TMI Tax Updates e-Newsletter
May 20,2026

Entitlement of the petitioner to regular bail during trial in view of long custody and incomplete prosecution evidence -Prolonged incarceration - Presumption of Innocence - Delay in trial - HELD THAT: - The Court noted that, although the allegations were serious and would not ordinarily justify grant of regular bail, the petitioner had remained in custody in the present case for more than five years and nine months. It further found that out of 51 prosecution witnesses only 27 had been examined and the trial was not proceeding at the desired pace, with substantial prosecution evidence still remaining. Applying the settled principle that an accused cannot be kept in custody for an indefinite period until the charges are proved in accordance with law, the Court held that the prolonged incarceration warranted consideration of bail notwithstanding the nature of the accusations. [Paras 9, 10, 11]

Regular bail was granted, subject to furnishing bail bonds and subject to conditions against influencing witnesses or tampering with evidence.

Final Conclusion: The petition was allowed and the petitioner was directed to be released on regular bail. The grant of bail was founded on the long period of custody already undergone and the slow progress of the trial, while preserving liberty to seek cancellation in case of misuse.

Maintainability of writ petition against pending criminal prosecution - Disputed questions of fact in writ jurisdiction - Offences punishable under the various provisions of Section 132 of the CGST Act, 2017 -Seeking quashing of the criminal complaint-HELD THAT: - Law is settled that, when facts are disputed or several factual issues are required to be gone into, this Constitutional Court in exercise of its high prerogative writ jurisdiction under Article 226 of the Constitution of India, as a self-imposed restriction, shall not interfere with such triable issues by conducting a fact finding inquiry.

The Court found that the criminal complaint was the foundation of the prosecution and that it contained several factual issues on the basis of which the proceeding had been initiated. It held that where such disputed factual matters require conclusive determination in a properly constituted criminal trial, the writ court, in exercise of jurisdiction under Article 226, ought not to undertake a fact-finding inquiry or interfere with triable issues. The Court further held that the decision in Suncraft Energy (P) Ltd.[2023 (8) TMI 174 - CALCUTTA HIGH COURT], having been rendered in a challenge to revenue action and not in relation to a pending criminal prosecution, was inapplicable. It was therefore left open to the petitioner to raise all points, including jurisdictional objections, before the jurisdictional criminal court during trial. [Paras 23, 25, 26, 27, 30]

The writ petition was dismissed as not fit for interference in writ jurisdiction, with liberty to the parties to urge all their points before the criminal court.

Final Conclusion: The Court declined to exercise writ jurisdiction to quash the pending criminal prosecution, holding that the controversy involved disputed factual issues to be decided in trial. The petitioner was left free to raise all factual and legal objections before the jurisdictional criminal court.

Violation of Principles of natural justice - No Opportunity of Personal hearing - Non-consideration of reply to show-cause notice - Mechanical adjudication - Invocation of provisions under Articles 226 and 227 of the Constitution of India. - HELD THAT: - The Court found from the reply in Form GST DRC-06 that the petitioner had in fact replied to the show-cause notice and had also opted for personal hearing. The original adjudication order proceeded on the manifestly erroneous basis that no reply had been furnished and did not disclose that any hearing had been granted. The subsequent rectification order, though acknowledging receipt of the reply, still did not reveal that any personal hearing had been afforded, nor did it deal with the points raised in the reply. The authority had thus proceeded mechanically, without independent application of mind, and in flagrant violation of principles of natural justice. Since the reply to the show-cause notice could not be treated as an empty formality, the impugned orders were unsustainable. [Paras 6]

The original order under Section 73 and the rectification order under Section 161 were quashed, and the matter was remanded to the adjudicating authority for fresh decision on merits after granting reasonable opportunity of hearing to the petitioner.

Final Conclusion: The writ petition was disposed of by setting aside both impugned orders on the ground of breach of natural justice. The matter was remitted to the adjudicating authority for fresh adjudication on merits after affording reasonable opportunity of hearing, with liberty to the petitioner to adduce evidence in support of his claim.

Entitlement to release detained consignment on payment under section 129(1)(a), despite the revenue's dispute regarding ownership, quantity, and supporting documents - Owner coming forward for payment of penalty - Dispute as to ownership of goods. - HELD THAT: - The Court held that Section 129 is a complete provision for detention and release of goods in transit and, on a strict and harmonious reading, contemplates release upon payment of the penalty prescribed either where the owner comes forward or where a person other than the owner does so. The provision does not indicate any legislative intent to continue detention as a charge or lien until the underlying demand is finally adjudicated; if the demand is ultimately sustained, recovery must proceed in accordance with law. In the present case, although the show-cause notice and demand recorded objections as to ownership, quantity, quality and the supporting documents, no contrary material was disclosed or identified to show that the petitioner's claim of ownership was untenable. The Court therefore treated the dispute as insufficient, at that stage, to deny release under Section 129(1)(a). The decisions in Riya Das [2026 (1) TMI 895 - CALCUTTA HIGH COURT], S.N. Trading Company & Anr. [2025 (7) TMI 618 - CALCUTTA HIGH COURT], M/s. Assam Supari Traders [2025 (8) TMI 1454 - CALCUTTA HIGH COURT] and JJ Traders [2025 (12) TMI 1535 - CALCUTTA HIGH COURT] were held not to alter that conclusion on the facts, as the revenue had not produced concrete material displacing the petitioner's assertion of ownership. [Paras 31, 32, 33, 34, 35]

The consignment was directed to be released in favour of the petitioner on compliance with Section 129(1)(a), and the revenue was left free to pursue recovery in accordance with law if the demand ultimately attained finality.

Final Conclusion: The writ petition was disposed of by directing release of the detained consignment to the petitioner on payment of penalty under Section 129(1)(a). The Court clarified that if the petitioner failed to pursue the statutory appeal and the demand became final, the revenue could recover it in accordance with law.

Validity of service of show cause notice - Affixation as mode of service - Premature recovery of tax demand - principles of natural justice - Recording of reasons under proviso to Section 78.

Validity of service of show cause notice - HELD THAT: - The Court held that Section 74A requires service of a show cause notice before a demand is raised, which is consistent with principles of natural justice. Under Section 169, service by affixation is permissible only where the other prescribed modes are not practicable. Since it was not disputed that no such impracticability had been declared before resorting to affixation, the show cause notice was not validly served. The demand order founded on such invalid service was therefore illegal. [Paras 6, 8, 9]

The show cause notice was held not to have been validly served, and the consequential demand order was declared illegal.

Premature recovery of tax demand - Recording of reasons under proviso to Section 78 - Recovery before expiry of statutory period - HELD THAT: - The Court held that Section 78 grants the taxable person three months from service of the order to make payment, and recovery before expiry of that period is permissible only if the proper officer, in the interest of revenue, records reasons in writing under the proviso. The recovery was made on the very day of the demand order by debiting the amount lying in the petitioner's electronic ledger, and it was fairly conceded that no such reasons had been recorded. The recovery action was therefore contrary to Section 78 and illegal. [Paras 7, 10]

The recovery made pursuant to the demand order was held illegal, and refund was directed.

Final Conclusion: The Court set aside the demand order and held the recovery made pursuant to it to be illegal. The State was directed to refund the amount recovered, while retaining liberty to proceed afresh against the petitioner in accordance with law.

Writ petitions - Challenged notices and tender conditions related to licences for a fixed period - Demand of GST under reverse charge mechanism - services received from the State Government of Tamil Nadu - Statutory corporation as distinct juristic entity - Best judgment assessment of unregistered person - Infructuous challenge on expiry of licence period.

Infructuous writ petition - Expiry of licence period - The challenge to the impugned notices requiring GST registration and payment, and to the tender conditions governing the bar licences, did not survive after expiry of the licence period. - HELD THAT: - The Court held that the licences in question had already expired and, therefore, any adjudication on the validity of the notices or the tender conditions would be purely academic. Since no effective relief could thereafter be granted in relation to those licences, the writ petitions concerning those notices and tender conditions were treated as having become infructuous. [Paras 60, 61, 163]

The writ petitions relating to the impugned notices and tender conditions were dismissed as infructuous.

Reverse charge mechanism - Service by Government - TASMAC not State Government - GST could not be demanded from the bar licensees under reverse charge on 99% of the licence fee paid under Rule 9B, because the service was not one supplied by the State Government within Notification No.13/2017-Central Tax (Rate). - HELD THAT: - There are also no indications that 99% of the licence fee which was requested to be paid directly to the Government was credited into the Consolidated Fund of the State of Tamil Nadu. Thus, in the absence of such foundational facts, it cannot be concluded that on the said amount, tax was payable under the Reverse Charge Mechanism.

The Respondents, Tamil Nadu State Marketing Corporation (TASMAC) is neither a Central Government nor a State Government or a Union territory or a Local Authority within the meaning of Sl.No.7 to Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 and / or SI.Nos to Notification No.13/2017-Central Tax (Rate) dated 28.06.2017.

These two Notifications apply only to supply of services by the “Central Government” or by the “State Government” or by the “Union Territory” or by the “Local Authority” to a “Business Entity”.

The Petitioners are independently liable to GST on the turnover arising from the supply of short eats (snacks) at the bar and on the amount received from the sale of used / empty bottles to the Respondents TASMAC.

The Court held that, for grant of bar licences under Rule 9B, the supplier of service was TASMAC itself. Though the tender conditions required 99% of the licence fee to be remitted to the Government and 1% to be retained by TASMAC as agency commission, that payment structure did not convert TASMAC into the State Government. TASMAC, being a company and a distinct juristic entity, could not be equated with the Central Government, State Government, Union Territory or Local Authority for the purpose of Notification No.13/2017-Central Tax (Rate). The reverse charge entry applies only where the specified service is supplied by those governmental entities to a business entity. Since that foundational requirement was absent, the demands raised on the petitioners on the footing that they were recipients of services from the State Government were unsustainable. [Paras 149, 150, 155, 156, 157]

The assessment orders and show cause notice, insofar as they sought to levy GST under reverse charge on the 99% licence fee, were held unsustainable and were quashed.

Threshold exemption - Taxable supplies of licensee - Best judgment assessment - The petitioners' own GST liability, if any, had to be examined with reference to their taxable supplies and the statutory machinery for unregistered persons, and not by invoking reverse charge on the licence fee. - HELD THAT: - The Court observed that the petitioners were independently liable, if at all, on their own supplies, namely sale of short eats and sale of used or empty bottles, and that their eligibility for exemption from registration and tax on the basis of turnover also required examination. As the impugned proceedings did not address those aspects and had proceeded on the wrong basis of reverse charge on licence fee, the proper course was recourse to the machinery under Section 63 for assessment of persons who failed to obtain registration though allegedly liable. Liberty was therefore given to the competent authority to initiate and complete proceedings under Section 63, subject to limitation, with exclusion of the period during which the writ petitions remained pending and a further period of three months thereafter. [Paras 159, 160, 161, 162, 163]

Fresh action, if warranted, was left open only under Section 63 of the respective GST enactments within the time stipulated by the Court.

Final Conclusion: The writ petitions challenging the notices and tender conditions were dismissed as infructuous on account of expiry of the licence period. The assessment orders and show cause notice founded on reverse charge liability over 99% of the licence fee were quashed, the Court holding that TASMAC is not the State Government for the purpose of Notification No.13/2017-Central Tax (Rate), while leaving it open to the authorities to proceed afresh under Section 63 in accordance with law.

Mandatory show cause notice under Section 73(1) - proper officer to serve a show cause notice - Summary in FORM GST DRC-01 together with an attachment showing determination of tax - Principles of natural justice. - HELD THAT: - The Court held that issuance of only the Summary of Show Cause Notice in Form GST DRC-01 along with the attachment to determination of tax did not satisfy the statutory requirement of a proper and prior show cause notice under Section 73(1). Relying on the earlier common judgment in W.P.[C] no. 3912/2024 and others, the Court reiterated that the summary is not a substitute for the notice contemplated by Section 73(1), and that the notice, statement under Section 73(3), and order under Section 73(9) are each required to be issued by the proper officer in the manner mandated by the statute and the rules. Since compliance with those requirements is a condition precedent for a valid order under Section 73(9), the impugned order was unsustainable in law. The authorities were, however, left free to proceed afresh in accordance with paragraph 29[F] of the earlier common judgment, and the petitioner was left at liberty to raise all grounds available in law in such fresh proceedings. [Paras 10, 11, 12, 14]

The impugned order was set aside and quashed for want of a valid prior show cause notice, with liberty to the authorities to initiate fresh proceedings in accordance with law.

Final Conclusion: The writ petition was allowed to the extent that the order passed under Section 73 was held unsustainable for absence of a proper prior show cause notice under Section 73(1). Liberty was reserved to the respondent authorities to proceed afresh in accordance with law and the earlier common judgment.

