TaxTMI Updates e-Newsletter
May 21,2024

Opportunity of hearing - reasoned order - delay in submission of appeal - quashing of appellate order - remand for fresh consideration - precedent of coordinate Bench

Opportunity of hearing - delay in submission of appeal - reasoned order - quashing of appellate order - remand for fresh consideration - precedent of coordinate Bench - Appellate authority's rejection of the petitioner's appeal on ground of delay without granting an opportunity of hearing and without a reasoned order. - HELD THAT: - The Court found that the impugned appellate order rejected the petitioner's appeal by noting only 'Delay in submission of Appeal' and that no opportunity of hearing was afforded to the petitioner. Relying on earlier decisions of a coordinate Bench and persuasive authority, the Court held that an appellate authority must afford the affected party an opportunity of hearing and record reasons when disposing of an appeal, particularly where delay is the basis for rejection. In consequence, the appellate order lacked the requisite procedural fairness and reasoned determination. The Court therefore quashed and set aside the impugned order and directed the appellate authority to grant an opportunity of hearing and thereafter pass a reasoned order, completing the exercise within two months from the date of the judgment. [Paras 4]

Impugned appellate order dated June 3, 2024 quashed and set aside; matter remanded to appellate authority to grant hearing and pass a reasoned order within two months.

Final Conclusion: Writ petition disposed of by quashing the appellate rejection for delay; appellate authority directed to hear the petitioner and pass a reasoned order within two months in accordance with the Court's directions and the precedents relied upon.

Mens rea for evasion of tax - penalty under Section 129(3) of the Uttar Pradesh Goods and Services Act, 2017 - expired e-way bill and portal extension facility - technical breach not attracting penalty - refund of tax and penalty deposited

Mens rea for evasion of tax - penalty under Section 129(3) of the Uttar Pradesh Goods and Services Act, 2017 - expired e-way bill and portal extension facility - technical breach not attracting penalty - Whether penalty under Section 129(3) could be sustained where the e-way bill had expired but goods were accompanied by invoice and e-way bill and there was no intention to evade tax. - HELD THAT: - The Court applied the principle established in earlier decisions that imposition of penalty for contraventions under the Act requires a finding of mens rea to evade tax. On the facts the goods were accompanied by the tax invoice and the e-way bill and the petitioner explained delay by mechanical breakdown of the vehicle causing slow movement. Although the portal provides a facility to seek extension of an e-way bill and no extension was sought, the authorities below treated the lapse as a ground for penalty without considering the absence of any intention to evade tax. The Court held that the failure to extend the e-way bill in these circumstances was a technical breach and, in the absence of mens rea or any factual basis for an intention to evade tax, could not sustain a penalty under Section 129(3). The court therefore quashed the orders imposing tax and penalty and directed refund of amounts deposited. [Paras 5, 6, 7]

Penalty under Section 129(3) set aside because no mens rea to evade tax was found; lapse of e-way bill was a technical breach and not a ground for penalty, and tax and penalty deposited to be refunded.

Final Conclusion: Writ petition allowed: impugned orders dated February 27, 2020 and November 27, 2020 quashed; tax and penalty deposited to be refunded to the petitioner within four weeks; no order as to costs.

Manifest error apparent on the face of the record - non-application of mind to documents submitted - principles of natural justice - judicial review under Article 226 - discretionary nature of writ of certiorari - remand for fresh consideration in light of documents - conditional suspension of order on deposit of part of assessed tax

Manifest error apparent on the face of the record - non-application of mind to documents submitted - principles of natural justice - judicial review under Article 226 - Adjudicating authority's failure to consider documents filed by the assessee rendered the order amenable to judicial review and amounted to a manifest error. - HELD THAT: - The adjudicating authority recorded that no agreement/contract, reconciliation statement, bills/invoices or other supporting documents had been submitted and therefore held the services taxable. The record, however, showed that several documents had in fact been filed by the assessee (annexure P-9 and related papers) and that the authority had 'glossed over' those submissions. That omission demonstrated non-application of mind and patent perversity in the decision-making process. The existence of an alternative statutory remedy did not oust the writ court's discretionary jurisdiction under Article 226 to correct a decision exhibiting such manifest error; a writ of certiorari may be exercised when a patent error on the record affects fairness of adjudication even though an alternative remedy exists. The Court therefore concluded that the order disclosed a reviewable defect arising from the failure to consider the documents relied upon by the assessee. [Paras 3, 4, 6]

The adjudicating authority's order was held to suffer from manifest error due to non-consideration of documents and was thus amenable to judicial interference.

Remand for fresh consideration in light of documents - conditional suspension of order on deposit of part of assessed tax - discretionary nature of writ of certiorari - Appropriate remedial direction: conditional suspension of the impugned order subject to deposit and remand to the adjudicating authority for fresh decision after giving opportunity and considering the documents. - HELD THAT: - In view of the manifest error, the Court exercised its discretion to grant relief by suspending the impugned order on the condition that the assessee deposit 7.5% of the tax assessed within four weeks. Upon such deposit the impugned order would remain suspended and the matter was remanded to the adjudicating authority to decide afresh in accordance with law, taking into account the documents already filed and any reconciliation statements or additional material the assessee may produce. The adjudicating authority was directed to give the assessee an opportunity of hearing and to pass a reasoned order within four months from the date of deposit. If the deposit was not made within the prescribed period, the impugned order would stand revived. [Paras 7, 8]

The impugned order was suspended on condition of deposit of 7.5% of the tax assessed and the matter remanded for fresh consideration with liberty to the assessee to file reconciliation statements and additional documents; failure to deposit would revive the order.

Final Conclusion: The High Court found that the adjudicating authority had failed to consider documents filed by the assessee, resulting in a manifest error warranting judicial interference; the impugned order was conditionally stayed on deposit of 7.5% of the assessed tax and the matter remanded for a fresh, reasoned decision after hearing and consideration of the submitted documents within a prescribed timeframe.

Opportunity of personal hearing under Section 75(4) of the Act - principles of natural justice - adjudication under Section 74(9) of the CGST Act, 2017 - self-imposed bar of alternative remedy - power of appellate authority to remand proceedings - remittance for fresh adjudication after affording hearing

Opportunity of personal hearing under Section 75(4) of the Act - principles of natural justice - Impugned adjudication order was passed without affording personal hearing and thereby violated principles of natural justice. - HELD THAT: - The Court found that no further notice was issued nor was any opportunity of personal hearing granted to the petitioner before the order was passed. Section 75(4) mandates that an opportunity of hearing be granted where a written request is received or any adverse decision is contemplated. The Court held that denial of personal hearing in adjudication proceedings is a gross violation of fundamental procedural requirements and natural justice, which renders the impugned order unsustainable. The Court emphasised that while a noticee may waive the right or fail to avail a granted hearing, those situations are distinct and do not justify a practice of denying personal hearings as a norm. [Paras 5, 6, 7, 9, 10]

Impugned order set aside as passed in violation of the right to personal hearing and principles of natural justice.

Self-imposed bar of alternative remedy - power of appellate authority to remand proceedings - Availability of an alternative remedy cannot be invoked to sustain an order vitiated by denial of personal hearing; appellate authority lacked power to remand in the facts of the case. - HELD THAT: - The Court held that the existence of an alternative remedy does not operate as a bar where an order is tainted by denial of natural justice; applying such a bar would be counter-productive to justice. The Court noted that, in the present facts, the appellate authority did not possess the power to remand the proceedings, and therefore reliance on alternative remedy or remand power could not cure the procedural infirmity. [Paras 10]

Self-imposed bar of alternative remedy inapplicable; appellate authority's remand power not available to cure the defect.

Remittance for fresh adjudication after affording hearing - remedial measures and disciplinary action against erring officials - Matter remitted to the adjudicating authority to pass a fresh order after affording due opportunity of hearing; Commissioner directed to take remedial measures including disciplinary action where natural justice is violated. - HELD THAT: - In view of the procedural infirmity, the Court set aside the impugned order and remitted the matter to the Deputy Commissioner for fresh adjudication in accordance with law after affording the petitioner a personal hearing. The Court accepted the State's assurance about preventing recurrence and additionally directed the Commissioner, Commercial Tax, Uttar Pradesh, to undertake remedial measures, including instituting disciplinary proceedings against officials who unjustifiably violate fundamental principles of natural justice, to ensure compliance by field formations. [Paras 11, 12, 13]

Matter remitted for fresh adjudication after affording personal hearing; directions issued to Commissioner for remedial and disciplinary measures.

Final Conclusion: Writ petition allowed; impugned order dated 19.08.2021 set aside and matter remitted for fresh adjudication after affording personal hearing, with directions to the Commissioner to ensure compliance and take remedial/disciplinary measures where natural justice is breached.

Self-certified copy requirement - electronic filing on common portal - procedural requirement - technical defect - dismissal for non-submission of certified copy - power under Article 226 - reasoned order on merits

Self-certified copy requirement - electronic filing on common portal - technical defect - dismissal for non-submission of certified copy - Whether non-submission of the self-certified copy of the order within seven days, when the appeal was filed electronically on the common portal within the prescribed time, warrants dismissal of the appeal. - HELD THAT: - The Court examined Rule 108 of the Central Goods and Services Tax Rules, 2017 and noted that where the decision or order appealed against is uploaded on the common portal the date of provisional acknowledgement is to be treated as date of filing. Drawing on precedents of other High Courts that treated failure to furnish a certified copy within the seven-day window as a procedural/technical defect, the Court held that mere non-filing of the certified copy within seven days should not lead to dismissal of an appeal which was filed electronically within the statutory time for filing appeals. The Court, exercising supervisory jurisdiction under Article 226, concluded that such procedural lapse ought not to defeat the adjudication on merits and that the appellate authority should be directed to hear the appeals afresh and decide them on merits after affording opportunity, rather than dismissing them for the procedural default. [Paras 6, 7]

Impugned order rejecting the appeal as time-barred for non-submission of the certified copy is quashed; appellate authority directed to de novo hear the appeals and pass a reasoned order on merits within three months.

Final Conclusion: The writ petition is allowed; the order dated July 03, 2023 is quashed and set aside and the appellate authority is directed to rehear the appeals de novo and pass reasoned orders on merits within three months.

Bail - arrest requirements under the scheme of the Central Goods and Services Tax Act, 2017 - custodial interrogation - confession and its retraction - economic offences and serious nature - absence of formal FIR/complaint - cooperation with investigation as bail condition - personal bond with sureties and restrictive conditions

Bail - arrest requirements under the scheme of the Central Goods and Services Tax Act, 2017 - custodial interrogation - confession and its retraction - economic offences and serious nature - absence of formal FIR/complaint - Whether the applicant was entitled to bail during trial having regard to the nature of allegations, the stage of investigation, recorded statements and the absence of any request for custodial interrogation or formal complaint/FIR. - HELD THAT: - The court examined the prosecution case as emerging from the record and noted that the applicant had been investigated, his statements recorded on multiple dates before arrest, and that no request for further custodial interrogation was made by the Department when he was produced before the Magistrate. The prosecution's case relied upon confessional statements attributed to the applicant and recoveries said to have been made at a search, and it alleged the applicant's involvement in creating and selling shelf-companies used to generate fake invoices and obtain input tax credit. The court accepted that economic offences are to be taken seriously but observed that the role attributed to the applicant was materially lesser than that of the main accused and that investigation had progressed to an advanced stage without a formal FIR/complaint being filed. In these circumstances, and particularly because no necessity for further custodial interrogation was shown, the court held that continued detention was not justified and a case for bail was made out, subject to appropriate conditions to allay the prosecution's apprehensions. [Paras 12, 13, 14]

Bail allowed to the applicant during trial, with the court recording that continued detention was not warranted in the absence of a shown necessity for further custodial interrogation and having regard to the stage of investigation and the lesser role attributed to the applicant.

Personal bond with sureties and restrictive conditions - cooperation with investigation as bail condition - non-tampering with prosecution evidence - What conditions should be imposed upon release on bail to safeguard the investigation and trial? - HELD THAT: - The court directed release on bail on furnishing a personal bond with two sureties and imposed specific conditions to address the prosecution's concerns. Conditions included deposit of passport (if any), prohibition on selling properties connected to the investigation, prohibition on tampering with prosecution evidence or intimidating witnesses, an obligation to cooperate with investigation and trial without seeking adjournments and to attend as required, and a prohibition on committing further offences. The court also directed verification of identity, status and residence of the applicant and sureties by the concerned court before acceptance of bonds, and warned that breach of conditions would be ground for cancellation of bail. [Paras 16, 17, 18]

Release on bail subject to furnishing bond with two sureties and the imposition of the specified restrictive and cooperative conditions, with verification of identity and warning that breach would invite cancellation of bail.

