TaxTMI Updates e-Newsletter
May 23,2022

Seizure and detention of goods under IGST/CGST - e-way bill validity and extension - bona fide generation of second e-way bill due to force majeure/COVID-19 restrictions - absence of intent to evade tax - quashing of administrative orders as arbitrary and illegal - violation of Article 14 - award of costs for harassment and abuse of power

Seizure and detention of goods under IGST/CGST - e-way bill validity and extension - bona fide generation of second e-way bill due to force majeure/COVID-19 restrictions - absence of intent to evade tax - quashing of administrative orders as arbitrary and illegal - violation of Article 14 - Validity of detention/seizure of the goods and vehicle and lawfulness of related orders and notices. - HELD THAT: - The Court found on the admitted facts that the goods originated from Panipat and were dispatched under a valid invoice and LUT for export to Nepal, and that a second e-way bill was generated bona fide because movement was disrupted by COVID-19 related border and movement restrictions. The respondents did not specifically deny the material averments explaining the delay or contend any intention to evade tax. Applying the reasoning in the cited Supreme Court decision, the mere expiry of an e-way bill, without evidence of intent to evade tax or other material indicating sale or diversion, does not justify detention, seizure or confiscation. The seizure and the consequential orders and notices were therefore held to be arbitrary, illegal and in breach of the petitioners' rights under Article 14, and liable to be quashed. The Court directed immediate release of the goods and vehicle. [Paras 12, 14, 15]

Impugned detention/seizure order dated 07.03.2022, release order dated 13.03.2022 and notices dated 22.03.2022 and 28.03.2022 quashed; goods and vehicle released forthwith.

Award of costs for harassment and abuse of power - quashing of administrative orders as arbitrary and illegal - Whether the petitioners are entitled to costs and the quantum of costs to be awarded. - HELD THAT: - Having found the detention and related proceedings to be arbitrary and amounting to harassment and abuse of power, and having applied the approach in the cited precedent which endorsed awarding costs in comparable circumstances, the Court exercised its discretion to compensate the petitioners for the litigation and harassment suffered. The award reflects the Court's view that the respondents' actions were unjustified and the petitioners should be compensated accordingly. [Paras 16]

Writ petition allowed with costs of Rs.50,000 to each petitioner (total Rs.1,00,000), payable by the respondents within four weeks.

Final Conclusion: The High Court quashed the detention, release order and notices as arbitrary and illegal, directed immediate release of the goods and vehicle, and awarded costs to the petitioners to compensate for the harassment caused by the respondents' actions.

Refund of unutilized input tax credit for zero-rated exports - application of the first proviso to Section 54(3) concerning goods actually subjected to export duty - treatment of goods specified at NIL rate in the Second Schedule to the Customs Tariff Act, 1975 - reliance on CBIC clarification dated 20th September, 2021 - remand for fresh consideration by the Appellate Authority

Refund of unutilized input tax credit for zero-rated exports - treatment of goods specified at NIL rate in the Second Schedule to the Customs Tariff Act, 1975 - application of the first proviso to Section 54(3) concerning goods actually subjected to export duty - Legal principle that exports of goods which are specified at a NIL rate in the Second Schedule to the Customs Tariff Act, 1975 and are not actually subjected to export duty are not barred by the first proviso to Section 54(3) from claiming refund of accumulated input tax credit. - HELD THAT: - The Court noted the concession of the statutory authority and the view expressed in the earlier Division Bench decision in M/s. B.S. Minerals (W.P.(C) No. 34402 of 2021) and the CBIC clarification dated 20th September, 2021 which explains that the phrase 'subjected to export duty' in the first proviso to Section 54(3) means goods on which export duty is actually leviable and paid at the time of export. Goods for which a NIL rate is specified in the Second Schedule, or which are exempted by notification or not covered by the Second Schedule, therefore cannot be regarded as subjected to export duty for the purpose of the restriction in the proviso. Applying this principle to the present controversy concerning export of "Iron Ore Fines" classified under the Second Schedule, the Court treated the legal position as settled by the cited authority and clarification, and directed that the appellate decision rejecting the refund be reconsidered in light of that view. [Paras 7, 8, 9]

The Court applied the legal principle that exports of goods specified at NIL rate in the Second Schedule are not caught by the restriction in the first proviso to Section 54(3) and directed reconsideration of the refund claim accordingly.

Remand for fresh consideration by the Appellate Authority - Whether the impugned appellate order should be set aside and the matter remitted for fresh hearing. - HELD THAT: - Finding that the Appellate Authority's order upholding rejection of the refund was erroneous in view of the Division Bench decision in B.S. Minerals and the admitted position of the revenue, the Court set aside the order dated 13th July, 2021 and remitted the appeal to the Additional Commissioner of State Tax (Appeal) for rehearing. The Appellate Authority was directed to afford the appellant an opportunity of hearing and to decide the appeal afresh taking into account the view expressed in the earlier Division Bench order, as expeditiously as possible. [Paras 9]

Impugned appellate order set aside and matter remanded to the Appellate Authority for fresh hearing and disposal in accordance with the legal position stated in the earlier Division Bench decision and CBIC clarification.

Final Conclusion: The appellate order dated 13th July, 2021 rejecting the refund claim is set aside and the matter is remitted to the Appellate Authority for rehearing and fresh disposal, having regard to the legal position that goods specified at a NIL rate in the Second Schedule to the Customs Tariff Act, 1975 are not covered by the restriction in the first proviso to Section 54(3) from claiming refund of accumulated input tax credit.

