation despite a subsequent majority CoC decision granting further time and deposits having been made under that decision - HELD THAT: - Having concluded that the Adjudicating Authority's basis for liquidation was flawed and that Respondent No.1 had not placed the 02.12.2022 CoC resolution on record, the Tribunal set aside the impugned liquidation order. It noted that the Financial Creditors on 02.12.2022 had approved further time and the SRA had deposited amounts as per that decision (in a fixed deposit with the largest Financial Creditor). The Tribunal directed dismissal of IA No.2767 of 2022, ordered that amounts deposited by the SRA be distributed to Financial Creditors in accordance with the Resolution Plan and the CoC decision dated 02.12.2022, and disposed of the appeals accordingly. [Paras 23, 24, 33]

Impugned liquidation order set aside; IA No.2767/2022 dismissed and RP directed to distribute amounts deposited by the SRA in accordance with the Resolution Plan and the CoC resolution of 02.12.2022.

Final Conclusion: The appeals are allowed. The NCLT order directing liquidation pursuant to IA No.2767 of 2022 is set aside and that IA is dismissed. The Tribunal held that an extension of time by the Financial Creditors is not a modification of an approved Resolution Plan, that the liquidation petition was improperly prosecuted without impleading affected parties or disclosing a subsequent CoC resolution, and directed the Resolution Professional to distribute amounts deposited by the Successful Resolution Applicant in accordance with the Resolution Plan and the CoC decision dated 02.12.2022.

Mandatory written consent under Regulation 31A(11) - Form AA of Schedule II as pre-condition for replacement of liquidator - Curability of procedural defects in appointment of liquidator - Power of the Adjudicating Authority to appoint or replace liquidator - Locus to file appeal under Section 61

Mandatory written consent under Regulation 31A(11) - Form AA of Schedule II as pre-condition for replacement of liquidator - Whether the consultation committee complied with Regulation 31A(11) by obtaining the mandatory written consent in Form AA before filing the application for replacement of the liquidator. - HELD THAT: - Regulation 31A(11) expressly requires that the consultation committee shall file an application for replacement of the liquidator after obtaining the written consent of the proposed liquidator in Form AA of Schedule II. The admitted facts show that no such written consent was placed before the committee or annexed to the application filed by the erstwhile liquidator. The purported consent dated 29.08.2023 (Annexure A22) was neither before the consultation committee nor filed before the Adjudicating Authority at the time of the application, and there is no record of the requisite Form IP1 being uploaded on the IBBI portal within the stipulated period to corroborate an earlier consent. On these findings the Adjudicating Authority correctly concluded there was no compliance with Regulation 31A(11). [Paras 40, 41, 42, 43, 44]

Failure to produce the mandatory written consent in Form AA meant Regulation 31A(11) was not complied with and the finding of the Adjudicating Authority in this regard is upheld.

Curability of procedural defects in appointment of liquidator - Whether non-production or non-filing of the mandatory written consent was a curable defect that could be remedied post-filing. - HELD THAT: - The Tribunal rejected the appellant's reliance on an authority concerning curable defects in other contexts, distinguishing that a written consent to act as IRP/RP or liquidator is a mandatory statutory precondition which must exist before filing the application. Given the statutory nature of the requirement under Regulation 31A(11) and related provisions, the absence of the consent could not be treated as a mere curable defect permitting post-filing rectification. [Paras 45]

The absence of the mandatory written consent is not a curable defect; the appellant's contention to the contrary is rejected.

Power of the Adjudicating Authority to appoint or replace liquidator - Whether the Adjudicating Authority acted beyond its powers in appointing Respondent No.2 instead of the person proposed by the consultation committee. - HELD THAT: - The Tribunal noted that the Adjudicating Authority possesses powers under the Code to appoint or replace a liquidator and may exercise those powers if it finds reasons to do so. A combined reading of Sections 33 and 34 and relevant authorities supports that the Adjudicating Authority has the competence to remove or appoint a liquidator where justified. Consequently, the Adjudicating Authority was within its jurisdiction to decline the proposed appointment and to appoint another liquidator. [Paras 46]

No error in the Adjudicating Authority acting to appoint Respondent No.2; the Authority has power to replace or appoint a liquidator.

Locus to file appeal under Section 61 - Whether the proposed liquidator (appellant), being only a prospective appointee, had locus to prefer the appeal under Section 61 of the Code as a person aggrieved. - HELD THAT: - The Tribunal observed that the appellant was only a proposed/prospective liquidator and did not possess an inherent or vested right to be appointed. The persons who could be aggrieved were the erstwhile liquidator who filed the replacement application or the consultation committee which approved the proposal. As the appellant lacked such a personal right or distinct aggrievement, its standing to challenge the Adjudicating Authority's order under Section 61 is questionable. [Paras 26, 27, 47]

The appellant, as a proposed liquidator, cannot be regarded as a person aggrieved entitled to maintain the appeal; its locus is doubtful.

Final Conclusion: The appeal is dismissed. The Adjudicating Authority correctly held that the mandatory written consent in Form AA required by Regulation 31A(11) was not filed and such absence is not a curable defect; the Adjudicating Authority was within its powers to appoint an alternative liquidator, and the appellant's locus to maintain the appeal is doubtful. No order as to costs.