Grant of rights as supply of services - Auctioning or assigning rights to collect offerings remnants, coconuts offered by devotees, and abandoned clothes - Religious body as business entity - Exemption for agricultural operations - Renting of precincts of religious place - administration and management of temples and religious institutions - statutory autonomous body -Reverse charge on legal services - Reverse charge on honorarium and sitting fees.

Grant of rights as supply of services - Religious body as business entity - Taxability of auctioned collection rights - The assignment by auction or tender of exclusive rights to collect rice and coconuts offered by devotees, and to collect abandoned clothes left by pilgrims, was held to be a taxable supply of services and not a sale of goods. - HELD THAT: - The Authority held that the applicant is a body corporate and that its recurring, organised auctioning and tendering of exclusive rights for consideration answers the statutory concept of business. In these transactions, no identified or ascertained goods are sold at the time of contract; what is conferred on the successful bidder is an exclusive operational or commercial right for a specified period, for consideration flowing from the contractor to the applicant. The true nature of the arrangement was therefore the grant of a licence or right, with the contractor acting at its own commercial risk. On that basis, the auction of rights to collect offering-remnants and abandoned clothes was treated as a supply of services in the course or furtherance of business, and the religious or hygienic context was held not to alter that legal character. [Paras 9]

Receipts from auctioning or tendering these rights are liable to GST as consideration for supply of services.

Religious ceremony exemption - Public conveniences exemption - Licence to operate facilities - The auctioning of rights to perform religious rituals and the auctioning of rights to manage and maintain toilets and washrooms within temple premises were held not to qualify for exemption and were treated as taxable supplies of services. - HELD THAT: - As regards rituals, the Authority held that the exemption for conduct of a religious ceremony applies to the person actually conducting the ceremony, whereas the applicant was only granting, for consideration, a right or licence to a third party to perform such activity. As regards toilets and washrooms, the exemption for public conveniences was held to apply to the person actually supplying the convenience service to users. The applicant was not itself providing that service, but granting an exclusive commercial right to the contractor to operate and maintain the facilities and collect user charges in its own capacity, subject only to regulatory supervision. In both situations, the applicant's outward supply was characterised as a distinct licensing arrangement undertaken for consideration in the course or furtherance of business. [Paras 9]

GST was held payable on receipts from auctioning rights to perform rituals and from auctioning rights to operate and maintain toilets and washrooms.

Exemption for agricultural operations - Renting of precincts of religious place - The auctioning of rights to harvest coconuts from temple lands was held exempt as a service directly related to agricultural operations, and the auctioning of rights to operate pooja item stalls was held eligible for exemption as renting of precincts of a religious place, subject to the prescribed conditions. - HELD THAT: - In relation to coconuts standing on temple lands, the Authority treated the activity as one directly linked to harvesting of agricultural produce in its primary form and therefore covered by the exemption for services relating to agricultural operations, including harvesting. In relation to pooja item stalls, the arrangement was viewed as a grant of space within temple precincts and thus as renting of precincts of a religious place meant for the general public. Since the supply was incidental and ancillary to religious worship, it was held to fall within the relevant exemption entry, though only subject to the monetary threshold and other conditions contained in that notification. [Paras 9]

GST was held not payable on auctioning rights to harvest coconuts from temple lands, and exemption for pooja item stalls was held available subject to the notification conditions.

Reverse charge on honorarium and sitting fees - Reverse charge on legal services - Honorarium and sitting fees paid to the President and Members of the Board were held not liable to reverse charge, whereas legal services received from advocates were held liable under reverse charge. - HELD THAT: - The Authority held that although the applicant is a body corporate, the reverse charge entry relating to services supplied by a director applies only where the supplier has the legal status of a director. The President and Members of the Board were found to be statutory functionaries and not directors under company law or analogous corporate law, so honorarium and sitting fees paid to them did not attract reverse charge. In contrast, the entry relating to legal services supplied by advocates applies to a business entity, and the applicant, having been held to be engaged in business for GST purposes, was treated as the recipient business entity liable to discharge tax under reverse charge on advocate services. [Paras 9]

No GST was payable under reverse charge on honorarium or sitting fees paid to the President and Members, but GST was payable under reverse charge on legal services received from advocates.

Final Conclusion: The Authority held that the Travancore Devaswom Board, though a statutory religious body, is a body corporate engaged in business for GST purposes, and that most auctioned rights in question were supplies of services by way of grant of licence or commercial rights. Accordingly, GST was held payable on auctioned rights relating to offering-remnants, abandoned clothes, rituals, toilets and on advocate services under reverse charge, while exemption was recognised for harvesting coconuts from temple lands and for pooja item stalls subject to the prescribed conditions, and reverse charge on honorarium and sitting fees was rejected.

Royalty - tax deduction at source (TDS) under section 195 - income deemed to accrue in India u/s 9(1)(vi) - Double Taxation Avoidance Agreement (DTAA) interpretation - end-user licence agreements (EULA) and distribution agreements - copyright versus copyrighted article; doctrine of first sale / principle of exhaustion - retrospective amendment - Explanation 4 to section 9(1)(vi) - principle of proportionality in section 195(2) -

HELD THAT:- The issue involved in the instant matter is covered by the decision of this Court in “Engineering Analysis Centre of Excellence Private Limited [2021 (3) TMI 138 - SUPREME COURT] and nothing survives in the present matter. The Special Leave Petition is, therefore, dismissed.

Bogus purchases - Profit element in accommodation entries - Estimation of disallowance - Income component theory - Restriction of addition on alleged bogus purchases to 6% - as decided by HC Revenue's challenge to the Tribunal's restriction of disallowance to 6% was rejected.

HELD THAT: -We are not inclined to interfere with the impugned order in exercise of our jurisdiction under Article 136 of the Constitution of India.

Special Leave Petition is, accordingly, dismissed and the accompanying interlocutory application(s), if any, stands disposed of.

TDS u/s 195 - Royalty or FTS or business profits - payment made to NTOs - income deemed to accrue in India under section 9(1)(vi) - Double Taxation Avoidance Agreement (DTAA) interpretation - end-user licence agreements (EULA) and distribution agreements - copyright versus copyrighted article; doctrine of first sale / principle of exhaustion - retrospective amendment - review petitions - HELD THAT:- We find that the very same judgment [2021 (3) TMI 138 - SUPREME COURT] and connected matters, which is sought to be subjected to review before us, was the subject matter of Review Petition [2024 (4) TMI 1168 - SC ORDER] in relation to some of the other appeals that formed part of the batch of connected matters.

Those review petitions in Review Petition were taken up by another 3-Judge Bench in Chambers, and by order by circulation [2024 (4) TMI 1168 - SC ORDER] that 3-Judge Bench deemed it fit to dismiss the review petitions, not only on the ground of delay, but also on merits. The order reflects that the 3-Judge Bench had gone through the review petitions and the connected papers and opined that it did not find any justifiable reason to entertain the review petitions.

In the light of the aforestated order, it would not be proper for this Bench to reopen the issue and consider the present review petitions on merits once again. The judgment [2021 (3) TMI 138 - SUPREME COURT] is presently in operation as regards the parties to the order [2024 (4) TMI 1168 - SC ORDER] dismissing the earlier review petitions, and it cannot be otherwise in relation to the parties to the present review petitions, who are identically situated. Review petiton dismissed.

Permanent establishment - business profit attributable to the PE in India - Income taxable in India - As decided by HC [2013 (3) TMI 900 - BOMBAY HIGH COURT] question raised in this appeal has been answered in favour of the assessee

appellant submitted that an application seeking permission to withdraw this appeal has been filed as the tax effect in the matter is below the prescribed monetary limit as per CBDT Circular No. 09/2024 dated 17.09.2024.

HELD THAT:- Application filed by the appellant is allowed and the Civil Appeal is dismissed as withdrawn, keeping all questions of law, if any, open.

Application filed by the respondent also stands disposed of.

Validity of order passed u/s 143(3) r.w.s.144B - denial of Principles of natural justice - Failure to consider reply filed by assessee - non-consideration of the adjournment request

HELD THAT: - The Court found from the record that the assessee had sought time up to 28.02.2026, but the respondents could not show whether that request was rejected or, if accepted, what date had been fixed for response. In that situation, the time available to the assessee remained uncertain. Since the assessee did file a reply on 28.02.2026, it was incumbent on the AO to consider that reply before passing the assessment order. The impugned order contained no reference to the reply or to the material and contentions accompanying it. The Court held that, when an adjournment is sought, the Assessing Officer should specifically communicate whether the request is granted and intimate the next date of hearing through the prescribed mode.

Non-consideration of the reply and failure to clearly communicate the position on adjournment amounted to infringement of the assessee's right of hearing and violation of principles of natural justice. [Paras 19, 20, 21, 22, 23]

The assessment order and consequential notice of demand were quashed, and the matter was remitted for fresh assessment after due intimation of hearing and consideration of the assessee's reply already filed.

Final Conclusion: The writ petition was allowed on the ground of breach of natural justice. The impugned assessment order and demand notice were set aside, and the Assessing Officer was directed to complete the assessment afresh after giving due hearing and considering the reply dated 28.02.2026.

Validity of order passed u/s 143(3) read with Section 144B - denial of Principles of natural justice - Failure to consider reply - Reasoned speaking order - assessment order passed on the same day as the filing of the assessee's detailed reply - HELD THAT: - The Court held that, notwithstanding the respondents' contention that sufficient opportunities had earlier been granted, the determinative fact was that the detailed reply uploaded by the assessee on 24.03.2026 was not considered before the assessment order was passed on that very day. An assessment made in such circumstances could not be sustained, since the authority was required to consider the reply on record and pass a reasoned speaking order after affording due opportunity of hearing, including personal hearing if required. The matter was therefore not examined on merits and was directed to be reconsidered on that limited procedural basis. [Paras 15, 16, 17, 18, 19]

The impugned assessment order was quashed, and the assessing authority was directed to consider the reply filed on 24.03.2026 and pass a reasoned speaking order after giving the petitioner an opportunity of hearing.

Final Conclusion: The writ petition was disposed of by setting aside the impugned assessment order on the ground that the assessee's detailed reply filed on the same day had not been considered. The assessing authority was directed to reconsider the matter and pass a reasoned order after affording hearing, without any adjudication on the merits of the assessment.

Refusal of registration u/s 12A - objects were confined to the benefit of its members and did not satisfy the definition of charitable purpose under section 2(15)

HELD THAT: - The Court found no reason to depart from the view adopted by the Tribunal in Jamiatul Banaat Tankaria [2024 (3) TMI 376 - ITAT AHMEDABAD] on which the Tribunal had relied while allowing the assessee's appeal. The said judgment has travelled to the Supreme Court which was filed against the judgment and order [2024 (10) TMI 712 - GUJARAT HIGH COURT] has been dismissed vide order [2025 (8) TMI 1808 - SUPREME COURT]

On that basis, the Court held that denial of registration under section 12A by examining the objects of the respondent trust in the manner done by the CIT(E) was illegal, and that no substantial question of law survived for consideration. [Paras 4]

The Tribunal's order setting aside the refusal of registration was upheld and the Revenue's appeal was dismissed.

Final Conclusion: The High Court held that the refusal of registration to the respondent trust was unsustainable in view of the settled position accepted by the Tribunal and affirmed thereafter. The tax appeal was therefore dismissed, and the proposed substantial question of law was held not to arise.

Disallowance of exemption claimed u/s 54B - Exemption on reinvestment in agricultural land - Non-deposit in Capital Gains Account Scheme - Utilization of sale consideration within statutory period

Whether Deduction u/s 54B denied merely because the unutilised amount was not deposited in the Capital Gains Account Scheme, when the assessee had in fact invested the sale consideration in purchase of agricultural land within two years from the date of transfer? - HELD THAT: - The Tribunal found that the fact of purchase of new agricultural land out of the sale proceeds of the original agricultural land was not disputed. It also recorded that the assessee had spent the sale consideration for purchase of new agricultural land within the period of two years prescribed u/s 54B.

Following the principle applied by K. RAMACHANDRA RAO [2015 (4) TMI 620 - KARNATAKA HIGH COURT] in relation to analogous capital gains exemption, the Tribunal held that the requirement of deposit in the Capital Gains Account Scheme operates where the consideration is not utilised within the prescribed period, and that exemption cannot be denied where the amount stood actually invested within the statutory time. In the absence of any contrary precedent or material to dislodge the finding of actual reinvestment, the deletion of disallowance was upheld. [Paras 6, 7, 8]

The assessee was held entitled to deduction u/s 54B and the Revenue's challenge to deletion of the disallowance was rejected.

Final Conclusion: The Tribunal upheld the order granting deduction under section 54B, holding that actual investment of the sale consideration in agricultural land within the statutory period was sufficient notwithstanding non-deposit in the Capital Gains Account Scheme. The Revenue's appeal was dismissed.