Final Conclusion: The bail application is allowed; the accused Mohit Kumar is directed to be released on bail on furnishing a personal bond with two sureties subject to specified conditions (passport deposit if any, no sale of relevant properties, no tampering with evidence or intimidation of witnesses, cooperation with investigation and trial, and verification of identity of applicant and sureties), breach of which will entail cancellation of bail. Observations are confined to disposal of the bail application and are not expressions on merits.

Technical glitch in electronic filing - restoration of appeal - condonation of delay - pre-deposit of penalty under proviso to Section 107(6) - application of Section 5 of the Limitation Act by virtue of Section 29(2)

Technical glitch in electronic filing - restoration of appeal - condonation of delay - pre-deposit of penalty under proviso to Section 107(6) - Whether the appellate authority's automated rejection of the first appeal for omission to state the disputed amount (caused by a technical glitch), and the consequent treatment of the second appeal as time-barred, could defeat the statutory right to challenge the order under Section 129(3), and what remedial directions are appropriate. - HELD THAT: - The Court accepted that the petitioner had filed the first appeal within the prescribed time but that it was auto-rejected because the disputed amount was not entered in the prescribed column due to a technical glitch. The appellate authority ought to have taken the timely filing of the first appeal into account when considering subsequent proceedings and, having regard to the principle of condonation of delay as explicated by the Division Bench in S.K. Chakraborty and sons v. Union of India & Ors., applied the doctrine that Section 5 of the Limitation Act is available by virtue of Section 29(2) (as relied upon in that decision). Given these facts, the petitioner's statutory right to challenge the order under Section 129(3) could not be defeated by an electronic filing error. Further, the proviso to Section 107(6) covering pre-deposit of penalty was noted; since the petitioner had paid the penalty under Section 129(1)(a), no further pre-deposit should be insisted upon in the exercise of appellate discretion in the peculiar circumstances of this case. In consequence, the appropriate remedial course is to set aside the rejections and restore the appeal for adjudication on merits, without insisting on any additional pre-deposit and after affording personal hearing. [Paras 10, 12, 13]

The orders of rejection dated 30th June, 2023 and 19th September, 2023 were set aside; the petitioner's appeals were restored and directed to be heard as a composite appeal on merits without insisting on any pre-deposit, with opportunity of personal hearing.

Final Conclusion: The writ petition is disposed of by restoring the appeals dismissed on automated/technical grounds; the appellate authority is directed to hear both appeals together on merits without requiring any pre-deposit, after giving personal hearing, and to decide the matter within six weeks.

Input tax credit - buyer's liability for supplier's default - proceedings under section 74 of the Goods and Service Tax, 2017 - burden of compliance on supplier for filing returns - deposit as condition for modification of demand

Input tax credit - buyer's liability for supplier's default - proceedings under section 74 of the Goods and Service Tax, 2017 - burden of compliance on supplier for filing returns - deposit as condition for modification of demand - Whether proceedings under section 74 could be initiated against the appellant for availing input tax credit where the appellant produced proper invoices, made payments through banking channels and the suppliers failed to file returns - HELD THAT: - The Court noted that the appellant had purchased goods on proper invoices, paid consideration through banking channels and the applicable GST, and had recorded these transactions and credits for the tax period April 2021 to March 2022. The suppliers had received GST from the appellant but had not filed their returns. The Court observed that it was the suppliers' duty to file returns and that the purchasing dealer, having produced invoices and proof of payment, could not be made fully liable for the suppliers' default. Applying the discretion available under the relevant provisions, the Court modified the earlier order by requiring the appellant to deposit a portion of the disputed demand as a condition for relief, balancing the need to protect revenue with the appellant's established documentary compliance. [Paras 4, 5, 6, 7]

Order modified: since the appellant produced invoices and payment evidence and the suppliers failed to file returns, appellant directed to deposit 10% of the demanded amount; appeal disposed of.

Final Conclusion: The appeal was allowed in part: having produced invoices and proof of payment for April 2021 to March 2022 and given the suppliers' failure to file returns, the impugned order was modified and the appellant was directed to deposit 10% of the demand, whereupon the appeal was disposed of.

Exemption under Notification No.12/2017-CT (Rate) dated 28.06.2017 - applicability of reverse charge for renting of property - taxation of pre-GST turnover - comparison between profit and loss account and GSTR-9/GSTR-9C - interest under Section 50 of the TNGST Act, 2017 - penalty under Section 73(9) of the TNGST Act, 2017 - remand for fresh consideration

Exemption under Notification No.12/2017-CT (Rate) dated 28.06.2017 - testing charges and professional/medical services exemption - Claimed exemption under Notification No.12/2017-CT (Rate) in respect of Sl.Nos.2, 3, 4 & 5 in the demand-table remitted for fresh consideration. - HELD THAT: - The High Court observed prima facie that the petitioner, a hospital, appears to be entitled to exemption under Notification No.12/2017-CT (Rate) dated 28.06.2017 insofar as the demands recorded at Sl.Nos.2, 3, 4 and 5 (testing charges, RCM towards rent/professional fees and other income) are concerned. The Court noted that many grounds raised before it were not pressed before the respondent and that the respondent's reliance on the assessee's profit and loss account vis-a -vis the returns (GSTR-9/GSTR-9C) requires detailed consideration. In view of these factors and the prima facie view on exemption, the Court refrained from adjudicating the merits and directed a fresh decision by the respondent on these claims of exemption. [Paras 8, 9]

Demands standing in Sl.Nos.2, 3, 4 & 5 set aside and remitted to the respondent for fresh consideration on merits and in accordance with law.

Applicability of reverse charge for renting of property - exemption under Notification No.13/2017-CT (Rate) dated 28.06.2017 - Liability to tax on reverse charge basis for the amount in Sl.No.1 in the demand-table remitted for fresh consideration. - HELD THAT: - The Court took a prima facie view that Notification No.13/2017-CT (Rate) dated 28.06.2017 may be applicable insofar as the demand at Sl.No.1 (tax on difference in turnover / rent issue) is concerned, and that the question whether reverse charge applies (particularly as to renting categories) and its application to the petitioner merits detailed examination by the respondent. Given the respondent's prior treatment and the need for comprehensive adjudication, the impugned order was set aside and the matter remitted for fresh adjudication. [Paras 8, 9]

Demand at Sl.No.1 set aside and remitted to the respondent for fresh consideration on merits and in accordance with law.

Taxation of pre-GST turnover - comparison between profit and loss account and GSTR-9/GSTR-9C - Treatment of turnover/income (including pre GST period) and the correctness of taxing pre GST turnover remitted for fresh consideration. - HELD THAT: - The Court recorded that the impugned demand appears to have resulted from an erroneous consideration of turnover/income in the profit and loss account for the period in dispute, which includes pre GST period transactions governed by the Finance Act, 1994. It noted that the respondent compared whole-year profit and loss figures with GST returns (GSTR-9/GSTR-9C) and that such comparison and the resultant taxation of pre GST turnover require detailed re-examination. Consequently, the matter was not decided on merits but remitted to the respondent to reassess after taking appropriate materials and pleadings into account. [Paras 6, 8, 9]

Question of taxation of turnover (including pre GST period) set aside and remitted for fresh consideration by the respondent.

Remand for fresh consideration - Direction to respondent to pass fresh order and for petitioner to file reply; writ petition allowed by way of remand. - HELD THAT: - Observing that several grounds raised by the petitioner were not previously urged before the respondent and that disputed factual questions require adjudication, the Court set aside the impugned order and remitted the matter to the respondent with directions to decide afresh on merits within eight weeks. The petitioner was directed to cooperate by filing a proper reply within two weeks. The impugned order was to be treated as corrigendum to the show-cause notice. The Writ Petition was allowed by way of remand. [Paras 9, 10, 11]

Impugned order set aside; matter remitted to respondent to decide afresh within the prescribed time with petitioner-directed cooperation; Writ Petition allowed by way of remand.

Final Conclusion: The High Court set aside the impugned order and, taking a prima facie view in favour of the petitioner on claimed exemptions and errors in treating pre GST turnover, remitted the matters to the respondent for fresh decision on merits within eight weeks, with directions for the petitioner to file a reply within two weeks; the writ petition is allowed by way of remand.

Violation of principles of natural justice - opportunity to cross-examine third-party witness - reliance on statements recorded from third parties in assessment proceedings - writ jurisdiction against an appealable order where alternative remedy exists - condonation of delay under Section 5 of the Limitation Act, 1963

Opportunity to cross-examine third-party witness - violation of principles of natural justice - reliance on statements recorded from third parties in assessment proceedings - Whether the assessment order is vitiated for denial of opportunity to cross-examine a third-party witness and whether the writ petition is maintainable on that ground. - HELD THAT: - The Court examined the record and found that the petitioner did not make any specific request before the assessing officer for issuance of summons to produce Amit Kumar Agarwal for cross-examination, despite participating in the proceedings. The earlier order under Section 148A(d) recorded that there was no scope to provide such an opportunity at that stage. Merely asserting in replies that the petitioner was not afforded a right to cross-examine, without applying for issuance of summons or making a specific prayer to the assessing officer, does not vitiate the assessment proceedings. Where an alternative remedy by way of appeal exists against an assessment order, writ jurisdiction is not to be exercised merely because the petitioner alleges denial of cross-examination when no specific procedural step was taken before the assessing officer to secure such an opportunity. [Paras 11, 13]

Writ petition on the ground of denial of opportunity to cross-examine is not entertained because no specific request for summons was made before the assessing officer and an alternative remedy by appeal is available.

Writ jurisdiction against an appealable order where alternative remedy exists - condonation of delay under Section 5 of the Limitation Act, 1963 - Directions to the petitioner and appellate authority regarding filing of appeal and consideration of request to cross-examine the third-party witness. - HELD THAT: - Recognising the existence of an alternative statutory remedy, the Court directed that the petitioner may file an appeal before the appellate authority within 15 days and accompany it with a server copy of this order and an application under Section 5 of the Limitation Act, 1963 explaining any delay. The appellate authority was directed to consider and, if appropriate, condone the delay in view of the pendency of the writ petition and to decide the appeal on merits. The Court further observed that the petitioner may seek an opportunity to cross-examine Amit Kumar Agarwal before the appellate authority, and that such a request shall be considered having regard to the Supreme Court's observations in ITO v. M. Pirai Choodi. [Paras 14, 15]

Petitioner permitted to file appeal within 15 days with an application for condonation of delay; appellate authority to consider condonation and any request to cross-examine the third-party in accordance with law and relevant precedent.

Final Conclusion: Writ petition dismissed without costs; petitioner directed to pursue appeal within a limited period with a delay-condonation application and the appellate authority directed to consider the appeal on merits and any request to cross-examine the third-party witness in accordance with law.

Rectification under section 154 of the Income-tax Act - acceptance of rectification application - absence of live grievance in appeal - application of mind

Rectification under section 154 of the Income-tax Act - acceptance of rectification application - absence of live grievance in appeal - application of mind - Whether the appeals by the assessee raise any sustainable grievance after the Assessing Officer accepted the assessee's rectification applications and reduced the tax liabilities for the assessment years in question - HELD THAT: - The Tribunal noted that the Assessing Officer, on receipt of rectification applications, passed rectification orders reducing the demands for A.Y. 2014-15, 2016-17 and 2018-19. The CIT(A) recorded these facts, found that rectification proceedings were not suo motu but taken up after the assessee's applications and that the liabilities were accordingly reduced. Since the relief sought in the rectification applications was granted by the Assessing Officer, the Tribunal found that the assessee had not shown how it remained aggrieved by the section 154 orders. The Tribunal accepted the reasoning of the CIT(A) that there was no merit in the grounds which alleged lack of application of mind or arbitrariness, because the disputed demands were adjusted by the rectification orders, leaving no live controversy for adjudication. [Paras 5, 6]

Appeals dismissed for lack of any grievance after rectification orders reduced the assessed liabilities for A.Y. 2014-15, 2016-17 and 2018-19.