Maintainability of appeal under the Insolvency and Bankruptcy Code, 2016 - aggrieved person - authorized representative - majority decision of a class of financial creditors binding on minority - commercial wisdom of the Committee of Creditors

Authorized representative - majority decision of a class of financial creditors binding on minority - aggrieved person - maintainability of appeal under the Insolvency and Bankruptcy Code, 2016 - Whether the present appellants, being minority homebuyers/associations, are an "aggrieved person" entitled to maintain an appeal under the Code against approval of the resolution plan which was approved by the authorised representative and by the Committee of Creditors with 87.60% voting share. - HELD THAT: - The Tribunal held that where homebuyers as a class, through an authorised representative selected in accordance with Regulation 16-A, have assented to a resolution plan and that stance is reflected in the voting placed before the CoC, individual or minority homebuyers or associations cannot maintain a challenge to the resolution plan and do not qualify as an "aggrieved person" for the purpose of preferring an appeal. The court relied on the established position that the authorised representative's role is to elicit and present the views of the financial creditors in class and that individual views are subsumed within the majority expressed through that process. The commercial wisdom of the CoC, having approved the plan with an overwhelming majority (87.60%), militates against judicial interference by dissenting minority homebuyers. Consequently, the appellants, having neither demonstrated deficiency in selection or functioning of the authorised representative nor shown that they represent the majority of their class, cannot challenge the CoC-approved plan and their appeal is not maintainable. [Paras 16, 21, 24, 25]

The appeal is not maintainable at the instance of the present appellants and is dismissed.

Final Conclusion: Appeal dismissed for want of maintainability: minority homebuyers/associations are not an "aggrieved person" to challenge a resolution plan approved by the authorised representative and the Committee of Creditors with majority voting; no order as to costs.

Default - due and payable - operation of Section 10A as a bar to initiation of CIRP - RBI moratorium on loan repayments - date of default - loan recall notice

Due and payable - default - date of default - Whether the claimed date of default (28.02.2020) could be treated as date of 'default' for the purposes of initiation of CIRP under the Code - HELD THAT: - The Tribunal analysed the statutory definition of "default" which requires non payment of a debt when it has become "due and payable", emphasising that both events-becoming due and being payable-must have occurred to constitute a default. The appellant had pleaded that the instalment became due on the last date of the month but was payable on the first day of the next month; accordingly the date of default could not be 28.02.2020 as claimed but at best 01.03.2020 when it became payable. The Tribunal examined the account statements and noted that the interest was capitalised on 01.03.2020 which increased the outstanding beyond the cash credit limit, but held that the legal test turns on when the debt became "due and payable" and whether payment had become exigible at that time. In short, the Court rejected the contention that 28.02.2020 could constitute the date of default where the instalment was payable only on 01.03.2020, and reiterated that establishment of a subsisting default (debt due and payable and unpaid) is a prerequisite to admission under Section 7. [Paras 48, 49, 50, 51, 56]

Date of default could not be fixed as 28.02.2020; at best it was 01.03.2020 when the instalment became payable, and the requirement of a debt being "due and payable" is essential to constitute a default for Section 7.

Operation of Section 10A as a bar to initiation of CIRP - RBI moratorium on loan repayments - loan recall notice - Whether initiation of CIRP was barred by Section 10A (and relevant RBI moratorium) having regard to the dates on which NPA classification and loan recall notice were issued - HELD THAT: - The Tribunal considered the purpose and wording of Section 10A, including the proviso and its explanation, and concluded that Parliament intended to bar initiation of CIRP in respect of defaults occurring on or after 25.03.2020 during the notified period; the explanation clarifies that defaults committed prior to 25.03.2020 are not covered. The Tribunal noted that the loan recall notice (27.08.2020) and the date of NPA classification (20.07.2020), as recorded in the appellant's pleadings, fall after 25.03.2020 and within the period of statutory protection. It also took into account the RBI circulars which granted a moratorium on instalments falling due between 01.03.2020 and the extended moratorium dates, observing that the combined effect of the RBI moratorium and the legislative bar in Section 10A was to afford protection against initiating CIRP for defaults in the stipulated period. The Tribunal rejected the appellant's submission that the respondent could not simultaneously rely on RBI circulars and Section 10A, finding instead that both measures aimed to protect businesses affected by COVID 19 and therefore precluded initiation of CIRP in the facts of the case. [Paras 57, 63, 64, 65, 66]

The claims to initiate CIRP were barred by operation of Section 10A together with the RBI moratorium in respect of the relevant acts (NPA classification and loan recall) which occurred after 25.03.2020; accordingly the appellant was not entitled to initiate CIRP in the circumstances.

Final Conclusion: The appeal is dismissed. The Tribunal held that the date of default could not be fixed as 28.02.2020 where the instalment was payable on 01.03.2020 and, in any event, the steps relied upon by the creditor (NPA classification and loan recall) occurred after 25.03.2020 and fell within the statutory/RBI moratorium protection under Section 10A, precluding initiation of CIRP; the appellant remains free to pursue other legal remedies for recovery.

Negative list of services - taxability of services provided by Government or local authority - support services - mega exemption - service tax liability on reverse charge - jurisdiction to issue show cause notices

Negative list of services - taxability of services provided by Government or local authority - support services - mega exemption - jurisdiction to issue show cause notices - service tax liability on reverse charge - Whether the impugned show cause notices and orders in original issuing service-tax demands against the petitioner municipalities were without jurisdiction because the services rendered fell within the negative list or were otherwise exempt, and the consequent entitlement to quash those proceedings - HELD THAT: - The Court applied the settled scheme under the service tax law that services provided by the Central/State Government or local authorities are generally covered by the negative list of services save for specified exceptions (e.g., certain Department of Posts services, services in relation to aircraft/vessel, transport of goods/passengers and support services to business entities). The Court relied on the Central Board's Education Guide and Guidance Note explaining that most governmental/local authority services are non-taxable and that only excluded categories or support services to business entities attract tax. The Court observed that where an activity is a support service, the recipient may be liable under the reverse charge mechanism by amendment of the Service Tax Rules, but that many activities of municipalities are not support services and further that specific activities (including services listed under the mega exemption) are exempt. Applying these principles to the material before it, the Court concluded that the activities of the petitioner municipalities fell outside the taxable ambit and that therefore the impugned show cause notices and orders lacked jurisdiction and could not be sustained. The Court noted earlier contrary dicta lacking reasoning and preferred the analysis in its order dated 22.03.2021 which it held covered the present case. It nevertheless recorded that for support services the recipient liability under the reverse-charge rule existed as a legal position, and treated renting by Government/local authorities as exempt under the mega-exemption when provided by such authorities rather than by third parties. [Paras 57, 58, 59, 60, 61]

The impugned show cause notice and the orders-in-original confirming demand are quashed; the writ petition is allowed and connected miscellaneous petitions are closed, with liberty for the respondent to adjudicate the issue before the Division Bench.