TP Adjustment - Certified segmental financials - Arm's length price of ECB interest - Outstanding receivables as international transaction - Set off of brought forward losses

Transfer pricing Adjustment - Certified segmental financials - certified segmental financial information furnished in the transfer pricing documentation rejected on an ad hoc basis merely because it did not match the segment disclosure in the audited financial statements - HELD THAT: - The Tribunal found that the assessee had prepared segmental results on a refined allocation method by directly identifying costs to the respective segments and allocating the balance on relevant cost drivers such as FTE hours, machine hours and turnover, and that the segmental data was certified by a Cost and Management Accountant. The discrepancy with the audited financial statements had been specifically explained on the basis that the audited segment disclosure followed AS-17 and did not go into business-segment-wise AE and non-AE bifurcation. The TPO had overlooked this explanation and had instead redistributed costs on revenue proportion, which would mechanically result in uniform profitability across segments and distort the true position. In the absence of any investigation, supporting material or pointed defect in the assessee's method of allocation, such rejection of the certified segmental results was held unsustainable. [Paras 19, 20, 21]

The matter was restored to the TPO for fresh consideration of the certified segmental financial results furnished by the assessee in its transfer pricing documentation.

Arm's length price of ECB interest - RBI-approved borrowing rate - Ad hoc benchmarking - Interest paid on external commercial borrowings at LIBOR plus 3% was at arm's length or LIBOR plus 2% - HELD THAT: - The Tribunal noted that the assessee had benchmarked the ECB interest through a detailed transfer pricing analysis and that the borrowing had been undertaken with prior RBI approval. Since the contracted rate of LIBOR plus 3% was within the ceiling prescribed by RBI, the Tribunal held that this was a relevant and sufficient indicator of arm's length pricing in the facts of the case. The TPO had neither undertaken a proper comparability analysis under Chapter X nor brought any material on record to justify substituting the rate with LIBOR plus 2%. The ad hoc rejection of the assessee's benchmarking was therefore not sustainable. [Paras 23, 24, 26, 27]

The benchmarking adopted by the assessee for ECB interest at LIBOR plus 3% was upheld.

Outstanding receivables as international transaction - Invoice-to-invoice benchmarking - LIBOR plus 200 basis points - whether Outstanding receivables from AEs constituted a separate international transaction, and the arm's length interest thereon had to be recomputed on the basis already adopted in the assessee's own earlier years? - HELD THAT: - The Tribunal rejected the contention that outstanding receivables were not an international transaction. At the same time, it accepted that the computation had to conform to the rule laid down in the assessee's own case for earlier years, namely, that where the receivables were in foreign currency, the applicable benchmark would be LIBOR plus 200 basis points. It further accepted the method that such imputation must be made on an invoice-to-invoice basis so that the actual period of delay for each invoice can be worked out. [Paras 28, 29]

The AO/TPO was directed to recompute the arm's length interest on outstanding receivables by applying LIBOR plus 200 basis points on an invoice-to-invoice basis in line with the earlier orders in the assessee's own case.

Set off of brought forward losses - Verification of claim - Amalgamation losses - HELD THAT: - The Tribunal found that adjudication of the claim for brought forward losses taken over on amalgamation involved verification of the record, including the assessee's compliance with the statutory requirements and the figures claimed in the return. As the DRP had already directed the AO to verify the record and allow the claim in accordance with law, no infirmity was found in that course. [Paras 33]

The DRP's direction to the AO to verify and allow the claim for brought forward losses in accordance with law was upheld.

Final Conclusion: The appeal was partly allowed. The rejection of the certified segmental financials was set aside and that issue was remitted to the TPO; the assessee's benchmarking of ECB interest at LIBOR plus 3% was accepted; interest on outstanding receivables was directed to be recomputed at LIBOR plus 200 basis points on an invoice-to-invoice basis; and the direction to verify the claim of brought forward losses was upheld.

Valuation of unquoted shares - addition u/s 56(2)(vii)(c) - Rule 11UA - Look-through valuation - Sham transaction - Retrospective application of amended valuation rule

HELD THAT: - The Tribunal held that the property received by the assessee was the shares of the holding companies. Therefore, the charge under section 56(2)(vii)(c), if at all attracted, had to be tested only with reference to those shares and by applying the statutory formula under Rule 11UA as it stood for the relevant years. Under the unamended Rule, the fair market value of unquoted equity shares was based on the book value of assets and liabilities appearing in the balance sheet, and not on a look-through substitution of the fair market value of shares or assets held by the investee company. By valuing the underlying companies instead of the shares actually acquired, the AO departed from the prescribed method and adopted a valuation mechanism not contemplated for the years under appeal. [Paras 29, 30, 32, 33, 35]

The additions could not be sustained because the valuation adopted by the Assessing Officer was contrary to section 56(2)(vii)(c) read with Rule 11UA applicable for the relevant assessment years.

Retrospective application of amended valuation rule - Sham transaction allegation - Colourable device - HELD THAT: - The Tribunal held that the Assessing Officer had in substance applied the later amended Rule 11UA, which introduced a look-through valuation of underlying shares and assets, to earlier assessment years, which was impermissible. It further held that the Revenue's case of sham or colourable device did not assist the addition as framed, because the Assessing Officer had chosen to tax the transaction under section 56(2)(vii)(c), a provision which proceeds on the footing of a real transaction alleged to be at undervalue. Once that provision was invoked, the valuation had to strictly conform to Rule 11UA, and the addition could not be supported by abandoning the statutory method on the basis of general allegations of tax avoidance. [Paras 34, 35, 36, 37, 38]

The Revenue's challenge failed; the deletion of the additions for both years was upheld.

Final Conclusion: The Tribunal upheld the orders deleting the additions made under section 56(2)(vii)(c) for A.Ys. 2015-16 and 2016-17. It held that the Assessing Officer had wrongly valued the underlying companies by applying a look-through method and, in effect, the amended Rule 11UA retrospectively, instead of valuing the shares actually purchased in accordance with the Rule as then in force.

Ex parte assessmentand ex-parte first appellate proceedings - Failure to consider additional evidence - rule 18 of the ITAT-Rules, 1963 - HELD THAT: - The Tribunal found that there was no evidence or submission before either the Assessing Officer or the first appellate authority, and that the proceedings had culminated ex parte because of the assessee's non-cooperation. At the same time, it noted that the assessment proceedings were conducted during the COVID-19 period and that documents and written submissions were stated to have been filed before the appellate authority as additional evidence.

Since the dispute had not been examined on the basis of cogent material and proper assistance, and the appellate stage also reflected procedural deficiency in dealing with the additional material, the matter was held fit for de novo assessment so that the issues could be verified afresh on evidence, without any comment on the merits. [Paras 6, 7]

The impugned appellate order was set aside and the matter was remanded to the Assessing Officer for verification of the issues in the light of evidence and for framing a fresh assessment.

Final Conclusion: The Tribunal set aside the ex parte appellate order and restored the matter to the Assessing Officer for fresh adjudication after considering evidence and explanations to be furnished by the assessee. The appeal was allowed for statistical purposes.

Share premium valuation u/s 56(2)(viib) - Discounted Cash Flow method - Assessing Officer's power to disturb prescribed valuation method - Rule 11UA valuation - whether addition u/s 56(2)(viib) could be sustained where the assessee had valued its shares by the DCF method prescribed under Rule 11UA and the Assessing Officer rejected that valuation by comparing projections with subsequent actual figures and by also attempting valuation under NAV method?

HELD THAT: - The Tribunal held that once the assessee exercises the statutory option of adopting a prescribed method for valuation of unquoted equity shares, the Assessing Officer cannot discard that method merely because later actual results differ from projected figures. A valuation under the DCF method is necessarily based on future projections and cannot be reworked by replacing projected financials with actual performance of subsequent years.

AO also could not shift to the NAV method when that was not the method chosen by the assessee. On the facts, the assessee had obtained a valuation report from a qualified chartered accountant and the Revenue did not bring cogent material to show perversity in the method adopted; the addition therefore ran contrary to the settled legal position governing section 56(2)(viib). [Paras 17, 18, 19, 20, 21]

The addition made on the share premium was deleted and the assessee's appeal was allowed.

Final Conclusion: The Tribunal held that the Revenue was not justified in rejecting the assessee's DCF valuation by substituting projected figures with actual results or by shifting to NAV valuation. The addition made under section 56(2)(viib) was vacated and the assessee's appeal was allowed.

Applicability of section 56(2)(x) - Receipt of immovable property - Strict construction of deeming fiction - difference between stamp duty value and purchase consideration of immovable property was sustainable for Assessment Year 2017-18

HELD THAT: - The Tribunal held that section 56(2)(x), introduced with effect from 01.04.2017, by its own language applies only where immovable property is received on or after that date, and the deeming provision becomes operative from Assessment Year 2018-19 onwards. Since the appeal before the Tribunal concerned Assessment Year 2017-18, the excess of stamp duty value over stated consideration could not be brought to tax under that provision.

Tribunal further held that a deeming fiction must be strictly construed and cannot be enlarged. Authorities below had invoked only section 56(2)(x), and not sections 69 or 69C, whose conditions are materially different. The Tribunal therefore deleted the addition and treated the remaining contentions as academic.

The addition made u/s 56(2)(x) and sustained in appeal was deleted as that provision had no application to Assessment Year 2017-18.

Final Conclusion: The Tribunal held that section 56(2)(x) was not applicable to Assessment Year 2017-18 and, on that ground, deleted the addition based on the difference between stamp duty value and purchase consideration. The other grounds were left as academic.

Non grant of TDS credit - Credit for prepaid taxes - Interest under sections 234A and 234B

Whether Denial of TDS credit in the assessment order could not be sustained where the Revenue had already rectified the earlier intimation and granted the credit? - HELD THAT: - The Tribunal held that the first appellate authority failed to appreciate the true controversy. Though the TDS credit had initially been denied in the intimation, that mistake stood rectified by the Revenue in the subsequent rectification order, leaving no surviving grievance against the earlier intimation. The Assessing Officer, while passing the scrutiny assessment, appears to have omitted to consider that rectification order.

Tribunal reiterated that credit of tax already paid by way of TDS is a rightful due of the assessee and cannot be denied merely because of an inadvertent omission. Since the Revenue did not assert any mismatch in credit, any other deficiency in the claim, or failure to offer the corresponding income to tax, the denial of TDS credit was unjustified. On that basis, the consequential levy of interest under sections 234A and 234B was also directed to be deleted. [Paras 5]

The assessee was held entitled to the claimed TDS credit, and the interest levied under sections 234A and 234B was deleted.

Final Conclusion: The Tribunal allowed the appeal and held that the assessee was entitled to the TDS credit claimed for the relevant assessment year. The denial of such credit in the assessment order was set aside, with a consequential direction to delete interest levied under sections 234A and 234B.

Nature of receipt - subsidy received by the assessee under the Jammu & Kashmir industrial policy, in the form of refund of GST/excise duty

HELD THAT: - The Tribunal held that the Assessing Officer was justified in not entertaining a claim made only through a revised computation, since such claim was not part of the return or a revised return. However, on the merits of the claim raised before the appellate forum, the Tribunal examined the Industrial Policy dated 14.06.2002 and Notification No. 56/2002 and found that the incentive granted to eligible units was in the nature of exemption/refund of excise duty for a specified period.

Following the decision in ACIT vs. Gravita Metal Inc. [2023 (6) TMI 1438 - ITAT AMRITSAR] as affirmed by the High Court in PCIT vs. Gravita Metal Inc. [2024 (11) TMI 97 - JAMMU AND KASHMIR AND LADAKH HIGH COURT] and noting that no contrary material was produced by the Revenue, the Tribunal held that such refund did not partake the character of a revenue receipt and was to be treated as a capital receipt not chargeable to tax. [Paras 5, 6, 8, 9, 10]

The subsidy received by way of refund of GST/Excise Duty under the New Industrial Policy was held to be a capital receipt and not exigible to tax.

Final Conclusion: The Tribunal allowed the appeal and held that the GST/Excise Duty refund received under the Jammu and Kashmir New Industrial Policy was a capital receipt not liable to tax for the assessment year in question.

Refund of terminal excise duty - The HC affirmed that where supplies made against international competitive bidding were admittedly entitled to exemption from terminal excise duty, refund of duty already paid could not be denied. - HELD THAT:- The Special Leave Petition was dismissed, and eight weeks' time was granted to the petitioner to refund the amount to the respondent.

Challenged the order cancelling the scrips and imposing penalty - Alternative statutory remedy - Suspension and cancellation of Importer-exporter Code Number - Violation of the principles of natural justice - Audi alteram partem - Denied Entity List.

