TaxTMI Updates e-Newsletter
May 16,2024

Opportunity of hearing under Section 75(4) of the U.P. GST Act, 2017 - principle of natural justice - mandatory personal hearing before passing an adverse assessment order - waiver of hearing signified by electronic option - remand for fresh hearing and decision

Opportunity of hearing under Section 75(4) of the U.P. GST Act, 2017 - mandatory personal hearing before passing an adverse assessment order - Whether the Assessing Authority was bound to afford an opportunity of personal hearing before passing the adverse assessment order despite the assessee indicating 'No' to personal hearing. - HELD THAT: - Section 75(4) of the Act requires that an opportunity of hearing be granted where a request is received or where any adverse decision is contemplated. The Court agreed with the coordinate bench in Bharat Mint & Allied Chemicals that a person/assessee is not required to request personal hearing and that it is mandatory for the Assessing Authority to afford such opportunity before passing an adverse order. Consequently, an electronic indication by the assessee declining personal hearing does not absolve the authority of the obligation to afford a real opportunity of hearing before creating civil liability by an adverse assessment order. The obligation derives from the statutory provision read with the principle of natural justice, and ensures reasonsed decision-making and fair appreciation at appellate stages. [Paras 7, 8, 10]

The Assessing Authority was bound to afford an opportunity of personal hearing before passing the adverse assessment order; the assessee's electronic indication of 'No' did not cure that requirement.

Remand for fresh hearing and decision - principle of natural justice - Whether the impugned assessment order should be set aside and remitted for fresh proceedings to afford the mandated opportunity of hearing. - HELD THAT: - The Court observed that the impugned order was passed without affording the minimal opportunity of hearing and that such opportunity is necessary both for observance of natural justice and for enabling the authority to pass an appropriate and reasoned order. Given the temporal gap between the notice (08.07.2021) and the order (03.11.2023), the assessee's stance could not be properly ascertained without fresh hearing. In light of these considerations, the Court allowed the writ petition, set aside the impugned order and remitted the matter to the Assistant Commissioner to issue a fresh notice and conclude proceedings expeditiously, with the petitioner undertaking to appear on the next date. [Paras 9, 11]

Impugned assessment order set aside and matter remitted for fresh notice and hearing; respondent to issue fresh notice within two weeks and conclude proceedings expeditiously.

Final Conclusion: Writ petition allowed; the assessment order dated 03.11.2023 is set aside for failure to afford the mandatory opportunity of personal hearing under Section 75(4) of the U.P. GST Act, 2017, and the matter is remitted for fresh notice and hearing for tax period 2019-20.

Search and seizure does not permit initiation of penalty proceedings - penalty under Section 129 of the Uttar Pradesh Goods and Services Tax Act, 2017 - quashing of penalty proceedings and refund of tax and penalty deposited

Search and seizure does not permit initiation of penalty proceedings - penalty under Section 129 of the Uttar Pradesh Goods and Services Tax Act, 2017 - Validity of initiating penalty proceedings under Section 129(3) of the Uttar Pradesh Goods and Services Tax Act, 2017 consequent to search and seizure of the assessee's business premises. - HELD THAT: - The Court, following the decisions of a coordinate Bench in Mahavir Polyplast Pvt. Ltd. and this Court's decision in Poddar Trading Company, held that a search and seizure of the godown cannot be the basis for initiating penalty proceedings under Section 129 of the Act. Applying those precedents, the proceedings initiated under Section 129(3) after the search were held to be unjustified. Consequent orders passed under Section 129(3) and the appellate order were therefore unsustainable and liable to be set aside.

The penalty proceedings initiated after search and seizure were quashed and set aside.

Quashing of penalty proceedings and refund of tax and penalty deposited - Relief to the petitioner in consequence of quashing the penalty order. - HELD THAT: - As the impugned orders sustaining penalty were quashed, the Court directed the respondents to refund the amount of tax and penalty deposited by the petitioner. The refund was ordered to be made within four weeks from the date of the judgment.

Respondents directed to refund the tax and penalty deposited within four weeks; writ petition allowed.

Final Conclusion: Writ petition allowed; penalty order dated June 18, 2018 and appellate order dated June 14, 2019 quashed and set aside, and respondents directed to refund the tax and penalty deposited within four weeks.

Principles of natural justice - Refund of GST - Show cause notice under Rule 92(3) - Notice in FORM GST-RFD-08 - Reply in FORM GST-RFD-09 - Section 54 refund scheme - Passing on the incidence of tax - Remand for fresh consideration

Principles of natural justice - Show cause notice under Rule 92(3) - Notice in FORM GST-RFD-08 - Reply in FORM GST-RFD-09 - Compliance of the show cause notice with the mandate of Rule 92(3) of the Central Goods and Services Tax Rules, 2017 and incorporation of principles of natural justice - HELD THAT: - Rule 92(3) requires that when the proper officer is satisfied that a refund claim is not admissible or payable, he must issue a notice in FORM GST RFD-08 stating reasons for that satisfaction, invite a reply in FORM GST RFD-09 and, after considering the reply, pass the final order. The Court found that the notices issued to the petitioner were identical, vague and did not disclose the tentative reasons on which the officer had formed satisfaction to reject the refund; they were thus non-speaking and failed to communicate the grounds of tentative rejection. Because the statutory scheme mandates disclosure of reasons so as to give a meaningful opportunity to be heard, the issuance of the impugned notices amounted to a mechanical formality and violated the rule and the principles of natural justice incorporated therein. Consequently the final orders passed in FORM GST-RFD-06 could not stand. [Paras 11, 12, 15, 16]

The notices under Rule 92(3) were non speaking and violated principles of natural justice; the consequent orders are vitiated.

Refund of GST - Section 54 refund scheme - Passing on the incidence of tax - Validity of the authority's conclusion (as recorded in the impugned orders) that the petitioner had passed on the incidence of tax and therefore was not entitled to refund - HELD THAT: - The impugned orders for the first time recorded the reasoning that the petitioner had passed the incidence of tax to buyers and therefore refund under Section 54(8)(e) would not be payable. However, that specific tentative reasoning was not communicated in the FORM GST-RFD-08 notices to the petitioner, depriving it of an opportunity to address that precise ground. The High Court did not decide the correctness of the factual or legal conclusion on incidence of tax; instead, because the mandatory procedural safeguard under Rule 92(3) was not observed, the Court set aside the final orders and refrained from adjudicating the substantive question on merits. [Paras 14, 15, 17]

The merits of the authority's conclusion on passing on incidence of tax were not finally adjudicated and require fresh consideration in compliance with Rule 92(3).

Remand for fresh consideration - Notice in FORM GST-RFD-08 - Reply in FORM GST-RFD-09 - Relief to be granted: setting aside of the impugned orders and remand for fresh consideration with proper notice and opportunity to reply - HELD THAT: - Given the failure to disclose the reasons for tentative rejection in the FORM GST-RFD-08 notices and the consequent breach of the procedural mandate in Rule 92(3), the Court concluded that the appropriate remedy is to set aside the orders in FORM GST-RFD-06 and remit the matters to the proper officer. The authority is directed to issue proper, speaking notices in FORM GST-RFD-08, obtain the petitioner's reply in FORM GST-RFD-09 and then pass orders in accordance with law after considering that reply. [Paras 16, 17]

Impugned orders are set aside and the matters are remitted to the proper officer for fresh consideration after issuance of proper FORM GST-RFD-08 notices and receipt of replies.

Alternative remedy - Maintainability of writ petition - Maintainability of the writ petition despite existence of statutory appellate remedy - HELD THAT: - Respondents contended that an alternative efficacious statutory remedy of appeal existed and thus the writ petition was not maintainable. The Court held that because there was a clear statutory breach of Rule 92(3) and violation of principles of natural justice in issuance of non speaking notices, the objection based on alternative remedy could not be sustained. The writ petition was therefore entertained and allowed to the limited extent of setting aside the impugned orders and remitting the matter for fresh consideration. [Paras 8, 17]

Objection based on availability of alternative remedy rejected; writ petition entertained and allowed for limited relief.

Final Conclusion: The Court set aside the six impugned FORM GST-RFD-06 orders dated 13.09.2023 for the listed periods, held that the FORM GST-RFD-08 notices were non speaking in violation of Rule 92(3) and principles of natural justice, rejected the objection of alternative remedy, and remitted the matters to the proper officer to issue proper FORM GST-RFD-08 notices, obtain replies and decide the refund claims afresh in accordance with law.

Refund of tax with interest - judicial review of assessment and refund orders - statutory remedy by way of appeal - re-assessment and rectification of assessment order - condonation of delay in statutory appeal

Refund of tax with interest - judicial review of assessment and refund orders - statutory remedy by way of appeal - Maintainability of writ petition challenging computation/adjustment of refund and interest where statutory appeal lies - HELD THAT: - The Court found that the petitioner sought re-examination of the computation and adjustment of a refund (and related interest) ordered by revenue authorities in respect of the assessment year 2011-2012 and consequential adjustments in the assessment for 2012-2013. The High Court observed that the dispute over the correctness of the computation, re-working of interest and adjustment in the assessment involves factual and statutory entitlement which falls to be examined by the appellate authority under the KGST/KVAT statutory scheme and not by this Court in writ jurisdiction. The earlier direction of this Court to compute refund with interest for 2011-12 had been complied with and subsequent rectification and appellate orders resulted in fresh determinations and a limited refund order; any grievance against those statutory orders must be agitated before the appropriate statutory fora. Consequently, the Court declined to exercise public law writ jurisdiction to re-assess the merits of the assessment/refund order and directed that if the petitioner files the statutory appeal, time lost in prosecuting the writ will be taken into account for condonation of delay. [Paras 7]

Writ petition dismissed as not maintainable; petitioner must pursue remedy under the statute by appealing to the appellate authority and any delay caused by pursuing the writ will be considered for condonation.

Final Conclusion: The writ petition challenging the assessment/refund computation is dismissed for want of statutory remedy; the petitioner is directed to approach the appellate authority under the Act, and any delay occasioned by prosecuting the writ shall be considered when seeking condonation.

Reverse charge mechanism - seigniorage - representation/objections - adjudication on merits - abeyance of recovery - Nine Judge Constitution Bench decision on nature of royalty

Representation/objections - adjudication on merits - abeyance of recovery - Nine Judge Constitution Bench decision on nature of royalty - Petition disposed by directing the petitioner to submit objections; adjudication to proceed on merits but adjudicatory orders to be kept in abeyance and no recovery of GST on seigniorage (royalty) until the Nine Judge Constitution Bench decides the nature of royalty. - HELD THAT: - The Division Bench directions in A. Venkatachalam were applied to the present petition. The petitioner was permitted to file objections/representations within a limited period. The tax authority is authorised to proceed with adjudication on merits after affording a reasonable opportunity of hearing, but any orders of adjudication shall be kept in abeyance. Recovery of GST on the seigniorage/royalty is restrained until the Nine Judge Constitution Bench delivers its decision on the nature of royalty. All other contentions are left open for parties to agitate in appropriate proceedings thereafter.

Writ petition disposed in terms of the directions in A. Venkatachalam: objections to be filed, adjudication on merits to follow with opportunity of hearing, but adjudicatory orders to be kept in abeyance and no recovery of GST on royalty until the Nine Judge Constitution Bench decides the issue.

Challenge to notification and circular - matters left open - Challenges to the notification and circular and other contentions are left open for action after the outcome of the Nine Judge Constitution Bench decision. - HELD THAT: - The Court made it clear that insofar as the petitioners challenge the impugned notification and circular, they remain free to act on those challenges after the constitutional bench decision. All contentions not finally adjudicated are preserved for pursuit before appropriate fora, including by filing appeals, post the decisive pronouncement of the Nine Judge Constitution Bench.

Challenges to the notification/circular and all other preserved contentions are left open for post-decision proceedings before appropriate forums.

Final Conclusion: Writ petition disposed of by applying the directions in A. Venkatachalam: petitioner to submit objections; authority to adjudicate on merits after hearing but adjudication/orders to remain in abeyance; no recovery of GST on seigniorage/royalty until the Nine Judge Constitution Bench determines the nature of royalty; other contentions left open for appropriate proceedings.

Cancellation of GST registration - opportunity to be heard - personal hearing - remand for fresh consideration - no interim benefit of registration - service of show cause notice - inconsistency between record and respondent's instructions

Cancellation of GST registration - service of show cause notice - opportunity to be heard - personal hearing - remand for fresh consideration - no interim benefit of registration - inconsistency between record and respondent's instructions - Impugned order cancelling the petitioner's GST registration is quashed and the matter is remanded for fresh consideration with directions to afford opportunity to be heard. - HELD THAT: - The petitioner stated she was unaware of the show cause notice and thus did not reply; the show cause notice relied on a report alleging non carrying on of business at the registered place. The cancellation order records non appearance and non reply, a statement inconsistent with the respondents' instructions that the petitioner had appeared and replied. In these circumstances the Court found it appropriate to set aside the cancellation order solely to afford the petitioner an opportunity to contest the proposed cancellation. The Court directed that the petitioner be allowed to file a reply within two weeks of receipt of this order, be given a reasonable opportunity including a personal hearing, and that the authority issue a fresh order within one month of receipt of the petitioner's reply. The Court made clear that no benefits of registration shall be available to the petitioner pending the fresh decision.

The cancellation order is quashed; the matter is remanded to the 1st respondent for reconsideration with directions to allow filing of a reply within two weeks, provide a personal hearing and pass a fresh order within one month; no interim registration benefits to the petitioner.

Final Conclusion: Writ petition allowed to the limited extent of quashing the cancellation order and remanding the matter for reconsideration on the terms stated; no costs.

Bogus loss incurred in penny stock - transaction was pre-arranged as well as sham and was carried out through penny script company/paper company - As decided by HC [2023 (6) TMI 837 - GUJARAT HIGH COURT] entire transaction of purchase and sale of the scripts was through National Stock Exchange or Bombay Stock Exchange and that also through the authorized brokers and tribunal correctly opined that merely on the conjecture and surmises, the Assessing Officer cannot make disallowance - Delay filling SLP

HELD THAT:- There is gross delay of 224 days in filing this special leave petition. The reasons assigned for condonation of delay in our view are not sufficient.

Hence, the application seeking condonation of delay is dismissed. Consequently, the special leave petition stands dismissed.

Nature of expenditure - expenditure claimed by assessee as salaries and marketing expenditure for development of new software platform - revenue or capital expenditure - ITAT held such expenditure claimed as Revenue expenditure - As decided by HC [2024 (5) TMI 659 - KARNATAKA HIGH COURT] Assessee has incurred expenditure in these two years to develop a software but due to change in technology, it had to abandoned the product, it had lost money spent on this product. The product having been abandoned, the Assessee shall not get any endure in benefit. The ITAT, in our considered opinion has correctly decided in favour of assessee.

HELD THAT:- We are not inclined to interfere with the impugned judgment and order passed by the High Court. Hence, the Special Leave Petition is dismissed.