Final Conclusion: Writ petition allowed. The Court quashed the impugned show cause notice and orders-in-original as lacking jurisdiction insofar as the services of the petitioner municipalities fall within the negative list or are otherwise exempt (including under the mega exemption); no costs; connected matters closed; respondent may proceed to adjudicate the issue before the Division Bench.

Prematurity of writ petition and prohibition on pre-empting adjudication - Quashing of Show Cause cum Demand Notice - Duty to adjudicate after hearing and in compliance with law - Claimed exemption under Mega Exemption Notification No.25/2012-ST

Prematurity of writ petition and prohibition on pre-empting adjudication - Quashing of Show Cause cum Demand Notice - Maintainability of the writ petition seeking quashment of the Show Cause cum Demand Notice dated 23.12.2020 - HELD THAT: - The Court held that the writ petition is premature and cannot be used to pre-empt the statutory adjudication. Although the petitioner challenged the Show Cause cum Demand Notice and asserted exemption, the correctness of the notice is to be determined in the adjudication process and thus cannot be disposed of in writ proceedings at this stage. The court declined to quash the Show Cause cum Demand Notice as a matter of pre-enforcement relief and directed the petitioner to participate in the statutory proceedings by filing a detailed reply. [Paras 10]

Writ petition dismissed as premature; petition to quash the Show Cause cum Demand Notice refused.

Duty to adjudicate after hearing and in compliance with law - Claimed exemption under Mega Exemption Notification No.25/2012-ST - Procedural directions for continuation and adjudication of the Show Cause cum Demand Notice - HELD THAT: - The Court directed the petitioner to file a detailed reply within 30 days from receipt of the order and directed the authority to adjudicate the Show Cause cum Demand Notice preferably within 30 days thereafter. The adjudicating authority must hear the petitioner before passing any order and ensure that the final orders are passed strictly in accordance with law. The Court noted the petitioner's contention regarding exemption under the Mega Exemption Notification but left the determination of that claim to the adjudicatory process. [Paras 11, 12]

Petitioner to file reply within 30 days; adjudicating authority to decide the Show Cause cum Demand Notice preferably within 30 days thereafter after hearing the petitioner and in accordance with law.

Final Conclusion: The writ petition is dismissed as premature; the petitioner is directed to file a reply within 30 days and the Show Cause cum Demand Notice is to be adjudicated by the authority, after hearing and in compliance with law, preferably within a further period of 30 days. No costs.

Adjustment of excess service tax under Rule 6(3) of the Service Tax Rules, 1994 - eligibility to utilise CENVAT/credit of excess service tax for subsequent service tax liability - refund claim under Section 11B of the Central Excise Act, 1944 as made applicable to the Finance Act, 1994 - demand under Section 73 of the Finance Act, 1994 and levy of interest and penalty under Sections 75 and 76 - doctrine of approbate and reprobate

Adjustment of excess service tax under Rule 6(3) of the Service Tax Rules, 1994 - eligibility to utilise CENVAT/credit of excess service tax for subsequent service tax liability - refund claim under Section 11B of the Central Excise Act, 1944 as made applicable to the Finance Act, 1994 - doctrine of approbate and reprobate - Appellant entitled to adjust excess service tax credit against subsequent service tax liability and such adjustment does not, per se, disentitle the appellant from contesting/refunding other portions of the excess payment. - HELD THAT: - The adjudicating controversy concerned whether the appellant could legitimately utilise credit of excess service tax paid on three supplementary invoices towards service tax liability on a subsequently raised revised supplementary invoice. The Tribunal noted as undisputed that excess service tax totalling the claimed amount had been paid and that the appellant had availed credit and utilised part of that credit to discharge a later service tax liability. The record of the earlier CESTAT order shows that the appellant confined its contest of refund to only one of the three invoices and had not agitated refund in respect of the other two because those amounts had been adjusted. Having regarded the factual matrix and the documentary material including the Chartered Accountant's certificate recording cancellation of the three supplementary invoices and non-receipt of consideration, the Tribunal concluded that Rule 6(3) (and allied Rule 6 provisions) permit adjustment of the credit so availed for subsequent service tax liability. The mere filing of a refund claim for the entire excess amount did not render the adjustment unlawful where part of the credit had in fact been utilised and where the appellant was not contesting adjustment of two of the invoices before the earlier Tribunal. The adjudicating authority's demand under Section 73 (and concomitant interest and penalty) based on disallowing the adjustment was therefore held unsustainable and reversed. [Paras 8, 13, 14]

Impugned order confirming demand is set aside; appeal allowed insofar as it holds the appellant eligible to adjust the excess service tax credit against subsequent service tax liability, with consequential reliefs as per law.

Final Conclusion: The Tribunal allowed the appeal, holding that the appellant was entitled to adjust the excess service tax credit against subsequent service tax liability under the Service Tax Rules and setting aside the order confirming demand; consequential relief granted as per law.

Manufacture under Section 2(f) of the Central Excise Act - Chapter Note 2 to Chapter 25 - crushed, ground or powdered forms as covered products - manufacturing activity excluded from business auxiliary service - Business Auxiliary Service exclusion of activities amounting to manufacture - limitation for extended period in excise demands

Manufacture under Section 2(f) of the Central Excise Act - Chapter Note 2 to Chapter 25 - crushed, ground or powdered forms as covered products - Crushing of mineral lumps into crushed/ground/powdered form amounts to manufacture within the meaning of Section 2(f). - HELD THAT: - The Tribunal applied the definition of "manufacture" in Section 2(f) and the Chapter Note 2 to Chapter 25, relying on earlier decisions which hold that conversion of mined lumps into powders or specified-sized chips produces marketable products having distinct name, character and use. The court observed that Chapter Note 2 recognises crushed/ground/powdered forms as products covered by Chapter 25 and that established precedents (including decisions cited in the order) support the view that crushing/grinding which results in a distinct commercially marketable product amounts to manufacture. On this basis the appellants' activity of crushing lumps was held to be a manufacturing process.