Alternative statutory remedy - Appellate remedy. - HELD THAT: - The Court held that, insofar as the order cancelling the scrips and imposing penalty was concerned, the appellant had rightly been relegated to the statutory remedy under Section 15/16 of the Act. The Court therefore affirmed that part of the order of the learned Single Judge and kept all issues open to be urged before the statutory authority. [Paras 10, 11]

The relegation of the appellant to the statutory appellate remedy against cancellation of scrips and penalty was upheld.

Suspension and cancellation of Importer-exporter Code Number - Principles of natural justice - Denied Entity List - The communication marking the appellant to the Denied Entity List was unsustainable for non-compliance with the statutory requirements governing suspension or cancellation of IEC and for violation of natural justice. - HELD THAT: - As per the statutory requirement of Section 7 of the Act, any person or entity is not authorized to engage in the business of import or export without obtaining the Importer-exporter Code Number and in a situation where such IEC Number is marked to “Denied Entity List”, such an entity in respect of which such communication is issued is legally barred from making any exports or imports.

The Court construed Section 8 of the Act as embodying the requirements of natural justice by mandating a written notice disclosing the grounds of the proposed action, an opportunity to make a representation, and a hearing before suspension or cancellation of the IEC. The impugned communication merely stated that the appellant's IEC/licence had been marked to the Denied Entity List and disclosed neither reasons nor compliance with the statutory procedure. Since, under Section 7, a person cannot lawfully carry on import or export without an IEC, such marking effectively disables the entity from conducting business and availing attendant benefits; the Court therefore treated the consequence as one attracting strict compliance with Section 8. The show cause notice relied upon by the respondents was held insufficient, as it did not satisfy the statutory requirement in relation to the impugned action. The communication was thus held to have been issued in flagrant violation of natural justice and in derogation of Section 8. [Paras 18, 19, 20, 21, 22]

The communication dated 12.09.2024 was quashed, with liberty to the respondents to proceed afresh in accordance with Section 8 after issuing a compliant notice and granting due opportunity.

Final Conclusion: The appeal was partly allowed. The order relegating the appellant to the statutory remedy against cancellation of SEIS scrips and penalty was maintained, but the communication placing the appellant in the Denied Entity List was quashed for breach of natural justice and non-compliance with Section 8 of the Act.

Re-export of the goods - Seeking to grant all necessary permissions to facilitate such re-export. - HELD THAT:- The authorities were directed, by way of indulgence and having regard to the facts and circumstances, to permit re-export of the goods and grant necessary permissions to facilitate such re-export, with the matter being stood over. The Court further observed that if re-export was not possible by the adjourned date despite the earlier request for extension, that would furnish a clear ground for rejection of the petition.

Applicability of Rule 2(a) of the General Rules - Classification of goods - imported parts as complete mobile phones and classify them under CTI 8517 14 00/8517 12 19 instead of as mobile phone parts - availed services of a Chartered Engineer to ascertain the exact nature of the goods - Burden of proof in reclassification - Essential character test - Whether rule 2(a) of the GIR would be applicable to the goods imported by the appellant by treating the imported goods as ‘complete’ mobile phones and not as ‘parts’ of mobile phones. -HELD THAT: - The Tribunal held that rule 2(a) applies only where incomplete or unfinished goods possess the essential character of the complete or finished article. On the material relied upon by the department itself, the Chartered Engineer had stated that the imported goods were parts received in disassembled or unassembled condition, formed an incomplete mobile phone, and did not constitute a complete article because battery, camera, software and further processes, including testing, were still required. The subsequent clarification also did not conclusively establish communication functionality without approved laboratory testing. In these circumstances, the department failed to conclusively prove that the imported goods had the essential character of complete mobile phones. The Tribunal further held that, where the department seeks to disturb the declared classification and reclassify the goods under a different tariff entry, the burden lies on the department to substantiate such reclassification, and that burden had not been discharged. [Paras 18, 19, 20, 21, 22]

The reclassification under CTI 8517 14 00/CTI 8517 12 19 was unsustainable, and the order confirming differential duty, interest, penalty and consequential confiscation was set aside.

Final Conclusion: The Tribunal held that the department failed to establish that the imported goods had the essential character of complete mobile phones so as to attract rule 2(a). The reclassification, and the consequential demand of duty with interest, penalty and confiscation, were therefore set aside and the appeal was allowed.

Extended period of limitation - Wilful misstatement or suppression of facts - Classification dispute - Intent to evade duty - Admissibility of statements -Confiscation for misdeclaration - Penalty under section 114A.

Extended period of limitation - Self-assessment - Classification dispute - HELD THAT: - The decision of the Supreme Court in Commissioner of Central Excise, Ahmedabad v. M/s. Urmin Products P. Ltd. & Others-[2023 (10) TMI 1112 - SUPREME COURT],on which reliance has been placed by the learned authorized representative of the department, does not come to the aid of the department. This was a case where the assessee had deliberately changed the classification to change advantage of lower rates of duties by very clearly drafting the letter without giving any details of the product which they were manufacturing at the material time. This apart, in the present case, as noticed above, there was no allegation on this aspect in the show cause notice.

This issue was examined by a division bench of this Tribunal in M/s GD Goenka Private Limited vs. The Commissioner of Central Goods and Services Tax, Delhi South- [2023 (8) TMI 995 - CESTAT NEW DELHI]and it was held that this cannot be made a ground to invoke the extended period of limitation.

The Tribunal held that, in a case of self-assessment, adoption of a particular tariff classification by the importer is a matter of view and understanding, and mere disagreement by the department on the proper heading does not by itself establish wilful misstatement or suppression with intent to evade duty. The appellant had furnished the relevant particulars in the Bills of Entry, and the goods were physically examined before clearance. The finding in the order that the appellant had changed classification to suit lower duty could not be sustained because that was not the allegation in the show cause notice. The reliance placed on statements recorded under section 108 was also held to be impermissible since the procedure under section 138B had not been followed. The Tribunal further held that the mere existence of a self-assessment regime cannot, by itself, justify invocation of the extended period. On that basis, the demand under section 28(4) was unsustainable, and the penalty under section 114A, being founded on the same allegation of suppression, also could not survive. [Paras 15, 16, 17, 18, 19]

The demand raised by invoking the extended period and the penalty imposed on the same basis were set aside.

Confiscation for misdeclaration - Wrong classification - Goods are not liable to confiscation merely because the importer adopted a wrong tariff classification in the Bills of Entry. - HELD THAT: - The Tribunal held that confiscation under section 111(m) is attracted where there is misdeclaration of goods, but not where the dispute is only as to classification. Even if the importer wrongly classifies the goods or wrongly self-assesses duty, that by itself does not render the goods liable to confiscation. Applying that principle, the confiscation ordered in the present case was held to be unjustified. [Paras 20]

The confiscation of the goods was set aside.

Final Conclusion: The Tribunal held that the case involved only a classification dispute and that the ingredients necessary for invoking the extended period were not established. Consequently, the duty demand raised under the extended period, the penalty, and the confiscation were all set aside, and the appeal was allowed.

Tariff classification of good - Imported blood glucose meters and similar diagnostic instruments - classifiable under Heading 90.27 of the Customs Tariff Act, 1975 or under Heading 90.18 - Specific heading over general heading - Diagnostic instruments for chemical analysis - Entitlement to exemption under Notification No. 24/2005-Cus. - HELD THAT:- The Tribunal held that the classification dispute was no longer res integra in view of the earlier Tribunal decision in Bayer Pharmaceuticals (P.) Ltd. Vs. Commissioner of Cus., Mumbai [2015 (11) TMI 943 - CESTAT MUMBAI], which had treated glucometers as instruments for chemical analysis falling under Heading 90.27. Adopting that reasoning, the Tribunal accepted that Heading 90.27, being the more specific entry for instruments for chemical analysis, prevailed over the more general medical instruments entry under Heading 90.18. It also noted that the earlier view had been followed in M/s. Abbott Healthcare Pvt Ltd.[2025 (6) TMI 1102 - CESTAT MUMBAI] and that such view stood affirmed by the Supreme Court [2026 (3) TMI 311 - SC ORDER]. On that basis, the Tribunal held that the appellant had correctly classified the goods under CTI 90278090 and had rightly availed the exemption. [Paras 7, 8, 9, 10]

The reclassification adopted in the impugned order was rejected, and the classification under CTI 90278090 with the claimed exemption was upheld.

Final Conclusion: The Tribunal allowed the appeal, holding that the imported subject goods were correctly classifiable under CTI 90278090 and were entitled to the benefit of Notification No.24/2005-Cus. The impugned order demanding differential duty and imposing penalty on the basis of classification under CTI 90189099 was set aside.

Maintainability of appeal - allegations of smuggling racket are merely on surmises and conjectures - Reasoned exercise of remand power - Exoneration in absence of corroborative evidence - adverse inference - natural justice - retraction of statement.

Maintainability of appeal - Revision under section 129DD. - HELD THAT: - The Tribunal held that the appellant was neither a passenger, crew member nor a person transferring residence, and no goods had been seized from his possession. The statutory provisions concerning baggage, baggage allowance and the Baggage Rules, relied upon by the Department, were therefore inapplicable to him. On that basis, and for the same reasons adopted from the connected order, the objection to maintainability under section 129A was rejected, and the request to defer the matter for the period prescribed for cross-objection was also declined. [Paras 5]

The appeal was held maintainable before the Tribunal and the preliminary objections of the Department were rejected.

Reasoned exercise of remand power - Exoneration in absence of corroborative evidence - Non-perversity of adjudication findings - The Commissioner (Appeals) was not justified in setting aside the appellant's exoneration and remanding the matter without addressing the adjudicating authority's findings on lack of evidence against him. - HELD THAT: - The adjudicating authority had examined the material concerning the appellant and recorded that the statement implicating him had been retracted, the WhatsApp chats did not show any advice or direction by him to bring the watches into India without payment of duty, and there was no substantial or corroborative evidence linking him to the alleged smuggling. The Department had also not examined the relevant persons in adjudication for treating their statements as relevant, and no admission of involvement by the appellant was shown. In these circumstances, the adjudicating authority's view exonerating the appellant was held to be a reasonable view and not perverse. The Commissioner (Appeals), however, remanded the matter in a summary manner without recording any reason for reconsidering the appellant's exoneration or indicating any illegality in those findings. The Tribunal therefore held that such summary reversal of factual findings in favour of the appellant could not be sustained. [Paras 10, 11, 12, 14, 15]

The remand order insofar as it concerned the appellant was set aside and the order exonerating him was restored.

Final Conclusion: The Tribunal rejected the preliminary objection to maintainability and held that the Commissioner (Appeals) had wrongly remanded the matter against the appellant without reasons. The impugned order, insofar as it concerned the appellant, was set aside and the adjudicating authority's order exonerating him was restored.

Export misdeclaration and confiscation - Diversion of duty-free gold under conditional Notification No. 57/2000-Cus - Penalty for conscious facilitation and use of false documents - Redemption fine in absence of goods - Preponderance of probability - Strict construction of exemption notifications.

Export misdeclaration - Confiscation of export goods - Material false declaration - HELD THAT: - The Tribunal held that scientific examination of the recalled consignment established that the goods were bangles with very low gold content and not 22 carat gold jewellery as declared. The discrepancy between the export documents and the goods actually found was fundamental and not a minor variation. Since the declaration was demonstrably false in material particulars and was used to obtain the benefit of Notification No. 57/2000-Cus., the case squarely attracted confiscation under Sections 113(i) and 113(ja). Procedural objections regarding recall, sealing and absence of foreign customs confirmation were held insufficient to displace the substantive scientific evidence. [Paras 22, 23, 24, 25, 26]

The confiscation of the export goods was upheld.

Conditional exemption - Diversion of duty-free gold - Strict compliance with notification conditions - Diversion of duty-free gold imported under Notification No. 57/2000-Cus. stood established. - HELD THAT: - The Tribunal found a substantial mismatch between the quantity of duty-free gold procured and the gold actually found in the exported jewellery, and held that no documentary trail or manufacturing records were produced to explain the shortfall. Statements of job workers and the scientific analysis of the exported goods corroborated that the imported gold was not used for the declared export purpose. Applying the principle that a beneficiary claiming a conditional exemption must strictly prove compliance, the Tribunal held that the unaccounted quantity of duty-free gold was diverted, making denial of exemption and confiscation under Section 111(o) legally justified. [Paras 37, 39, 40, 41, 42]

The finding of diversion and confiscability of the diverted gold was affirmed, while no redemption fine was sustained because the goods were unavailable.