Ex parte assessment - violation of principles of natural justice - opportunity of personal hearing under Section 144B - remand for fresh consideration - treating assessment order as final show cause notice - mandatory prior notice of 15 days for hearing

Ex parte assessment - violation of principles of natural justice - opportunity of personal hearing under Section 144B - Validity of the assessment order dated 28.03.2024 passed without affording meaningful opportunity of hearing to the assessee. - HELD THAT: - The Court found that the assessment process, as recorded in the NFAC order sheet, involved issuance of a show cause notice with an inadequate two day window and that no proceeding took place on the date fixed for hearing. The assessing authority thereafter proceeded to finalise an order ex parte without conducting any hearing or fixing another date. Applying the principles articulated in the Court's earlier decision concerning the obligation to afford opportunity of personal hearing under the statutory scheme, the Court held that such denial amounted to a gross violation of natural justice. The order passed on 28.03.2024 could not be sustained for having been drawn on an ex parte basis for no fault of the assessee. [Paras 11, 12, 13]

The assessment order dated 28.03.2024 is set aside being vitiated by denial of a real opportunity of hearing.

Remand for fresh consideration - treating assessment order as final show cause notice - mandatory prior notice of 15 days for hearing - Procedure to be followed on remand for completion of assessment after setting aside the ex parte order. - HELD THAT: - The Court directed that the set aside order be treated as a final show cause notice to enable the assessee to file a written reply within a short specified period. If the Assessing Officer accepts the written explanation in entirety, he may pass consequential orders without fixing further hearing dates since the assessee did not request personal hearing. If the Assessing Officer proposes to reject the explanation, he must fix a hearing date after giving at least 15 days' prior notice communicated through the prescribed electronic mode; the assessee undertook to appear on such date. The assessment proceedings are to be carried on and completed in accordance with law following these directions. [Paras 13, 14]

The matter is remitted for fresh consideration in terms of the directions: the petitioner to file written reply within the stipulated time; acceptance may lead to a consequential order without further hearing, but rejection requires a hearing with at least 15 days' notice.

Final Conclusion: The ex parte assessment order for A.Y. 2022 23 dated 28.03.2024 is set aside for breach of natural justice and the matter is remitted for fresh adjudication with specified directions permitting the assessee to file a written reply and requiring, where rejection is proposed, at least 15 days' prior electronic notice of hearing.

Onus under Section 68 to prove identity, creditworthiness and genuineness - preponderance of probability - doctrine of 'source of source' or 'origin of origin' - summons under Section 131 - service and compliance - assessment under Section 143(3) and addition under Section 68 - reasonable inquiry and investigatory role of Assessing Officer

Summons under Section 131 - service and compliance - natural justice - opportunity to comply - Whether summons issued under Section 131 were served/ complied with by the assessee - HELD THAT: - The Court examined the inconsistent stand taken by the assessee before the authorities and in the supplementary affidavit regarding receipt of the Section 131 summons. The averment that the notice was received after completion of assessment was held to be vague and unsupported by documentary proof; the later statement that the summons were never served was a contrary stance. Reading the materials and the explanations offered by the assessee, the Court found that there had been noncompliance of the summons issued under Section 131 prior to completion of assessment. The Court therefore accepted the finding of noncompliance and treated the assessee's explanation as not established on the record. [Paras 23, 24]

Assessee failed to establish service/compliance of the Section 131 summons; noncompliance is held.

Onus under Section 68 to prove identity, creditworthiness and genuineness - preponderance of probability - doctrine of 'source of source' or 'origin of origin' - Whether the assessee discharged the primary onus under Section 68 in respect of share application money and share premium - HELD THAT: - Applying settled principles, the Court reiterated that the assessee must prove identity of the subscribers, their capacity to advance funds and the genuineness of the transactions. Having reviewed the facts - incorporation shortly before allotment, allotment pattern (shares at par to five individuals on 30.03.2012 and large premium to two companies on 31.03.2012), lack of track record or assets, the audited financials of subscribing companies showing negligible profits and no fixed assets, and inadequacy of the documentary matrix (draft agreements/MOU not establishing real transfer or possession) - the Court held that on the preponderance of probability the identity, creditworthiness and genuineness were not established. The Court endorsed the tribunal's and lower authorities' application of the relevant tests and principles and concluded that the Assessing Officer was justified in making the addition under Section 68. [Paras 26, 27, 28, 29, 30]

Assessee failed to discharge the onus under Section 68; addition sustained on facts and preponderance of probability.

Reasonable inquiry and investigatory role of Assessing Officer - assessment under Section 143(3) and addition under Section 68 - Whether the tribunal or appellate authorities erred in re-examining facts or in failing to remit the matter for fresh consideration - HELD THAT: - The Court considered the submissions that the tribunal examined matters not raised before the Assessing Officer and that the assessee was denied opportunity to file documents. Having noted the assessee's inconsistent factual claims about service of summons and that material facts and financial particulars were examined by the Assessing Officer, CIT(A) and the tribunal, the Court found no infirmity in the fact finding process warranting interference. The authorities applied established legal tests, scrutinised the documentation (including the allotment pattern, MOA, MOU and financial statements) and reached concurrent findings which were neither perverse nor unsustainable on the record. [Paras 25, 28, 29, 30]

No fault in re examination by authorities; no occasion to remit - concurrent findings sustained.

Final Conclusion: The appeal is dismissed. No substantial question of law is found to arise: the assessee failed to prove identity, creditworthiness and genuineness of the share subscription and premium for AY 2012-2013, the summons under Section 131 were not established to have been complied with, and the addition under Section 68 as sustained by the authorities is upheld.

Search and seizure under Section 132 - reason to believe - satisfaction note - judicial review of administrative satisfaction - non-disclosure of reasons - prior information as pre-condition for search - use of material unearthed in subsequent proceedings

Search and seizure under Section 132 - reason to believe - prior information as pre-condition for search - judicial review of administrative satisfaction - Validity of the authorisations and search and seizure action under Section 132 of the Income tax Act - HELD THAT: - The Court examined whether the statutory pre conditions for invoking Section 132(1) existed, namely that the authority had information in its possession prior to the search which gave it a reason to believe that one of the contingencies in clauses (a)-(c) was satisfied. The Court recorded that no summons or notices had been issued earlier to the petitioners and therefore no reasonable belief of prior non production or likely non production could be founded (para. 20). The sealed departmental file was perused in camera and, on that inspection, the Court found the material did not disclose information capable of giving rise to the requisite reason to believe; the reasons recorded appeared to be a pretence, relying on irrelevant and general material, and did not show the process of formation of a reasonable belief (paras. 21-23). Applying the principles in the cited precedents, the Court held that where the satisfaction note fails to satisfy judicial conscience and jurisdictional pre conditions, the action under Section 132 is vitiated. [Paras 20, 21, 22, 23, 24]

Authorisations and the consequent search and seizure under Section 132(1) are quashed and set aside for failure to satisfy the statutory pre conditions.

Satisfaction note - non-disclosure of reasons - judicial review of administrative satisfaction - Whether the satisfaction note and the information leading to the search must be disclosed to the assessee and the manner in which the Court may examine such material - HELD THAT: - The Court noted the settled law that reasons for recording satisfaction are administrative and need not be communicated to the assessee at the stage of authorisation, though the reasons may have to be placed before the Court on a challenge (paras. 15, 17, 21, 33 of cited authority). Consistent with that principle, the Court examined the departmental file in a sealed envelope (para. 22) but did not direct disclosure of the satisfaction note to petitioners. The Court emphasised that it may review whether reasons were actuated by mala fides or were a pretence and whether extraneous or irrelevant material was considered, but it will not ordinarily assess adequacy or sufficiency of the reasons in a writ petition (paras. 21, 33 of cited authority). [Paras 15, 21, 22, 33]

The Court examined the departmental material in camera, declined to order disclosure of the satisfaction note to petitioners, and applied judicial review limited to whether the recorded reasons were bona fide or a pretence.

Use of material unearthed in subsequent proceedings - Consequences of quashing the search as to the use of material gathered during the search - HELD THAT: - Although the search and seizure was quashed for invalidity, the Court clarified that this does not preclude the Revenue from relying on information or material gathered during the course of the search for making adjustments to the assessee's income in appropriate proceedings. The Court recorded that revenue is entitled to utilise such material in proceedings permissible in law (para. 25). [Paras 25]

Quashing the search does not bar the Revenue from using information or material unearthed during the search in appropriate proceedings.

Relief and consequential orders - Relief to petitioners consequent upon quashing of search and ancillary directions - HELD THAT: - Having quashed the search and all consequent actions and notices (para. 24), the Court made the writ rule absolute and directed return of the bank guarantee furnished by petitioners pursuant to an earlier order, to be discharged within four weeks (paras. 26-27). [Paras 24, 26, 27]

All consequential actions and notices arising from the quashed search are set aside; the writ is made absolute and the bank guarantee shall be returned and discharged.

Final Conclusion: The High Court quashed and set aside the authorisations and search and seizure under Section 132(1) for lack of requisite prior information and reason to believe; it examined the departmental file in camera, refused disclosure of the satisfaction note to petitioners, clarified that the Revenue may still use material unearthed in appropriate proceedings, set aside consequent notices and actions, made the writs absolute and directed return of the bank guarantee.

Power of the Commissioner to cancel registration under Section 12A - quasi-judicial nature of registration under Section 12A - prospective effect of the amendment to Section 12AA(3) - cancellation of registration under Section 12AA(3) - scope of enquiry into genuineness of educational institutions for registration/cancellation - surplus or profit incidental to educational activity does not, by itself, disentitle exemption

Power of the Commissioner to cancel registration under Section 12A - quasi-judicial nature of registration under Section 12A - prospective effect of the amendment to Section 12AA(3) - Whether the Commissioner had power to cancel registration granted under Section 12A on 02.03.2010. - HELD THAT: - The Court held that the Commissioner did not possess an express power to cancel a registration granted under Section 12A on the date the impugned order was passed. The registration under Section 12A is quasi-judicial in character and, in the absence of an express statutory power to rescind such quasijudicial orders, the authority cannot cancel a registration once granted. The Tribunal therefore correctly concluded that cancellation dated 02.03.2010 was without jurisdiction because the amendment empowering cancellation of registrations granted under Section 12A came into effect only subsequently. The Court relied on the established principle that an express conferral of power is necessary to withdraw or rescind a quasijudicial grant of registration, and that a later statutory amendment conferring such power is prospective in operation. [Paras 16, 17, 18]

The Commissioner lacked power to cancel the registration on 02.03.2010 and the cancellation order was without jurisdiction.

Prospective effect of the amendment to Section 12AA(3) - cancellation of registration under Section 12AA(3) - Whether the ITAT was correct in holding that the amendment to Section 12AA(3) empowering cancellation of registrations granted under Section 12A took effect only prospectively and did not validate the Commissioner's cancellation dated 02.03.2010. - HELD THAT: - The Court accepted the Tribunal's conclusion that the amendment to Section 12AA(3) (which expressly empowered the Commissioner to cancel registrations granted under Section 12A) operated prospectively and could not be applied to validate an order of cancellation passed prior to its effective date. Consequently, the power to cancel registrations under Section 12A arose only after the statutory provision came into force, and could not be read into the law retrospectively to uphold cancellations made earlier. [Paras 16, 17, 18]

The amendment to Section 12AA(3) is prospective and does not validate the cancellation effected on 02.03.2010; the Tribunal's view was upheld.

Scope of enquiry into genuineness of educational institutions for registration/cancellation - surplus or profit incidental to educational activity does not, by itself, disentitle exemption - Whether, on merits, the Commissioner was justified in cancelling registration on the ground that the institution was engaged in profit-making under the garb of education. - HELD THAT: - Applying contemporary Supreme Court pronouncements concerning educational institutions, the Court observed that an institution engaged in education may legitimately generate surplus, and surplus in itself is not a conclusive indicium of profit-oriented activity if it is generated in the course of providing education or educational activities. The Commissioner is entitled to examine audited accounts and other records to ascertain genuineness and conformity with objects when considering registration or cancellation, but such examination must be made in accordance with statutory conditions and within the powers available at the relevant time. Given that cancellation dated 02.03.2010 was without jurisdiction, the Tribunal correctly restored registration; the Court also noted that the factors identified by higher judicial authority must guide any inquiry into the institution's activities. [Paras 19, 21, 22]

On the merits, surplus alone does not automatically negate charitable character; the Commissioner must apply the legal tests set out by higher authority, and the impugned cancellation was not sustainable.

Final Conclusion: Appeals dismissed. The orders of the ITAT dated 16.07.2010 quashing the Commissioner's cancellations and restoring the registrations under Section 12A are upheld; the Commissioner had no jurisdiction to cancel the registrations on the dates impugned and the statutory amendment conferring such power operates prospectively.

Error apparent on the face of the record - review jurisdiction - notice under Section 148 and procedure under Section 148A - G.K.N. Driveshafts procedural requirement to furnish reasons and hear objections - application of Ashish Agarwal limited to notices issued on or after 01.04.2021 - remand for furnishing reasons and hearing before reassessment - bona fide technical glitch in departmental portal and its effect on jurisdiction

Application of Ashish Agarwal limited to notices issued on or after 01.04.2021 - notice under Section 148 and procedure under Section 148A - Whether the common order is vitiated by failure to apply the law in Ashish Agarwal and hence suffers from an error apparent on the face of the record. - HELD THAT: - The Court held that Ashish Agarwal governs the procedure to be followed where a notice under Section 148 is issued on or after 01.04.2021 and treats such notice as one under the amended regime (Section 148A). In the present matters the notices were issued prior to 01.04.2021 (31.03.2021) and therefore Ashish Agarwal is not germane to the facts. The petitioner's subsequent filing of the return and request for reasons after 01.04.2021 does not retrospectively convert the notice into one governed by the amended procedure. Consequently, there was no failure to apply a binding precedent in the impugned order and no error apparent on the face of the record on that ground. [Paras 6]

Ashish Agarwal does not apply; no reviewable error on that ground.

G.K.N. Driveshafts procedural requirement to furnish reasons and hear objections - remand for furnishing reasons and hearing before reassessment - bona fide technical glitch in departmental portal and its effect on jurisdiction - Whether the facts stated (including the departmental portal glitch and the assessee's filing requesting reasons) disclose an error apparent on the face of the record warranting review of the Court's order remanding for reasons and hearing. - HELD THAT: - The Court examined G.K.N. Driveshafts which prescribes that when a notice under Section 148 is issued, the assessee may file a return and request reasons, and upon receipt of reasons is entitled to file objections which the AO must consider with a speaking order before proceeding. The Court found that the High Court's order of 04.11.2022 had taken the departmental statement of a bona fide mistake (a technical glitch resulting in the AO not seeing the uploaded return and request for reasons) into account and had remanded the matters to afford the assessee the opportunity to receive reasons and a hearing before reassessment, in line with the procedure in G.K.N. Driveshafts. The present review petitions sought reappreciation of merits rather than identifying an error apparent on the face of the record. Having reviewed the record, affidavit, and the view taken, the Court found no ground for review. [Paras 7, 8]

No error apparent in the finding of a bona fide portal glitch or in remanding for furnishing reasons and hearing; review petitions dismissed.