The crushing of lumps into crushed/ground/powdered form is a manufacturing activity under Section 2(f) and is excisable as such.

Manufacturing activity excluded from business auxiliary service - Business Auxiliary Service exclusion of activities amounting to manufacture - limitation for extended period in excise demands - Service tax demand under the category of Business Auxiliary Service is not sustainable where the activity amounts to manufacture; further, the demand for extended period was not sustained on limitation grounds. - HELD THAT: - The definition of business auxiliary service expressly excludes "any activity that amounts to manufacture of excisable goods." Having concluded that crushing is a manufacturing activity, the Tribunal held that the same cannot be taxed as Business Auxiliary Service. The Tribunal also considered precedent on extended period demands and, following the reasoning in cited authorities, held that the demand could not be sustained for the extended period; accordingly the impugned demands (and related consequences) were set aside and relief granted to the appellants.

No service tax is leviable under Business Auxiliary Service for the crushing activity; the demand is also unsustainable for the extended period and is set aside.

Final Conclusion: The appeals are allowed: the crushing of lumps into crushed/ground/powdered form is a manufacturing activity under Section 2(f) and therefore excluded from Business Auxiliary Service; consequential demands (including for the extended period) are set aside and relief is granted to the appellants.

Taxability of laying of cables (including telecommunication cables) - Applicability of Board Circular No.123/5/2010 to laying of cables - Erection, Commissioning or Installation Service - Extended period and requirement of suppression - Interpretational dispute and limitation

Taxability of laying of cables (including telecommunication cables) - Applicability of Board Circular No.123/5/2010 to laying of cables - Erection, Commissioning or Installation Service - Laying of optic fibre cables for BSNL is not liable to service tax and falls within the non-taxable activities clarified by Board Circular No.123/5/2010. - HELD THAT: - The Tribunal examined the definition of 'Erection, Commissioning or Installation Service' and the Board's Circular No.123/5/2010 which lists certain cable-related activities as not taxable. The Circular at para-3 describes 'laying of cables under or alongside roads' and related entries without qualification to 'electric' cables, using the term 'cable' in general terms. The Tribunal accepted that the language of Sl. No.2 in the Circular is unqualified and thus covers telecommunications cables such as optic fibre. The Tribunal also noted contemporaneous departmental communications and a decision of another Tribunal holding laying of optic fibre cables for BSNL to be non-taxable, and found that the Board's clarification and existing authorities support the view that the activity is not subject to service tax. On these grounds the demand on merits was held unsustainable and set aside. [Paras 6, 8, 9]

Demand of service tax for laying of optic fibre cables is quashed; issue on merits decided in favour of the appellant.

Extended period and requirement of suppression - Interpretational dispute and limitation - Invoking the extended period of limitation was not justified; the show cause notice is time-barred. - HELD THAT: - The Tribunal found no evidence of suppression with intent to evade tax. The appellant had accounted for the receipts and the demand was quantified from the appellant's own records. Given that the taxability question was interpretational-borne out by the Board's Circular and divergent departmental positions-the Tribunal held that the extended period could not be invoked. Consequently the notice was held to be barred by limitation. [Paras 10]

Extended period invocation rejected; the show cause notice is time-barred and the demand cannot be sustained on limitation grounds.

Final Conclusion: Appeal allowed; the impugned order is set aside, the service tax demand (and associated interest/penalties) is quashed on merits and as time-barred, with consequential relief if any.

Renting of immovable property services - exemption of services rendered by Government or local authority as sovereign functions - fees, fines and statutory charges levied by local authorities - reverse charge mechanism - limitation and extended period of demand - remand for quantification and verification of demand

Renting of immovable property services - exemption of services rendered by Government or local authority as sovereign functions - Whether the demand of service tax on renting of immovable property and other municipal services is sustainable or requires fresh adjudication. - HELD THAT: - The Tribunal observed that the principal controversy - whether a municipality's receipts from letting, fees and other charges fall within the taxable ambit or are excluded as sovereign/constitutional functions - is disputed in binding High Court decisions and requires detailed factual and legal examination. Conflicting High Court precedents were noted: Cuddalore Municipality (holding many municipal activities to be sovereign and exempt) and earlier decisions including Madurai Corporation and G.V. Matheswaran (holding municipalities liable to service tax on renting). Given the existence of differing High Court rulings and recent remand directions in analogous cases, the Tribunal concluded that the Adjudicating Authority must reconsider, on merits and in light of the municipal statute, Article 243W/243X and relevant High Court decisions, whether the activities were carried out as sovereign functions and therefore beyond service tax coverage. The matter is remanded for fresh consideration of liability of the municipality to pay service tax on the various services claimed by the Department. [Paras 6, 7]

Matter remanded to the Adjudicating Authority for fresh consideration on whether amounts collected by the municipality for renting and other services are taxable or fall within sovereign-function exemption.

Fees, fines and statutory charges levied by local authorities - exemption of services rendered by Government or local authority as sovereign functions - Whether fees, fines and other statutory charges collected by the municipal authority for functions listed in the Twelfth Schedule are taxable or exempt as sovereign functions. - HELD THAT: - The Tribunal recorded that certain demands relate specifically to fees and charges collected while performing functions listed in the Twelfth Schedule and under the Coimbatore City Municipal Corporation Act, 1981, linked to Article 243W/243X. It held that these matters require detailed examination to determine if such receipts are part of sovereign activity exempt from service tax and therefore remitted the issue to the Adjudicating Authority to examine statutory powers, the nature of the services, and applicable exemptions. [Paras 7]

Remanded to the Adjudicating Authority to determine, on merits, whether fees and statutory charges collected for Twelfth Schedule functions are taxable or exempt as sovereign functions.