Final Conclusion: All three appeals are dismissed as the Assessing Officer's rectification orders accepted the assessee's claims and there remained no live grievance to sustain the appeals for A.Y. 2014-15, 2016-17 and 2018-19.

Reopening of assessment on 'reason to believe' - approval for reopening by competent authority - scope of reassessment limited to reasons recorded - explanation of unexplained cash credits under section 68 - treatment of cash deposits as unexplained money under section 69A - taxability of sale proceeds of agricultural land

Reopening of assessment on 'reason to believe' - approval for reopening by competent authority - Validity of initiation of proceedings under sections 147/148 by reason of cash deposits and approval obtained from higher authority - HELD THAT: - The Tribunal found on the record that the Assessing Officer formed reasons to believe based on information about substantial cash deposits and obtained the requisite approval from the proper authority. The contentions that the reopening was mechanically recorded or that the sanctioning authority acted without independent application of mind were considered but rejected. The Tribunal declined to quash the reopening, observing that the AO had taken proper approval and that the presence of large unexplained cash deposits together with non-filing of return justified reopening beyond four years for verification. The assorted procedural objections raised by the assessee were not accepted and the Tribunal refused to adjudicate further on them. [Paras 11]

Reopening under sections 147/148 upheld as valid; sanction/approval on record and reopening not quashed.

Scope of reassessment limited to reasons recorded - explanation of unexplained cash credits under section 68 - treatment of cash deposits as unexplained money under section 69A - taxability of sale proceeds of agricultural land - Whether additions made by AO/CIT(A) (under section 68/69A) were sustainable once assessee produced evidence of sale of agricultural land as source of cash deposits - HELD THAT: - On merits the Tribunal accepted that the assessee produced documents showing sale of agricultural land and that the deposits in the bank related to those transactions. The Tribunal emphasised the principle that reassessment proceedings must remain within the mandate of the reasons recorded for reopening; once the source for the cash deposits was brought on record, the AO could not legitimately travel beyond that mandate to make further additions. Consequently, the Tribunal held that sustaining additions on the basis that the deposits were unexplained - and the CIT(A)'s confirmation under a different head (section 69A) - was impermissible where the sources had been established on verification. The appeal was allowed to that extent. [Paras 12]

Additions disallowed insofar as they exceeded the scope of reopening; once sources for cash deposits (sale of agricultural land) were established, additions under section 68/69A could not be sustained.

Final Conclusion: Reopening of assessment was held valid on the recorded reasons and with proper sanction; however, on merits the Tribunal allowed the appeal partly, holding that once the assessee produced evidence that bank deposits arose from sale of agricultural land, the Assessing Officer/CIT(A) could not make additions beyond the mandate of the reasons for reopening and the additions under section 68/69A were not sustainable to that extent.

Definition of "royalty" under Explanation 2 to section 9(1)(vi) - meaning of "process" as an item of intellectual property - "use" or "right to use" requires possession, dominion and control - Effect of Explanation 5 and Explanation 6 in widening scope of "process" - distinction between service/usage of facility and payment for use of equipment - business profits versus royalty; requirement of permanent establishment

Definition of "royalty" under Explanation 2 to section 9(1)(vi) - meaning of "process" as an item of intellectual property - Effect of Explanation 5 and Explanation 6 in widening scope of "process" - distinction between service/usage of facility and payment for use of equipment - Whether the interconnect utility charges received by the non-resident assessee constitute "royalty" under the definition contained in Explanation 2 read with Explanations 5 and 6 to section 9(1)(vi). - HELD THAT: - The Tribunal examined the textual and contextual meaning of the word 'process' in Explanation 2 and held that 'process' is to be read as a species of intellectual property, ejusdem generis with patent, invention, secret formula, etc., and not as any publicly available method or mere facility. While Explanation 5 and 6 expand the scope by clarifying that royalty includes consideration irrespective of possession, control or situs and that 'process' includes transmission by satellite, cable or fibre, those explanations do not eliminate the requirement that the grantor be denuded of exclusive rights and that the recipient obtain possession/dominion/control over the intellectual property. Applying the tests developed in the authorities considered (including AAR and judicial precedents addressing 'use' and 'right to use'), the Tribunal found that the Indian telecom operator merely availed a service or facility (bandwidth/connectivity) and did not obtain the exclusive right to use or control the underlying process/equipment. The predominant character of the transaction is provision of telecommunication service by the non-resident provider using its own network; there was no transfer of an item of intellectual property nor any grant of exclusive rights which would attract the royalty definition. Consequently, the receipts cannot be characterised as 'royalty' under Explanation 2 read with Explanations 5 and 6. [Paras 8]

Payments received as interconnect utility charges are not "royalty" within the meaning of Explanation 2 read with Explanations 5 and 6 to section 9(1)(vi).

Business profits versus royalty; requirement of permanent establishment - "use" or "right to use" requires possession, dominion and control - Whether, having regard to absence of treaty and facts, the payments are taxable in India as business profits because of a permanent establishment or otherwise taxable in India. - HELD THAT: - The Tribunal noted that no case was made out by the Revenue to establish that the non-resident assessee had a permanent establishment in India. In the absence of PE and given that the receipts do not qualify as royalty, the sums received are business receipts of the non-resident arising from extra-territorial sources and accordingly are taxable in the recipient's country under ordinary principles. The Tribunal relied on the finding that the nature of the arrangement was provision of international carriage/connectivity services from the non-resident's network and that the revenue did not demonstrate any nexus that would convert those receipts into Indian-taxable business profits by reason of presence or PE in India. [Paras 4, 11]

There is no permanent establishment of the assessee in India; the payments are not taxable in India as business profits and are to be regarded as business profits taxable in the recipient's country.

Final Conclusion: Following analysis of Explanation 2 read with Explanations 5 and 6 and the jurisprudence on the meaning of "use" and "process", the Tribunal held that the interconnect utility charges received by the Hong Kong resident assessee do not constitute "royalty" and, in the absence of any permanent establishment in India, the receipts are not taxable in India; the appeals are accordingly partly allowed.

Fee for technical services (FTS) as defined in Explanation 2 to section 9(1)(vii) - royalty (use of process) as defined in Explanation 2 to section 9(1)(vi) - TDS liability under section 194J - noscitur a sociis - remand for examination with technical expert evidence - application of DTAA vis-a -vis domestic law - retrospective clarificatory/explanatory amendments to definition of royalty

Fee for technical services (FTS) as defined in Explanation 2 to section 9(1)(vii) - TDS liability under section 194J - noscitur a sociis - remand for examination with technical expert evidence - Whether roaming charges paid to other telecom operators constitute fees for technical services attracting TDS under section 194J - HELD THAT: - The Tribunal examined authorities at High Court, Supreme Court and coordinate benches and applied the interpretive rule of noscitur a sociis to Explanation 2 to section 9(1)(vii), concluding that 'technical services' carries a human-element requirement. Post-Supreme Court remand practice (examination with technical experts) and subsequent factual determinations by various benches established that provision of roaming/interconnect connectivity is automated after initial configuration and does not involve human intervention during actual call/data traffic. The Tribunal found these precedents and the factual findings persuasive and held that roaming charges are not FTS and therefore do not attract TDS under section 194J; consequential findings of default under section 201(1) were set aside on this ground. [Paras 15]

Roaming charges do not amount to fees for technical services and no TDS under section 194J was deductible; grounds allowed.

Royalty (use of process) as defined in Explanation 2 to section 9(1)(vi) - application of DTAA vis-a -vis domestic law - retrospective clarificatory/explanatory amendments to definition of royalty - Whether roaming charges constitute 'royalty' (use of process) so as to attract TDS - HELD THAT: - The Tribunal reviewed jurisprudence interpreting 'process' and 'royalty' under domestic law and various DTAAs, noting that treaty definitions are narrower (require 'use of' or 'right to use' and, in treaty language, often envisage a 'secret' process). Applying the rule of ejusdem generis/noscitur a sociis and the binding decisions of jurisdictional High Courts and Tribunals, the Tribunal concluded that the interconnect/roaming payments are for standard automated telecom services, not for the use of an exclusive intellectual property or secret process, and that retrospective explanatory amendments to the domestic definition do not alter DTAA import where applicable. On these grounds roaming charges were held not to be royalty. [Paras 15]

Roaming charges are not 'royalty' within the meaning of Explanation 2 to section 9(1)(vi) (nor under relevant DTAAs) and therefore do not attract TDS as royalty.

TDS liability under section 194J - interest under section 201(1A) - Validity of interest levied under section 201(1A) consequent to alleged non-deduction of TDS - HELD THAT: - Interest under section 201(1A) is consequential to a finding of TDS default. Having quashed the primary TDS demand on roaming charges (and retained that the assessee was not in default on those payments), the Tribunal held that the impugned interest obligation falls away and requires no separate adjudication. [Paras 17]

Interest levied under section 201(1A) consequent to the deleted TDS demand is rendered infructuous.

Appeal rendered infructuous - Effect of outcome of ITA No. 265/Ind/2018 on ITA No. 415/Ind/2014 (revision under section 263) - HELD THAT: - Parties agreed and the Tribunal observed that a successful adjudication in ITA No. 265/Ind/2018 on the TDS issues would make the revision appeal under section 263 infructuous. Following allowance of the TDS-related grounds, the Tribunal dismissed ITA No. 415/Ind/2014 as infructuous without further adjudication. [Paras 18, 19]

ITA No. 415/Ind/2014 dismissed as infructuous; ITA No. 265/Ind/2018 allowed.

Final Conclusion: The Tribunal allowed the assessee's appeal on the contested grounds: roaming/interconnect charges paid to other telecom operators are neither fees for technical services nor royalty and therefore did not attract TDS under section 194J; consequential interest under section 201(1A) ceased to operate; the related revision appeal under section 263 was held infructuous and dismissed.

Unexplained investments - Amount of investments not fully disclosed in books - Family settlement does not amount to transfer - Deemed income arising from difference between stamp duty value and consideration - Burden on Assessing Officer to find excess expenditure before invoking section 69B - Income from house property - deemed annual value and municipal ratable value

Unexplained investments - Amount of investments not fully disclosed in books - Family settlement does not amount to transfer - Deemed income arising from difference between stamp duty value and consideration - Burden on Assessing Officer to find excess expenditure before invoking section 69B - Deletion of addition made by the Assessing Officer under section 69/69B of the Act in respect of difference between stamp duty valuation and sale consideration for purchase of the impugned property. - HELD THAT: - The Tribunal held that section 69 applies only to investments not recorded in the books, whereas the impugned purchase was recorded in the assessee's books and therefore could not sustain an addition under section 69. Section 69B requires the Assessing Officer to first find that the assessee has expended an amount in excess of that recorded in the books before the burden shifts to the assessee to explain the excess; no such finding or other evidence of excess expenditure was recorded by the AO, who relied solely on stamp duty valuation. Further, the impugned transaction was found to have taken place pursuant to a family settlement: the family settlement deed and clause designating transfer to entities majority/solely owned and controlled by the relevant family member, together with the assessee's shareholding (99.99% held by the family member) and inclusion of the property in schedule-2C, supported treating the transfer as consequent to the family settlement. The Tribunal also observed that the statutory provision available in that assessment year to tax such difference was section 56(2)(vii)(b), which applied only to individuals and HUFs, and that section 56(2)(x) (covering all classes of assessees) operated only from AY 2017-18. In view of these factors the Tribunal deleted the addition made under section 69/69B. [Paras 10, 11, 12, 13, 14]

Addition under section 69/69B deleted; Grounds No. 1 to 6 allowed.

Income from house property - deemed annual value and municipal ratable value - Deemed income arising from expected rent - Remand of the dispute over deemed income from house property to the Assessing Officer for fresh consideration in view of additional evidence on municipal ratable value. - HELD THAT: - The Tribunal noted that the AO, relying on information obtained under section 133(6), assessed a deemed monthly rent of Rs. 33,000 and made an addition to income from house property, whereas the assessee produced additional evidence of municipal ratable value substantially lower than the value adopted by the AO. As the property was vacant and no actual rent was received, the municipal ratable value evidence goes to the root of the issue. For substantial cause the Tribunal admitted the additional evidence and directed that the matter be remitted to the AO for fresh adjudication, permitting the AO to examine the newly filed material and decide in accordance with law while affording the assessee an opportunity of being heard, keeping in view the Tribunal precedent cited by the assessee. [Paras 15, 16, 18]

Issue remitted to the Assessing Officer for fresh consideration on the basis of admitted additional evidence; Grounds No. 7 & 8 allowed for statistical purposes.