Final Conclusion: The Review Petitions are dismissed. The Court finds no error apparent on the face of the record in the order dated 04.11.2022: Ashish Agarwal is inapplicable as the notices were issued before 01.04.2021, and the remand to afford reasons and hearing was consistent with G.K.N. Driveshafts and the departmental statement of a bona fide technical glitch.

Reopening of assessment under Section 147 of the Income-tax Act - reason to believe - change of opinion - tangible material - nexus / live link between material and formation of belief

Reopening of assessment under Section 147 of the Income-tax Act - reason to believe - change of opinion - nexus / live link between material and formation of belief - Validity of reassessment proceedings initiated under Section 147 where original assessment had dealt with the same interest receipts and payments - HELD THAT: - The Court examined the original assessment order and the contemporaneous computation and found that the assessee had fully disclosed both interest paid and interest received and that the Assessing Officer, after discussion in the assessment order, had treated those items as capital (i.e., had applied his mind to the facts). The law requires that reopening under Section 147 proceed from a bona fide "reason to believe" based on tangible material having a direct nexus or live link with the inference of escapement of income; mere change of opinion on the same material is not a permissible basis for reassessment. Where the assessing authority has consciously formed an opinion in the original assessment on the same question, subsequently initiating reassessment on the identical material constitutes a change of opinion rather than discovery of new material. Applying these principles to the present facts, the Court held that the Assessing Officer's attempt to tax the already-discussed interest receipt as a revenue item in reassessment was premised on a change of opinion and therefore the proceedings under Section 147/148 were without jurisdiction and rightly quashed by the Tribunal. [Paras 11, 20, 21, 22, 23]

Reassessment proceedings under Section 147/148 were based on change of opinion and were invalid; the ITAT order setting aside the reassessment is upheld.

Final Conclusion: The appeal is dismissed. The substantial question of law is answered against the revenue and in favour of the assessee: reassessment initiated on the same material which had been considered in the original assessment amounted to change of opinion and was unlawful.

Applicability of Section 143(1A) to processing under Section 143(1)(a) - Effect of setting aside Section 143(1)(a) intimation and filing of revised return - Single assessment rule and supremacy of scrutiny assessment under Section 143(3) - Levy as a compliance penalty for exaggerated loss declared in processed returns - Adverse inference from conduct of filing a revised return

Applicability of Section 143(1A) to processing under Section 143(1)(a) - Single assessment rule and supremacy of scrutiny assessment under Section 143(3) - Validity of invoking additional tax under Section 143(1A) after intimation under Section 143(1)(a) was set aside and a subsequent assessment was completed under Section 143(3). - HELD THAT: - The Court held that Section 143(1A) is confined to adjustments made in the course of processing a return under Section 143(1)(a) and applies only where the loss declared in the return is reduced or converted into income as a result of such processing. Where the intimation under Section 143(1)(a) has been set aside by the appellate authority and the matter proceeded to scrutiny assessment under Section 143(3), the legislative purpose of Section 143(1A) is not attracted. The judgment emphasises the principle that only one assessment order may operate for an assessment year and, once a scrutiny assessment under Section 143(3) is finally passed, the prior intimation stands subsumed and cannot independently support imposition of additional tax under Section 143(1A). Consequently adjustments made and penalties contemplated by Section 143(1A) cannot be invoked after a completed and final scrutiny assessment. [Paras 17, 18, 20, 21]

Imposition of additional tax under Section 143(1A) could not be sustained once the Section 143(1)(a) intimation was set aside and a final assessment under Section 143(3) was concluded.

Effect of setting aside Section 143(1)(a) intimation and filing of revised return - Adverse inference from conduct of filing a revised return - Levy as a compliance penalty for exaggerated loss declared in processed returns - Whether the assessee's conduct in filing a revised return (withdrawing claim for a deduction) justified drawing an adverse inference and sustaining additional tax under Section 143(1A). - HELD THAT: - The Court rejected the revenue's contention that the assessee could be made liable to additional tax on the basis of an inference of non bonafide conduct arising from the original return once a revised return had been filed and scrutiny assessment completed. The appellate order setting aside the original intimation rendered the original processing ineffective; the assessee was entitled to file a revised return within the surviving period and the Assessing Officer proceeded by initiating scrutiny assessment. The Legislature intended Section 143(1A) as a sanction linked specifically to processing under Section 143(1)(a); it was not designed to operate where the intimation has been set aside and the matter adjudicated on merits in a final scrutiny assessment. Accordingly, the asserted adverse inference and consequent levy of additional tax could not be sustained on these facts. [Paras 6, 19]

The Tribunal's sustaining of additional tax on the basis of alleged adverse inference from the assessee's filing of a revised return was not valid; the levy could not survive the setting aside of the intimation and the subsequent final scrutiny assessment.

Final Conclusion: Appeal allowed: additional tax levied under Section 143(1A) set aside because the Section 143(1)(a) intimation was quashed and a final assessment under Section 143(3) was thereafter passed, precluding invocation of Section 143(1A) on these facts.

Reasonable time to furnish reply to show-cause notice - failure to consider reply filed by assessee - setting aside assessment order passed without considering submissions - remand for fresh consideration - opportunity of hearing before passing a reasoned order

Reasonable time to furnish reply to show-cause notice - failure to consider reply filed by assessee - Time granted for submission of reply was unreasonably short and the Assessing Officer ought not to have ignored the reply filed by the petitioner on the due date. - HELD THAT: - The Court found that the time afforded by the show-cause notice dated 20.03.2024, which required a response by 24.03.2024 at 15:45 hrs, was extremely short. The petitioner submitted its reply on 24.03.2024 at 23:39 hrs through the National Faceless Assessment Centre and again sent a reminder on 25.03.2024, explaining that the e-filing portal had been closed. There was no undue delay on the part of the petitioner in tendering the reply on the date fixed. In those circumstances, respondent no.2 should not have ignored the submission merely because it could not be uploaded on the portal before the stated cut-off time; the Assessing Officer's refusal to consider the reply rendered the subsequent decision vitiated by absence of consideration of the petitioner's submissions. [Paras 10, 13]

The Court held that reasonable time had not been granted and the reply filed on 24.03.2024 (and reiterated on 25.03.2024) ought to be considered.

Setting aside assessment order passed without considering submissions - remand for fresh consideration - opportunity of hearing before passing a reasoned order - Impugned assessment order dated 27.03.2024 set aside and matter remitted for fresh consideration after giving the petitioner opportunity to be heard. - HELD THAT: - Having concluded that the petitioner's reply was filed on the date stipulated and that insufficient time had been granted, the Court set aside the order under Sections 143(3) read with 144B dated 27.03.2024 which was passed without considering those submissions. The matter was remitted to respondent no.2 with a direction to consider the replies dated 24.03.2024 and 25.03.2024, to pass a reasoned order in accordance with law and to communicate the same to the petitioner. The Court further directed that the petitioner may be afforded an opportunity of being heard before the fresh order is passed. [Paras 13]

Impugned order set aside; matter remitted to respondent no.2 to consider the submissions, pass a reasoned order and afford opportunity of hearing.

Final Conclusion: Writ petition allowed; the assessment order dated 27.03.2024 is quashed and the matter is remitted to respondent no.2 to consider the replies of 24.03.2024 and 25.03.2024, afford the petitioner an opportunity of hearing, and pass a reasoned order in accordance with law.

Non-applicability of Rule 2BBB to the assessment year in question - Interpretation of 'solely' in relation to charitable institutions engaged in education - Requirement that all objects of an educational institution relate to imparting education for Section 10(23C) - Commissioner/authority entitled to examine audited accounts and records when considering approval under Section 10(23C) - Substantial government financing test for exemption under Section 10(23C) (20% rule)

Non-applicability of Rule 2BBB to the assessment year in question - Rule 2BBB was not applicable to A.Y. 2012-13 because it came into force only from 12.12.2014. - HELD THAT: - The Tribunal's finding that Rule 2BBB did not apply to the impugned assessment year was accepted. The Court noted the date on which Rule 2BBB was brought into force and held that it could not be applied retrospectively to A.Y. 2012-13. Consequently, any reliance on Rule 2BBB for the assessment year in question is misplaced. [Paras 3]

Rule 2BBB held not applicable to A.Y. 2012-13; Tribunal's finding on this point upheld.

Interpretation of 'solely' in relation to charitable institutions engaged in education - Requirement that all objects of an educational institution relate to imparting education for Section 10(23C) - Commissioner/authority entitled to examine audited accounts and records when considering approval under Section 10(23C) - Substantial government financing test for exemption under Section 10(23C) (20% rule) - The exemptions claimed under Section 10(23C)(iiiab) were rightly allowed on the basis of the Assessing Officer's findings and in view of the Supreme Court's conclusions in New Noble Educational Society regarding the interpretation of 'solely' and the power to examine accounts. - HELD THAT: - The Court applied the principles laid down by the larger Bench in New Noble Educational Society, including: (a) the expression 'solely' requires that all objects of the institution relate to education; (b) surplus generated in the course of providing education is not per se disqualifying; and (c) the Commissioner/appropriate authority may examine audited accounts and other records to ascertain genuineness and functioning when considering approval under Section 10(23C). On the facts, the Assessing Officer had found that the trust received government grants exceeding 20% of gross receipts (bringing it within the substantial financing concept) and that expenditures were incurred towards educational aims and objects. In light of these findings and the legal position in New Noble, the Tribunal's quashing of the CIT(Exemptions) order and the Assessing Officer's grant of exemption required no interference. [Paras 5, 6, 7]

Exemptions under Section 10(23C)(iiiab) upheld; Tribunal and Assessing Officer's orders affirmed and not interfered with.

Final Conclusion: Application for condonation of delay allowed; no substantial question of law arises after applying New Noble Educational Society; appeal dismissed and impugned orders of the ITAT and Assessing Officer are not interfered with.

Special audit under section 142(2-A) - natural justice - prima facie satisfaction for special audit - judicial review under Article 226 - scope of special audit and terms of reference

Natural justice - special audit under section 142(2-A) - Validity of the orders directing a special audit in view of alleged breach of natural justice - HELD THAT: - The Court accepted that the statutory provision requires that the assessee be given a reasonable opportunity of being heard before directing a special audit. While five days afforded to the petitioner to reply to the notice dated 1 March 2024 was short and the Assessing Officer passed the order without fully considering the objections, the court held that not every procedural breach attracts interference. The writ court must be satisfied that breach caused substantive prejudice or that the alleged flaw would have produced a different outcome. The objections by the petitioner prima facie lacked merit and, since the nominated auditor's report is an intermediate step and not a final adjudication, the limited breach did not warrant setting aside the order. On this basis the Court declined to quash the orders but recorded that its observations were not expressions on merits. [Paras 14, 15, 16]

The challenge on the ground of breach of natural justice was rejected and the orders directing a special audit were upheld, subject to protective directions.

Prima facie satisfaction for special audit - judicial review under Article 226 - Extent of judicial scrutiny of the Assessing Officer's satisfaction for ordering a special audit - HELD THAT: - The Court held that the satisfaction formed by the Assessing Officer under sub-section (2-A) is to be a prima facie satisfaction based on materials such as nature, complexity and volume of accounts, doubts about correctness, multiplicity of transactions or specialised nature of business and in the interests of revenue. Such prima facie satisfaction is not open to exhaustive judicial scrutiny under Article 226 unless mala fide or there are no materials to justify the opinion. The power may validly be exercised even at a late stage and the possibility that the special audit extends temporal limitation was not, without more, a ground for interference. [Paras 9, 12, 13]

Judicial review is limited; the Court will not set aside the Assessing Officer's prima facie satisfaction absent mala fides or absence of supporting material.

Scope of special audit and terms of reference - special audit under section 142(2-A) - Whether and how the special audit's scope and timeline should be regulated to protect the assessee's interest - HELD THAT: - Although declining to quash the orders, the Court exercised its supervisory jurisdiction to prevent undue prejudice. It extended the time for submission of the auditor's report, confined the auditor's inquiry to the matters specified in paragraph 5 of the impugned order, and prohibited reference to any internal departmental appraisal report. These directions were issued to balance the Revenue's interest in conducting a special audit and the assessee's right against excessive or irrelevant inquiry. [Paras 16]

Protective directions issued: extension of time for report, limitation of audit scope to specified matters, and prohibition on use of internal departmental appraisal.

Final Conclusion: Writ petitions challenging the orders directing a special audit were dismissed; the Court upheld the orders while (i) observing that the prima facie satisfaction for ordering a special audit is not amenable to broad judicial interference absent mala fide or absence of material, and (ii) granting limited protective directions as to timeline and scope of the special audit.

Interest under Section 244A - interest on unpaid refund amount - capitalisation of interest - obligation of Assessing Officer to implement Tribunal orders - remand for recomputation - liability for interest on shortfall in part payment

Interest under Section 244A - interest on unpaid refund amount - capitalisation of interest - obligation of Assessing Officer to implement Tribunal orders - remand for recomputation - Quashing of the Assessing Officer's order dated 26th August 2019 and remand for recomputation of interest under Section 244A in accordance with the principles laid down in India Trade Promotion Organisation as directed by ITAT and this Court. - HELD THAT: - The Court found that the impugned order dated 26th August 2019 did not apply the principles articulated by the Delhi High Court in India Trade Promotion Organisation and as directed by the Tribunal. The Court held that when a refund becomes due, the amount due includes both the tax and the interest element; where the Revenue makes only part payment and omits the interest component, Section 244A obliges payment of interest on the outstanding amount (conceptualised as capitalisation of the quantified interest), and the Assessing Officer's role is limited to giving effect to the Tribunal's direction rather than re examining or distinguishing the Tribunal's reliance on India Trade Promotion Organisation. For these reasons the order was quashed and the matter remanded to an Assessing Officer to compute the interest payable by strictly applying the India Trade Promotion Organisation principles as directed by ITAT and this Court, with the recomputation to be completed by the date directed by the Court. [Paras 2]

Order dated 26th August 2019 quashed; matter remanded to an Assessing Officer to compute interest under Section 244A by strictly applying India Trade Promotion Organisation as directed by ITAT and this Court.

Obligation of Assessing Officer to implement Tribunal orders - remand for recomputation - Directing reassignment of the remand to an officer other than Mr. Rahul Singhania because he repeatedly failed to follow Tribunal and Court directions, while declining to take punitive action at present. - HELD THAT: - The Court recorded that the same officer, Mr. Rahul Singhania, had earlier failed to give effect to Tribunal and Court directions and again did not apply the correct legal principles in the impugned order. To ensure faithful implementation of the Tribunal's and Court's directions, the Court ordered that the Principal Commissioner of Income Tax 1, Mumbai, assign the matter to an officer other than Mr. Singhania. Although the Court noted repeated non compliance, it exercised restraint and declined to take action against Mr. Singhania on the present occasion, warning that similar future conduct would not be met with like indulgence. [Paras 1, 2]

Matter to be assigned to an Assessing Officer other than Mr. Rahul Singhania; no disciplinary action taken at present but warning issued.