Reverse charge mechanism - Responsibility for service tax under reverse charge alleged against the assessee. - HELD THAT: - The assessee contended that part of the demand was raised on reverse charge basis and that the assessee (as service recipient) is not liable to pay under the asserted facts. The Tribunal did not decide this point on the merits but remanded the overall matters to the Adjudicating Authority, leaving all issues open for fresh consideration, including the applicability of reverse charge provisions to specific services. [Paras 3, 9]

Left open and remanded for fresh adjudication, including determination of liability under the reverse charge mechanism.

Limitation and extended period of demand - Whether the demands fall within the limitation period or require fresh consideration on limitation grounds. - HELD THAT: - The assessee raised limitation as an independent defence, asserting absence of suppression and that, as a local authority subject to government audit, extended period invocation was inappropriate. The Tribunal noted the Adjudicating Authority had not recorded any finding on limitation and directed that limitation and any invocation of extended period be considered afresh by the Adjudicating Authority in the remand. [Paras 3, 8]

Remanded to the Adjudicating Authority to consider limitation and any invocation of extended period afresh and record findings.

Remand for quantification and verification of demand - Quantification of the confirmed demand where the Adjudicating Authority reduced amounts based on municipal records. - HELD THAT: - The Department challenged the reduction of quantified demand, asserting that the Show Cause Notices were based on municipal website data and that the adjudicating officer must verify actual receipts. The Tribunal directed that, if liability is sustained, the Adjudicating Authority should quantify the demand after examining actual amounts received for each service, verify records and compute interest/penalties as appropriate. All issues of quantification were left open for determination on remand. [Paras 4, 9]

Remanded to the Adjudicating Authority to verify records and quantify any sustainable demand service wise; all quantification issues left open.

Final Conclusion: Impugned orders are set aside and the appeals are allowed by remanding the matters to the Adjudicating Authority for fresh consideration on all contested issues - liability of the municipality to service tax (including renting and other municipal charges), applicability of reverse charge, limitation/extended period, and quantification of any sustainable demand - in light of municipal statute, constitutional provisions and relevant High Court decisions; all issues left open for de novo adjudication.

Classification of taxable service - works contract services vs erection, commissioning and installation services - Composite supply including supply of materials - Appropriate categorisation for levy of service tax

Works contract services - erection, commissioning and installation services - composite supply including supply of materials - Services rendered by the appellant are to be classified as works contract services and not as erection, commissioning and installation services; demand confirmed under the latter category is unsustainable. - HELD THAT: - The Commissioner's own findings (recorded facts) show that the appellant's contracts required supply of materials in addition to labour/services (see scope of work recorded in the order). Where the supply of materials forms part of the contractual scope, the nature of service becomes composite and falls within works contract services rather than being a pure service simpliciter such as erection, commissioning and installation services. The Tribunal placed reliance on the coordinate bench decision in Real Value Promoters Pvt. Ltd. (2018 (9) TMI 1149 - CESTAT Chennai) which held that classification as erection, commissioning and installation is appropriate only when the service is in the nature of services simpliciter; that principle applies here because the recorded scope includes material supply. Applying that determinative principle to the facts recorded by the Commissioner, the Tribunal concluded that the demand framed under the category of erection, commissioning and installation services is not sustainable and must be set aside. [Paras 11, 12, 13]

Demand of service tax confirmed under the category of erection, commissioning and installation services is set aside and the appeal is allowed with consequential relief.

Final Conclusion: The Tribunal set aside the demand confirmed under the category of erection, commissioning and installation services for the period 2009-10 to 2012-13, holding the appellant's supplies to be works contract services; the appeal is allowed with consequential relief.

Adjustment of sanctioned rebate - recovery during pendency of appellate/revisional proceedings - remand for fresh consideration - refund with interest

Adjustment of sanctioned rebate - recovery during pendency of appellate/revisional proceedings - refund with interest - Legitimacy of adjusting previously sanctioned rebate against a departmental recovery which has been set aside and remitted for fresh consideration - HELD THAT: - The Court found that the petitioner's entitlement to rebate for exports made in the specified months was not in dispute and that the rebate sanction previously issued (Order-in-Original No.103/2012) has been set aside by this Court, with the matter remitted to the respondents for fresh consideration. In these circumstances there is no subsisting demand in force arising from the recovery order which could justify adjustment of the sanctioned rebates that are otherwise payable to the petitioner. The Court therefore held that the adjustments made under Section 11AA in the impugned orders were unjustified while the remand is in effect, and that the amounts so adjusted must be refunded. The Court further directed that such refundable amounts be repaid together with interest. The determinative reasoning is that coercive enforcement or adjustment cannot be sustained where the impugned recovery order has been set aside and the claim remitted for reconsideration, leaving no operative demand against which to adjust sanctioned rebates. [Paras 16, 17, 18]

Adjustments of the sanctioned rebate are unjustified; the amounts adjusted must be refunded to the petitioner with interest.

Remand for fresh consideration - independent recovery post-remand - Scope of relief on remand and the Department's right to recover if, on fresh consideration, the petitioner is held ineligible for certain rebates - HELD THAT: - The Court remitted the matter concerning the earlier sanction and recovery to the Original Authority for fresh consideration. While directing refund of amounts adjusted in the meantime, the Court clarified that if, in the remand proceedings, the Revisional Authority holds the petitioner ineligible for rebate for the exports in question (including the reference to April, 2012), the respondents retain the statutory right to recover any amounts lawfully found payable by the petitioner; such recovery would be independent and may be effected from the date appropriate in law as determined upon fresh adjudication. This preserves the Department's statutory remedy subject to the outcome of the remand. [Paras 18]

Matter remitted for fresh consideration; if on remand the petitioner is held ineligible, respondents may independently recover the amounts as permissible by law.