Consequential effect on interest under section 234B - Treatment of interest under section 234B is consequential to the tax adjustments and did not require separate adjudication by the Tribunal. - HELD THAT: - The Tribunal recorded that the grievance on levy of interest under section 234B arises consequentially from the additions appealed against and therefore did not call for independent determination in the present proceedings. [Paras 19]

Interest under section 234B not separately adjudicated as it is consequential.

Final Conclusion: The appeal is allowed for statistical purposes: the addition under section 69/69B in respect of the difference between stamp duty value and consideration is deleted; the dispute on deemed income from house property is remitted to the Assessing Officer for fresh consideration in light of admitted municipal ratable value evidence; interest under section 234B was not independently adjudicated as consequential.

Computation of capital gains under a registered Development Agreement - Admissibility of value stated in a registered Joint Development Agreement as consideration - Application of Section 54F - deduction for investment in residential house received in kind - Proceedings under section 147 read with section 144 of the Income tax Act - assessment based on available record - Remand to Assessing Officer for fresh decision on claim within statutory four corners

Computation of capital gains under a registered Development Agreement - Admissibility of value stated in a registered Joint Development Agreement as consideration - Proceedings under section 147 read with section 144 of the Income tax Act - assessment based on available record - Whether the Assessing Officer and the Commissioner (Appeals) were justified in adopting the value mentioned in the registered Joint Development Agreement and determining the assessee's share of consideration at the figure arrived at by prorating the built up area after excluding land value. - HELD THAT: - The Tribunal held that where a Joint Development Agreement is registered and records both the share entitlement and an estimated project value, capital gains are to be computed on the date of registration based on the registered JDA. The contents of a registered document are to be given precedence over oral evidence unless rebutted by contemporaneous evidence; no such rebuttal was placed before the Tribunal. The Assessing Officer computed the assessee's share from the registered JDA after excluding prorata land value, and that approach accords with the jurisprudence recognizing the date of registration as the date of transfer when a JDA is registered. In the absence of evidence displacing the JDA value, the grounds contesting the valuation were held to be without merit and dismissed. [Paras 8, 9, 10]

Grounds challenging the adoption of the registered JDA value and the computation of the assessee's share are dismissed.

Application of Section 54F - deduction for investment in residential house received in kind - Claim admissibility before appellate authorities versus claim before Assessing Officer - Remand to Assessing Officer for fresh decision on claim within statutory four corners - Whether the assessee is entitled to deduction under section 54F in respect of constructed area received pursuant to the JDA and whether the Tribunal can entertain and allow such claim. - HELD THAT: - The Tribunal noted that the assessee had not claimed deduction under section 54F in the return and had not filed a revised return before the Commissioner (Appeals), making the claim initially raised only in appellate proceedings. While authorities below relied on the precedent that claims not made before the Assessing Officer may be barred, the Tribunal observed that the Tribunal's powers under section 254 are not so constrained. Rather than deciding entitlement on merits, the Tribunal considered it appropriate to remit the issue to the Assessing Officer for fresh adjudication within the four corners of section 54F. The Assessing Officer is directed to afford the assessee an opportunity of hearing, consider any documents the assessee may file, examine whether the statutory conditions of section 54F are satisfied (including whether receipt of constructed area in kind amounts to investment for the section), and pass a reasoned speaking order accordingly. [Paras 11, 12]

Issue remanded to the Assessing Officer for de novo consideration of the section 54F claim with directions to decide after hearing and on evidence; appeal allowed for statistical purposes.

Final Conclusion: The Tribunal upheld the Assessing Officer's adoption of the registered Joint Development Agreement value for computing capital gains and dismissed valuation grounds; the question of entitlement to deduction under section 54F was not decided on merits but remitted to the Assessing Officer for fresh, speaking adjudication after giving the assessee an opportunity to produce evidence.

Assessment under Section 153C and its interplay with Section 153A - Recording of satisfaction as precondition for proceedings under Section 153C - Validity of assessment initiated under Section 144 r.w.s. 142(1) where Section 153C proceedings were applicable

Assessment under Section 153C and its interplay with Section 153A - Recording of satisfaction as precondition for proceedings under Section 153C - Validity of assessment initiated under Section 144 r.w.s. 142(1) where Section 153C proceedings were applicable - Whether the assessment for A.Y. 2012-13 made under Section 144 r.w.s. 142(1) was valid when a satisfaction relevant to Section 153C had been recorded and Section 153C proceedings were not invoked. - HELD THAT: - The Tribunal applied the principle that where seized documents/assets belonging to a person other than the searched person are involved, the Assessing Officer must record a satisfaction that the seized items belong to that other person before initiating proceedings under Section 153C; thereafter the Assessing Officer having jurisdiction over that other person proceeds in accordance with Section 153A. The date of recording of such satisfaction governs the application of the proviso to Section 153A and the period of six assessment years. In the present case the satisfaction relevant to Section 153C was recorded on 18.11.2013 (A.Y. 2014-15), and therefore assessments for A.Y. 2012-13 fall within the scope of Section 153C/153A procedure. The Tribunal held that, because the AO did not invoke Section 153C and did not initiate proceedings under that provision but instead made an assessment under Section 144 r.w.s. 142(1), the assessment was not in conformity with the statutory scheme and is to be treated as void ab initio. [Paras 9, 10]

The assessment for A.Y. 2012-13 made under Section 144 r.w.s. 142(1) is void ab initio as Section 153C proceedings ought to have been invoked following the satisfaction recorded on 18.11.2013.

Final Conclusion: Cross objection of the assessee allowed; revenue appeal dismissed, and assessment for A.Y. 2012-13 held void ab initio for failure to invoke the statutory procedure under Section 153C/153A.

Mis classification of imported goods - what is admitted need not be proved - voluntariness of statement under section 108 - retraction of statement and evidential value - payment of differential duty 'under protest' - evidential proof required - confiscation and redemption fine - penalty under section 114A of the Customs Act, 1962 - penalty under section 112 of the Customs Act, 1962 - appellate authority exceeding jurisdiction

Mis classification of imported goods - what is admitted need not be proved - Re classification of the imported goods as Aluminium Paste Copper Clad Laminates and liability to differential customs duty was upheld. - HELD THAT: - The partner of the appellant voluntarily accepted on record that the goods were aluminium based and agreed to the revised classification and to pay differential duty. The Tribunal applied the settled principle that facts admitted by a party need not be further proved by the department and relied on earlier decisions to hold that the reclassification and the computed differential duty are sustainable. Consequently, the demand for differential duty and its acceptance by the appellant were upheld. [Paras 10, 11, 12, 17]

Re classification and the demand of differential customs duty are confirmed.

Voluntariness of statement under section 108 - retraction of statement and evidential value - The recorded statement accepting re classification was held to be voluntary and the subsequent retraction was rejected as belated and inadmissible. - HELD THAT: - The statement of the partner recorded on 25.03.2021 accepted the revised classification and duty. The retraction dated 16.04.2021 was made after the adjudicating order and was treated as an afterthought. In absence of any material to show that the statement was obtained by duress or exhortation, the Tribunal declined to give evidential value to the retraction and upheld reliance on the original admission. [Paras 9, 13]

The admission is treated as voluntary and the later retraction is rejected.

Payment of differential duty 'under protest' - evidential proof required - The plea that the differential duty was paid 'under protest' was rejected for want of contemporaneous evidence. - HELD THAT: - The record did not show the challan or contemporaneous documentation indicating that the differential duty payment was made under protest; the notation of payment under protest made later was held to be an afterthought and of no evidential value. Accordingly, the Tribunal refused to treat the payment as involuntary. [Paras 7, 14]

The claim of payment 'under protest' is rejected.

Confiscation and redemption fine - Confiscation of the goods and the option to redeem on payment of the prescribed fine were confirmed. - HELD THAT: - Having accepted the mis classification and the duty demand, and with the counsel for the appellant not disputing confiscation and redemption fine during hearing, the Tribunal confirmed the order of confiscation and the redemption fine as imposed by the adjudicating authority. [Paras 2, 3, 17]

Confiscation and the redemption fine are confirmed.

Penalty under section 114A of the Customs Act, 1962 - penalty under section 112 of the Customs Act, 1962 - appellate authority exceeding jurisdiction - The penalty imposed under section 112 by the Commissioner (Appeals) was held to be beyond the appellate authority's jurisdiction and was set aside; the penalty under section 114A had already been set aside by the Commissioner (Appeals). - HELD THAT: - The adjudicating authority's order had imposed penalty under section 114A and did not refer to section 112. The Commissioner (Appeals), while setting aside the section 114A penalty, imposed penalty under section 112 despite no such proposal or adjudication in the original order. The Tribunal found the appellate authority lacked jurisdiction to impose a penalty under section 112 in the appeal and distinguished the decision relied upon by the department where the show cause notice had specifically proposed section 112. Accordingly, the appellate imposition of penalty under section 112 was set aside. [Paras 3, 15, 16]

Penalty under section 112 imposed by the Commissioner (Appeals) is quashed; penalty under section 114A remains set aside.

Final Conclusion: The appeal is partly allowed: re classification, differential duty demand, confiscation and redemption fine are confirmed; the appellant's admission is treated as voluntary and retraction/payment under protest are rejected; the penalty imposed by the Commissioner (Appeals) under section 112 is set aside as beyond jurisdiction and the earlier penalty under section 114A remains set aside.

Classification of goods by tariff headings - Specific overrides the generic - Rule 3(a) and Rule 3(c) of the General Rules for the Interpretation of the Harmonized System - HSN Explanatory Notes as an aid to classification - Note 2(u) to Chapter 39 - exclusion where goods classifiable in Chapter 90 - Note I(L) to Chapter 90 - plastic containers for collection, storage and transfusion of blood - End-use and special design for medical purposes as determinative of classification under Chapter 90

Classification of goods by tariff headings - End-use and special design for medical purposes as determinative of classification under Chapter 90 - HSN Explanatory Notes as an aid to classification - Note 2(u) to Chapter 39 - exclusion where goods classifiable in Chapter 90 - Whether insulated plastic vaccine carriers and similar boxes are classifiable under Chapter 90 (heading 9018) as instruments or appliances used in medical, surgical or veterinary sciences or under Chapter 39 (heading 3923) as articles for conveyance or packing of plastics (insulated ware). - HELD THAT: - The Tribunal found the products to be insulated boxes specifically designed and manufactured to WHO/UNICEF/Ministry specifications for carrying vaccines and blood, made of high density polyethylene with polyurethane foam insulation. The HSN Explanatory Notes to heading 3923 describe it as covering plastic articles used for packing or conveyance generally, but Note 2(u) to Chapter 39 expressly excludes articles of Chapter 90. The HSN Explanatory Notes and Note I(L) to Chapter 90 demonstrate that plastic containers intended for collection, storage and transfusion of blood are included in heading 9018, and that Chapter 90 embraces instruments and appliances used in medical practice irrespective of material. The Tribunal applied the established principle that a specific medical design and dedicated end-use favour classification under Chapter 90 (specific) over a more generic Chapter 39 description. Precedents relied upon by the parties were examined: the Laxbro decision was found factually distinguishable (laboratory ware, not medical-use carriers); decisions such as Cognate India and Becton Dickinson support classification under Chapter 90 where items are specially designed for medical use. The Tribunal also noted that the Commissioner had concluded the goods were more specifically classifiable under heading 9018 and there was no application of Rule 3(c) by the Commissioner. Having regard to the special design, intended medical use, HSN Notes and the express exclusion in Note 2(u), the Tribunal concluded that classification under heading 9018 is appropriate. [Paras 9, 10, 11]

The insulated plastic vaccine carriers and similar boxes are classifiable under Chapter 90, heading 9018, and not under Chapter 39 heading 3923; the Revenue's appeal is dismissed.

Final Conclusion: The Revenue's appeals challenging classification were dismissed; the insulated plastic vaccine/blood carriers manufactured to WHO/UNICEF/Ministry specifications are classifiable under Chapter 90 (heading 9018) on account of their specific medical design and end-use, and Note 2(u) to Chapter 39 excludes them from Chapter 39.