Procedural leave to withdraw appeal - Dismissal of Income Tax Appeal No.650 of 2019 as withdrawn with liberty to file a writ petition within three weeks. - HELD THAT: - On the appellant's concession that the matter was inadvertently filed as an appeal instead of a writ petition in view of settled precedent, the Court granted leave to withdraw the appeal and allowed liberty to institute the appropriate writ petition within the prescribed short period. The appeal was therefore dismissed as withdrawn with the requested liberty. [Paras 5, 6]

Income Tax Appeal dismissed as withdrawn with liberty to file a writ petition within three weeks.

Final Conclusion: The High Court quashed the Assessing Officer's order dated 26th August 2019 and remanded the matter for recomputation of interest under Section 244A strictly applying the India Trade Promotion Organisation principles as directed by ITAT and this Court; the matter must be reassigned to an officer other than Mr. Rahul Singhania and the recomputation completed as directed; the Income Tax Appeal was dismissed as withdrawn with liberty to file a writ petition.

Final registration after provisional registration under section 12A(1)(ac)(iii) - maintainability of premature application for registration - provisional approval and final approval under section 80G(5) - Clause (iii) and Clause (iv) of the First Proviso - limitation for filing application: at least six months prior to expiry of provisional approval or within six months of commencement of activities - applicability of CBDT circulars extending time for applications and their limited scope - continuity of benefit of prior 80G approval without break upon subsequent final approval

Final registration after provisional registration under section 12A(1)(ac)(iii) - maintainability of premature application for registration - limitation for filing application: at least six months prior to expiry of provisional approval or within six months of commencement of activities - Whether the assessee's application for final registration under section 12A(1)(ac)(iii) was premature and non-maintainable despite provisional registration valid from A.Y 2022-23 to A.Y 2026-27. - HELD THAT: - The Tribunal examined the language of section 12A(1)(ac)(iii) and held that where an institution has been provisionally registered under section 12AB, the statutory prescription identifies the earliest event for filing final registration - either within six months of commencement of activities or at least six months prior to expiry of the provisional period, whichever is earlier. That formulation does not bar an applicant from filing the application earlier than six months before expiry; rather it prescribes the outer limits for the application. The Tribunal therefore concluded that rejection on the ground of prematurity was incorrect and directed restoration to the CIT(Exemption) to consider the application on merits. [Paras 4]

Impugned order rejecting the application as premature set aside; matter restored to the CIT(Exemption) to consider the application for final registration on merits.

Provisional approval and final approval under section 80G(5) - Clause (iii) and Clause (iv) of the First Proviso - limitation for filing application: at least six months prior to expiry of provisional approval or within six months of commencement of activities - applicability of CBDT circulars extending time for applications and their limited scope - continuity of benefit of prior 80G approval without break upon subsequent final approval - Whether the assessee's application for final approval under Clause (iii) to the First Proviso to section 80G(5) was time-barred because the institution had commenced activities prior to grant of provisional approval, and whether the CIT(Exemption) misapplied CBDT circulars. - HELD THAT: - The Tribunal followed earlier coordinate-bench decisions and interpreted Clause (iii) to mean that an application for final approval becomes competent only after provisional approval has been granted; the time limits in Clause (iii) apply with reference to the date of commencement of activities after provisional approval or six months prior to expiry of provisional approval, whichever is earlier. Consequently, an institution which obtains provisional approval under Clause (iv) is entitled to apply for final approval under Clause (iii) notwithstanding that some activities were carried on prior to provisional approval. The Tribunal also held that CBDT circulars extending dates were aimed at institutions which stood approved before the 2020 amendment and applied under Clause (i); those circulars do not curtail or expand the time-limits applicable to institutions which obtained fresh provisional approval under Clause (iv). Applying these principles to the facts, the Tribunal directed the CIT(Exemption) to grant provisional approval under Clause (iii) (if otherwise eligible) and to decide the application for final approval expeditiously; it further held that if final approval is granted, the benefit under section 80G enjoyed prior to the 2020 amendment shall be deemed continuous without break. [Paras 5, 8]

Impugned rejection set aside; directed grant of provisional/final approval if otherwise eligible and directed CIT(Exemption) to decide final approval within the prescribed timeline; prior 80G benefit to be treated as continuous if final approval is granted.

Final Conclusion: Both appeals allowed. The order rejecting the application for final registration under section 12A(1)(ac)(iii) is set aside and remitted to the CIT(Exemption) for fresh consideration on merits. The order rejecting final approval under section 80G(5) is set aside; the CIT(Exemption) is directed to grant provisional/final approval if the assessee is otherwise eligible and, if final approval is granted, the prior 80G benefit is to be deemed continuous without any break.

Exemption under section 54 - date of acquisition for section 54 - purchase of under-construction property versus booking/agreement - date of possession as date of purchase for under-construction flats - beneficial construction of fiscal provisions

Exemption under section 54 - date of acquisition for section 54 - date of possession as date of purchase for under-construction flats - Assessee entitled to deduction under section 54 by treating date of possession of the new flat as the date of purchase where the agreement related to an under-construction property. - HELD THAT: - The Tribunal held that where the assessee entered into an agreement to purchase an under construction flat, the agreement only confers a right to purchase and actual "purchase" within the meaning of section 54 occurs when the flat is completed and possession is handed over (when it becomes inhabitable). The Tribunal relied on the beneficial character of section 54 and precedent of the Bombay High Court in Beena K. Jain and coordinate decisions treating the date of handing over possession/completion as the relevant date for purchase. Applying that principle to the facts, possession was handed over on 02/02/2011 which falls within the one year prior window to the transfer on 10/02/2011, and therefore the claim of deduction under section 54 is allowable. [Paras 26, 27]

Deduction under section 54 allowed treating 02/02/2011 (date of possession/completion) as date of purchase of the new property.

Penalty under section 271(1)(c) - prematurity of penalty proceedings - Claims for initiation of penalty proceedings under section 271(1)(c) in respect of the disallowance/variance were not upheld and were dismissed as premature. - HELD THAT: - The Tribunal recorded that grounds challenging initiation of penalty proceedings (alleging concealment/furnishing of inaccurate particulars) were premature at that stage. Having allowed the substantive claim under section 54, the Tribunal found no basis to sustain the penalty challenges raised in grounds 2 and 3 and dismissed those grounds accordingly. [Paras 28]

Grounds 2 and 3 dismissed as premature.

Final Conclusion: Appeals partly allowed: deduction under section 54 sustained by treating date of possession (02/02/2011) as date of purchase of the new flat for AY 2011-12; challenges to initiation of penalty proceedings dismissed as premature.

Penal provision to be strictly construed - penalty under Section 11(2) of the Foreign Trade (Development and Regulation) Act, 1992 - contravention of import/export provisions - waiver of customs duty under a sanctioned rehabilitation scheme - effect of reservation of liberty to file fresh proceedings after withdrawal

Effect of reservation of liberty to file fresh proceedings after withdrawal - prosecution of transferred/amalgamated entity's cause of action - Whether the High Court erred in dismissing the writ petition on the ground that the earlier writ petition was withdrawn without liberty to file a fresh petition. - HELD THAT: - The Division Bench's order of 13th December 2013 expressly permitted withdrawal of the earlier writ petition while granting liberty to file a fresh writ petition on the same cause of action within one week. That grant of liberty was recorded in paragraph 4 of the Division Bench's order. Although the appellant filed the fresh writ petition after six months, the reservation of liberty precluded dismissal of the subsequent petition on the ground that no liberty had been granted when the earlier petition was withdrawn. The Single Judge and the Division Bench therefore erred in resting their dismissal on the recorded ground that no liberty to file a fresh petition had been granted when the earlier petition was withdrawn. [Paras 9]

The dismissal of the writ petition on the stated ground was erroneous because liberty to file a fresh petition had been expressly reserved by the Division Bench.

Penalty under Section 11(2) of the Foreign Trade (Development and Regulation) Act, 1992 - contravention of import/export provisions - penal provision to be strictly construed - waiver of customs duty under a sanctioned rehabilitation scheme - Whether a penalty under Section 11(2) of the FT Act can be lawfully imposed for mere non-fulfilment of an export obligation under a licence. - HELD THAT: - Section 11(2) punishes making, abetting or attempting to make any export or import in contravention of the FT Act, rules, orders or the foreign trade policy. In the present case there was no allegation that the appellant's predecessor made or attempted to make any export or import in contravention of those provisions; the case rested on failure to fulfil the licence condition of exporting finished goods within the prescribed period. The rehabilitation scheme expressly waived customs duty payable on account of non-fulfilment of export obligation, but that waiver related only to customs duty and does not validate the invocation of Section 11(2) which penalises contraventions of export/import law. As Section 11(2) is penal in nature, it must be strictly construed; absent an allegation of contravention of export/import provisions, the imposition of penalty under Section 11(2) cannot be sustained. [Paras 11, 12, 13]

The penalty imposed under Section 11(2) was unsustainable and is set aside.

Final Conclusion: The impugned orders of the High Court and the Order in Original imposing the penalty under Section 11(2) of the FT Act are set aside: the dismissal of the writ petition on the ground of absence of liberty was erroneous, and the penalty could not be sustained as Section 11(2) does not cover mere non fulfilment of an export obligation.

Extension by officer senior in rank under proviso to Section 28(9) of the Customs Act - limitation for recovery of duties and extended limitation under Section 28(9) - transaction value principle under Section 14 and Customs Valuation Rules - rejection of transaction value based on contemporaneous imports - reliance on uncertified electronic communications and third party emails as evidence - differential Anti Dumping Duty and supplier specific ADD rates - penalty unsustainable where foundational demand is not established

Differential Anti Dumping Duty and supplier specific ADD rates - reliance on uncertified electronic communications and third party emails as evidence - limitation for recovery of duties and extended limitation under Section 28(9) - Whether differential Anti Dumping Duty was payable in respect of the seven contested Bills of Entry and whether the demands were sustainable. - HELD THAT: - The Tribunal examined the Department's reliance on a letter said to be from the manufacturer (Tung Ga) and related attachments to displace the appellants' claim of imports from Tung Ga. The letter dated 29.03.2019 contained internal inconsistencies (referencing invoices dated after the letter) casting serious doubt on its genuineness; accordingly the Tribunal held the demand could not be sustained on that basis. Separately, for two Bills of Entry where imports were correctly declared as from Zhejiang but were charged ADD at a lower rate by mistake at assessment, the Tribunal held that, in absence of any suppression or mis declaration, any short paid ADD could only be recovered within the normal period; the notice issued well beyond that period was time barred. Applying these findings, the Tribunal set aside the differential ADD confirmed in respect of all seven Bills of Entry. [Paras 15, 16]

Differential Anti Dumping Duty confirmed in respect of all seven Bills of Entry is not sustainable and is set aside.

Transaction value principle under Section 14 and Customs Valuation Rules - rejection of transaction value based on contemporaneous imports - reliance on uncertified electronic communications and third party emails as evidence - Whether the assessable values declared in the 26 Bills of Entry could be rejected and re determined by reference to NIDB/contemporaneous import data. - HELD THAT: - The Tribunal applied the valuation scheme under Section 14 and the Customs Valuation Rules, observing that the appellants' declared transaction values were accepted at the time of assessment and that the Department's case for rejection rested on third party emails and attachments that the Tribunal found to be suspect and not properly authenticated. There was no cogent material demonstrating contemporaneous imports of identical/similar goods with adequate details (type, quality, quantity, contract terms, histograms of yarn etc.) to justify rejection of the transaction value. In absence of proof of forgery or of any of the special circumstances permitting rejection, the transaction values had to be accepted and the re determination on NIDB data was unsustainable. [Paras 18, 21]

The assessable values declared in the 26 Bills of Entry cannot be rejected; the re determined values and differential customs duty confirmed on that basis are set aside.

Penalty unsustainable where foundational demand is not established - reliance on uncertified electronic communications and third party emails as evidence - Whether the penalties imposed on the appellants and on the common director were sustainable. - HELD THAT: - Because the Tribunal held that the demands for differential ADD and differential customs duty were unsustainable, any interest or penalty predicated on those demands could not stand. With respect to penalty on the director, the Tribunal noted that the departmental reliance on a statement given by him was undermined by a subsequent retraction which was not acted upon; coupled with the failure to establish the underlying offences, the penalty on the director was also held unsustainable. [Paras 22, 23]

Penalties imposed on all appellants and on the director are set aside.

Final Conclusion: Appeals allowed. The impugned adjudication is set aside for violation of the proviso to Section 28(9) (no extension by a senior officer), for failure to establish differential ADD or undervaluation (reliance on unauthenticated/suspect emails and absence of proper contemporaneous comparables), and consequentially all demands, interest and penalties are quashed; appellants to receive consequential relief as per law.

Interest on delayed payments - appointed day / day of acceptance / deemed date of acceptance - proviso limiting contractual payment period to 120 days - overriding effect of statutory interest provision on contractual bar - compound interest liability - prospective effect of statutory amendment effective 10.08.1998 - privity of contract - operation of Section 43(4) of the Arbitration and Conciliation Act, 1996 on setting aside an award

Proviso limiting contractual payment period to 120 days - prospective effect of statutory amendment effective 10.08.1998 - Effect of the proviso to Section 3 of the 1993 Act on contractual payment terms and temporal application of the amendment - HELD THAT: - The proviso to Section 3 restricts parties from agreeing a contractual payment period in excess of 120 days from the day of acceptance or deemed acceptance; where a contract provides a longer period, interest becomes payable for the excess period. The amendment that inserted the proviso and the enlargement of the definition of "supplier" by Act No. 23 of 1998 operates with effect from 10.08.1998. The Court treated the proviso as modifying contractual rights prospectively from its effective date and as fixing an upper time-limit for payment. [Paras 5, 6, 7, 8, 11]

The proviso restricts contractual payment terms to 120 days and, as enacted by Act No.23 of 1998, applies with effect from 10.08.1998; contractual clauses providing for a longer period are thereby curtailed for the period beyond 120 days.

Appointed day / day of acceptance / deemed date of acceptance - Necessity and manner of ascertaining the appointed day, day of acceptance or deemed acceptance for computation of interest - HELD THAT: - Computation of interest under the 1993 Act requires precise determination of the appointed day, which in turn depends on the day of acceptance or deemed acceptance. The Court observed that where the proviso may be applicable (including supplies or payments after 10.08.1998), factual ascertainment of the acceptance/deemed acceptance date is necessary because interest is payable only after 120 days from such date. This factual inquiry may require examination of matters relating to the consignee (MSEB) though MSEB need not be made a party to fresh proceedings. [Paras 12, 14]

Ascertainment of the appointed day/day of acceptance or deemed acceptance is required for computing interest and must be determined on facts; this factual determination is remitted for fresh consideration.

Privity of contract - prospective effect of statutory amendment effective 10.08.1998 - Effect of the amendment and governmental order on the contractual relationship between MSSIDCL and SSPL - HELD THAT: - By Act No.23 of 1998 and the cited Government Order, MSSIDCL is to be treated or deemed to be a supplier vis-a -vis MSEB for purposes of claiming interest from its buyer. However, the Court held that this statutory treatment does not alter the privity of contract between MSSIDCL and SSPL under the supply/purchase order dated 30.03.1995; MSSIDCL remains the buyer vis-a -vis SSPL and the contractual rights and obligations between them remain unaffected save for the statutory limitation imposed by the proviso to Section 3. [Paras 14]

The amendment and Government Order deem MSSIDCL to be a supplier vis-a -vis MSEB for statutory purposes, but do not change the contractual relationship or privity between MSSIDCL and SSPL.