Final Conclusion: Writ petitions allowed; impugned adjustments set aside and amounts adjusted in respect of the sanctioned rebate to be refunded to the petitioner with interest; matter relating to the earlier sanction remitted to the respondents for fresh consideration, with liberty to recover independently if the petitioner is held ineligible on remand; no costs.

Power to charge excise duty on capacity basis - Option to compound under Rule 96ZO(3) - Irrevocability of option within a financial year - Alternative procedures under Section 3A(4) and Rule 96ZO(3)

Option to compound under Rule 96ZO(3) - Irrevocability of option within a financial year - Alternative procedures under Section 3A(4) and Rule 96ZO(3) - Whether the declaration made in 1997-98 can be treated as the declaration for 1998-99 under Section 3A read with Rule 96ZO(3) of the Central Excise Rules - HELD THAT: - The Court accepted that Section 3A and Rule 96ZO(3) create an alternative, legislatively sanctioned scheme of compounding excise liability based on furnace capacity, which an assessee may opt to avail. Following the reasoning in the decisions of the Supreme Court (as cited in the judgment), the two procedures - determination of actual production under Section 3A(4) and compounding under Rule 96ZO(3) - are alternative and mutually exclusive. Once an assessee has validly exercised the option to pay on a compounded basis for a financial year, that option cannot be withdrawn during that financial year. The procedure for discontinuing the compounding option requires timely application to the jurisdictional authority and, if the assessee wished the compounding not to continue into the next financial year, that application had to be made before the commencement of that year and certainly prior to depositing the compounding amount for the month which indicates continuation. In the present case the assessee did not make any application to withdraw before the relevant date and, having paid the compounding amount for April 1998, had thereby indicated intention to remain under the compounding scheme for 1998-99. Consequently the declaration and option already exercised continued to govern for 1998-99 and the assessee could not legitimately seek assessment on actual production mid-year. [Paras 14, 15, 16, 17, 18]

Declaration made for 1997-98 was treated as the declaration for 1998-99; option once exercised for a financial year cannot be withdrawn during that year and the assessee's attempt to switch to actual production mid-year was rightly rejected.

Final Conclusion: The reference is answered in favour of the revenue and against the assessee; the application is dismissed.

Valuation of excisable goods manufactured by a job-worker - Applicability of Rule 10A(iii) of the Central Excise Valuation Rules - Inapplicability of Rule 8 where goods are sold and not captively consumed - Residuary valuation under Rule 11 and application of Ujagar Prints formula (cost of materials plus conversion) - Binding effect of coordinate bench decisions

Valuation of excisable goods manufactured by a job-worker - Applicability of Rule 10A(iii) of the Central Excise Valuation Rules - Inapplicability of Rule 8 where goods are sold and not captively consumed - Residuary valuation under Rule 11 and application of Ujagar Prints formula (cost of materials plus conversion) - Valuation adopted by the appellant (cost of raw materials plus conversion/job-work charges) for job-worked HDPE bottles is legally correct and Rule 8 of the Valuation Rules is not applicable. - HELD THAT: - The Tribunal examined whether the assessable value of HDPE bottles manufactured on job-work basis and cleared to the principal manufacturer should be determined under Rule 8 or under the residuary and job-worker provisions. Rule 8 applies where excisable goods are not sold by the assessee but are used for consumption by him or on his behalf; that factual matrix is absent because the bottles were sold/cleared to the principal (M/s. Marico) and not captively consumed by the appellant. Rule 10A applies to goods produced by a job-worker on behalf of a principal; where clauses (i) and (ii) do not apply, clause (iii) directs that the foregoing rules, wherever applicable, shall mutatis mutandis apply, necessitating a sequential consideration of the Valuation Rules. In the present facts Rules 3-8 were inapplicable and the value therefore falls to be determined under the residuary principle (Rule 11) and the established formula in Ujagar Prints (cost of raw materials plus conversion charges). The Tribunal further relied on a coordinate-bench decision addressing identical facts which held that Rule 8 did not apply and upheld valuation in line with Ujagar Prints and Rule 10A(iii); judicial discipline required adherence to that view. Applying these principles to the material facts, the impugned demand founded on application of Rule 8 could not be sustained. [Paras 6, 7, 8]

Appellant's method of valuation (cost of raw material plus conversion/job-work charges) upheld; valuation under Rule 8 rejected and impugned orders set aside.

Final Conclusion: The appeal is allowed; the impugned adjudication and penalty based on application of Rule 8 are set aside and consequential relief, if any, shall follow as per law.

Entitlement to Cenvat credit on the basis of invoices from registered suppliers who were later alleged to be non-existent - onus on Revenue to prove that inputs were not physically received and transactions were mere paper transactions - due diligence under Rule 9(5) of the Cenvat Credit Rules, 2004 - reliance on departmental registration as indicia of supplier's legitimacy - inadmissibility of penalty where foundational demand is unsustainable and no proposal for confiscation was made

Entitlement to Cenvat credit on the basis of invoices from registered suppliers who were later alleged to be non-existent - due diligence under Rule 9(5) of the Cenvat Credit Rules, 2004 - onus on Revenue to prove that inputs were not physically received and transactions were mere paper transactions - Cenvat credit availed by the appellant cannot be denied where the appellant has complied with statutory record-keeping and due diligence requirements and the suppliers were registered with the department, despite later departmental findings alleging non-existence of upstream manufacturers or first stage dealers. - HELD THAT: - The Tribunal examined the documentary and contemporaneous records produced by the appellant - registered invoices in prescribed format, GRs/bilties, weighment slips, entries in RG-23A/RG-234, goods receipt notes, and payments through banking channels - and found that the appellant had taken the reasonable precautions mandated by Rule 9(5) CCR, 2004. In the factual matrix, earlier departmental registration of the purported manufacturers and dealers and acceptance of returns weighed in favour of the purchaser. The Tribunal held that once the department itself had registered those entities and later cancelled registrations, the buyer who relied on such registrations and maintained statutory records cannot be faulted for not investigating upstream links; the burden is on Revenue to establish that inputs were not physically received and that transactions were only on paper. The Tribunal applied its consistent earlier rulings in identical fact situations in which appeals were allowed, and concluded that Revenue failed to discharge its burden to prove non-receipt or sham transactions. (See findings reflected in paragraphs 7, 7.1 and 8.) [Paras 7, 8]

Allowed the appeal and held that the Cenvat credit taken by the appellant was admissible.