Unjust enrichment - refund of duty - test of unjust enrichment under Section 27 of the Customs Act - presumption under Section 28 of the Customs Act - amendment of Bills of Entry under Section 149 of the Customs Act - burden of duty passed on to buyers - finality of self-assessed bill of entry and belated refund claims

Unjust enrichment - test of unjust enrichment under Section 27 of the Customs Act - presumption under Section 28 of the Customs Act - refund of duty - amendment of Bills of Entry under Section 149 of the Customs Act - burden of duty passed on to buyers - Whether the appellant was unjustly enriched and therefore disentitled to refund of excess duty claimed in respect of imported goods - HELD THAT: - The Tribunal recorded that the original adjudicating authority had earlier rejected the refund claim on grounds that the exemption under the Notification was conditional, that the self-assessed Bills of Entry were final and that the appellant failed to rebut the statutory presumption under Section 28 that the duty burden was passed on to buyers. Subsequent to the appeal, the appellant sought amendment of the same Bills of Entry under Section 149 following intervening Supreme Court authority; the High Court directed amendment under Section 149 to reflect the concessional rate and to enable refund application. Pursuant thereto the Original Adjudicating Authority amended the position and, after considering evidence including prior similar refunds, expressly held that there was no unjust enrichment and granted consequential refund. Given this subsequent adjudication by the Original Authority that the differential duty had not been passed on to buyers, the Tribunal found that the primary controversy between the parties (unjust enrichment disentitling refund) had been resolved in favour of the appellant by the competent authority, rendering the present appeal moot. [Paras 6, 7]

Appeal disposed as infructuous since the Original Adjudicating Authority, after amendment of the Bills of Entry as directed by the High Court, held there was no unjust enrichment and granted the refund.

Final Conclusion: The appeal was disposed of as infructuous because the Original Adjudicating Authority subsequently granted the refund after amending the Bills of Entry and finding that there was no unjust enrichment; the Tribunal therefore did not adjudicate the substantive merit afresh.

Renewal of mining lease - deemed extension under Mineral Concession Rules, 2016 - lapse of mining lease for non-production - termination of agency on liquidation - power of Official Liquidator to carry on business for winding up - creditors' rights in winding up

Renewal of mining lease - deemed extension under Mineral Concession Rules, 2016 - Validity of the Company Court/High Court direction to constitute a High Powered Committee to decide renewal of the Kolha Roida, Thakurani and Dalki mining leases and whether renewal should be directed. - HELD THAT: - The Company Judge had directed formation of a High Powered Committee to decide, within three months, on renewal of the three leases in light of potential adverse consequences of non renewal and the prospect of realising funds for creditors. The Court examined the factual matrix - BPMEL having been non operational for decades, the power of attorney in favour of OMDC having terminated on liquidation, OMDC being a separate juristic entity with penal liabilities it cannot meet, and absence of any viable plan to fund, manage or operate the mines. In these circumstances entertaining renewal would be futile and devoid of practical benefit. Consequently the direction to constitute a High Powered Committee was unjustified and was set aside; the Company Court was not to examine renewal. The orders rejecting or dismissing the renewal applications were upheld in respect of Kolha Roida and treated as rejected/dismissed for Thakurani and Dalki. [Paras 27, 31, 32, 37, 38]

Direction to constitute a High Powered Committee set aside; renewals will not be examined and the State's rejection of Kolha Roida (and rejection/dismissal of Thakurani and Dalki) is upheld.

Termination of agency on liquidation - power of Official Liquidator to carry on business for winding up - Whether the Official Liquidator should be authorised, or the Company Court should exercise powers under the Companies Act to permit the liquidator to carry on business or appoint OMDC as agent to pursue renewal and continue mining operations. - HELD THAT: - BPMEL had executed a power of attorney in favour of OMDC which, by operation of law, stands terminated on liquidation. Although the Companies Act confers powers on a liquidator to carry on business for beneficial winding up, the Court found no basis to exercise such powers here. BPMEL has been in liquidation and non operational for decades; OMDC lacks capacity to meet penal liabilities and there is no demonstrated financial, technical or managerial plan to render renewal or continuation feasible. Given this factual backdrop, the Court declined to direct or sanction the Official Liquidator to carry on business or to appoint OMDC as agent to pursue the renewals. [Paras 31, 33]

No sanction to the Official Liquidator to carry on business or to appoint OMDC as agent for the purpose of renewing or operating the leases; such relief refused.

Creditors' rights in winding up - Entitlement and remedy of TGP (assignee of UCO Bank) and the workmen to claim dues arising from BPMEL's liquidation. - HELD THAT: - TGP, as an assignee, and the workmen have admissible claims recognised by the Official Liquidator and are entitled to pursue payment in accordance with the Companies Act, 1956. Though payments have been made in part, remaining claims and interest are to be enforced by raising all available pleas and contentions before the Company Court in accordance with law. The Court emphasised that non payment of workmen does not justify the extraordinary relief of lease renewal sought by TGP, and directed that proceedings before the Company Court continue so that creditors and workmen may seek enforcement of their dues under the Companies Act. [Paras 34, 35, 36, 39]

TGP and the workmen may pursue their claims and remedies before the Company Court under the Companies Act; relief of lease renewal is not granted as a means to satisfy creditors.

Final Conclusion: The appeal against the High Court (Calcutta) judgment is allowed; the direction to constitute a High Powered Committee is set aside and renewal of the three leases (Kolha Roida, Thakurani and Dalki) will not be examined-the State's rejection of renewal is upheld. The Official Liquidator is not authorised to carry on business or appoint OMDC as agent to effect renewal. TGP and the workmen remain entitled to pursue their claims under the Companies Act before the Company Court; no order as to costs.

Interim relief against regulatory disciplinary orders - judicial review of NFRA orders - debarment and monetary penalty by NFRA - self-review and auditor negligence - application of Standards on Auditing (SA 299, SA 240, SA 330, SA 500) - challenge to constitutional validity of Section 132(4) of the Companies Act, 2013

Interim relief against regulatory disciplinary orders - debarment and monetary penalty by NFRA - self-review and auditor negligence - Whether interim relief should be granted restraining enforcement of the NFRA final order debarring the auditors and imposing penalties - HELD THAT: - The Court examined the record of the NFRA final order, including the contemporaneous communications from the joint auditor (PW), the sequence of events showing PW's detailed observations dated 24.04.2019 and subsequent resignation with filing under section 143(12), and NFRA's findings that PHD and the engagement partner failed to perform independent procedures, resulting in self-review and failure to obtain sufficient appropriate audit evidence. Having regard to these findings on record, the Court found no prima facie ground to grant interim relief. The Court noted the NFRA's specific reliance on alleged non-compliance with auditing standards (including SA 299 (Revised), SA 240, SA 330 and SA 500) and its conclusions as to negligence and lack of adequate audit procedures; on that basis the Court declined to stay or enjoin the NFRA order at the interim stage.

Applications for interim directions rejected; no interim relief granted.

Judicial review of NFRA orders - challenge to constitutional validity of Section 132(4) of the Companies Act, 2013 - Whether the writ petitions raising constitutional and other challenges to the NFRA order should be entertained and placed with the board hearing related matters - HELD THAT: - The petitioners challenged the NFRA final order and also attacked the constitutional validity of Section 132(4) as well as certain NFRA Rules. The Court recorded that it is already hearing a batch of matters questioning Section 132(4) and accordingly entertained the instant writ petitions on its board. The Court directed ordinary procedural steps: issuance of notice, a timeline for filing of reply and rejoinder, and administrative tagging of these petitions with W.P.(C) 1065/2021 for hearing on the listed date. The Court did not adjudicate the merits of the constitutional challenge or NFRA's findings at this stage; it confined itself to admitting the petitions for judicial consideration and fixing procedural directions.

Writ petitions entertained and tagged with W.P.(C) 1065/2021; notice issued and timelines fixed for pleadings.

Procedural disposal of interlocutory applications - Disposition of miscellaneous/interlocutory applications filed in the writ petitions - HELD THAT: - Certain miscellaneous applications (CM APPL. 24158/2024, 24160/2024, 24162/2024) were allowed subject to exceptions and disposed of, as recorded in the order. Other interim applications for directions (CM APPL. 24157/24159/24161/2024) seeking interim protection were considered and rejected for the reasons given in relation to the NFRA record.

Specified miscellaneous applications allowed subject to exceptions and disposed; interim direction applications rejected.

Final Conclusion: The Court refused interim protection against the NFRA final order after noting the record and NFRA's conclusions; the writ petitions challenging the NFRA order and the constitutional validity of Section 132(4) are entertained, notice is directed, pleadings timetabled, the matters are tagged with W.P.(C) 1065/2021 for further hearing, and certain interlocutory applications are disposed of as recorded.

Tagging of related appeals for joint hearing - service of adjudicatory orders - uploading of tribunal orders on official website - requirement of certified copy to be enclosed with appeal - administrative clarification by regulatory authority

Tagging of related appeals for joint hearing - Notice issued and matter tagged with Civil Appeal No. 4404/2024 for joint consideration. - HELD THAT: - The Court directed that notice be issued in the present appeal and that it be tagged with Civil Appeal No. 4404/2024 titled "Sanjay Kumar Bansal vs. M/s. Soni Realtors Pvt. Ltd. & Ors.", thereby ordering association of the matters for purposes of onward hearing. Service was directed to be effected by all permissible modes, including dasti.

Notice issued and the appeal tagged with Civil Appeal No. 4404/2024; notice to be served by all modes including dasti.

Service of adjudicatory orders - uploading of tribunal orders on official website - requirement of certified copy to be enclosed with appeal - administrative clarification by regulatory authority - Direction to issue notice to the Insolvency and Bankruptcy Board of India to examine procedural ambiguities relating to service, uploading, and certified copies of NCLT orders. - HELD THAT: - The Court recorded its inclination to issue notice to the Insolvency and Bankruptcy Board of India (IBBI) in view of apparent ambiguity concerning (a) the modes and efficacy of service of orders passed by the National Company Law Tribunal, (b) the practice of uploading NCLT orders on the website, and (c) the requirement to obtain a certified copy of the order and enclose the same with an appeal. The IBBI was directed to examine whether the existing process requires clarification, modification or simplification and, implicitly, to assist the Court by addressing these administrative and procedural issues.

IBBI to be issued notice and requested to examine and advise on possible clarification, modification or simplification of the processes concerning service, uploading and certified copies of NCLT orders.

Final Conclusion: The Court issued notice and ordered the present appeal to be tagged with Civil Appeal No. 4404/2024; service is to be effected by all modes including dasti. The Court has inclined to issue notice to the IBBI to examine and report on procedural ambiguities relating to service of NCLT orders, their uploading on the website, and the requirement of certified copies with appeals.

Substantive appeal against admission under the Insolvency and Bankruptcy Code, 2016 - Right to raise grounds afresh before National Company Law Appellate Tribunal - Disposal of appeal without adjudicating merits

Substantive appeal against admission under the Insolvency and Bankruptcy Code, 2016 - Right to raise grounds afresh before National Company Law Appellate Tribunal - Availability of a substantive appeal against the NCLT order admitting a petition under the Insolvency and Bankruptcy Code, 2016 and the course open to the appellant. - HELD THAT: - The Court recorded that the National Company Law Tribunal had passed an order admitting the petition on 3 May 2024. It observed that a substantive appeal lies against an order of admission under the Insolvency and Bankruptcy Code, 2016. In consequence, the Court held that the appellant is at liberty to press all grounds raised in the present appeal before the National Company Law Appellate Tribunal in an appeal directed against the order of admission dated 3 May 2024. The Supreme Court did not adjudicate the merits of those grounds but indicated the proper forum and procedure for their consideration. [Paras 2, 3, 4]

Appeal disposed of with direction that the appellant may raise the grounds before the NCLAT in an appeal against the NCLT order dated 3 May 2024; merits not decided.

Final Conclusion: The appeal is disposed of; the appellant may file an appeal against the NCLT order of admission dated 3 May 2024 before the National Company Law Appellate Tribunal and may raise all grounds there; no adjudication on merits was undertaken.

Summary order. Appeal dismissed as withdrawn; appellant granted liberty to file a review of the impugned judgment limited to the ground that the Section 7 petition was barred by limitation; court makes no comment on merits; if the review is dismissed, appellant permitted to challenge the impugned order dated 02.04.2024 confined to the question of limitation; pending applications disposed of.