Operation of Section 43(4) of the Arbitration and Conciliation Act, 1996 on setting aside an award - Consequences of setting aside the arbitral award and appellate outcome - HELD THAT: - The Division Bench of the High Court set aside the arbitral award dated 30.06.2003. This Court found no reason to interfere with that conclusion. Upon setting aside the award, Section 43(4) of the Arbitration and Conciliation Act, 1996 becomes operative and will apply in the proceedings that follow. The appellate process culminated in dismissal of the appeal by this Court. [Paras 13, 17]

The High Court's order setting aside the arbitral award is upheld; Section 43(4) of the Arbitration and Conciliation Act, 1996 will apply; the appeal is dismissed.

Compound interest liability - Interest on delayed payments - Whether compound interest awarded under Section 5 was properly treated as part of the principal and adjudicated in the award - HELD THAT: - There is a dispute as to whether compound interest (awarded by the sole arbitrator with monthly rest at the prescribed rate) should be treated as part of the principal amount under Section 5. The Court recorded that this aspect was not considered by the arbitrator. Given the outstanding controversy and absence of adjudication on this question in the award, the matter requires further examination. [Paras 15]

The question whether compound interest is to be treated as principal was not adjudicated in the award and thus remains open for fresh consideration.

Final Conclusion: The appeal is dismissed; the Division Bench's order setting aside the arbitral award is upheld and Section 43(4) of the Arbitration and Conciliation Act, 1996 will apply. The proviso to Section 3 limits contractual payment periods to 120 days (effective from 10.08.1998) and factual determination of the appointed day/acceptance date is necessary for computation of interest; the question whether compound interest is to be treated as principal remains undecided and requires fresh consideration. MSSIDCL continues to be the buyer vis-a -vis SSPL and the statutory deeming of MSSIDCL as supplier to MSEB does not alter their privity of contract.

Summary order. Appeal dismissed; delay condoned; order of the National Company Law Appellate Tribunal dated 1 December 2023 in Company Appeal (AT) No 91 of 2023 upheld; pending application disposed of.

Restoration of company's name in the register - Appeal to Tribunal against Registrar's order for removal of name - Removal of name under Section 248 - Non compliance with filing of annual accounts and notices - Payment of costs and compounding for failure to comply with Companies Act obligations - Payment to a dissolved company and consequential procedure

Appeal to Tribunal against Registrar's order for removal of name - Restoration of company's name in the register - Appellants' challenge to the Registrar's order removing the company's name was allowed and the company's name directed to be restored in the register. - HELD THAT: - The Court held that the appeal against the Registrar's order dated 21.08.2017 was preferred within the statutory time and that a practical rather than a purely technical view should be adopted in assessing appellants' lapses. The Court was satisfied on the material before it that the company was in existence and operative during the relevant period and that removal of the name was not justified. Accordingly, the impugned judgment rejecting restoration was set aside and restoration ordered.

Restoration of the name of R.P. Casting Private Limited in the register of companies directed by allowing the appeal.

Non compliance with filing of annual accounts and notices - Payment of costs and compounding for failure to comply with Companies Act obligations - Restoration is made subject to conditions: payment of costs and potential compounding for statutory violations by the company and its directors. - HELD THAT: - While permitting restoration, the Court found that the directors were negligent in failing to comply with the filing requirements under the Companies Act and in not responding to notice under Section 248. For that reason the Court directed the appellant to pay costs to the Registrar as a precondition for restoration and observed that the company may be liable to pay compounding fees for failure to file accounts and other compliance failures. The Registrar is authorised to initiate appropriate proceedings for compounding, and the company may apply for compounding of the violations. The Court also clarified that other statutory authorities retain their rights to take action if the company has contravened other enactments.

Restoration ordered subject to payment of costs of Rs.5,00,000 to the Registrar within 60 days and subject to any compounding or other proceedings as per law.

Final Conclusion: The impugned judgment refusing restoration is set aside; the appeal is allowed and the company's name is restored in the Registrar's records subject to payment of the directed costs and without prejudice to compounding proceedings or action by other statutory authorities.

Interlocutory order - reconstitution of Committee of Creditors - direction to issue notice and file reply - fresh adjudication after hearing parties

Interlocutory order - appeal rendered academic - Maintainability of the appeal against the interlocutory order dated 29.01.2024 - HELD THAT: - The impugned order challenged in this appeal is an interlocutory order passed in I.A. 3151/2022. A subsequent order dated 11.03.2024 of the Adjudicating Authority directed issuance of notice to all members of the Committee of Creditors and listing of the application for hearing, thereby leaving all issues open for fresh consideration. In view of the subsequent directions and the fact that the Adjudicating Authority will decide the application afresh after hearing the parties, the appeal seeking to challenge the earlier interlocutory direction has lost its present utility and need not be kept pending before this Tribunal.

The appeal is disposed of as the impugned interlocutory order has been overtaken by the subsequent proceeding and all contentions are left open for fresh adjudication by the Adjudicating Authority.

Reconstitution of Committee of Creditors - direction to issue notice and file reply - fresh adjudication after hearing parties - Procedure to be followed by the Adjudicating Authority in I.A. 3151/2022 - HELD THAT: - The Adjudicating Authority in its order dated 11.03.2024 directed the applicant to issue notice to all members of the Committee of Creditors along with the copy of the application for filing replies and appearance, and listed the application for further hearing. The Tribunal recorded that the Adjudicating Authority shall consider and decide I.A. 3151/2022 afresh after hearing the parties and considering the replies, and that all contentions of the parties are left open for determination by the Adjudicating Authority in accordance with law. The Tribunal also noted that earlier directions to the Resolution Professional to examine the issue afresh may be revisited by the Adjudicating Authority in the course of that fresh adjudication.

I.A. 3151/2022 to be adjudicated afresh by the Adjudicating Authority after issuance of notices and hearing of replies; all contentions reserved for decision by the Adjudicating Authority.

Final Conclusion: The interlocutory appeal is disposed of as academic in view of the Adjudicating Authority's subsequent order directing fresh notice and hearing in I.A. 3151/2022; the Adjudicating Authority shall decide the application afresh after hearing the parties and considering their replies, with all contentions left open.

Applicability of Section 10A (suspension of CIRP initiation) - Effect of pre-existing default on invocation of Section 10A - One Time Settlement and Consent Decree - effect of compromise on original remedy - Doctrine of estoppel by acceptance of benefit of settlement - Acknowledgement of debt and extension of limitation under Section 18 of the Limitation Act - Effect of Consent Decree of DRT on limitation for filing insolvency application

Applicability of Section 10A (suspension of CIRP initiation) - Effect of pre-existing default on invocation of Section 10A - Section 10A does not bar the Section 7 application where the date of default pleaded is prior to the commencement of the Section 10A period. - HELD THAT: - The Adjudicating Authority correctly admitted the Section 7 application which expressly pleaded date of default as 08.08.2018, a date prior to the Section 10A suspension period. Section 10A, by its Explanation, does not apply to defaults committed before 25.03.2020. The Tribunal followed NCLAT precedent holding that where default is continuing and was committed prior to Section 10A period, Section 10A cannot be invoked to defeat the financial creditor's remedy. The fact that subsequent events (OTS, undertaking, joint filing for consent decree) occurred during or after the Section 10A period does not convert an earlier default into one sheltered by Section 10A when the Section 7 petition pleads the pre-10A default and annexes the computation chart and acknowledgements. [Paras 7, 13, 14, 19]

Section 10A is not attracted and does not bar the Section 7 application as the default relied upon was committed on 08.08.2018.

One Time Settlement and Consent Decree - effect of compromise on original remedy - Doctrine of estoppel by acceptance of benefit of settlement - The OTS and the subsequent Consent Decree did not preclude the Bank from filing a Section 7 application after the OTS was declared failed, because the OTS expressly provided for cancellation and revival of the Bank's full claim on non-adherence. - HELD THAT: - The OTS/Consent Terms expressly contemplated filing of a joint application for Consent Decree before the DRT and contained clauses (notably clause (j) and clause k(iii)) providing that failure to make payments as per the schedule would lead to cancellation of the compromise and entitlement of the Bank to recover the entire outstanding amount with interest. The parties jointly filed the application and obtained a Consent Decree; the OTS did not abolish the Bank's original claim but provided an agreed compromise subject to reversion on default. The argument that inability to sell mortgaged I.T. parks absolved the Corporate Debtor of payment obligations is contrary to the OTS, which expressly contemplated promoters meeting any shortfall from other sources. Principles cited on acceptance of benefit of settlement (estoppel) do not assist the Appellant to defeat the contractual right of the Bank to treat the OTS as failed and claim full dues. [Paras 9, 10, 11, 20, 21]

The Bank was entitled to declare the OTS failed and pursue recovery; the OTS/Consent Decree did not bar filing of the Section 7 application.

Acknowledgement of debt and extension of limitation under Section 18 of the Limitation Act - Effect of Consent Decree of DRT on limitation for filing insolvency application - Acknowledgements and the Consent Decree operate to extend limitation so that the Section 7 application filed on 13.03.2023 was within time. - HELD THAT: - The Bank's Section 7 petition relied on earlier acknowledgements (including OTS proposals and financial statement acknowledgements) which invoke the benefit of Section 18 of the Limitation Act. Further, the Consent Decree passed by the DRT on 26.04.2022 provides a fresh cause of action and, in accordance with authoritative precedent relied upon by the Tribunal, yields a fresh three-year limitation period from the date of the decree. The petition filed on 13.03.2023 therefore falls within the extended limitation period arising from these acknowledgements and the DRT decree. [Paras 22]

The Section 7 application was filed within the extended limitation period and is not time-barred.

Final Conclusion: No merit in the appeal; the order admitting the Section 7 application is upheld and the appeal is dismissed.

Locus to file appeal - standing of an independent director - maintainability under Section 61(1) of the Insolvency and Bankruptcy Code, 2016 - admission of claim by the Resolution Professional - verification of financial creditor's claim - revocation of One Time Settlement and restoration of original liabilities - effect of admission order under Section 7 on subsequent challenges - Committee of Creditors voting rights - proxy litigation and imposition of costs

Locus to file appeal - standing of an independent director - maintainability under Section 61(1) of the Insolvency and Bankruptcy Code, 2016 - Whether the appellant, an independent director, had locus to file the appeal and was a person aggrieved under the IBC - HELD THAT: - The Tribunal noted that the appellant is an independent director with no pecuniary interest in the corporate debtor and was a representative of the ex-management in the CoC. The Bench observed prima facie that an independent director could not be considered an aggrieved person with respect to the admission or quantum of a financial creditor's claim. Although the point of locus was not raised before the Adjudicating Authority and the appeal was heard on merits, the Tribunal reiterated that the appellant had no legal stake in the admitted claim or its quantum and therefore lacked standing as a person aggrieved under Section 61(1) of the IBC. [Paras 8, 14]

Appellant lacked locus as an aggrieved person; appeal proceeded on merits notwithstanding want of standing but appellant was found not to be a person aggrieved.

Admission of claim by the Resolution Professional - verification of financial creditor's claim - revocation of One Time Settlement and restoration of original liabilities - effect of admission order under Section 7 on subsequent challenges - Committee of Creditors voting rights - Whether the RP erred in admitting the financial creditor's claim ignoring the One Time Settlement (OTS) of 2008 and whether the OTS had in fact been revoked - HELD THAT: - The Tribunal examined the OTS letter, the annexure thereto and the correspondence between the financial creditor and the corporate debtor. Clause 2 of the annexure to the OTS expressly conferred on the financial creditor the right to revoke the OTS and restore original liabilities in the event of default. The admission order under Section 7 (dated 28.03.2022) recorded that the OTS was cancelled in August 2009 and that all original liabilities had been restored; those findings were not challenged. The balance sheets and periodic communications from the financial creditor corroborated restoration of liabilities and continual updates of dues. In view of these records, the Tribunal held that the RP's admission of the financial creditor's claim conformed with the Section 7 admission and supporting documents, and that no fault was shown in the RP's verification and admission of the claim. The Tribunal also observed that the constitution of the CoC and the voting shares based on the admitted claim were known to the appellant from the outset. [Paras 14, 15]

OTS was revoked on 12.08.2009 and original liabilities were restored; RP correctly admitted the financial creditor's claim and the appellant's challenge to the quantum failed.

Final Conclusion: Appeal dismissed on merits for lack of substance; appellant (an independent director) had no locus as an aggrieved person and the admission of the financial creditor's claim was held to be in order following revocation of the OTS; cost imposed on appellant for initiating frivolous/proxy litigation.

Acknowledgement in writing under Section 18 of the Limitation Act - time-bar and limitation for initiation of insolvency process under Section 95 - exclusion of period by Supreme Court's Suo Motu orders (15.03.2020 to 28.02.2022) - presentation of Section 95 application through a Resolution Professional - estoppel from disputing assignee status where assignee's status was accepted in earlier Section 7 proceeding

Acknowledgement in writing under Section 18 of the Limitation Act - time-bar and limitation for initiation of insolvency process under Section 95 - exclusion of period by Supreme Court's Suo Motu orders (15.03.2020 to 28.02.2022) - Whether the Section 95 application filed on 10.08.2021 was barred by limitation - HELD THAT: - The Appellant's Recall/Invocation Notice dated 04.03.2016 gave rise to the claim, but subsequently the Appellant executed a Declaration-cum-Undertaking dated 29.01.2018 which acknowledged the debt. Such written acknowledgement operates to extend the period of limitation under the principle embodied in Section 18 of the Limitation Act, thereby restarting the three-year period from the date of the undertaking. Further, the Supreme Court's Suo Motu orders excluded the period from 15.03.2020 to 28.02.2022 from reckoning of limitation. Applying these two principles, the adjudicatory conclusion was that the three-year period arising from the 29.01.2018 undertaking fell within the excluded period and, read together with the acknowledgement, the petition filed on 10.08.2021 cannot be held time-barred.

The Section 95 application was not barred by limitation and the Adjudicating Authority correctly admitted it.

Presentation of Section 95 application through a Resolution Professional - Whether the Section 95 application was invalid because it was signed by the Resolution Professional and not an authorized officer of the Financial Creditor - HELD THAT: - Section 95(1) permits a creditor to file an application through a Resolution Professional. The Resolution Professional signed the application and also furnished written consent in Form A. The record contains an authorization by the Financial Creditor authorizing the Resolution Professional to sign the application on its behalf. No defect was pointed out by the Adjudicating Authority and none exists in the application requiring dismissal or curative opportunity in the circumstances of this case.

Filing and signing of the Section 95 application by the Resolution Professional was permissible and did not vitiate the application.