Nominated agency liability - Section 28(1) and Section 28(4) - Bond-based recovery under exemption scheme - Further duty demand and fraud-based proceedings against HDFC Bank were not sustainable beyond the duty and interest already discharged through the statutory bond mechanism. - HELD THAT: - The Tribunal distinguished between recovery of customs duty flowing from Notification No. 57/2000-Cus., the Foreign Trade Policy framework, Circular No. 27/2016-Cus. and the executed bonds, and fraud-based consequences under Section 28(4). It held that a nominated agency remains liable to discharge duty on export default under the exemption scheme, but fraud, collusion, wilful suppression or intentional misstatement by the exporter cannot automatically be imputed to the nominated agency. Since HDFC Bank had paid the entire duty with interest before issuance of the show cause notice and no evidence of collusion or conscious involvement was found, the case was correctly treated under Section 28(1) and not Section 28(4). [Paras 51, 52, 53, 54, 55]

The adjudicating authority's view that no further fraud-based duty proceedings survived against HDFC Bank was upheld and the Department's challenge was rejected.

Mens rea in customs penalties - Abetment and conscious facilitation - Use of false declarations - Penalties were sustainable only against those noticees whose role disclosed conscious involvement, active facilitation, deliberate procedural deviation or knowing use of false export documentation, and were not sustainable where the evidence showed only procedural lapse, labour activity or absence of collusion. - HELD THAT: - The Tribunal undertook a role-specific analysis. It upheld penalties on the exporter and proprietor for deliberate misdeclaration and use of false export documents; on Narendra Sharma and Ashok Jain for conscious operational facilitation of the fraudulent exports; on the Customs Broker firm and its key personnel for repeatedly routing examination through a non-rostered officer and thereby facilitating clearance of misdeclared goods; and on the Appraiser who, despite not being rostered, examined the goods and facilitated export clearance. It also held that Section 114AA was attracted against Narendra Sharma and the Appraiser because the evidence established conscious use or facilitation of materially false declarations, but Section 112(ii) was not invocable against those against whom no dealing with the imported gold itself was proved. On the other hand, the exoneration of the Superintendent, the goldsmiths/job workers and HDFC Bank was upheld because the record did not establish conscious involvement, collusion, mens rea or active abetment as required for penal liability. [Paras 105, 106, 107, 108, 109]

The impugned penalties were substantially confirmed, with additional penalties under Section 114AA imposed on Narendra Sharma and the Appraiser, while the non-imposition or dropping of penalties against the Superintendent, the job workers and HDFC Bank was upheld.

Redemption fine - Non-availability of goods for confiscation - Nominated agency not liable for third-party fraud - Redemption fine could not be imposed on HDFC Bank when the goods were not physically available and the Bank had neither custody nor culpable involvement in the fraudulent export. - HELD THAT: - The Tribunal held that Section 125 proceeds on the basis that confiscated goods are available to be redeemed on payment of fine, and where the goods are no longer available for confiscation, the foundation for redemption fine fails. It further held that HDFC Bank, as a nominated agency, was not the user, manufacturer, exporter or beneficiary of the diversion and no evidence of collusion or mens rea was established against it. In those circumstances, redemption fine could not be fastened on the Bank for fraudulent acts committed by others. [Paras 110, 113, 114, 115]

The Department's appeal seeking redemption fine on HDFC Bank was rejected.

Final Conclusion: The Tribunal substantially affirmed the impugned order by upholding confiscation of the misdeclared export goods, holding diversion of duty-free gold proved, and sustaining penalties against the principal participants and facilitators in the fraudulent export scheme. The Department's appeals were rejected except to the limited extent of imposing penalty under Section 114AA on Narendra Sharma and the Appraiser, while the exoneration of HDFC Bank, the Superintendent and the job workers, and the non-imposition of redemption fine on unavailable goods, were affirmed.

Classification of imported product Reformate - Tariff heading 2707 50 00 versus 2710 12 19 - Binding effect of decision in identical imports - Doctrine of merger.

Classification of reformate - HELD THAT: - The Tribunal held that the product under dispute was identical to the reformate considered in Reliance Industries Ltd.[2021 (12) TMI 633 - CESTAT MUMBAI], which was affirmed by the Hon’ble Supreme Court in [2024 (3) TMI 1303 - SC ORDER], where it had already been held that products obtained by processing of petroleum are covered by the expression "similar products" in heading 2707 and that the expression "at 250oC" in sub-heading 2707 50 00 is to be read as "by 250oC". The Revenue's attempt to distinguish the present case on the basis of different findings in the adjudication order was rejected, since the product itself was admitted to be identical. The Tribunal therefore declined to accept reclassification under heading 2710 12 19. [Paras 18, 19, 20]

The demand founded on classification under CTI 2710 12 19 was held unsustainable.

Binding effect of decision in identical imports - Doctrine of merger - The classification issue could not be reopened in respect of identical imports after the Supreme Court had declined to interfere with the Tribunal's decision in the earlier identical case. - HELD THAT: - Relying on Kunhayammed Versus State of Kerala [2000 (7) TMI 67 - SUPREME COURT (LB)], the Tribunal held that where the earlier identical dispute had already culminated in the Supreme Court's order declining interference with the Tribunal's decision, the matter could not be reopened merely by pointing to different observations in the present adjudication order. On that basis, the Tribunal treated the earlier decision governing identical imports as binding for the present case as well and found no justification to sustain the impugned order. [Paras 20, 21, 22]

Reopening of the same classification dispute for identical goods imported by the appellant was held unjustified, and the impugned order was set aside.

Final Conclusion: The Tribunal allowed the appeal and set aside the impugned order, holding that reformate imported by the appellant was classifiable under CTI 2707 50 00. In view of the earlier decision on identical imports having been upheld by the Supreme Court, the Revenue was held not entitled to reopen the same classification dispute.

Entitlement to regular bail in the customs smuggling investigation - restricted and mis-declared goods - Custodial interrogation - Documentary evidence in custody of department. - HELD THAT: - The Court found that the entire case rested on documentary material and that the seized goods as well as incriminating material were already in the custody of the DRI. It noted that the applicant's statements had been recorded on multiple occasions, no incriminating documents were found during the search of his residence, and for confrontation with documentary evidence his further custody was not required. The Court also considered that the applicant had been in jail since 19/04/2026, had no antecedents, and had been regularly filing income-tax returns, and therefore the apprehensions regarding absconding or interference with the investigation could be addressed by imposing conditions. [Paras 7]

Regular bail was granted subject to conditions, as further detention was held to be unwarranted.

Final Conclusion: The bail application was allowed. The Court held that, in view of the documentary nature of the case and the material already being with the DRI, continued custody of the applicant was not necessary and the prosecution's concerns could be safeguarded through conditions.

Maintainability of appeal challenging disposal of the SCORES complaint and seeking monetary compensation and regulatory action - Tribunal dismissed the appeal, holding that the monetary relief claimed was in the nature of a civil dispute beyond its jurisdiction and that the appellant, after availing the SCORES mechanism, ought to have pursued the remedies available thereunder if still aggrieved. - HELD THAT:- Delay was condoned, the Court found no ground to interfere with the impugned judgment of the Securities Appellate Tribunal, and the appeal was dismissed while leaving it open to the appellant to avail such other remedies as may be available in law.

Erroneous exercise of jurisdiction by the Regional Director - Wrongly exercised jurisdiction in allowing the shifting of the registered office - Delegated legislation - Clean slate theory - second proviso to Rule 30(9) of the Companies (Incorporation) Rules, 2014 barred shifting of the registered office of a company when appeals against the approved resolution plan were pending​​​​​​​ - Override under Section 238 of the IBC - locus to challenge the order of the Regional Director under Article 226 of the Constitution of India.

Shifting of registered office - Interpretation of second proviso to Rule 30(9) - Override under Section 238 of the IBC - Jurisdictional error -HELD THAT: - The Court held that Section 13(4) of the Companies Act operates through the procedure prescribed in Rule 30 of the 2014 Rules, and the provisos to Rule 30(9) are binding restrictions on the exercise of that statutory power. The second proviso, inserted specifically for cases where management has been taken over under an approved resolution plan, was construed strictly. Its condition that no appeal against the resolution plan be pending was treated as an independent threshold. The Court read the second "and" in the proviso as "or", holding that pendency of an appeal, or pendency/initiation of inquiry, inspection or investigation after approval of the plan, is by itself sufficient to bar shifting. There was no inconsistency between the IBC and the 2014 Rules on this question; hence Section 238 of the IBC could not be invoked to override the statutory restriction governing the Regional Director's power under the Companies Act. The NCLAT order merely left the matter to the Regional Director to decide in accordance with law and did not confer authority to ignore the proviso. The absence of a stay of the resolution plan was held immaterial, and the contrary view taken by the Single Judge was found to amount to rewriting the Rule. [Paras 59, 60, 61, 65, 66]

The order of the Regional Director was beyond jurisdiction and violative of the second proviso to Rule 30(9); consequently, the order of the Regional Director and the order of the Single Judge were set aside, and the application for shifting of the registered office was directed to remain in abeyance so long as the statutory embargo continues.

Locus standi in writ jurisdiction - Alternative remedy - Prejudice test - The appellants were entitled to maintain the writ petition against the order of the Regional Director, and the challenge could not be rejected on grounds of lack of locus, alternative remedy, or absence of prejudice. - HELD THAT: - The Court found that the appellants had been specifically notified and heard by the Regional Director in the Section 13(4) proceeding, had raised objections there, and were themselves appellants before the NCLAT against approval of the resolution plan. They were therefore persons aggrieved by the order permitting shifting and could invoke writ jurisdiction in the absence of any efficacious statutory remedy against the Regional Director's order. The contention founded on Section 60(5) of the IBC was rejected, since the NCLT had no jurisdiction to test the legality of an order passed by the Regional Director under the Companies Act. The Court further held that where the impugned action suffers from a legal bar and excess of jurisdiction, the test of real prejudice applicable to minor procedural irregularities has no application. [Paras 49, 50, 51, 63, 64]

The writ petition was maintainable at the appellants' instance, and interference was warranted because the impugned order suffered from jurisdictional illegality rather than a mere procedural defect.

Final Conclusion: The appeal was allowed. The Court held that pendency of appeals against the approved resolution plan attracted the statutory embargo under the second proviso to Rule 30(9), rendering the Regional Director's order permitting shifting of the registered office without jurisdiction; the impugned orders were therefore set aside and the application for shifting was directed to remain in abeyance.

Excess of jurisdiction - Availability of an appellate remedy before the NCLAT - Limits of contempt jurisdiction - Modification of substantive interim orders in contempt proceedings - Actus curiae neminem gravabit - Whether this Court can entertain the present revisional application in the facts of the present case when an appellate remedy is available to the petitioner before NCLAT.

Alternative remedy under Article 227 - Jurisdictional error -HELD THAT: - The Court held that the existence of a statutory appellate remedy does not by itself bar exercise of supervisory jurisdiction where the tribunal is alleged to have assumed a jurisdiction not vested in it, failed to exercise jurisdiction, or acted perversely causing grave injustice. The petitioner's plea that the impugned direction had been issued without jurisdiction was sufficient to invite scrutiny under Article 227, even though an appellate remedy was otherwise available and even though the petition also referred to urgency in approaching the appellate forum. [Paras 23, 24, 25, 26, 27]

The objection based on availability of an alternative appellate remedy was rejected, and the petition was held maintainable under Article 227.

Limits of contempt jurisdiction - Modification of substantive interim orders in contempt proceedings - Actus curiae neminem gravabit - While dealing only with contempt applications, the NCLT could not issue a direction affecting the merits of the pending interlocutory application or effectively neutralise the earlier interim restraint on finalisation of the sale. - HELD THAT: - The Court found from the impugned order itself that the NCLT was exercising contempt jurisdiction and not deciding the pending interlocutory application on merits. In such jurisdiction, the inquiry is confined to whether there has been wilful disobedience of the order alleged to have been violated, and the court cannot travel beyond the four corners of that order, reopen the underlying dispute, or grant substantive directions altering the original interim arrangement. The direction that there should be no impediment to conclusion of the sale process and execution of the sale certificate therefore exceeded contempt jurisdiction. That part of the order was consequently set aside. At the same time, since the sale certificate had already been issued and possession had been delivered to a third-party auction purchaser, the Court declined to restore status quo ante, and directed that the sale certificate and all consequential steps would abide by the result of the pending interlocutory application before the NCLT, which was to be decided independently and uninfluenced by the impugned observations. [Paras 38, 39, 40, 41, 42]

The direction in paragraph 12 of the NCLT's order was set aside as being without jurisdiction, but the completed sale steps were left to abide by the outcome of the pending interlocutory application before the NCLT.

Final Conclusion: The High Court held that the petition under Article 227 was maintainable because the challenge was to an order alleged to have been passed in excess of jurisdiction. It set aside the portion of the NCLT's contempt order permitting completion of the sale process, while directing that the sale certificate and subsequent steps would abide by the decision in the pending interlocutory application before the NCLT.