Application under Section 12A of the Insolvency and Bankruptcy Code, 2016 - Applicants under Section 7, Section 9 and Section 10 of the IBC - Maintainability of Section 12A application

Application under Section 12A of the Insolvency and Bankruptcy Code, 2016 - Applicants under Section 7, Section 9 and Section 10 of the IBC - Maintainability of Section 12A application - Scope and maintainability of an application under Section 12A of the IBC and who is competent to file it. - HELD THAT: - The Court held that an application under Section 12A of the Insolvency and Bankruptcy Code, 2016 is competent only if filed by the applicant who has initiated proceedings under Section 7, Section 9 or Section 10 of the IBC. The decision rests on the construction adopted by the Court that the remedy under Section 12A is available to the party which is the original applicant under those specified provisions; consequently, third parties or persons other than the applicant in proceedings under Section 7, 9 or 10 cannot maintain an application under Section 12A. The Court found no reason to interfere with the impugned judgment which applied that principle.

Application under Section 12A is maintainable only when filed by the applicant in proceedings under Section 7, 9 or 10 of the IBC; appeal dismissed.

Final Conclusion: The Civil Appeal is dismissed; the Court affirms that Section 12A applications under the IBC may be filed only by the applicant who has moved under Section 7, 9 or 10.

Appellate interference - Confirmation of appellate tribunal order - Dismissal of appeal - Disposal of pending applications

Appellate interference - Confirmation of appellate tribunal order - Dismissal of appeal - Whether the Supreme Court should interfere with the National Company Law Appellate Tribunal's order dated 14 March 2024 in Company Appeal (AT)(Insolvency) No 1366 of 2023. - HELD THAT: - The Bench examined the impugned order of the National Company Law Appellate Tribunal dated 14 March 2024 and found no reason to disturb or set it aside. No substantive legal principle or error was identified that warranted interference by this Court. Having concluded that the NCLAT's decision stands, the Court proceeded to dismiss the appeal and disposed of any pending applications consequential to that determination.

The NCLAT order dated 14 March 2024 in Company Appeal (AT)(Insolvency) No 1366 of 2023 is not interfered with; the appeal is dismissed and pending applications are disposed of.

Final Conclusion: Appeal dismissed; the Supreme Court declined to interfere with the NCLAT order dated 14 March 2024 in Company Appeal (AT)(Insolvency) No 1366 of 2023, and any pending applications are disposed of.

Initiation of proceedings under the Insolvency and Bankruptcy Code, 2016 not an appropriate remedy - condonation of delay - observations of court not to be treated as binding findings in other proceedings - dismissal of appeals

Initiation of proceedings under the Insolvency and Bankruptcy Code, 2016 not an appropriate remedy - dismissal of appeals - Appropriateness of initiating insolvency proceedings in the facts of the present cases and the consequential fate of the appeals - HELD THAT: - The Court agreed with the impugned judgments' observations that, on the factual background and the disputes arising in these matters, initiation of proceedings under the Insolvency and Bankruptcy Code, 2016 was not the appropriate remedy. Applying that conclusion to the present appeals, the Court dismissed the appeals. The Court expressly clarified that the observations recorded in the impugned judgments and the dismissal in these appeals are confined to the present matters and shall not be treated as binding findings in any other pending or future proceedings between the parties.

Appeals dismissed; initiation of IBC proceedings held not appropriate on these facts; observations not to be treated as binding in other proceedings.

Condonation of delay - Application for condonation of delay in filing Civil Appeal(D) No. 3564 of 2024 - HELD THAT: - The Court recorded that delay in Civil Appeal(D) No. 3564 of 2024 was condoned. No further reasoning on delay was required for disposal of the appeals, but the specific order condoning delay was made.

Delay in Civil Appeal(D) No. 3564 of 2024 condoned.

Final Conclusion: The appeals are dismissed; delay in Civil Appeal(D) No. 3564 of 2024 is condoned; the Court's observations that IBC proceedings were not the appropriate remedy are confined to these cases and are not binding in other proceedings; pending applications, if any, are disposed of.

No interference with appellate tribunal's order - Dismissal of civil appeal - Maintenance of National Company Law Appellate Tribunal decision

No interference with appellate tribunal's order - Maintenance of National Company Law Appellate Tribunal decision - Whether the Court should interfere with the impugned order dated 28 February 2024 passed by the National Company Law Appellate Tribunal in Company Appeal (AT) (Insolvency) No 287 of 2024. - HELD THAT: - The Bench considered the impugned order of the National Company Law Appellate Tribunal and found no reason to interfere with it. Having examined the matter, the Court concluded that the appellate forum's decision calls for no interference and there is no ground to reverse or modify the NCLAT order dated 28 February 2024. [Paras 1]

The Court declined to interfere with the NCLAT order dated 28 February 2024 and dismissed the civil appeal.

Final Conclusion: The civil appeal was dismissed and the impugned NCLAT order dated 28 February 2024 was upheld; pending applications, if any, were disposed of.

Contractual incorporated joint venture - non partnership / no separate legal entity - allocation of pecuniary liabilities under joint venture agreement - presumption of security interest - relinquishment or realisation of security interest under Regulation 21A - payment obligations under Section 53 of the Code - secured asset becoming part of the liquidation estate

Contractual incorporated joint venture - non partnership / no separate legal entity - allocation of pecuniary liabilities under joint venture agreement - Whether the VAT refund belonged to FEMC Pratibha JV or to the Corporate Debtor - HELD THAT: - The tribunal held that the JV was an incorporated contractual arrangement without the characteristics of a separate legal entity and expressly constituted a non partnership. The JV and its supplements allocated 100% of the project responsibilities and all pecuniary liabilities, including VAT liabilities, to the Corporate Debtor while FEMC was only a technical/consultancy partner entitled to a fixed consultancy fee. The Yes Bank itself, in its Form B claim, acknowledged that FEMC was only the technical partner and that pecuniary liability rested on the Corporate Debtor. Both projects had been completed before initiation of insolvency and the Corporate Debtor had discharged the VAT liabilities; accordingly the refund paid by the VAT authorities into the account communicated by the Liquidator was properly treated in accordance with the parties' contractual rights and obligations. [Paras 12, 15]

VAT refund was not the separate asset of FEMC Pratibha JV and was correctly treated in accordance with the JV agreements as belonging to the Corporate Debtor.

Presumption of security interest - relinquishment or realisation of security interest under Regulation 21A - payment obligations under Section 53 of the Code - secured asset becoming part of the liquidation estate - Whether Yes Bank's failure to comply with Regulation 21A(2) justified inclusion of the VAT refund in the liquidation estate - HELD THAT: - The tribunal upheld the Adjudicating Authority's conclusion that the Yes Bank, having elected not to relinquish its security, was obliged under Regulation 21A(2) to pay the amounts corresponding to CIRP costs, liquidation costs and specified dues (as to be shared under clause (a) and sub clause (i) of clause (b) of Section 53(1)). The Liquidator issued a notice quantifying the share payable and, after the bank did not make the required payment within the specified period, the operation of Regulation 21A(3) caused the secured asset to become part of the liquidation estate. The appellate court found no error in treating the VAT refund as part of the liquidation estate for distribution under the Code. [Paras 13, 16, 17]

Yes Bank's non compliance with Regulation 21A(2) resulted in the secured asset becoming part of the liquidation estate and justified including the VAT refund in the liquidation estate.

Final Conclusion: The Appellate Tribunal found no error in the Adjudicating Authority's order: the VAT refund was properly treated as belonging to the Corporate Debtor under the JV agreements, and the Yes Bank's failure to comply with Regulation 21A rendered the secured asset part of the liquidation estate; the appeal is dismissed.

Business Support Services - managing distribution and logistics - Support Services of Business or Commerce - giving on hire - exemption under Clause 22(b) of Notification No.25/2012-ST

Business Support Services - managing distribution and logistics - Providing open space on the roof of buses for transportation of parcels/goods by the appellant does not constitute rendition of "Business Support Service". - HELD THAT: - The agreement between the appellant and M/s Sai Marketing & Loading Co. shows that the appellant's primary obligation was to make available open space on the roof of buses for placement of parcels and to provide open space at bus depots for storage, while booking, distribution, loading, unloading, insurance, challans and related operational activities remained the responsibility of M/s Sai Marketing & Loading Co. The definition of "Support Services of Business or Commerce" contemplates activities such as evaluation of customers, telemarketing, processing of purchase orders, fulfilment services, information and tracking of delivery schedules and "managing distribution and logistics." The Revenue did not demonstrate that the appellant undertook management of distribution or logistics; the contractual allocation of responsibilities shows the appellant merely hired out space. The terminology "managing distribution and logistics" cannot be stretched to cover the mere provision of space on hire where the service recipient performs all logistical functions. For these reasons the activity cannot be classified as "Business Support Services." [Paras 9]

Answered against the Revenue and in favour of the appellant.

Business Support Services - Support Services of Business or Commerce - Providing open space at bus depots for storage of parcels/goods by the appellant does not constitute rendition of "Business Support Service". - HELD THAT: - The contractual terms allocate to the second party the construction and maintenance of storage sheds, electricity charges after meter installation, insurance, responsibility for damage or loss, staff for parcel operations, and all operational expenses. The appellant's role at depots is confined to permitting use of space; it does not manage or perform the logistic or distribution functions enumerated in the definition of "Support Services of Business or Commerce." Consequently the depot-storage arrangement is not caught by the departmental characterisation as "Business Support Service." [Paras 7, 9]

Answered against the Revenue and in favour of the appellant.

Giving on hire - exemption under Clause 22(b) of Notification No.25/2012-ST - The appellant is entitled to exemption under Clause 22(b) of Notification No.25/2012-ST for giving on hire to a Goods Transport Agency a means of transportation of goods, as applied to the present arrangement of hiring space to a goods transport agent. - HELD THAT: - Clause 22 of the Notification grants exemption for services by way of giving on hire to a Goods Transport Agency a means of transportation of goods. The agreement must be read in its commercial and contractual context: it permits M/s Sai Marketing & Loading Co., a goods transport agent, to utilise space on buses and at depots for transportation and storage of parcels in consideration of a license fee. Although the authorities below treated the transaction as taxable parcel/postal service revenue and reasoned that the bus as primarily a passenger vehicle was not a "means of transportation of goods," that approach overlooks the substance of the agreement which effects hiring of space to a goods transport agency for carriage of goods. The exemption under Clause 22(b) therefore covers the activity in dispute and the appellant is not liable to service tax on that account. [Paras 10, 11]

Exemption under Clause 22(b) applies; appellant not liable to service tax.

Final Conclusion: The Tribunal set aside the impugned order, held that hiring out roof space and depot space did not amount to "Business Support Services," and allowed the appellant's appeal by holding that the arrangement falls within the exemption under Clause 22(b) of Notification No.25/2012-ST; the appeal is allowed.

Exemption under Notification No. 25/2012 ST (Entry No. 14(a)) - exemption for services to Government/Indian Railways (Entry No. 12A(a) of Notification No. 25/2012 ST) - classification as works contract service versus original works - invocation of extended period for suppression - penalty under Section 78 of the Finance Act, 1994 for suppression

Classification as works contract service versus original works - exemption under Notification No. 25/2012 ST (Entry No. 14(a)) - exemption for services to Government/Indian Railways (Entry No. 12A(a) of Notification No. 25/2012 ST) - Whether the services rendered under the impugned work orders were taxable or exempt - HELD THAT: - The Tribunal examined the two work orders and the separate schedules contained therein. It held that works described in Schedule A constituted original works and were therefore covered by Entry No. 14(a) of Notification No. 25/2012 ST, resulting in exemption; works in Schedule B though characterised as non original by the lower authorities were nevertheless services provided to Indian Railways and thus fell under the exemption at serial no. 12A(a) of the same notification. Having found that both Schedule A and Schedule B services were exempt (either as original works or as services to the Government/Railways), the Tribunal concluded there was no tax liability on the appellant in respect of the work orders under challenge. [Paras 5]

Demand confirmed by the authorities is set aside as the services are exempt under Notification No. 25/2012 ST.