Estoppel from disputing assignee status where assignee's status was accepted in earlier Section 7 proceeding - Whether the Appellant could challenge the Assignment Agreement or the Financial Creditor's status as assignee in the Section 95 proceeding - HELD THAT: - The Financial Creditor's status as assignee was accepted in the earlier Section 7 proceeding in which the Corporate Debtor's insolvency resolution process was initiated and a resolution plan approved. Given that the assignee's status was thus previously adjudicated and the Section 7 petition was admitted, the Appellant cannot re-open or dispute the assignee status in the present Section 95 proceeding. The challenge to the Assignment Agreement was therefore rejected as untenable in these proceedings.

The Appellant cannot dispute the Financial Creditor's assignee status in the Section 95 proceeding where it was already accepted in the Section 7 admission.

Unstamped instrument contention - Whether the contention that the Personal Guarantee was unstamped vitiates the admission of the Section 95 application - HELD THAT: - The Appellant never questioned execution of the joint guarantee before the Adjudicating Authority, and the Appellant subsequently made a written acknowledgement of the debt by the Declaration-cum-Undertaking. The unstamped nature of the guarantee was not raised earlier before the Adjudicating Authority. In the circumstances, the contention that the deed was unstamped does not provide a basis to set aside the admission of the Section 95 application.

The unstamped guarantee contention does not invalidate the admission of the Section 95 application and is rejected.

Final Conclusion: The appeal is dismissed. The Adjudicating Authority did not err in admitting the Section 95 application: the application was not time-barred in view of the written acknowledgement and the Supreme Court's excluded period, filing through the Resolution Professional was permissible, challenges to assignee status and unstamped guarantee were unsustainable in the present proceedings.

Interim bail - power to grant interim bail as part of Article 21 liberties - legality of arrest under the Prevention of Money Laundering Act, 2002 - election exigency and interim release - non-interference with witnesses and official records as condition of interim release

Interim bail - power to grant interim bail as part of Article 21 liberties - election exigency and interim release - non-interference with witnesses and official records as condition of interim release - Grant of interim bail to the appellant Arvind Kejriwal in connection with ECIR No. HIU-II/14/2022 - HELD THAT: - The Court exercised its well-established jurisdiction to grant interim release while final adjudication is pending, recognising that the power to grant regular bail includes the power to grant interim bail and that temporary release may be warranted by compelling circumstances. The ongoing 18th Lok Sabha General Elections and the pendency of substantial legal challenges to the arrest, including questions of the arrest's legality, were treated as material peculiarities relevant to the exercise of discretion. The Court observed that although non-appearance on multiple summons was a negative factor, other considerations-absence of conviction, lack of criminal antecedents, no threat to society, the prolonged pendency of investigation and the sub judice status of legality of arrest-militated in favour of a temporary, conditioned release. The Court rejected the submission that granting interim bail in the electoral context impermissibly privileges politicians, noting that individual circumstances may justify temporary release and that conditions can guard against interference with investigation or trial. [Paras 8, 14, 15, 18, 19]

Appellant released on interim bail in respect of ECIR No. HIU-II/14/2022 (22.08.2022) until 1 June 2024, to surrender on 2 June 2024, subject to furnishing bail bonds in the specified sum with one surety, and subject to conditions including non-visiting the Office of the Chief Minister and the Delhi Secretariat, refraining from signing official files except as necessary for required clearances, no comments regarding the case, and no interaction with witnesses or access to official files connected with the case.

Legality of arrest under the Prevention of Money Laundering Act, 2002 - Final adjudication on the legality and validity of the arrest is not decided and remains under consideration by this Court - HELD THAT: - The Court recorded that multiple legal pleas, including scope and alleged violation of the statutory provision impugned (relating to arrest under the Prevention of Money Laundering Act, 2002), have been raised and that hearings are incomplete. In view of the pending appeal and unresolved legal questions, the Court refrained from directing the appellant to seek interim relief from the trial court and instead dealt with interim release itself. The substantive issues concerning the legality of the arrest and related challenges are to be finally considered in due course; they were not decided on merits in this order. [Paras 3, 6, 15]

Questions regarding the legality and validity of the arrest remain pending before the Court for final determination and were not finally adjudicated in this order.

Final Conclusion: Interim bail granted to Arvind Kejriwal until 1 June 2024 on specified conditions; the substantive challenges to the legality of his arrest and other legal issues remain pending for final adjudication by this Court.

Interim bail - Surrender and cancellation of warrant by undertaking - Verification of charge-sheet and cognizance - PMLA investigation and charging document

Interim bail - Surrender and cancellation of warrant by undertaking - Petitioner entitled to interim bail pending further proceedings - HELD THAT: - The Court noted that the petitioner was not arrested during investigation under the PMLA, ECIR relates to 2016 and the complaint was filed on 30th December, 2020; after summons were issued and the petitioner failed to appear, a warrant was issued and the petitioner thereafter surrendered and applied for bail. The Court observed that, even without surrendering, the petitioner could have sought cancellation of the warrant by giving an undertaking to attend the Special Court. Having regard to these facts and that the petitioner has undergone incarceration for a period of one year and one month, the Court held that the petitioner should be enlarged on interim bail. The order is not a final disposal of the petition but grants interim relief subject to the Special Court imposing appropriate terms and conditions and production before that Court. [Paras 2, 7]

Interim bail granted; petitioner to be produced before the Special Court and to be enlarged on interim bail on appropriate terms and conditions by the Special Court.

Verification of charge-sheet and cognizance - PMLA investigation and charging document - Whether a separate charge-sheet was presented and whether cognizance was taken requires verification - HELD THAT: - The Court observed that documents in the counter affidavit, notably the document at page 96, prima facie indicate that an Assistant Director of the Enforcement Directorate presented a charge-sheet to the special public prosecutor which was ordered to be registered as a Criminal Miscellaneous Case and presented before the Special Court for cognizance. The Additional Solicitor General stated, on instructions, that in that State a complaint is sometimes referred to as a charge-sheet and that in fact no separate charge-sheet existed; however, the Court noted the record still gives rise to an impression that a charge-sheet was presented. In view of this uncertainty the Court directed a verification of the record of Criminal Case No. 2 of 2021 by calling for the entire soft copy from the Special Judge (PMLA), Dehradun, and directed that copies be furnished to the parties and a printed version placed before the Court for determination whether cognizance was taken on the basis of a charge-sheet. [Paras 3, 4, 5]

Registry directed to call for the entire record of Criminal Case No. 2 of 2021 from the Special Judge (PMLA), Dehradun, provide copies to parties and place printed record before this Court for verification of whether a charge-sheet was presented and cognizance taken.

Final Conclusion: Interim bail granted to the petitioner subject to production before and enlargement by the Special Court on appropriate conditions; the Supreme Court has directed verification of the trial-court record (Criminal Case No. 2 of 2021) regarding the existence of a charge-sheet and whether cognizance was taken, and listed the matter for further hearing on 10th May, 2024.

Look Out Circular - quashing of administrative travel restrictions - renewal requirement under Ministry of Home Affairs guidelines for LOCs - non-cooperation not amounting to grounds for continued detention - conditional liberty subject to undertaking and disclosure of contact details

Look Out Circular - renewal requirement under Ministry of Home Affairs guidelines for LOCs - quashing of administrative travel restrictions - Validity of the LOC dated 17th January 2020 issued against the petitioner. - HELD THAT: - The Court found that the Enforcement Directorate had not produced material establishing the petitioner's complicity in the PMLA investigation and that no renewals of the LOC had been placed on record as required by the MHA guidelines. In view of the absence of incriminating material against the petitioner despite his having appeared before the ED on multiple occasions, and the lack of documentary proof of periodic renewal of the LOC, the continued operation of the impugned LOC could not be sustained. The Court therefore held that the LOC issued on 17th January 2020 was not maintainable and warranted quashing. [Paras 6, 8, 9]

Impugned LOC dated 17th January 2020 quashed and set aside.

Non-cooperation not amounting to grounds for continued detention - conditional liberty subject to undertaking and disclosure of contact details - Whether alleged non-cooperation justified continued restriction on the petitioner's liberty and what conditions, if any, should govern his release. - HELD THAT: - The Court rejected the submission that mere non-cooperation justified detention, noting that non-cooperation may arise from an absence of any relevant information with the person and cannot alone be the basis for depriving livelihood or freedom. Taking into account the petitioner's long overseas employment, the absence of material implicating him, and his undertaking to cooperate and disclose residence and contact details, the Court exercised its supervisory jurisdiction to grant relief subject to safeguards. The relief was made conditional on the petitioner's undertaking already filed, requirement of minimum seven days' notice for any summon to return, prompt disclosure of overseas address and contact details before going abroad and on change, prohibition on contacting the accused, and liberty for the ED to issue a fresh LOC if new material emerges. [Paras 8, 9]

Petitioner released from the effects of the LOC subject to the undertaking and specified conditions; ED remains free to issue a fresh LOC if occasion arises.

Final Conclusion: The petition is allowed: the LOC dated 17th January 2020 is quashed; liberty is granted subject to the petitioner's undertaking to cooperate, notification and contact conditions, seven days' notice for summons, prohibition on contacting the accused, and the ED's right to issue a fresh LOC if new material emerges.

Place of provision of service under Rule 10 of POP Rules - Intermediary versus principal characterization under Rule 2(f) and Rule 9 of POP Rules - Taxability of ocean freight for export shipments - CBEC Circular guidance on freight forwarders acting as agent or principal

Place of provision of service under Rule 10 of POP Rules - Intermediary versus principal characterization under Rule 2(f) and Rule 9 of POP Rules - Taxability of ocean freight for export shipments - CBEC Circular guidance on freight forwarders acting as agent or principal - Whether the differential freight margin retained by the appellant on outbound shipments is liable to service tax as Business Auxiliary Service or is not taxable because the appellant provides the transportation service on his own account and the place of provision is outside India. - HELD THAT: - The Tribunal found that the appellant entered into contracts with carriers on a principal-to-principal basis and undertook legal responsibility, risks and liabilities for transportation rather than merely acting as an agent. Consequently the appellant falls within the exclusion in Rule 2(f) and is not an "intermediary" under Rule 9. Applying Rule 10 of the Place of Provision of Services Rules, the place of provision of a service of transportation of goods is the destination of the goods; for outbound shipments the destination is outside India. The CBEC Circular distinguishing cases where a freight forwarder acts as agent (taxable as intermediary) and where he acts as principal (transportation service provided, place of provision at destination) supports this characterization. Having held that the service is one of transportation whose place of provision for export shipments is outside the taxable territory, the freight margin recovered for outbound shipments does not attract service tax.

Impugned order-in-appeal set aside; appeal allowed and demand in respect of freight margin on outbound shipments held not leviable to service tax.

Final Conclusion: The appellant acted as principal in providing transportation for outbound shipments; accordingly the place of provision is outside India under Rule 10 of the POP Rules and the freight margin retained on export shipments is not taxable-the appellate order is set aside and the appeal is allowed.

Leviability of service tax on supply of ready mix concrete - Demand of service tax based on discrepancies between statutory returns and books of account - Burden of proof on the Revenue to identify the service, service recipient and consideration - Invoking extended period/penalty based on alleged suppression

Burden of proof on the Revenue to identify the service, service recipient and consideration - Demand of service tax could not be sustained where the Department failed to identify any specific taxable service, service recipient or consideration and relied on discrepancies between returns and accounts. - HELD THAT: - The Tribunal held that service tax can be levied only when a specific service, the service provider and recipient and the consideration therefor are clearly identified and proved by the Revenue. The Department had not specified the classification of any service or the consideration received; instead it proceeded on an assumption and sought to confirm demand on the basis of differences between ST-3 returns, VAT returns, 26AS statements and the balance sheet. Reliance on such discrepancies or on notional income in the absence of direct evidence of a taxable service is legally unsustainable. The adjudicatory approach of confirming tax merely from balance sheet entries and other statutory returns, without proving that a service was rendered and consideration received, was rejected following precedents cited by the Tribunal. [Paras 7]

The demand of service tax confirmed on the basis of unidentified services and discrepancies in documents is set aside.

Leviability of service tax on supply of ready mix concrete - Supply of ready mix concrete was treated as sale of an excisable product and not as rendition of a taxable service in the facts of the case. - HELD THAT: - The Tribunal noted the settled position in earlier decisions that contracts for supply of ready mix concrete ordinarily constitute sale of an excisable product rather than a taxable service where the primary and dominant object is supply of RMC. Applying that reasoning to the present record, and having regard to the CBEC circular and judicial precedents relied upon by the appellant, the Tribunal found no cogent evidence of provision of a taxable service by the appellant. Consequently, service tax exigibility on the supplies could not be sustained. [Paras 8]

The supplies of ready mix concrete were not exigible to service tax on the record and the demand on this ground is quashed.

Invoking extended period/penalty based on alleged suppression - Extended period of limitation and penalties could not be invoked in the absence of specific allegations or evidence of suppression or intent to evade service tax. - HELD THAT: - The show cause and impugned order invoked the extended period and imposed penalties on the premise that the appellant had not registered or paid service tax. The Tribunal observed that no concrete allegation of suppression or mala fide intention was established and that the Department had not produced evidence to demonstrate an intent to evade duty. Since the foundational demand itself was not proved and there was no substantiation of suppression, invocation of extended limitation and imposition of penalties were unsustainable. [Paras 7, 9]

Extended period and penalties imposed are not sustainable in the absence of proof of suppression or intent and are set aside along with the demand.

Final Conclusion: The impugned order confirming service tax, interest and penalties is set aside; the appeal is allowed and the demand on the basis of unidentified services and on supplies of ready mix concrete is quashed.

ST-3 return filing obligation under Section 70 - penalty for non-filing of returns - nil service / zero tax liability and waiver of penalty under proviso to Rule 7C - power of Central Excise Officer to reduce or waive penalty under Rule 7C - limitation period for issuance of show cause notice

ST-3 return filing obligation under Section 70 - nil service / zero tax liability and waiver of penalty under proviso to Rule 7C - power of Central Excise Officer to reduce or waive penalty under Rule 7C - Whether penalty for non-filing of ST-3 returns for the period October 2012 to March 2013 should be sustained where the assessee contends there were no service transactions and service tax payable was nil. - HELD THAT: - The Tribunal found that the statutory scheme requires filing of ST-3 returns under Section 70 only where services are provided. The 3rd proviso to Rule 7C empowers the Central Excise Officer to reduce or waive the penalty if the gross amount of service tax payable is nil and there is a sufficient reason for not filing the return. Where the appellant's stated reason for non-filing was absence of any service transactions, no documentary proof of transactions could be produced, and the authorities ought to have considered and exercised the discretion under the proviso. The Tribunal held that the facts fall squarely within the scope of the proviso and that the authorities should have entertained waiver of the late fee/penalty accordingly.

Demand for penalty for October 2012 to March 2013 set aside; waiver under proviso to Rule 7C found to be appropriate and authorities faulted for not exercising their discretion.