Inclusion of foreign oil and gas assets - offshore subsidiaries - Inclusion of subsidiary assets in corporate insolvency resolution process - Separate corporate personality of holding and subsidiary companies - Commercial wisdom of Committee of Creditors - Implementability of resolution plan and pre-existing contractual rights - Co-extensive Liability of Guarantor - Right of First Refusal - Binding effect of prior appellate adjudication.

Binding effect of prior appellate adjudication - Finality of decided issues - HELD THAT: - It is amply clear the issue of inclusion of assets in the CIRP of VIL+12 group companies has been considered and answered conclusively in the negative and against Mr. Dhoot in judgement [2022 (1) TMI 1415 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] order by upholding the commercial wisdom of CoC in this respect.

The Tribunal held that the relief sought in the earlier appeal against approval of the resolution plan and the relief sought in the present challenge to the order directing inclusion of the foreign oil and gas assets were, in substance, identical. In the earlier appeal, the appellant had specifically questioned non-inclusion of those assets in the information memorandum and sought a fresh process including them. That challenge was rejected after considering the same proceedings, documents and contentions. The earlier judgment therefore brought a complete quietus to the issue, and the order directing inclusion of the assets could no longer survive after such adjudication. [Paras 39, 40, 41, 42, 48]

It is a settled position of law courts must take cognisance of events and developments subsequent to the institution of proceedings while deciding the lis viz Pasupuleti Venkateswarlu v. Motor and General Traders [1975 (3) TMI 130 - SUPREME COURT], and Beg Raj Singh v. State of U.P. & Ors.[2002 (12) TMI 629 - SUPREME COURT]. Thus, the judgement [2022 (1) TMI 1415 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] has settled the issue in the instant appeals, we are not inclined to interfere.

The plea for inclusion of the foreign oil and gas assets in the CIRP of Videocon Industries Ltd was held to be already concluded against Mr. Dhoot, and the order dated 12.02.2020 was treated as unsustainable.

Inclusion of subsidiary assets in corporate insolvency resolution process - Separate corporate personality of holding and subsidiary companies - Corporate guarantor liability - Commercial wisdom of Committee of Creditors - HELD THAT: - The Tribunal found that the contemporaneous correspondence, the group's own financial treatment, the writ pleadings, the consolidation application and the subsequent conduct of Mr. Dhoot all showed that the foreign oil and gas business was kept distinct from the domestic business. The lenders' claims in the CIRP of Videocon Industries Ltd arose from its corporate guarantee, but co-extensive liability of borrower and guarantor did not mean the borrower's assets had to be imported into the guarantor's CIRP. The Tribunal further held that a holding company and its subsidiary are distinct legal persons, and assets of subsidiaries over which the corporate debtor has no ownership rights cannot form part of the corporate debtor's CIRP. Whether to consolidate or keep the processes separate was within the lenders' and CoC's commercial wisdom, particularly when the businesses were materially different and separate resolution processes were considered more viable. [Paras 64, 79, 80, 81, 83]

The Tribunal held that the foreign oil and gas assets could not be included in the CIRP of Videocon Industries Ltd, and that separate CIRPs of Videocon Industries Ltd and Videocon Oil Ventures Ltd were consistent with the Code.

Implementability of resolution plan and pre-existing contractual rights - Right of first refusal - Commercial wisdom of Committee of Creditors - Jurisdiction under insolvency process - HELD THAT: - The Tribunal held that the CIRP of Videocon Oil Ventures Ltd was run in accordance with the Code and that the plans and offers received triggered pre-existing contractual rights, including the right of first refusal under the quota holders arrangement. Since an approved plan must be implementable, the Resolution Professional and the CoC were justified in ensuring compliance with those contractual preconditions before placing the matter for approval. The Tribunal accepted the view that the insolvency process does not confer an unrestricted power to override third-party contractual rights and that there is no prohibition on the CoC considering a structure which, in its commercial wisdom, maximises value and yields a feasible resolution. The challenge to the NCLT's competence or to the ROFR exercise was therefore rejected. [Paras 76, 77, 78, 80, 82]

The order approving consummation of the transaction with BPRL in the CIRP of Videocon Oil Ventures Ltd was upheld, and the appeals challenging the order dated 26.06.2024 were dismissed.

Final Conclusion: The Tribunal held that the foreign oil and gas assets of Videocon Oil Ventures Ltd and its foreign subsidiaries could not be brought into the CIRP of Videocon Industries Ltd, and that the issue already stood concluded by the earlier appellate judgment. Consequently, the order directing their inclusion was set aside, the appeals against that order were allowed, and the appeals challenging the approval of the BPRL transaction in the CIRP of Videocon Oil Ventures Ltd were dismissed.

Recovery of tax from the Corporate Debtor (CD) - subsequent statutory lien asserted by the State Tax Department -Priority of security interest - Realisation of security outside liquidation - recovery of local sales tax vis-à-vis to the recovery of Central sales tax qua State trade or commerce - Overriding effect of insolvency framework - Bona fide discharge of liquidator's duties - enforcement of security interest - pari passu.

Priority of security interest - Statutory tax charge - Realisation of security outside liquidation - First in time rule - HELD THAT: - The Tribunal found that the bank's charge had been created in 2012 and duly registered with the Registrar of Companies, whereas the tax department's asserted lien arose only in 2019. Chronological priority, therefore, rested with the bank. Once the secured financial creditor exercised its option under Section 52(1)(b) of the Code to realise the security interest outside the liquidation estate, and the liquidator verified that interest under Section 52(3), the enforcement could not be obstructed by a later statutory lien. The Tribunal accepted that the tax department could be treated as a secured operational creditor by virtue of the statutory charge, but held that such status did not place it above an earlier registered security interest or alter the priority under the Code. Section 48 of the Transfer of Property Act was held not to confer any special priority on the appellant over the bank. The reliance on State Tax Officer v. Rainbow Papers Ltd. [2022 (9) TMI 317 - SUPREME COURT] was rejected on the ground that the case dealt with classification of tax dues as secured debt and did not decide a contest of priority against a prior registered secured creditor or a case involving enforcement under Section 52. The decisions cited on creation of statutory charge under the CST/GVAT regime were likewise held distinguishable because the determinative question here was not whether a statutory charge existed, but whether it could defeat an earlier perfected bank charge. [Paras 52, 53, 54, 55, 56]

The direction requiring release of the tax department's charge and permitting the bank to realise its security interest was upheld, and the appeal on priority was rejected.

Liquidator's statutory duties - Bona fide conduct - Expunction of adverse observations - HELD THAT: - The Tribunal held that no fault could be found with the liquidator's conduct. The tax department's claim had been admitted during liquidation, initially in accordance with the then-prevailing legal position and later reclassified after the judgment in Rainbow Papers. The alleged lien had not been disclosed in the claim form and was discovered only when the bank sought to enforce its security. In these circumstances, the liquidator's act of permitting enforcement by the secured creditor after statutory verification was treated as discharge of duty under the Code, not as excess of authority or procedural irregularity. [Paras 44, 45, 49, 51, 57]

The Tribunal recorded that the liquidator acted strictly in accordance with the Code and expunged the adverse observations made against him in the impugned order.

Final Conclusion: The appeal was dismissed. The Tribunal held that the bank's earlier registered security interest had priority over the later statutory tax lien and that the liquidator had acted bona fide and within his statutory authority; the adverse observations against the liquidator were accordingly expunged.

Successive bail - Change in circumstances - Delay in trial - The High Court found that the grounds pressed in the second bail application did not amount to any fresh or material change in circumstances after rejection of the earlier bail plea - application for bail was therefore dismissed. - HELD THAT: - The Special Leave Petition was dismissed, with liberty to the petitioner to renew the prayer for bail if the trial does not proceed and the delay is not attributable to the petitioner.

Scheduled offence under the PMLA - Proceeds of crime - Entitlement to bail -Twin conditions for bail under the PMLA - routing and layering of funds - Admissibility of statements recorded under Section 50 of the PMLA - Presumption of culpability - Reasonable grounds for believing not guilty.

Scheduled offence under the PMLA - Proceeds of crime - Prima facie involvement in money laundering - The material on record prima facie disclosed the existence of scheduled offences and the petitioner's involvement in generation, routing and utilisation of proceeds of crime so as to attract the provisions of the PMLA. - HELD THAT: - The Court held that FIR No. 13/2022 included offences which are scheduled offences under the PMLA, and the material collected in investigation, including recovery of a firearm and statements of co-accused, prima facie indicated the petitioner's involvement in illegal possession and alleged supply of firearms. The Court further noted that in FIR No. 299/2025, offences corresponding to scheduled offences were added during investigation, whereafter the respondent continued investigation under the PMLA and filed the prosecution complaint. On the question of proceeds of crime, the Court found prima facie material showing substantial deposits and withdrawals through accounts operated by the petitioner, his family members and the Trust, suggesting routing and layering of funds. The Court also took note of the allegation that the petitioner exercised effective control over the Trust accounts, that other trustees signed blank or pre-signed cheques without knowledge of utilisation, and that no proper books, audited statements or income-tax returns were maintained, thereby rendering the explanation of charitable transactions not prima facie acceptable. [Paras 5]

The contention that no scheduled offence existed and that the transactions could not be treated as connected with money laundering was rejected at the bail stage.

Twin conditions for bail under the PMLA - Admissibility of statements recorded under Section 50 of the PMLA - Burden regarding proceeds of crime - The petitioner was not entitled to bail as the mandatory twin conditions governing bail under the PMLA were not satisfied. - HELD THAT: - The Court accepted that statements recorded under Section 50 of the PMLA are admissible in evidence and relied on Abhishek Banerjee & Anr. v. Directorate of Enforcement [2024 (9) TMI 508 - SUPREME COURT] for that proposition, observing that the lawfulness of the transactions is a matter for trial. It then applied the principle stated in Union of India vs. Kanhaiya Prasad [2025 (2) TMI 563 - SUPREME COURT] that the bail conditions under Section 45 of the PMLA, by reason of the overriding non-obstante clause, are mandatory and continue to govern bail notwithstanding the general provisions of criminal procedure. Having regard to the prosecution complaint, the statements recorded under Section 50, the recoveries and the financial transactions reflected in the accounts, the Court concluded that sufficient prima facie material existed against the petitioner and that he had failed to establish reasonable grounds for believing that he was not guilty or that he would not commit an offence while on bail. [Paras 5]

Bail was declined because the petitioner failed to satisfy the mandatory twin conditions under the PMLA.

Final Conclusion: The Court dismissed the bail application, holding that the material on record prima facie disclosed scheduled offences, routing and layering of funds, and the petitioner's involvement in the alleged offence of money laundering. It held that the mandatory twin conditions for bail under the PMLA were not satisfied.

Discharge and framing of charge - sufficient ground for proceeding -Prima facie case under PMLA - Proceeds of crime - Admissibility of statements under Section 50 PMLA - Territorial jurisdiction - Revisional interference.

Discharge and framing of charge -Prima facie case under PMLA - Strong suspicion - Sufficient grounds existed to proceed against the petitioner for the offence under the PMLA and the rejection of discharge followed by framing of charge did not suffer from legal error. - HELD THAT: - In the case of Asim Shariff v. NIA, [2019 (7) TMI 1546 - SUPREME COURT], it has been held by the Hon’ble Apex Court that the words ‘not sufficient ground for proceeding against the accused’ clearly show that the Judge is not a mere post office to frame the charge at the behest of the prosecution, but has to exercise his judicial mind to the facts of the case in order to determine whether a case for trial has been made out by the prosecution. In assessing this fact, it is not necessary for the court to enter into the pros and cons of the matter or into a weighing and balancing of evidence and probabilities which is really his function after the trial starts. At the stage of Section 227, the Judge has merely to sift the evidence in order to find out whether or not there is sufficient ground for proceeding against the accused. The sufficiency of ground would take within its fold the nature of the evidence recorded by the police or the documents produced before the court which ex facie disclose that there are suspicious circumstances against the accused so as to frame a charge against him.

From legal propositions it can be safely inferred that if, upon consideration of the record of the case and the documents submitted therewith, and after hearing the submissions of the accused and the prosecution in this behalf, the Judge considers that there is no sufficient ground for proceeding against the accused, he shall discharge the accused and record his reasons for doing so and if, after such consideration and hearing as aforesaid, the Judge is of the opinion that there is ground for presuming that the accused has committed an offence, the trial Court shall frame the charge. However, the defence of the accused cannot be looked into at the stage of discharge. The accused has no right to produce any document at that stage. The application for discharge has to be considered on the premise that the materials brought on record by the prosecution are true.