Invocation of extended period for suppression - penalty under Section 78 of the Finance Act, 1994 for suppression - Whether extended period was rightly invoked and penalty under Section 78 was sustainable on the ground of suppression - HELD THAT: - The Tribunal found that because the appellant had no tax liability-services being exempt-there was no wilful suppression or intent to evade tax. Mere non registration and non filing of returns, absent an intention to evade tax, do not constitute suppression warranting invocation of the extended period. Relying on established principle that failure to declare does not ipso facto amount to willful suppression, the Tribunal held the extended period was wrongly invoked and the penalty under Section 78 (and consequentially any penalty under Section 77) could not be sustained. [Paras 5]

Extended period invocation and penalty under Section 78 are unwarranted and set aside.

Final Conclusion: The appeal is allowed; the demand and penalties confirmed by the lower authorities are set aside as the services under the impugned work orders are exempt under Notification No. 25/2012 ST and there was no suppression or intent to evade tax to justify extended period or penalty.

Extended period of limitation invoked for suppression of facts with intent to evade - reliance on third party Form 26AS for raising demand without independent verification - burden of proof for deliberate suppression - distinction between transfer of property in goods and value of taxable service (works contract / abatement) - self assessment and ST 3 returns as evidentiary material - eligibility for SSI exemption

Extended period of limitation invoked for suppression of facts with intent to evade - burden of proof for deliberate suppression - Extended period invoked on allegation of suppression was not justified. - HELD THAT: - The Tribunal found that the department relied on third party information but did not establish any positive act of deliberate concealment by the appellant. The appellant had filed ST 3 returns and had deposited service tax; further, material produced by the appellant (Form 26AS, invoices, ST 3 returns and deposit challan) falsified the department's claim as to the amount and period of receipts. Applying the principle that suppression requires a deliberate omission proved by the revenue, and that mere differences in tax records do not ipso facto establish fraud, the invocation of the extended period was held to be improper.

Extended period wrongly invoked; allegation of suppression not proved; invocation set aside.

Reliance on third party Form 26AS for raising demand without independent verification - self assessment and ST 3 returns as evidentiary material - Demand based solely on Form 26AS and aggregate figures without examining ST 3 returns and explanations cannot be sustained. - HELD THAT: - The Tribunal observed that the department used Form 26AS data covering April 2012 to March 2013 to compute a demand for the disputed period July 2012 to March 2013 without adjusting receipts antecedent to the impugned period. The difference between Form 26AS and ST 3 returns was not investigated to determine whether it related to taxable consideration or to exemptions/abatements. In absence of such verification and having regard to the appellant's filed returns and documents, the demand based on third party data alone was unsustainable.

Demand confirmed on the basis of Form 26AS alone is not maintainable; demand cannot be confirmed.

Distinction between transfer of property in goods and value of taxable service (works contract / abatement) - eligibility for SSI exemption - Value of replaced parts is transfer of goods and should not be included as consideration for service; abatement/SSI relief claim made out. - HELD THAT: - On examination of the invoices, the Tribunal concluded that amounts shown for replaced parts represented transfer of property in goods and therefore did not form part of the value of the service rendered. Consequently, the appellant's contention that the activity fell within works contract/abatement treatment and that SSI exemption notifications applied was accepted. The department's reliance on an earlier circular did not change the characterisation of the transactions or justify inclusion of parts' value in the service consideration.

Parts replaced are transfer of goods and not service value; abatement/SSI relief cannot be denied on the record before the Tribunal.

Final relief by setting aside adjudicating order - Whether the order under challenge should be set aside. - HELD THAT: - Considering that the extended period was wrongly invoked, the demand was based on unverified third party data, and the appellant produced ST 3 returns, Form 26AS and invoices showing lower receipts and parts' values separable from service consideration, the Tribunal found the adjudicating authorities' confirmation of demand unsustainable. Precedents relied upon by the Tribunal support that mere disparity in records is insufficient to infer suppression without positive evidence.

Order under challenge set aside; appeal allowed.

Final Conclusion: The Tribunal allowed the appeal, set aside the impugned order, held that the extended period was wrongly invoked as suppression was not proved, found the demand unsustainable where based solely on unverified Form 26AS figures, accepted that parts replaced constituted transfer of goods (not service value) entitling the appellant to abatement/relief and noted entitlement to applicable SSI exemption.

Exemption of health care services under the negative list regime - business auxiliary service - joint venture and absence of service relationship - extended period of limitation under the proviso to section 73(1) of the Finance Act, 1994

Business auxiliary service - exemption of health care services under the negative list regime - Whether net nursing home receipts and consultation receipts of the hospital are exigible to service tax as "business auxiliary service" - HELD THAT: - The Tribunal's earlier reasoning in Sir Ganga Ram Hospital, accepted by the Department, establishes that arrangements under which clinical establishments engage consultant doctors on a revenue sharing model are contracts for the provision of health care services by the clinical establishment and the consultants jointly, not contracts by which the hospital furnishes separate "infrastructural" or "business support" services to the doctors for a consideration. Taxing the share retained by the clinical establishment as business support service would defeat the exemption granted to clinical establishments providing health care services under the negative list regime. Applying that precedent to the facts, the Principal Commissioner erred in treating the retained amounts as consideration for business auxiliary services and in confirming service tax on net nursing home receipts and consultation receipts. [Paras 9]

Demand confirmed under "business auxiliary service" on net nursing home receipts and consultation receipts is set aside.

Joint venture and absence of service relationship - Whether the arrangements between the appellant hospital and pathology laboratories amount to provision of service by the hospital to the laboratories or constitute a joint venture - HELD THAT: - The agreements between the hospital and the pathology agencies show collaboration to jointly run pathology testing for the hospital's patients with shared responsibilities, contribution of infrastructure, revenue sharing and mutual rules for conducting the business. These features characterise a joint venture rather than a unilateral provision of infrastructural services by the hospital to independent service providers. Consequently, there is no basis to hold that the hospital rendered a taxable service to the pathology laboratories. [Paras 10, 11]

Demand confirmed as service tax in respect of amounts arising from the hospital's arrangements with pathology laboratories is set aside as the relationship is a joint venture and not one of service provider-service recipient.

Show cause notice specificity - exemption of health care services under the negative list regime - Whether miscellaneous income proposed to be taxed can be sustained where the show cause notice did not specify the category of service for the period prior to July 2012 - HELD THAT: - The show cause notice failed to indicate the specific category of service under which the miscellaneous receipts were being taxed for the period prior to July 2012. In that factual and procedural posture, the confirmation of demand relating to miscellaneous income cannot be sustained as the statutory and substantive basis for the levy was not properly indicated in the notice. [Paras 13, 14]

Order confirming demand insofar as it relates to miscellaneous income is set aside for lack of specification in the show cause notice.

Final Conclusion: The appeal is allowed to the extent indicated: the Principal Commissioner's confirmation of service tax on net nursing home and consultation receipts (as business auxiliary service), on amounts arising from the pathology laboratory arrangements, and on miscellaneous income is set aside; the appellant did not contest the demand under renting of immovable property services.

Cenvat Credit on outward freight (input service) - freight borne by manufacturer / FOR basis - Section 4A valuation (MRP-based assessment) - place of removal - interpretation of Rule 2(l) of Cenvat Credit Rules, 2004 - exclusion of input services "upto the place of removal"

Cenvat Credit on outward freight (input service) - freight borne by manufacturer / FOR basis - interpretation of Rule 2(l) of Cenvat Credit Rules, 2004 - Cenvat Credit on Service Tax paid on outward freight borne by the manufacturer for goods cleared to distributors/dealers on FOR (delivery at buyer's premises) is admissible. - HELD THAT: - The Tribunal found that the appellant produced a Chartered Accountant's certificate and supporting factual material establishing that invoices were made on FOR basis, the appellant bore the freight to the buyers' premises and did not recover freight from the buyers. The Tribunal treated those facts as identical to earlier decisions of the Ahmedabad Bench in Sanghi Industries Ltd. and Ultratech Cement Ltd., which allowed credit where ownership and freight liability remained with the manufacturer until delivery to the buyer. The Tribunal also noted reliance on Roofit Industries and distinguished the Apex Court's decision in CCE & ST v. Ultratech Cement as addressing only the concept of "place of removal" and not the "point of sale" or FOR/destination pricing issue. Applying that reasoning to the facts, the Tribunal held the appellant was entitled to take Cenvat Credit on Service Tax paid on outward freight for the period in question. [Paras 10, 11, 13]

Appeal allowed; Cenvat Credit on Service Tax paid on outward freight (for goods sold on FOR basis) upheld with consequential relief.

Section 4A valuation (MRP-based assessment) - place of removal - exclusion of input services "upto the place of removal" - The exclusion in Rule 2(l) of the Cenvat Credit Rules describing input services as used only "upto the place of removal" is not applicable to goods valued under Section 4A (MRP-based valuation). - HELD THAT: - The Tribunal examined the statutory scheme and observed that "place of removal" is defined under Section 4 of the Central Excise Act for goods chargeable to duty with reference to value under Section 4, but Section 4A (which prescribes valuation based on Retail Sale Price/MRP) contains no reference to "place of removal." Consequently, the Rule 2(l) limitation framed with reference to "upto the place of removal" cannot be applied to clearances governed by Section 4A. The Tribunal further noted that for Section 4 goods abatement for outward freight exists (and credit is denied for that category), but that scheme is not pari materia with Section 4A clearances where freight forms part of the assessable value. On this basis the Tribunal held the exclusion in Rule 2(l) cannot operate to deny the appellant's credit for Section 4A clearances. [Paras 14, 15, 16]

Rule 2(l)'s "upto the place of removal" restriction does not apply to goods assessed under Section 4A; therefore Cenvat Credit cannot be denied on that ground.

Final Conclusion: The appeal is allowed: Cenvat Credit claimed on Service Tax paid on outward freight for cement cleared to distributors/dealers on FOR basis (September 2015 to November 2015) is admissible; Rule 2(l) exclusion tied to "place of removal" does not operate to deny credit for clearances governed by Section 4A (MRP-based valuation).

Cenvat credit - inputs and capital goods - fabrication of capital goods - eligibility of MS items used in supporting structures - prospective operation of amendment to Rule 2(k) explanation 2

Cenvat credit - inputs and capital goods - fabrication of capital goods - eligibility of MS items used in supporting structures - entitlement to Cenvat credit on MS items (pipes, chains, jackets, hollow pipes, plates, flats, angles, channels, sheets, rods, beams, cable trays and hand rail pipes) used for fabrication and for structural support in the factory of manufacture - HELD THAT: - The Tribunal held that Cenvat credit is admissible on MS items received in the factory of production and employed in fabrication of capital goods or supporting structures which are integral to manufacture of dutiable finished goods. The SCNs were founded on the Larger Bench decision in Vandana Global Ltd, but that approach was reversed by the Hon'ble Chhattisgarh High Court which held that the amendment to explanation 2 to Rule 2(k) was not clarificatory and operates prospectively. The Tribunal followed this view and the consistent rulings of other High Courts (including Madras and Gujarat) and its own earlier decision under similar facts, concluding that inputs used in the factory either as inputs or as parts of capital goods for fabrication of capital goods qualify for credit. There was no dispute regarding receipt of the MS items in the factory or their use in fabrication/support structures; accordingly the disallowance and corresponding penalties were set aside. [Paras 5, 6, 7, 8]

Allowed appeals; set aside impugned orders and permit consequential reliefs in accordance with law

Final Conclusion: Cenvat credit on the MS items used in fabrication and supporting structures in the factory of production is allowed; the impugned orders disallowing such credit are set aside and consequential benefits granted.