Penalty for non-filing of returns - limitation period for issuance of show cause notice - Rule 7C - waiver for nil returns - Whether the demand for late fee/penalty in respect of the period October 2012 to March 2013 and for April 2016 to September 2016 was time-barred or otherwise unsustainable, and whether the conflicting adjudications for April-September 2016 entitle the appellant to benefit. - HELD THAT: - The Tribunal agreed that the show cause notice dated 08.02.2019 in respect of October 2012 to March 2013 was beyond the five-year limitation period and hence the demand for that period was unsustainable on limitation grounds. As to April-September 2016, the records showed two show cause notices and two order-in-originals taking contrary views; an earlier order dated 30.03.2021 had dropped the demand while a later order dated 31.03.2021 confirmed it. Given this peculiar situation and that the order dropping the demand was earlier in time and observed that the case merited waiver under the proviso to Rule 7C, the appellant was entitled to the benefit; accordingly the impugned confirming order lacked merit and was set aside.

Demand for October 2012 to March 2013 quashed as time-barred; demand for April 2016 to September 2016 set aside in favour of the appellant on account of prior order dropping demand and applicability of waiver principles.

Final Conclusion: The appeal is allowed; the penalty/late fee demands for the periods October 2012 to March 2013 and April 2016 to September 2016 are set aside-the first as barred by limitation and the second in favour of the appellant following prior adjudication and in light of the proviso to Rule 7C permitting waiver where service tax payable is nil.

Exemption for construction of original works under Notification No.25/2012-ST (Sl. No.14) - definition of Original Work in Explanation 1 to Rule 2A(ii) (Service Tax Determination of Value Rules, 2006) - eligibility for 60% abatement under Rule 2A(ii) - inclusion of value of free issue materials in taxable service value - distinction between a service and an activity integral to production (not taxable) - application of Supreme Court decision in Commissioner of Service Tax v. Bhayana Builders (value of free supply materials)

Exemption for construction of original works under Notification No.25/2012-ST (Sl. No.14) - definition of Original Work in Explanation 1 to Rule 2A(ii) (Service Tax Determination of Value Rules, 2006) - Works contract services for laying new railway lines and for modification/renovation of existing railway lines fall within the definition of 'Original Work' and are exempt under Sl. No. 14 of Notification No. 25/2012-ST. - HELD THAT: - The Tribunal examined the definition of 'Original Work' in Explanation 1 to Rule 2A(ii), which covers (i) all new constructions and (ii) additions and alterations to abandoned or damaged structures required to make them workable. Some work orders before the Tribunal related to construction of new railway lines and others to renovation/modification. A renovation work order for Santaldih STPS squarely falls within part (ii) of the definition. Reliance was also placed on this Tribunal's prior view in Mahendra Kumar Anchalia that the exemption under Sl. No. 14 is available even when railway lines are laid for private entities. On this basis the Tribunal concluded that both new construction and modification/renovation works undertaken by the assessee are 'Original Work' and eligible for exemption under Sl. No. 14 of Notification No.25/2012-ST, rendering the confirmed demand unsustainable. [Paras 8]

Demand of service tax confirmed (Rs. 3,96,05,317/-) in respect of works contract services for railway works set aside.

Distinction between a service and an activity integral to production (not taxable) - Transportation and dumping of ash silo inside the plant is an activity integral to production and not a taxable 'service activity'. - HELD THAT: - The work order HEL:WO:1219 (Transportation and Dumping of Ash Silo to Specified Areas Inside the Plant) was held to be an essential part of the production process and not a service activity, in line with the Tribunal's earlier decision in Marshall Corporation Ltd. Consequently, the demand of service tax confirmed in respect of this work order is unsustainable. Although the assessee had earlier collected and deposited service tax (after availing 60% abatement), the Tribunal held the activity not liable to service tax. [Paras 9]

Demand of service tax confirmed (Rs. 3,27,841/-) in respect of the ash-transport work set aside.

Inclusion of value of free issue materials in taxable service value - application of Supreme Court decision in Commissioner of Service Tax v. Bhayana Builders (value of free supply materials) - Value of free issue materials is not includable in the gross value for the purpose of demanding service tax; the adjudicating authority rightly dropped that portion of demand. - HELD THAT: - The adjudicating authority relied on the Hon'ble Supreme Court's decision in Commissioner of Service Tax v. Bhayana Builders to hold that value of free supply materials cannot be included in the assessable value for service tax. The Tribunal agreed with that approach and upheld the dropping of the demand attributable to inclusion of free issue materials. [Paras 10]

Dropping of demand related to inclusion of free issue materials in assessable value is upheld.

Eligibility for 60% abatement under Rule 2A(ii) - Abatement at 60% under Rule 2A(ii) is available for those work orders which are supplementary to earlier work orders; the adjudicating authority rightly dropped the demand on this ground. - HELD THAT: - The notice alleged some work orders were independent and thus ineligible for the 60% abatement. During hearings the assessee produced evidence that the impugned work orders were supplementary to earlier contracts. The Tribunal perused that evidence and found it established that the work orders were ancillary/supplementary, thereby attracting the 60% abatement under Rule 2A(ii). Accordingly, the Tribunal upheld the adjudicating authority's dropping of the demand on this count. [Paras 10]

Dropping of demand for contracts held to be supplementary and eligible for 60% abatement is upheld.

Final Conclusion: The Tribunal allowed the assessee's appeal and set aside the confirmed service tax demands relating to railway works and the ash-transport activity; the Tribunal also upheld the adjudicating authority's dropping of demands for inclusion of free issue materials and for contracts eligible for 60% abatement. The Department's appeal was rejected and the appeals disposed accordingly.

Includible in taxable value of taxable service - reimbursable expenses - Clearing and Forwarding Agent service - service tax liability discharged by service recipient - consignment note and goods transport agency transaction - interpretational dispute and extended period of limitation

Includible in taxable value of taxable service - reimbursable expenses - Clearing and Forwarding Agent service - service tax liability discharged by service recipient - Reimbursed freight and allied expenses received by the appellant from M/s.ACCL in the course of providing C&F Agency service are not includible in the taxable value for service tax. - HELD THAT: - The Tribunal examined whether amounts reimbursed by M/s.ACCL to the appellant for freight, octroi, entry fees and similar outlays incurred in the course of C&F activity fall within the taxable value of the clearing and forwarding service. The show cause notice and subsequent demand were confined to reimbursable expenses received by the appellant as part of the C&F activity and did not relate to freight for which consignment notes were issued under a separate Goods Transport Agency arrangement (where service tax had been discharged by the service recipient). The Tribunal held that the legal position prior to the 2015 amendment is settled by the decision in Intercontinental Consultants & Technocrats Pvt. Ltd. Vs Union of India , as affirmed by the Apex Court, which treats genuine reimbursable expenses as not includible in the taxable value. Applying that precedent and having regard to the factual finding that the amounts in dispute were reimbursements accounted in the appellant's books and for which service tax on freight (where applicable) had been discharged by M/s.ACCL, the demand cannot be sustained and must be set aside. [Paras 9, 11, 13, 14, 15]

Demand in respect of reimbursed freight and allied expenses set aside; such reimbursements are not includible in taxable value.

Interpretational dispute and extended period of limitation - reimbursable expenses - Invocation of the extended period of limitation for the service tax demand is unsustainable. - HELD THAT: - The Tribunal addressed the contention on limitation noting that the demand was derived from figures in the appellant's books of account and that there was no established positive act of suppression by the appellant. Further, the question whether reimbursable expenses are includible in taxable value was an interpretational issue then pending adjudication and subject to statutory amendment considerations. In these circumstances the Tribunal concluded that the invocation of the extended period, which requires concealment or a clear case of suppression, cannot be sustained and the extended-period demand must be rejected. [Paras 16]

Extended period invocation rejected; limitation defence upheld in favour of the appellant.

Final Conclusion: The appeal is allowed: the confirmed demand, interest and penalties are set aside insofar as they pertain to reimbursed freight and allied expenses for the period April 2008 to June 2012, and the extended period invocation is rejected, with consequential reliefs granted.

Levy of service tax on construction of residential complex - liability of promoter/developer as builder prior to 1.7.2010 - eligibility for abatement in works contract service - taxability of construction for educational institutions (non-commercial use) - invocation of extended period and requirement of suppression

Liability of promoter/developer as builder prior to 1.7.2010 - levy of service tax on construction of residential complex - Appellant as promoter/developer is not liable to service tax for construction of the residential complex for the period upto 1.7.2010. - HELD THAT: - The Tribunal examined the nature of the agreement and project structure and accepted that the appellant acted as promoter/developer/builder, selling undivided shares subject to construction by the builder. In light of Board Circular No.108/02/2009 and consistent Tribunal precedents treating such promoter/developer activity as not taxable until the legislative amendment effective 1.7.2010, the appellant is not liable to service tax as a builder/promoter for the period upto 1.7.2010. The Tribunal relied on the reasoning that such transactions constituted self-service or agreements to sell where service tax was not intended to be levied prior to the explained amendment. [Paras 8]

Demand in respect of construction of the residential complex for the period upto 1.7.2010 is set aside.

Eligibility for abatement in works contract service - levy of service tax on construction of residential complex - Appellant is entitled to abatement for construction of the residential complex for the period from 1.7.2010 to February 2012 and the denial of abatement in the SCN cannot be sustained. - HELD THAT: - For the period w.e.f. 1.7.2010 the activity falls under taxable construction of residential complexes, but the appellant had discharged service tax after availing abatement. The adjudicating authority's conclusion that materials used in execution would defeat abatement was held erroneous. Applying precedents (including the Heavy Engineering Corporation decision and its approval) and the statutory scheme for abatement under Works Contract Service, the Tribunal held that the appellant was eligible for the abatement and that the demand raised by denying abatement is not legal. The Tribunal therefore set aside the differential demand while leaving intact the tax paid by the appellant for the period post-1.7.2010 as disclosed in returns. [Paras 9, 11]

Differential demand denying abatement for the period 1.7.2010 to February 2012 is set aside; amount paid by appellant remains undisturbed.

Taxability of construction for educational institutions (non-commercial use) - invocation of extended period and requirement of suppression - Construction of the engineering college used solely for educational purpose is not taxable as commercial construction, and invocation of the extended period is not justified in absence of suppression. - HELD THAT: - The Tribunal accepted that the constructed building is used solely as an educational institution and is AICTE-recognised. Applying Board Circular No.80/10/2004 (para 13.2), constructions solely for educational, charitable or similar non-profit purposes are non-taxable. The demand under Works Contract Service for the engineering college therefore could not be sustained. Further, the Department's figures were drawn from the appellant's accounts and there was no evidence of positive act of suppression or intent to evade tax; the appellant's bona fide belief (based on the Board circular) that the service was not taxable negated invocation of the extended limitation period. On these bases the Tribunal answered limitation in favour of the appellant. [Paras 13, 15]

Demand in respect of construction of the engineering college is set aside and extended period invocation rejected.

Final Conclusion: The appeal is allowed. The demands in respect of the residential complex for the period upto 1.7.2010 and for the engineering college are set aside; the differential demand denying abatement for the period 1.7.2010 to February 2012 is quashed while preserving the tax amount already paid by the appellant for that period.

Mens rea as ingredient for penalty under Section 11AC - subsidiary operation of Rule 25(1)(b) 'subject to the provisions of Section 11AC' - confiscation and penalty for failure to account for excisable goods

Mens rea as ingredient for penalty under Section 11AC - subsidiary operation of Rule 25(1)(b) 'subject to the provisions of Section 11AC' - confiscation and penalty for failure to account for excisable goods - Penalty under Rule 25(1)(b) cannot be imposed independently of Section 11AC where mens rea is a requisite for imposition of penalty. - HELD THAT: - The court examined whether penalty under Rule 25 of the Central Excise Rules, 2002 can be imposed without invoking Section 11AC of the Central Excise Act, 1944. Applying binding principles that Section 11AC requires proof of intent to evade duty (mens rea) before attracting the enhanced penalty, the court held that Rule 25 commences with the phrase 'subject to the provisions of Section 11AC of the Act' and therefore operates only where the conditions of Section 11AC are met. The Tribunal's conclusion that confiscation and penalty were justified for non-maintenance of records under Rule 25 was examined against the materials before the Commissioner (Appeals), who had accepted invoices and reconciled stock for the relevant period. In those circumstances, the requisite intention to evade duty was not established. Consequently, Rule 25 could not be invoked to impose the penalty in the absence of the mens rea required under Section 11AC. The court therefore found the Tribunal's order setting aside the Commissioner (Appeals) to be unsustainable and proceeded to quash that order. [Paras 8, 13, 16, 17, 18]

The question of law is answered in favour of the assessee: Rule 25 cannot be applied to impose penalty unless the mens rea condition of Section 11AC is satisfied; the Tribunal's order dated 01.09.2010 is quashed.

Final Conclusion: The appeal is allowed; the Tribunal's order dated 01.09.2010 is quashed.

Apportionment of Cenvat credit where manufacturer produces both dutiable and exempted goods under Rule 6(3) of the Cenvat Credit Rules, 2004 - Inapplicability of Rule 11(3) of the Cenvat Credit Rules where Rule 6(3) governs - Lapse of Cenvat credit consequent to exemption of final product - Requirement of separate accounts for inputs for invocation of different Cenvat mechanisms

Apportionment of Cenvat credit where manufacturer produces both dutiable and exempted goods under Rule 6(3) of the Cenvat Credit Rules, 2004 - Inapplicability of Rule 11(3) of the Cenvat Credit Rules where Rule 6(3) governs - Requirement of separate accounts for inputs for invocation of different Cenvat mechanisms - Applicability of Rule 6(3) (and not Rule 11(3)) for determination of availability/lapse of Cenvat credit where common inputs are used for both dutiable parts and exempted final goods and no separate accounts were maintained. - HELD THAT: - The Tribunal held that where an assessee manufactures both dutiable goods (parts of e-bikes) and exempted final products (e-bikes) using common inputs and does not maintain separate accounts, the mechanism of apportionment under Rule 6(3) of the Cenvat Credit Rules, 2004 applies. The Cenvat credit does not wholly lapse on issuance of the exemption notification; instead, credit attributable to inputs, WIP and finished exempted goods will lapse while the balance may be utilized after payment in terms of Rule 6(3). The Bench found no applicability of Rule 11(3) to these facts and relied on its earlier Final Order dated 22.07.2016 where identical factual and legal questions were decided in favour of the assessee. Given that the Department did not contend that only exempted goods were manufactured, the Tribunal accepted the assessee's contention that Rule 6(3) governs and rejected the revenue's contention attracting Rule 11(3). [Paras 6, 7, 8]

Impugned order set aside; Rule 6(3) held applicable and Rule 11(3) held not applicable; appeal allowed.

Final Conclusion: The Tribunal allowed the appeal, holding that apportionment under Rule 6(3) of the Cenvat Credit Rules, 2004 governs the claim where common inputs are used for both dutiable and exempted products without separate accounts, and that Rule 11(3) is not applicable; the impugned order was set aside.