Inadmissibility of penalty where foundational demand is unsustainable and no proposal for confiscation was made - penalty under Rule 26 of the Central Excise Rules, 2002 and its nexus with confiscation - Penalties imposed on the appellant company and its director were not sustainable where the primary demand for denial of Cenvat credit was set aside and there was no proposal for confiscation in the show cause notice as a basis for penalty under Rule 26. - HELD THAT: - The Tribunal found that having concluded that the appellant had complied with Rule 9(5) and that the claim of paper transactions was not established by Revenue, the consequential imposition of penalties could not stand. The appellate decision in favour of the appellant on admissibility of credit and the absence of a confiscation proposal in the show cause notice meant that the statutory basis for imposing the penalties (including under Rule 26) was not made out. Consequently, penalties confirmed by the adjudicating authority were set aside. (See paragraph 8 and concluding orders in paragraph 9.) [Paras 8, 9]

Set aside the penalties imposed on the appellant and its director.

Final Conclusion: Impugned order denying Cenvat credit, directing recovery with interest and imposing equal penalty, was set aside as the appellant had taken statutory precautions and Revenue failed to establish that transactions were mere paper transactions; consequential penalties were also quashed and the appeals allowed.

CENVAT Credit utilization for payment of Education Cess and Secondary and Higher Education Cess - Interpretation of Rule 3(4) of the Cenvat Credit Rules, 2004 - Scope and effect of Rule 3(7)(b) of the Cenvat Credit Rules, 2004 and the word "respectively" - Characterisation of Education Cess and Secondary and Higher Education Cess as duties of excise - Interaction between Cenvat Credit Rules and levy under the Finance Acts

CENVAT Credit utilization for payment of Education Cess and Secondary and Higher Education Cess - Interpretation of Rule 3(4) of the Cenvat Credit Rules, 2004 - Scope and effect of Rule 3(7)(b) of the Cenvat Credit Rules, 2004 and the word "respectively" - Characterisation of Education Cess and Secondary and Higher Education Cess as duties of excise - CENVAT Credit availed on Basic Excise Duty can be utilized for payment of Education Cess and Secondary and Higher Education Cess. - HELD THAT: - The Tribunal examined Rule 3(4) which permits utilization of CENVAT credit for payment of "any duty of excise" on final products and Rule 3(7)(b) which limits utilization of credit in respect of certain duties by specifying that such credit shall be utilized only towards payment of those duties "respectively." Relying on earlier decisions including the Tribunal's view in Vedanta Ltd. and the reasoning in the High Court decision concerning NCCD, the Tribunal held that the restriction in Rule 3(7)(b) confines utilization of credit taken in respect of the specifically listed duties to payment of those duties, but does not prohibit utilization of credit taken on basic excise duty for payment of other duties/cess which are in the nature of duties of excise. The Tribunal rejected the department's contention that Education Cess and Secondary and Higher Education Cess, being levied under the Finance Acts, are outside the scope of utilisation under Rule 3(4); it accepted that those cesses are in the nature of duties of excise and thus fall within the ambit of "any duty of excise" for purposes of Rule 3(4). The Tribunal distinguished the Supreme Court's decision in Unicorn Industries as addressing exemption notifications rather than the question of credit utilisation, and relied on subsequent and co-ordinate decisions which support the permissive view on utilisation of basic excise duty credit for payment of such cesses. [Paras 14, 15, 16]

The demand for recovery on the ground that CENVAT credit of Basic Excise Duty was wrongly utilized for payment of Education Cess and Secondary and Higher Education Cess is unsustainable; the impugned order is set aside and the appeal is allowed.

Final Conclusion: The Tribunal allowed the appeal, holding that CENVAT credit availed on Basic Excise Duty could be validly utilized for payment of Education Cess and Secondary and Higher Education Cess; the adjudicating authority's demand and penalty were set aside.

Reversal of CENVAT credit under Rule 6 of Cenvat Credit Rules - Excisability of waste products (Bagasse and Press mud) - Definition of 'service' and trading in securities - Interpretation of 'service' under Section 65B(44) and levy under Section 66B of the Finance Act - Onus on Revenue to prove exigibility of tax

Excisability of waste products (Bagasse and Press mud) - Reversal of CENVAT credit under Rule 6 of Cenvat Credit Rules - Onus on Revenue to prove exigibility of tax - Press mud is a waste product like Bagasse and not an excisable manufactured product; Rule 6 of the Cenvat Credit Rules is not attracted and no reversal of credit is warranted for Press mud for the period in dispute. - HELD THAT: - The Tribunal applied the Supreme Court's ratio in DSCL Sugar Ltd. and the subsequent reasoning of the Allahabad High Court as followed by a co-ordinate CESTAT bench, holding that bagasse is an agricultural waste and not a manufactured final product; insertion of an explanatory provision does not convert a waste into a manufactured final product for the purposes of Rule 6. Press mud, being similar in nature to bagasse as a residue/waste arising from the manufacture of sugar, retains the character of non-manufactured waste. Rule 6(1) obliges reversal of CENVAT credit only where the output is an exempted service or an excisable final product; in absence of excisability or manufacture of Press mud, the reversing obligation does not arise. The revenue bears the burden of proving exigibility; given the settled precedents and the characterisation of Press mud as waste, the impugned demand based on Rule 6 cannot be sustained for the period under adjudication.