Piercing the corporate veil - doctrine of lifting the veil - recovery of tax dues from directors' personal assets - vicarious liability of directors for company tax dues - statutory authority for recovery from persons other than the dealer

Piercing the corporate veil - doctrine of lifting the veil - recovery of tax dues from directors' personal assets - statutory authority for recovery from persons other than the dealer - Whether the revenue could lawfully recover the tax dues of the company-under-liquidation from the personal assets of the petitioner, a director of the company. - HELD THAT: - The Court held that recovery from the personal assets of the petitioner is impermissible in the absence of material justifying invocation of the doctrine of lifting or piercing the corporate veil. All assessments were made after the Official Liquidator had taken over the company's assets; the assessing authority's issuance of a recovery notice against the petitioner rested on his alleged directorship but the revenue has not pleaded or produced special facts showing that the corporate personality was used as a cloak for fraud or that the petitioner personally operated behind the corporate veil to avoid liability. The settled principle, as adverted to in the Court's discussion, is that the corporate veil may be pierced only where there is positive material showing misuse of the corporate form (fraud, sham, or clear control for impermissible purposes) and not as a routine device whenever company dues remain unrecovered. Where the statute does not expressly provide for recovery from directors or other persons, the assessing authority must first place on record relevant material to justify lifting the veil; absent such material, directors cannot be made personally liable merely because the company has unpaid tax dues. The Court further noted precedent treatment that statutory provisions (where present) may render directors liable, but no comparable provision empowering recovery from directors under the relevant VAT/CST scheme was placed before the Court in this case. Applying these principles to the facts, the Court found no basis to sustain recovery proceedings against the petitioner personally and restrained the revenue from so proceeding, while leaving open recovery from the company's assets. [Paras 4, 7, 8, 10]

Recovery of the company's tax dues from the petitioner's personal assets is restrained; the petition is allowed and the revenue may proceed only against the assets of the company-under-liquidation.

Final Conclusion: Writ petition allowed; revenue restrained from recovering the company's tax dues from the petitioner's personal assets, but permitted to pursue recovery from the company-under-liquidation's assets.

Resolution Plan bindingness - Extinguishment of statutory dues upon approval of a resolution plan - Requirement of Section 30(2) of the Insolvency and Bankruptcy Code - Overriding effect of Section 238 of the Insolvency and Bankruptcy Code - Moratorium under Section 14 of the Insolvency and Bankruptcy Code - Assessing authority's duty to verify compliance of resolution plan with statutory requirements

Resolution Plan bindingness - Extinguishment of statutory dues upon approval of a resolution plan - Moratorium under Section 14 of the Insolvency and Bankruptcy Code - Validity of the assessment order (Ext. P11) in light of the Insolvency and Bankruptcy Code - HELD THAT: - The High Court held that the question whether claims not recorded in an approved resolution plan stand extinguished is governed by the Code and relevant Supreme Court authority. The court found that the resolution plan approved on 20.01.2020 did not take into account the assessment proceedings under the KGST Act for the period 01.04.2018 to 31.03.2019 because the liability had not crystallized at the time of approval; only notices had been issued. Since the assessing authority in Ext. P11 did not examine or record whether the approved resolution plan met the requirements of Section 30(2) of the Code (which determines whether a plan validly addresses statutory dues), the court could not uphold the assessment order without that prerequisite inquiry. For these reasons the impugned assessment order was set aside and the matter remitted for fresh consideration. [Paras 29, 31, 32]

Ext. P11 set aside; assessment order quashed and matter remitted for fresh consideration.

Requirement of Section 30(2) of the Insolvency and Bankruptcy Code - Assessing authority's duty to verify compliance with Section 30(2) - Assessing authority's power to pass fresh order after verification - Remand to determine whether the approved resolution plan complied with Section 30(2) and the consequent effect on statutory dues - HELD THAT: - The Court directed that the assessing authority must examine whether the resolution plan approved by the NCLT satisfied the statutory requirements of Section 30(2) of the Code, in particular insofar as statutory dues are concerned. No finding on this aspect appears in Ext. P11; therefore the tribunal redirected the matter back to the State Tax Officer for that limited but necessary enquiry. The petitioner was ordered to produce all relevant documents before the assessing authority on the stated date, and the assessing authority was directed to pass a fresh order expeditiously in accordance with law after undertaking the examination required by Section 30(2). The remand was for fresh consideration and verification, not a decision on the merits of compliance with Section 30(2). [Paras 31, 32]

Matter remitted to the State Tax Officer to examine compliance of the resolution plan with Section 30(2) and to pass a fresh assessment order after hearing the petitioner.

Final Conclusion: The assessment order dated 12.09.2023 (Ext. P11) is set aside and the matter is remitted to the State Tax Officer to examine whether the resolution plan met the requirements of Section 30(2) of the Insolvency and Bankruptcy Code; the petitioner is directed to produce documents on 05.03.2024 and the assessing authority shall pass a fresh order expeditiously in accordance with law.

Bail-restricting proviso in Section 43D(5) of the Unlawful Activities (Prevention) Act - prima facie true test for bail under special enactments - constitutional jurisdiction under Article 21 to grant bail despite statutory restrictions - appellate jurisdiction of the High Court under Section 21(2) of the National Investigation Agency Act to examine supplementary charge-sheet - exercise of appellate power to decide bail on merits versus remanding to Special Court

Appellate jurisdiction of the High Court under Section 21(2) of the National Investigation Agency Act to examine supplementary charge-sheet - exercise of appellate power to decide bail on merits versus remanding to Special Court - Validity of the Division Bench's remand to the Special Court instead of deciding the bail petition on merits - HELD THAT: - The Court examined whether the High Court, sitting as an appellate forum under Section 21(2) of the NIA Act, was obliged to remit the matter to the Special Court for first consideration of the second supplementary chargesheet. The Court held that the Division Bench's course of remanding was a permissible option but not the only one; the High Court (and consequently this Court in appellate jurisdiction) could examine materials arising after the Sessions Court order including the NIA supplementary chargesheet. Given the exceptional circumstances of prolonged detention, advanced age and medical condition of the detenue, the Court declined to remit the matter and proceeded to decide the bail claim on merits. The Court therefore overruled the preliminary objection that the High Court must not consider the fresh accusations for the first time while exercising appellate jurisdiction. [Paras 13, 15, 17]

High Court could have examined the second supplementary chargesheet in exercise of appellate jurisdiction and remand was not mandatory; this Court proceeded to decide bail on merits.

Bail-restricting proviso in Section 43D(5) of the Unlawful Activities (Prevention) Act - prima facie true test for bail under special enactments - Whether the accusations against the appellant under Chapters IV and VI of the 1967 Act satisfy the proviso to Section 43D(5) (i.e., whether there are reasonable grounds for believing the accusation is prima facie true) - HELD THAT: - The Court applied the settled approach under special enactments that the court must be satisfied on broad probabilities that the accusation is prima facie true. It reviewed the three chargesheets, documentary recoveries and witness statements relied upon by the prosecution (including letters, FSL results and statements of protected witnesses). The material chiefly consisted of third party recoveries from co-accused devices, statements indicating presence at meetings, and assertions of association; there was no direct evidence of participation in terrorist acts, recruitment, or receipt/raising of funds for terrorist purposes. The Court concluded that the materials do not, on their face, establish the elements of offences under Sections 16, 17, 18, 18B, 20, 38, 39 and 40 of the 1967 Act to the requisite prima facie standard. [Paras 20, 36]

No reasonable grounds exist to believe that accusations under Chapters IV and VI of the 1967 Act are prima facie true.

Constitutional jurisdiction under Article 21 to grant bail despite statutory restrictions - bail-restricting proviso in Section 43D(5) of the Unlawful Activities (Prevention) Act - Whether, having found the bail-restricting provision inapplicable on the materials, the appellant should nonetheless be released on bail in view of prolonged pre-trial detention, age and medical condition - HELD THAT: - The Court recognised that statutory restrictions on grant of bail under the 1967 Act are valid but reiterated that constitutional jurisdiction under Article 21 permits enlargement on bail where deprivation of liberty is disproportionate. Taking into account that charges have not been framed despite long incarceration (nearly six years), the appellant's advanced age and ailments, the absence of prima facie satisfaction under Section 43D(5), and that prosecution did not seek custody for further investigation, the Court found continued detention disproportionate. The Court indicated its findings are prima facie and without prejudice to trial, and observed the prosecution's appellate rights but prioritised the detenue's liberty in the exceptional facts. [Paras 38, 39, 41]

Appellant entitled to grant of bail on constitutional grounds; statutory bar not an absolute impediment where proviso not satisfied and detention is prolonged and disproportionate.

Exercise of appellate power to decide bail on merits versus remanding to Special Court - Form and conditions of bail to be granted - HELD THAT: - Having allowed bail, the Court directed release subject to conditions tailored to ensure attendance and prevent obstruction: surrender of passport, restriction on leaving State without leave, furnishing residence and single active mobile number, keeping mobile active with GPS location and pairing with investigating officer, and fortnightly reporting to local police. The Court left power to the Special Court to impose further conditions and observed prosecution may move for cancellation upon breach before the Special Court. [Paras 42, 43]

Appellant released on bail subject to specified conditions and further conditions as the Special Court may impose; prosecution may seek cancellation before Special Court on breach.

Final Conclusion: The appeal is allowed: the Court declined to remit the matter to the Special Court and proceeded to decide the bail claim on merits, held that the materials do not prima facie satisfy the bail-restricting proviso of Section 43D(5) of the UAPA, and directed release of the appellant on bail subject to specified conditions while preserving prosecution's right to seek cancellation before the Special Court.

Writ jurisdiction in contractual disputes - extraordinary/discretionary relief under Article 226 - exceptional circumstances for entertaining money claims - serious and genuine dispute as bar to writ relief - delay and laches as disentitling to discretionary relief - completion certificate not ipso facto a bar to pleas on liability - probative value of CAG report and ministerial response

Writ jurisdiction in contractual disputes - extraordinary/discretionary relief under Article 226 - exceptional circumstances for entertaining money claims - Entertaining writ petitions seeking contractual money claims against an entity amenable to writ jurisdiction - HELD THAT: - The Court held that writ jurisdiction is a public law remedy and, although not barred in contractual matters, money claims against the State or its instrumentalities are ordinarily to be litigated in the established civil forums. Only in exceptional circumstances should a High Court exercise its discretionary power under Article 226 to entertain such contractual money claims. The principles in M.P. Power Management and Puna Hinda were applied to conclude that the writ court may call upon the State to honour payment obligations where the State's action is per se arbitrary or where no serious and genuine dispute on liability exists. The learned Single Judge's exercise of discretion in permitting the writ petitions was examined against these standards and found to be inappropriate in the facts of these cases. [Paras 16, 17, 29, 31, 32]

Writ petitions for the money claims were not maintainable in the absence of exceptional circumstances warranting exercise of discretionary relief under Article 226.

Delay and laches as disentitling to discretionary relief - exceptional circumstances for entertaining money claims - Effect of inordinate delay and limitation on maintainability of writ petitions for contractual money claims - HELD THAT: - The Court held that a writ petition seeking monetary relief must be filed within a reasonable time akin to the limitation period prescribed for a suit; delay and laches disentitle a party to discretionary relief under Article 226. On the facts, the completion certificate was issued on January 7, 2015 and the final bill submitted on February 23, 2015, yet the writ petition was filed in December, 2022. The writ petitioners failed to explain the inordinate delay or to demonstrate that a civil suit would not have been barred by limitation at the time of filing the writ. Consequently, the delay constituted a bar to exercising writ jurisdiction in their favour. [Paras 34, 35, 36, 37]

The writ petitions were barred by delay/laches and could not be entertained; the period under the Limitation Act is to be treated as the reasonable time for filing such writs.

Serious and genuine dispute as bar to writ relief - completion certificate not ipso facto a bar to pleas on liability - probative value of CAG report and ministerial response - Whether the existence of completion certificate and CAG observations precluded a finding of a serious and genuine dispute on liability for payment - HELD THAT: - The Court found that issuance of a completion certificate did not automatically render the final bill an admitted liability when contemporaneous material showed objections and non-payment by the mentor institute. The record showed that the Assistant Engineer had recorded objections on 03.06.2016 and that NIT, Durgapur returned the original file without releasing payment; further, the CAG report contained adverse observations about irregularity and applicable GFR provisions. While a CAG report commands respect, it is not sacrosanct and must be read with ministerial responses; nevertheless, the existence of the noted objections and returned file established a serious and genuine dispute as to liability which defeated the writ petitions. The learned Single Judge erred in treating the completion certificate as determinative without considering these factors. [Paras 21, 22, 23, 24, 39]

There was a serious and genuine dispute on liability to make payment; the completion certificate did not oust that dispute and the Single Judge's reliance on it warranted interference.

Final Conclusion: Appeals allowed. The common judgment and order of the Single Judge is set aside on grounds of maintainability: the writ petitions involving contractual money claims were not entitled to discretionary relief under Article 226 in the absence of exceptional circumstances, and were barred by inordinate delay and the existence of a serious and genuine dispute as to liability. Parties are left free to seek appropriate relief before the proper forum; no order as to costs.