Condonation of delay - appeal decision - appealability - reasoned decision on the merits - requirement of certified copy for memorandum of appeal - duty to intimate date for collection of certified copy - limitation and one year outer limit for condonation

Appealability - appeal decision - reasoned decision on the merits - Whether an order refusing condonation of delay under Sub section 2 of Section 35 (thereby refusing to admit an appeal) is an appealable "decision" under Sub section 7 of Section 35 and Sub section 1 of Section 36 of the Goa VAT Act. - HELD THAT: - The Court held that the statutory word "decision" in Sub section 7 of Section 35 and Sub section 1 of Section 36 denotes a reasoned decision on the correctness of the assessment (i.e., a decision on the merits) and not every order passed by the appellate authority. Orders which merely refuse to admit an appeal or refuse condonation of delay, or which reject an appeal on procedural grounds (for example non compliance with Rules 32/33 or failure to deposit undisputed amounts), do not contain the reasoned determination on the legality or correctness of the assessment contemplated by Sub section 7 and therefore are not "appeal decisions" within the meaning of Section 36. The Court distinguished earlier authorities (including Mela Ram and Chintels) on the basis that those statutes employed different language and scheme mandating appeals against "orders" or expressly provided for appeals from refusals, whereas the Goa VAT Act confines second appeals to the appellate authority's reasoned decisions on merits. The statutory scheme and purposive construction lead to reading "decision" as a final, reasoned adjudication on the assessment rather than any order having the effect of rejecting an appeal. [Paras 20, 27]

An order refusing condonation of delay and refusing to admit the appeal is not a "decision" under Sub section 7 of Section 35 or Sub section 1 of Section 36 and is not appealable to the Tribunal.

Condonation of delay - requirement of certified copy for memorandum of appeal - duty to intimate date for collection of certified copy - limitation and one year outer limit for condonation - Whether the impugned order refusing condonation of delay was correctly passed on the facts of this case. - HELD THAT: - The Court examined the procedural facts: the petitioner had applied for a certified copy of the assessment order, there is no denial that no intimation was given to the petitioner when the certified copy was ready, and inspection of the departmental file disclosed the earlier application and a certified copy with a date endorsed as when it was ready. Rule 33 requires the memorandum of appeal to be accompanied by a certified copy, and the Court reasoned that when an authority prepares a certified copy on an application it ought to inform the applicant of the date for collection so that time spent awaiting the certified copy can be excluded in reckoning limitation. The Appellate Authority failed to enquire whether the petitioner had been intimated or to consider the circumstances set out in the condonation application, and thus acted in a cursory manner and exceeded its jurisdiction in refusing condonation. In view of these findings the Court exercised supervisory jurisdiction under Article 227 to quash the impugned order and condoned the delay. [Paras 26, 28]

The order refusing condonation of delay is quashed and set aside; the delay in filing the appeal is condoned and the appellate authority is directed to admit and decide the appeal in terms of Sub section 6 of Section 35.

Final Conclusion: The petition succeeds: the Court holds that an order refusing condonation of delay is not an appealable "decision" under Sections 35(7) and 36(1) of the Goa VAT Act, quashes the impugned order refusing condonation, condones the delay in filing the appeal against the Assessment Order for Assessment Year 2014-15, and directs the Appellate Authority to admit and decide the appeal.

Powers of revision - proviso to Section 32(2) of the AP VAT Act - appellate jurisdiction of the Appellate Tribunal constituted under Section 3 of the AP VAT Act - binding effect of an Appellate Tribunal's decision on revisional power - error apparent on the face of the record - scope of review under Order 47 Rule 1 CPC - review not to be an appeal in disguise

Proviso to Section 32(2) of the AP VAT Act - powers of revision - appellate jurisdiction of the Appellate Tribunal constituted under Section 3 of the AP VAT Act - Whether the Deputy Commissioner (CT) had no power to exercise revision under the proviso to Section 32(2) of the AP VAT Act because the issue had been decided by the Appellate Tribunal. - HELD THAT: - The Court examined Section 32(2) and its proviso and read the proviso with reference to Section 33 and the definition and constitution of the Appellate Tribunal under Section 3. It found that the proviso precludes exercise of revisional power only in respect of issues which are the subject matter of an appeal before, or which were decided on appeal by, the Appellate Tribunal constituted for the State of Andhra Pradesh. On the material before it, there was no order of the Andhra Pradesh Appellate Tribunal deciding the issue; hence the proviso to Section 32(2) was not attracted and there was no inherent lack of jurisdiction in the Deputy Commissioner to invoke revisional powers. [Paras 10, 11, 12, 13, 14]

Proviso to Section 32(2) did not operate to oust revisional power because the Andhra Pradesh Appellate Tribunal had not decided the issue; Deputy Commissioner had jurisdiction to invoke revision.

Binding effect of an Appellate Tribunal's decision on revisional power - powers of revision - Whether a decision of the Appellate Tribunal at Telangana (filed by the petitioner) would preclude revisional action by the Andhra Pradesh Deputy Commissioner. - HELD THAT: - The Court noted that the provisions refer specifically to decisions of the Appellate Tribunal constituted under Section 3 for the State of Andhra Pradesh. An order of the Telangana Appellate Tribunal, even if on a similar question, was not shown to be a decision of the Andhra Pradesh Appellate Tribunal; the petitioner had not placed any Andhra Pradesh Appellate Tribunal order on record. The review petition could not be used to re-agitate the matter or to substitute fresh appellate material; reliance on the Telangana order did not establish lack of jurisdiction. [Paras 12, 13, 15]

An order of the Telangana Appellate Tribunal did not displace the revisional jurisdiction of the Andhra Pradesh Deputy Commissioner in the absence of a decision by the Andhra Pradesh Appellate Tribunal.

Scope of review under Order 47 Rule 1 CPC - error apparent on the face of the record - review not to be an appeal in disguise - Whether the review petition disclosed an error apparent on the face of the record or any other ground warranting review. - HELD THAT: - Relying on binding principles summarised in Sanjay Kumar Agarwal and Kamlesh Verma, the Court reiterated that review jurisdiction is limited to mistakes apparent on the face of the record, discovery of new evidence, or other sufficient reasons; it cannot be used to re-open concluded issues or to rehear the matter as an appeal. The petitioner's contention merely sought re-agitation of issues already addressed and rested on an order of the Telangana Tribunal that had not been shown to be a decision of the Andhra Pradesh Appellate Tribunal. The contention did not disclose any manifest, self-evident error warranting review. [Paras 16, 17, 18]

No ground for review made out; the review petition is not maintainable as it seeks to re-agitate the matter and does not demonstrate an error apparent on the face of the record.

Final Conclusion: The review petition is dismissed; there is no apparent error in the judgment under challenge, and the Deputy Commissioner's revisional jurisdiction was not ousted by any decision of the Andhra Pradesh Appellate Tribunal.

Strict interpretation of exemption notifications - general exemption under State sales tax law - exemption under Section 9(1) of the APGST Act - levy under Section 5A(1)(vi) of the APGST Act - meaning of 'generally' in Section 8(2A) of the CST Act and its Explanation - burden on assessee to show applicability of exemption - literal construction of taxing statutes

Exemption under Section 9(1) of the APGST Act - levy under Section 5A(1)(vi) of the APGST Act - strict interpretation of exemption notifications - Whether G.O. Ms. No. 1091 dated 31.10.1994 grants a general exemption for the purposes of Section 5A(1)(vi) of the APGST Act on sales of pulp moulded egg trays manufactured by SSI units. - HELD THAT: - G.O. Ms. No. 1091 was issued under Section 9(1) and states exemption is granted on the sale of pulp moulded egg trays manufactured by Small-Scale Industrial Units. Section 9(1) contemplates exemption with reference to a specified class of goods or class of persons; sub-section (2) permits express restrictions or conditions. Where a notification is issued under Section 9(1) without imposing restrictions under Section 9(2), it operates as a general exemption for the purposes of Section 5A(1)(vi). Applying the principles of literal construction and established authority on taxing statutes, the Court held that the plain wording of G.O. Ms. No. 1091 grants exemption 'generally' under the State Act for the commodity that is manufactured by SSI units, and therefore the exemption falls within clause (vi) of Section 5A(1). [Paras 43, 44, 45, 46, 76]

G.O. Ms. No. 1091 grants a general exemption for the purposes of Section 5A(1)(vi) of the APGST Act on the sale of pulp moulded egg trays manufactured by SSI units.

Interpretation by plain language - literal construction of exemption clause - applicability of State exemption to a dealer who did not manufacture the goods - Whether the exemption in G.O. Ms. No. 1091 is available to a Small-Scale Industrial dealer who sells pulp moulded egg trays not manufactured by that dealer. - HELD THAT: - The notification exempts the sale of the specified commodity when it is manufactured by SSI units; it does not, by its plain language, require that the selling dealer must also be the manufacturer. The Court interpreted the phrase 'manufactured by the Small-Scale Industrial Units' as qualifying the commodity (i.e., trays manufactured by SSI units), not the identity of the selling dealer. Applying literal construction and the settled canon that where the wording is clear it must be given effect, the Court concluded that a sale of the exempted commodity by the respondent, who is an SSI dealer though not the manufacturer of those particular trays, falls within the exemption. The Court also observed that even if ambiguity were assumed, the rule that ambiguous taxing provisions may be construed in favour of the subject would benefit the respondent. [Paras 56, 57, 76]

The respondent-dealer, though not the manufacturer of the specific trays sold, is entitled to the exemption under G.O. Ms. No. 1091 for sales of pulp moulded egg trays manufactured by SSI units.

Meaning of 'generally' in Section 8(2A) of the CST Act and its Explanation - limitation of State exemption for Central Sales Tax relief - Pine Chemicals principle on conditional exemptions - Whether the G.O. Ms. No. 1091 qualifies as an exemption 'generally' under Section 8(2A) of the Central Sales Tax Act so as to exempt inter state sales from Central Sales Tax. - HELD THAT: - Section 8(2A) of the CST Act grants relief only where the sale or purchase is 'exempt from tax generally' under the appropriate State law; its Explanation excludes exemptions that apply only in specified circumstances or subject to specified conditions. The Explanation operates restrictively: an exemption that is conditional or operative only in certain circumstances will not qualify as an exemption 'generally' for CST purposes. G.O. Ms. No. 1091 ties exemption to the commodity being manufactured by SSI units; that condition makes the exemption operative in specified circumstances and therefore not an exemption 'generally' as defined in the Explanation. Relying on Pine Chemicals and subsequent authorities, the Court held that although the G.O. Ms. No. 1091 provides a general exemption for State levy under Section 5A(1)(vi), it does not satisfy the requirement of being 'exempt from tax generally' for the purposes of Section 8(2A) of the CST Act; consequently, the respondent cannot claim exemption from Central Sales Tax under Section 8(2A). [Paras 69, 71, 73, 74, 76]

G.O. Ms. No. 1091 does not constitute an exemption 'generally' within the meaning of Section 8(2A) of the Central Sales Tax Act; the respondent is not entitled to exemption under the CST Act.

Final Conclusion: The Sales Tax Appellate Tribunal was correct in holding that the respondent is entitled to exemption under G.O. Ms. No. 1091 (State law) for sales of pulp moulded egg trays manufactured by SSI units; however, that notification does not qualify as a 'general' exemption under Section 8(2A) of the Central Sales Tax Act and consequently the respondent cannot claim exemption under the Central Act. All tax revision petitions are dismissed accordingly.

Dishonour of cheque under Section 138 of the Negotiable Instruments Act, 1881 - presumption under Section 118 and Section 139 of the Negotiable Instruments Act, 1881 - rebuttal of presumption on balance of probabilities - existence of legally enforceable debt or other liability - holder in due course - concurrent findings of fact and appellate interference - perverse finding / no evidence test

Presumption under Section 118 and Section 139 of the Negotiable Instruments Act, 1881 - existence of legally enforceable debt or other liability - rebuttal of presumption on balance of probabilities - Whether the cheques were issued in discharge of a legally enforceable debt and whether the accused had successfully rebutted the statutory presumption - HELD THAT: - The Court considered the evidence examined by the Trial Court, the First Appellate Court and the High Court and accepted the appellate fora's conclusion that the complainant had failed to show that any sum was advanced as financial assistance or that the alleged debt appeared in the complainant's books. The defence explanation that transactions were for stock-market trading through the accused's account and that some cheques were not handed over but were alleged to have been procured from CBI custody constituted a plausible case on the balance of probabilities. Given the absence of corroborative documentary proof of an enforceable debt or of handing over the cheques, the appellate courts found that the presumption under Section 118 read with Section 139 was rebutted. The Supreme Court found no reason to hold those findings to be perverse or to be findings based on no evidence. [Paras 6, 11]

Findings that no enforceable debt was proved and that the accused rebutted the statutory presumption are upheld; the cheques were not proved to have been issued in discharge of a legally enforceable debt.

Concurrent findings of fact and appellate interference - perverse finding / no evidence test - Whether this Court should interfere with the concurrent findings of the First Appellate Court and the High Court - HELD THAT: - Applying the established principle that interference under Article 136 is warranted where concurrent findings are perverse or based on no evidence, the Court examined whether the appellate courts' assessments of oral and documentary evidence met that threshold. The Supreme Court concluded that both appellate fora had examined the evidence threadbare, reached conclusions adverse to the complainant on the central factual question (existence of an enforceable debt and possession/handing over of the cheques) and that those conclusions were neither perverse nor unsupported by evidence. Consequently, no error of law or jurisdiction arose to justify interference. [Paras 11, 12]

Concurrent findings of the appellate courts are not perverse or without evidence and do not warrant interference by this Court.

Final Conclusion: Petitions dismissed; concurrent appellate findings that the complainant failed to prove an enforceable debt and that the accused rebutted the statutory presumption are upheld and do not attract interference under Article 136.

Extraordinary jurisdiction under Article 142 - Enforcement of arbitral award - Interest on arbitral award - Modification of judicial orders in aid of enforcement of arbitral awards - Section 34 and Section 37 of the Arbitration and Conciliation Act, 1996

Extraordinary jurisdiction under Article 142 - Enforcement of arbitral award - Interest on arbitral award - Whether this Court should, in exercise of its extraordinary jurisdiction under Article 142, direct payment of the monetary Award and award interest in view of delay, the age of the appellant and the pendency of related reference proceedings. - HELD THAT: - The Court recorded that an Appellate Arbitral Tribunal Award dated 27th September, 2013 had directed credit of the decretal amount to the appellant and that the respondent has not paid or offered the amount since 9th May, 2017. Noting the advanced age of the appellant and that the appeals would remain pending until resolution of a referred question by a larger Bench, the Court found it appropriate to exercise its extraordinary jurisdiction under Article 142 to secure just and effective relief. For that purpose the Court modified the impugned judgment to direct payment of the decretal sum and to award simple interest at the rate of 12% per annum from 27th September, 2013 till payment, thereby balancing the need for enforcement of the arbitral award with equitable considerations arising from delay and the appellant's circumstances. The Court also observed that if proof is produced that the amount payable has been deposited with NSE and a lien exists, the respondent may apply to NSE for lifting the lien on producing proof of payment in terms of this order. [Paras 12, 15, 16, 19]

Impugned judgment modified: respondent directed to pay the decretal amount with simple interest at 12% per annum from 27th September, 2013 within two months; appeals allowed.

Final Conclusion: The Court exercised its Article 142 power to modify the impugned order and directed the respondent to pay the Awarded sum with simple interest at 12% per annum from the date of the Appellate Arbitral Tribunal Award, furnishing a two month timeline for payment; appeals allowed and no order as to costs.