Thus, at the time of considering an application for discharge, the Court is required to consider the limited extent to find out whether there is prima facie evidence against the accused to believe that he has committed any offence as alleged by the prosecution; if prima facie evidence is available against the accused, then there cannot be an order of discharge.

It is settled connotation of law that at the stage of framing of charge, the probable defence of the accused is not to be considered and the materials, which are relevant for consideration, are the allegations made in the First Information Report/complaint, the statement of the witnesses recorded in course of investigation, the documents on which the prosecution relies and the report of investigation submitted by the prosecuting agency. The probative value of the defence is to be tested at the stage of trial and not at the stage of framing of charge and at the stage of framing of charge minute scrutiny of the evidence is not to be made and even on a very strong suspicion, charges can be framed.

It is apparent from record that the prosecution case is not based merely on procedural aspects of the tender process, but on the documented financial trail establishing the generation and laundering of bribe money. The material indicates that the petitioner paid illegal gratification to secure favourable Technical Appraisal Reports (TAR) and thereafter engaged in layering through fabricated invoices and a transaction which, upon examination of VAT returns, absence of production records, and timing of invoice, has been found to be colourable device for routing funds.

The Court held that at the stage of discharge or framing of charge, the enquiry is confined to whether the material produced by the prosecution, taken at face value, discloses the ingredients of the alleged offence and raises grave suspicion; a mini trial or evaluation of the defence is impermissible. Applying that standard, the prosecution complaint, certified bank records, the alleged routing of funds through intermediary entities and relatives, the transaction shown through M/s Naskar Ceramics, and the structured movement of money to persons connected with the co-accused public servant furnished prima facie material showing concealment, layering and projection of the alleged proceeds of crime as untainted property. The petitioner's explanations founded on loans, business transactions and tender procedure were treated as matters for trial and not grounds for discharge at this stage. The Court therefore found prima facie involvement of the petitioner in the process or activity connected with proceeds of crime and held that the ingredients of the offence under Section 3 punishable under Section 4 of the PMLA stood sufficiently disclosed for the matter to proceed to trial. [Paras 117, 118, 125, 126, 127]

The challenge to the orders refusing discharge and framing charge was rejected, as prima facie material existed to try the petitioner for money laundering.

Admissibility of statements under Section 50 PMLA - Judicial proceedings - Corroborative evidentiary value - Statements recorded under Section 50 of the PMLA were admissible and could be relied upon at the stage of considering discharge and framing of charge. - HELD THAT: - In the case of Tarun Kumar v. Assistant Director [2023 (11) TMI 904 - SUPREME COURT] the Hon’ble Apex Court while relying upon the ratio rendered by the three judge Bench of the Hon’ble Apex Court in the case of Rohit Tandon [2017 (11) TMI 779 - SUPREME COURT] has observed that the statements of witnesses/ accused are admissible in evidence in view of Section 50 of the said Act and such statements may make out a formidable case about the involvement of the accused in the commission of a serious offence of money laundering.

The Court held that proceedings under Section 50 of the PMLA are in the nature of inquiry, the authorities recording such statements are not police officers, and the statements are deemed to be part of judicial proceedings and are admissible in evidence. In the present case, those statements were not treated in isolation but as material corroborating the primary documentary evidence in the form of bank trails and transaction records. The Court therefore rejected the attempt to discredit the prosecution case on the footing that reliance had been placed on statements recorded under Section 50. [Paras 108, 109, 110, 111, 113]

The Court accepted the legal admissibility and relevance of the Section 50 statements and held that they could validly support the prosecution case at the threshold stage.

Territorial jurisdiction - Continuing offence - Scheduled offence nexus - The Special Court at Ranchi had territorial jurisdiction to try the PMLA case. - HELD THAT: - The Court held that the scheduled offence was registered at Ranchi and the alleged conspiracy relating to manipulation of the MECON tender was conceived and executed there. Since the proceeds of crime were stated to arise from that scheduled offence and the offence under Section 3 of the PMLA is a continuing offence, the nexus with Ranchi was sufficient to sustain the competence of the Special Court at Ranchi. The objection to territorial jurisdiction was accordingly found untenable. [Paras 98]

The plea of lack of territorial jurisdiction was rejected.

Revisional interference - Patent error - Orders refusing discharge - Interference in revision against orders refusing discharge or framing charge was not warranted in the absence of patent legal or jurisdictional error. - HELD THAT: - The Hon’ble Apex Court in the case of Asian Resurfacing of Road Agency (P) Ltd. v. CBI [2018 (4) TMI 3 - SUPREME COURT] has held that interference in the order framing charges or refusing to discharge is called for in the rarest of the rare cases only to correct the patent error of jurisdiction.

The Court reiterated that revisional power cannot be equated with appellate power and does not permit meticulous reappraisal of the prosecution material. Such power is to be exercised only where continuation of proceedings is barred in law, the allegations taken at face value do not constitute the offence, or a patent error of law, procedure or jurisdiction is shown. As the Special Court had applied the correct threshold test and the record disclosed prima facie material giving rise to grave suspicion, no ground for revisional interference was made out. [Paras 121, 122, 123, 124, 127]

The criminal revisions were not maintainable on merits as no patent illegality or jurisdictional error was shown in the impugned orders.

Final Conclusion: The High Court held that the material collected by the prosecution disclosed a prima facie case of money laundering against the petitioner, that the Section 50 statements were admissible, and that the Special Court at Ranchi had jurisdiction. Finding no patent illegality in the orders refusing discharge and framing charge, the criminal revisions were dismissed.

Speaking order - lack of independent reasoning - Non-application of mind - Retention/continued freezing of immovable and movable properties in the form of cash, vehicles, digital devices, bank lockers, bank accounts, Fixed Deposits (FDs), shares and demat accounts - wrongful gain and wrongful loss to the consortium banks - involvement of proceeds of crime in money-laundering - legality of the proceedings in terms of the provisions of section 8 -HELD THAT: - As regards the legality of the proceedings in terms of the provisions of section 8, it is submitted by the respondents that before issuing a show cause under Section 8(1) of the PMLA, the Adjudicating Authority has to independently reach a conclusion based on the complaint before it that reasons to believe' exist regarding the commission of money laundering. The purpose of a show cause notice under Section 8(1) of the PMLA is to accord a fair opportunity of adjudication to a party whose property is sought to be attached.

The legal presumption under Section 24(a) of the 2002 Act, would apply when the person is charged with the offence of money-laundering and his direct or indirect involvement in any process or activity connected with the proceeds of crime, is established. The existence of proceeds of crime is, therefore, a foundational fact, to be established by the prosecution, including the involvement of the person in any process or activity connected therewith. Once these foundational facts are established by the prosecution, the onus must then shift on the person facing charge of offence of money-laundering- to rebut the legal presumption that the POC are not involved in money laundering, by producing evidence which is within his personal knowledge. In other words, the expression “presume” is not conclusive. It also does not follow that the legal presumption that the POC are involved in money-laundering is to be invoked by the authority or the court, without providing an opportunity to the person to rebut the same by leading evidence within his personal knowledge.

The Tribunal found that the impugned order largely reproduced the original application, statutory provisions, factual allegations, replies, rejoinders and written submissions, but did not record the Adjudicating Authority's own adjudicatory findings on the objections raised by the appellants. The operative reasoning consisted only of broad observations that there was prima facie involvement and that investigation was ongoing, without disclosing the process of reasoning or application of mind. The Tribunal held that this did not satisfy the statutory requirement that, after considering the reply, hearing the parties and taking into account the material on record, the Authority must record a finding whether all or any of the properties are involved in money-laundering. Mere pendency of investigation could not by itself justify retention of seized properties and records. On that ground, the matter required de novo adjudication by a detailed speaking order. [Paras 55, 56, 57, 58]

The impugned order was set aside and the matter was remanded to the Adjudicating Authority for fresh adjudication by a detailed speaking order, with status quo to continue in the meantime.

Final Conclusion: The Tribunal set aside the common order permitting retention and continued freezing of the properties, holding that it was a non-speaking order lacking independent findings and the statutory determination required under the PMLA. The matters were remanded to the Adjudicating Authority for fresh de novo adjudication, with status quo to be maintained meanwhile.

Rectification of mistake apparent on record - Refund under Rule 5 of CENVAT Credit Rules - Examination of nexus of input services - Entitlement to credit under Notification No. 27/2012-CE(NT) and Section 142 of the Central Goods and Services Tax Act, 2017 - Premature Direction - involvement in provision of various kinds of back-end services in the nature of book-keeping, revenue accounting, call centre, back-office management, IT helpdesk services, collectively called as “BPO Services”, to third parties, on behalf of its client located outside India viz. Genpact International Inc, Hungary Branch.

Rectification of mistake apparent on record - The final remand order required rectification to remove the inconsistency regarding examination of nexus of input services while deciding the refund claim. - HELD THAT: - The Tribunal found that its earlier order contained an inconsistency, since one part remanded the matter for examination of eligibility of credit, whereas another part had already observed that, if credit on a particular service was considered ineligible for refund, recourse had to be taken to Rule 14 of CCR, 2004. Accepting the applicant's contention to that extent, the Tribunal held that, in the remand proceedings, nexus could be examined only where there was a subsisting demand issued under Rule 14 of CCR, 2004, and therefore modified the operative portion of the earlier order accordingly. [Paras 6, 8]

The earlier final order was rectified by directing that nexus can be examined only if there is a subsisting demand issued to the appellant under Rule 14 of CCR, 2004.

Treatment of amount held ineligible for refund - Prematurity of direction - Remand to adjudicating authority - HELD THAT: - The Tribunal held that such a direction was premature because the matter already stood remanded for determination of the amount actually eligible for refund. At that stage, it would be improper to presume what course the adjudicating authority might adopt if any amount were ultimately held ineligible for refund. The adjudicating authority was therefore left to deal with any rejected amount in accordance with law and the applicable judicial pronouncements. [Paras 7, 8]

The request for a present finding on entitlement to credit of the rejected refund amount was declined as premature, leaving the matter to be dealt with by the adjudicating authority in accordance with law.

Final Conclusion: The rectification application was allowed in part. The Tribunal modified the operative portion of its earlier remand order by clarifying that nexus could be examined only where there was a subsisting demand under Rule 14 of CCR, 2004, while leaving treatment of any amount found ineligible for refund to the adjudicating authority in accordance with law.

Reversal of cenvat credit on common input services - subscription to and redemption of mutual fund units - trading of goods falling within the negative list. - HELD THAT: - An identical issue fell for consideration before the Principal Bench of this Tribunal in M/s Siegwerk India Pvt. Ltd. v. Commissioner, CGST [2024 (10) TMI 220 - CESTAT NEW DELHI]. The Tribunal, after an exhaustive examination of the relevant statutory provisions and the nature of mutual fund transactions, unequivocally held that the redemption of mutual fund units does not constitute “trading of goods” and cannot be treated as an “exempted service” requiring reversal of CENVAT Credit. The reasoning of the Tribunal was that upon redemption, mutual fund units simply cease to exist rather than being transferred to any third party and therefore no transfer of title, a sine qua non of “trading”, takes place. The Tribunal further held that the extended period of limitation was inapplicable and the mere fact that a discrepancy surfaced through an audit does not, by itself, justify invocation of the five-year extended period under the proviso to Section 73(1) ibid. Accordingly the demand, interest, and penalties in that matter were set aside in their entirety.

The Tribunal held that, before an activity can be treated as an exempted service under Rule 2(e) of the CENVAT Credit Rules, 2004, it must first answer the definition of service under Section 65B(44), namely an activity carried out by one person for another for consideration. Mere subscription to mutual fund units and their subsequent redemption does not involve the appellant rendering any activity to another person for consideration, and the Revenue failed to identify any service recipient. The Tribunal also accepted the reasoning in the earlier decisions that redemption of mutual fund units results in extinguishment of the units and not transfer of title to a third party; therefore, the transaction is not trading of goods. Since the activity was neither a service nor an exempted service, Rule 6 had no application and no obligation arose to maintain separate accounts or reverse common credit. [Paras 11, 12]

The demand for reversal of CENVAT credit, along with interest and penalties, was held to be unsustainable.

Final Conclusion: The Tribunal held that subscription to and redemption of mutual fund units is neither trading of goods nor an exempted service, and therefore Rule 6 of the CENVAT Credit Rules, 2004 was not attracted. The impugned order was set aside and the appeal was allowed with consequential relief.

Activity of facilitation of campus placement by an educational institution - Manpower Recruitment or Supply Agency Service - Client-employer relationship - Whether the activity of facilitating campus placement by an educational institution, for which charges are collected from students, falls within the scope of “Manpower Recruitment or Supply Agency Service” under Section 65(105)(k) of the Finance Act, 1994 read with Circular No. 96/7/2007-ST dated 23.08.2007? -HELD THAT: - The statutory definition of “taxable service” under Section 65(105)(k) contemplates a service provided to a client, namely an employer or prospective employer, in relation to recruitment or supply of manpower. The charging provision, therefore, inherently requires a service provider-client relationship where the consideration flowing from such client (i.e. the employer). In the present case, it is undisputed that the appellant collects placement-related fees from students and no consideration is received from recruiting companies. The appellant merely facilitates interaction between students and prospective employers without undertaking recruitment on behalf of such employers.