Demand based on treating Press mud as an excisable final product and requiring reversal of CENVAT credit under Rule 6 is set aside.

Definition of 'service' and trading in securities - Interpretation of 'service' under Section 65B(44) and levy under Section 66B of the Finance Act - Reversal of CENVAT credit under Rule 6 of Cenvat Credit Rules - Investment in shares/securities by the appellant does not amount to a 'service' or 'trading in securities' that would attract reversal of credit as an exempted service. - HELD THAT: - The Tribunal examined whether the appellant's investment activity constituted a service and found no material on record to establish that the investment was an activity carried out for another for consideration. The definition of 'service' under Section 65B(44) excludes mere transfers of title in goods; trading in securities involves transfer of title and therefore does not qualify as a 'service'. Even treating the activity as 'exempted service' presupposes it first being a service; prior to and after introduction of the negative list, the activity must satisfy the ingredient of being a service. The Revenue relied on surmise without proving a service element or that the investments were part of a trading activity for others. Consequently, the requirement to reverse input credits under Rule 6 does not arise in respect of such investments.

Demand and reversal of CENVAT credit on account of the appellant's investments in shares/securities is quashed and the impugned order is set aside on this ground.

Final Conclusion: Both grounds of demand are set aside: Press mud is held to be a non-excisable waste like bagasse and Rule 6 reversal does not apply; investment in shares/securities is not a 'service' attracting reversal. The appeal is allowed with consequential benefits as per law.

Amendment of cause title on corporate name change - Corporate Insolvency Resolution Process - effect of successful resolution applicant on pre-CIRP statutory dues - finality of NCLT/NCLAT orders on survival of claims - disposal of special leave petition as infructuous

Amendment of cause title on corporate name change - Amendment of the cause title to reflect the petitioner's change of name to Minosha India Limited was permitted. - HELD THAT: - The Court allowed the interlocutory application seeking that the petitioner's name in the cause title be changed to Minosha India Limited following the successful completion of the Corporate Insolvency Resolution Process in which Minosha India Limited is the successful resolution applicant. There was no objection to the application and the amendment was directed to be made in the cause title.

Application allowed and cause title to be amended to Minosha India Limited.

Disposal of special leave petition as infructuous - finality of NCLT/NCLAT orders on survival of claims - effect of successful resolution applicant on pre-CIRP statutory dues - The Special Leave Petition was disposed of as having become infructuous and was treated as withdrawn in view of prior decisions recording that the new management will not be liable for pre-CIRP statutory dues and the NCLAT holding that the respondent's claim does not survive. - HELD THAT: - Having regard to this Court's earlier judgment dated 10.03.2021 affirming the NCLT order that the new management of the petitioner will not be responsible for outstanding statutory dues and other claims for the period prior to commencement of CIRP, and to the NCLAT judgment dated 16.10.2023 holding that the respondent's claim against the petitioner does not survive for consideration, the petitioner's prayer that the SLP be disposed of as infructuous was accepted. The Court therefore disposed of the Special Leave Petition as withdrawn. The order records the developments and disposes the petition accordingly, while leaving questions of law, if any, open for consideration.

SLP disposed of as having become infructuous and treated as withdrawn; questions of law, if any, kept open.

Interlocutory application for intervention - The interlocutory application for intervention was disposed of. - HELD THAT: - The Court recorded that the interlocutory application for intervention stands disposed of in consequence of the disposal of the Special Leave Petition and the other orders recorded in the proceedings.

Interlocutory application for intervention disposed of.

Final Conclusion: The Court allowed amendment of the cause title to reflect the petitioner's change of name to Minosha India Limited; disposed of the Special Leave Petition as having become infructuous and treated it as withdrawn in light of earlier NCLT/NCLAT and this Court's developments concerning pre-CIRP liabilities; interlocutory application for intervention was disposed of; questions of law, if any, remain open.

Issuance of demand notice in Form I - Interest on penalty payable under Regulation 5 - Mandatory nature of procedural requirements for recovery - Deemed default and recovery proceedings dependent on service of notice

Issuance of demand notice in Form I - Interest on penalty payable under Regulation 5 - Mandatory nature of procedural requirements for recovery - Whether the Competition Commission of India could levy interest on the penalty from 10.12.2018 without first issuing the demand notice in Form I and following the procedure prescribed by the 2011 Regulations - HELD THAT: - The Court examined Regulations 3 and 5 of the Competition Commission of India (Manner of Recovery of Monetary Penalty) Regulations, 2011 and Form I appended thereto, and concluded that the scheme mandates that a person on whom a penalty is imposed must be informed by service of a demand notice in Form I specifying the amount due and the period within which it is payable. Regulation 3(2) provides thirty days from service of the demand notice for payment, and Regulation 5 makes interest leviable only if the amount specified in the demand notice is not paid within the period specified. Form I expressly warns that failure to deposit within the stipulated period will attract simple interest at the rate specified in Regulation 5. The specific insertion of the interest clause in Form I and the language of Regulations 3 and 5 indicate that issuance of the demand notice and the time specified therein are pre conditions to the liability to pay interest. The Court relied on authorities holding that liability to pay penal interest arises only upon failure to comply with a notice of demand (see Mohan Wahi and State of Kerala v. Joy Varghese ) and on the principle that when power to act is coupled with a prescribed mode, that mode is mandatory. Applying these principles, the Court held that interest cannot be levied from 10.12.2018 unless the demand notice in Form I had been served and the timelines in the Regulations observed. [Paras 14, 15, 16, 22, 23]

Interest on the delayed payment of penalty could not be levied from 10.12.2018 in the absence of issuance of the demand notice in Form I and compliance with the procedure prescribed by the 2011 Regulations; the impugned order levying such interest is set aside.

Final Conclusion: Writ petition allowed: the order directing payment of interest from 10.12.2018 until payment is set aside for non compliance with the mandatory demand notice procedure under the 2011 Regulations.