Identical issue came up for consideration before the Tribunal in Motilal Nehru National Institute of Technology [2015 (8) TMI 1138 - CESTAT ALLAHABAD], wherein, after detailed examination of the statutory provisions and Board Circular No. 96/7/2007-ST dated 23.8.2007, it was held that such activities do not satisfy the essential ingredients of the taxable service. The Tribunal specifically observed that where the consideration flows from students and not from employers, the activity cannot be classified as manpower recruitment or supply service. The Tribunal also clarified that the Circular dated 23.08.2007 (supra) contemplates situations where educational institutions charge placement fees from recruiting companies, and not where fees are collected from students.

The aforesaid decision has further been followed by this Tribunal in Sydenham Institute of Management vs. CCE, [2016 (6) TMI 321 - CESTAT MUMBAI], wherein it has been reiterated that such placement activities are not exigible to service tax under ‘Manpower Recruitment and Supply Agency Services’.

Applying the above binding principles to the facts of the present case the students cannot be regarded as “clients” within the meaning of the taxable entry and no consideration flows from the employers. There is also no service rendered to an employer in relation to recruitment or supply of manpower. Consequently, the essential ingredients of the taxable entry are absent, and the activity cannot be brought within the ambit of the said service. It is settled legal position that the taxing statutes must be interpreted strictly and nothing can be added or implied beyond the clear language of the provision. Also that in case of any ambiguity, the benefit must necessarily go to the assessee and not to the Revenue. Unless the activity of the appellant squarely falls within the four corners of the provision, no tax can be levied by stretching the language of the provision or by relying upon executive circulars. Therefore the reliance placed by the Revenue on Circular dated 23.08.2007 (supra) is misplaced, as executive instructions cannot override or expand the scope of the charging provision.

The demand under Manpower Recruitment or Supply Agency Service was unsustainable and the impugned order was set aside.

Final Conclusion: For the period 2006-07 to 2007-08, the Tribunal held that fees collected from students for campus placement facilitation were not taxable as Manpower Recruitment or Supply Agency Service, since no service was rendered to an employer and no consideration flowed from any recruiting company. The appeal was accordingly allowed.

Entitlement to waiver of penalty under Section 80 of the Finance Act, 1994 on the basis of pre-SCN and post-SCN payments - Reasonable cause -Simultaneous penalties under Sections 76 and 78 - Extended period of limitation for suppression - failure to fully pay the Service Tax liability - Engaged in providing “Rent-a-Cab Operator Service”.

Penalty waiver under reasonable cause - Collection but non-deposit of service tax - HELD THAT: - The Tribunal held that, although the appellant had deposited substantial amounts before issuance of the show cause notice and during adjudication, that circumstance by itself did not constitute reasonable cause. The determinative finding was that the appellant had collected service tax from the recipients and had also reflected it as tax liability, but did not remit the amount to the department. In such a situation, failure to deposit the collected tax could not be treated as a ground for relief under reasonable cause, and the appellant was therefore not entitled to the benefit of Section 80. [Paras 14, 16]

Penalties were not liable to be waived under Section 80, and the challenge to penalties on that basis was rejected.

Simultaneous penalties under Sections 76 and 78 - HELD THAT: - While noticing the departmental reliance on a contrary view, the Tribunal held that simultaneous imposition of penalties under Sections 76 and 78 was not permissible, as held in a catena of judgments. On that reasoning, the penalty under Section 76 alone was set aside, while the rest of the order was left undisturbed. [Paras 17]

The penalty under Section 76 was set aside, but the remaining penalties were not interfered with.

Extended period of limitation for suppression - Non-disclosure of taxable receipts - HELD THAT: - The Tribunal accepted the finding that the appellant had collected amounts from clients towards taxable services but had failed to pay the corresponding service tax, and that the tax liability was worked out from income tax assessments, showing that the relevant details had not been disclosed to the service tax department. On those facts, the Tribunal held that there was clear evasion of payment of service tax and that the department had rightly invoked the extended period. [Paras 18, 19]

The challenge to the invocation of the extended period of limitation failed.

Final Conclusion: The appeal was partly allowed. The Tribunal upheld the invocation of the extended period and declined waiver of penalties under Section 80, but set aside the penalty imposed under Section 76 on the ground that simultaneous penalties under Sections 76 and 78 were not imposable.

Cenvat credit taken on the disputed input services - Nexus with output services - Mismatch between the ITC statement and ST-3 returns, or curable defects in documents - Procedural defects in input documents - Reversal of wrongly availed credit.

CENVAT credit eligibility - Nexus with output service - Credit on the disputed input services could not be denied as ineligible for want of nexus with output services. - HELD THAT: - The Tribunal held that the same categories of input services had already been examined in the appellant's own case for an earlier period [2017 (12) TMI 836 - CESTAT BANGALORE] and credit had been found admissible. In view of that finding, the demand raised in the impugned order on the footing that the services lacked nexus with the exported output service was unsustainable. [Paras 11]

Denial of credit on the ground of ineligibility or absence of nexus was set aside.

Denial of credit on mismatch with ST-3 returns - Verification of records - HELD THAT: - The Tribunal reiterated its earlier remand direction that denial of credit must rest on legal ineligibility and not merely on a numerical difference between statements. On examining the invoices produced by the appellant, it found that the credit reflected in the ST-3 returns was correct. The disallowance made solely on the alleged mismatch was therefore not maintainable. [Paras 11]

The credit disallowed on account of difference between the ITC statement and ST-3 returns was allowed.

Procedural defects in input documents - Substantive benefit not denied for procedural lapse - Reversal of wrongly availed credit - HELD THAT: - The Tribunal found that, despite the earlier remand direction requiring consideration of condonation of omissions in the documents, the adjudicating authority again rejected the claim on the same documentary grounds without properly considering the invoices and the PAN-based registration particulars furnished by the appellant. It held that minor procedural lapses could not defeat substantive entitlement to credit. At the same time, the Tribunal recorded that the excess credit admitted by the appellant had already been reversed, and the appeal was therefore only partly allowed with that amount standing apart from the relief granted. [Paras 12]

The documentary disallowance was set aside, except to the extent of the excess credit admittedly reversed by the appellant, and the appeal was partly allowed.

Final Conclusion: The Tribunal held that the disputed CENVAT credit could not be denied either on the ground of lack of nexus, mismatch between the ITC statement and ST-3 returns, or curable defects in documents. Relief was, however, not extended in respect of the excess credit admittedly availed and reversed by the appellant, and the appeal was consequently partly allowed.

Entitlement to claim input tax credit on explosives and other inputs/capital goods used in captive mining operations - Job work mining - definition of ‘Capital Goods’ - Mining and Manufacturing as Integral Operations. - HELD THAT: - It is not the case of the respondents that the material excavated after the mining process was sold out by some other entity, to the appellant-Company, rather it is the appellant-Company only who got the material excavated, may be on job work basis.

Applying the Apex Court in Chowgule & Co. Pvt. Ltd. & Anr. vs. Union of India & Ors [1980 (11) TMI 61 - SUPREME COURT] and Indian Copper Corporation Limited vs. Commissioner Of Commercial Taxes [1964 (10) TMI 41 - SUPREME COURT]to the present matter, it is not disputed that the explosives purchased by the appellant-Company were used in the mining operation and not in any other operation subsequent to mining. In view of the said undisputed fact, the explosives on which the input tax credit has been claimed by the appellant-Company, would definitely be covered by the definition of ‘Capital Goods’.

The Court held that, the petitioner-Companies being the lessees of the captive mines, the fact that excavation was carried out on job work basis was of no consequence, since the excavated material was not sold by any independent entity to the Companies but was mined for their own use. It further held that where the mined material is used in manufacture, mining and manufacturing are integral and inter-dependent processes. On that footing, explosives used in the actual mining operation, and not in any post-mining activity, were held to fall within the eligible category for claiming input tax credit under Section 18 of the Act of 2003. The respondents' objections founded on job work, on the consumable nature of explosives, and on their use in mining rather than manufacture, were all rejected. [Paras 15, 16, 17, 18, 20]

The petitioner-Companies were held entitled to claim input tax credit on taxes paid on the purchase of inputs and capital goods used in the captive mining activity linked to manufacture for the assessment years in question.

Final Conclusion: The revision petitions were allowed and the Tax Board orders were quashed. It was held that the petitioner-Companies were entitled to input tax credit under Section 18 of the Rajasthan Value Added Tax Act, 2003 on inputs and capital goods used in captive mining connected with the manufacturing process for the assessment years concerned.

Legality of striking off the tenant's defence under Order XV Rule 5 CPC - application seeking extension of time - First date of hearing - Substantial compliance - Wilful default - Judicial discretion in procedural compliance - High Court has committed a manifest error in law in interfering with the well-reasoned order of the Trial Court and in granting indulgence to the respondent despite clear and admitted defaults. - HELD THAT: - The Court held that although Order XV Rule 5 CPC is intended to prevent a tenant from continuing in possession without depositing admitted rent or damages, striking off the defence is a penal and drastic consequence and cannot be imposed mechanically. The court must examine whether there was due or substantial compliance and whether the default was wilful or contumacious. It further held that the expression first date of hearing means the date on which the court applies its mind to the controversy, ordinarily for determining the points in issue, and not a merely procedural date. Since the Trial Court had not conclusively determined that foundational date and had also not adequately examined the questions of proper service, opportunity, compliance, and the nature of the default, the basis for striking off the defence was uncertain. The High Court, though justified in bearing in mind that procedure should advance justice, also failed to sufficiently reconcile its earlier conditional order with the later extension of time. In these circumstances, neither order could stand, and the matter had to be remitted for a reasoned decision on the application under Order XV Rule 5 CPC after determining the first date of hearing, examining compliance, and deciding whether any default was wilful or bona fide. [Paras 24, 25, 26, 27, 28]

The impugned orders were set aside and the application under Order XV Rule 5 CPC was remanded to the Trial Court for fresh adjudication after affording opportunity to both parties, with all merits kept open.

Final Conclusion: The Court set aside both the order striking off the defence and the subsequent order extending time, and remanded the matter to the Trial Court for a fresh, reasoned determination of the application under Order XV Rule 5 CPC. All rival contentions were left open.

Maintainability of miscellaneous application in disposed proceedings - Effect of dictated order and signed order - Clerical or Arithmetical Error - Material change in judgment before signing - Correction of accidental slip or omission.

Maintainability of miscellaneous application in disposed proceedings - Review in disguise - Abuse of process - HELD THAT: - The Court held that a miscellaneous application after disposal is maintainable only for correction of clerical or arithmetical errors, or in rare cases where an executory order has become impossible to implement because of subsequent events. The present application satisfied neither condition and, in substance, sought to rewrite the final order and question its legal force. The absence of the required affidavit under the governing practice directions reinforced the defect. The Court treated the application as a misconceived attempt amounting to a review in the garb of clarification and as a gross abuse of process. [Paras 15, 16, 17, 18, 19]

The miscellaneous application was held not maintainable and liable to dismissal with costs.

Effect of dictated order and signed order - Material change in judgment before signing - Correction of accidental slip or omission - The signed order uploaded after correction remained the only final order, and the differences from the in-court dictation were not material changes requiring rehearing. - HELD THAT: - The Court distinguished Vinod Kumar Singh [1987 (11) TMI 385 - SUPREME COURT] and U.P. Housing & Development Board & Ors. v. M/s Fast Builders, Lucknow and Anr. on facts, holding that this was not a case of two operative orders or of rehearing after an earlier pronouncement. It held that the draft dictated in court was subject to correction, refinement and enhancement in chambers before signing, and that only material alterations would require further hearing. On the facts, treating the pending writ petition as disposed of with liberty to pursue remedies after a fresh State decision, and omitting a status quo direction, were held to be corrections and refinement, not material departures from the court's intended disposition. The Court further held that grant or non-grant of status quo was merely ancillary and, in the circumstances, its omission corrected an error rather than altered the substance of the decision. The signed order therefore embodied the Court's final and binding decision. [Paras 25, 26, 27, 28, 29]

The contention that the dictated version prevailed over the signed order was rejected, and the signed order was affirmed as the final operative order.

Final Conclusion: The Court dismissed the miscellaneous application both as not maintainable and on merits, holding that the signed order alone constituted the final operative order and that the changes from the dictated draft were only corrections and refinement, not material alterations. Exemplary costs were imposed on the applicants.