Review under Order XLVII Rule 1 and Section 114 CPC - Scope of review - error apparent on the face of the record - Composition scheme under Section 10(1) of the GST Act - Meaning of "preceding financial year" for Section 10(1) - Penalty under Section 74 of the GST Act - Penalty under Section 73 of the GST Act - Requirement of fraud or willful intention to defraud for invocation of Section 74

Review under Order XLVII Rule 1 and Section 114 CPC - Scope of review - error apparent on the face of the record - Maintainability and outcome of the review application under Order XLVII Rules 1 and 2 read with Section 114 CPC - HELD THAT: - The Court applied settled principles governing review jurisdiction, emphasising that review is confined to grounds in Order XLVII Rule 1 and cannot be used as an appeal in disguise. The Bench summarised the tests from binding precedents that only a glaring omission, patent mistake or error apparent on the face of the record, newly discovered evidence unavailable despite due diligence, or substantial miscarriage of justice will justify review. The Court observed that the plea now raised in the review was available at the time of the original writ petition and was not argued earlier; no error apparent on the face of the record that would vitiate the earlier order was demonstrated. Applying these principles to the facts, the Court found no sufficient ground to re-open the judgment and dismissed the review petition. [Paras 17, 26]

Review petition dismissed for want of any error apparent on the face of the record or other permitted ground for review.

Penalty under Section 74 of the GST Act - Penalty under Section 73 of the GST Act - Requirement of fraud or willful intention to defraud for invocation of Section 74 - Validity of invoking Section 74 (penalty equal to tax) instead of Section 73 in the facts of this case - HELD THAT: - The petitioner contended that Section 74, providing for penalty equal to tax where there is fraud or wilful intent to defraud revenue, could not be invoked absent a finding of fraud and that Section 73 should apply. The Court noted that the review cannot be used to raise contentions that were available but not pressed in the original petition. On the merits, the Court accepted that the option for composition is self-declaratory and requires verification; where the self-declaration is found to be incorrect, intentional and willful non-disclosure of crucial facts can be inferred from the record. Given the authorities and the factual finding that the composite-option declaration was incorrect and subject to verification, the Court found no fault in the authorities invoking the provisions applicable to penalty and refused to interfere with the imposition of penalty as confirmed by the appellate authority. [Paras 18, 24, 25]

Imposition of penalty as confirmed by the authorities was upheld; no interference with invocation of the heavier penalty was warranted on review.

Composition scheme under Section 10(1) of the GST Act - Meaning of "preceding financial year" for Section 10(1) - Interpretation of the expression "preceding financial year" in Section 10(1) for the financial year 2017-2018 - HELD THAT: - The Court had earlier considered and decided that for the GST financial year 2017-2018 (GST regime commencing 1.7.2017) the "preceding financial year" for reckoning aggregate turnover is the financial year 2016-2017 under the VAT regime. The Court reasoned that the legislature's use of the word 'preceding' in Section 10(1) is deliberate and necessary to fix the parameter for extending composition benefits; excluding the VAT-year turnover would render the provision nugatory and permit incorrect self-declarations to subvert the scheme. That interpretation was affirmed and underpinned the finding that the petitioner's self-declaration required verification and was found incorrect. [Paras 14, 15]

For FY 2017-2018 under the GST regime, the preceding financial year is 2016-2017 under the VAT regime; the petitioner's entitlement to the composition scheme was rightly denied on that basis.

Final Conclusion: The review application is dismissed. The High Court upheld its earlier conclusions that the petitioner was not entitled to composition benefit by reference to the preceding (VAT) year, and that the impugned tax, interest and penalty as confirmed by the authorities do not warrant interference on review.

Classification of support services under SAC 9967 - Support services for water transport - Place of supply under Section 13(3) of the IGST Act - Export of services under Section 2(6) of the IGST Act - Distinction between intermediary and principal-to-principal supply

Classification of support services under SAC 9967 - Support services for water transport - SAC 9985 v. SAC 9967 - Whether the applicant's proposed vessel-related end-to-end services are classifiable as support services under SAC 9967 or under SAC 9985. - HELD THAT: - The Authority examined the nature and scope of the specified activities (berthing/port liaison, documentation, crew assistance, bunker arrangements, repairs coordination and other on call vessel services) and compared the Annexure classifications under Notification No. 11/2017-C.T.(Rate). While Heading 9985 covers various 'support services' generally, Group 99675 (Heading 9967) expressly covers "supporting services for water transport" including port and waterway operation services, pilotage and berthing, and other supporting services for water transport. The applicant's services are intrinsically linked to the presence and operations of the vessel in Indian territorial waters and fall within the scope of supporting services for ports and vessels. Because a more specific classification (Group 99675 / SAC 9967) exists for such vessel/port-related support services, the Authority held that the services do not fall under the residuary entry of SAC 9985 but are classifiable under SAC 9967. The applicable rate is as per Sl. No.11(ii) of Notification No.11/2017-C.T.(Rate) (supporting services in transport other than GTA). [Paras 8, 10]

The proposed services are classifiable under SAC 9967 (supporting services in transport) and taxable at the rate specified for Sl. No.11(ii) of Notification No.11/2017-C.T.(Rate).

Place of supply under Section 13(3) of the IGST Act - Export of services under Section 2(6) of the IGST Act - Distinction between intermediary and principal-to-principal supply - Whether the proposed support services qualify as "export of services" under Section 2(6) of the IGST Act. - HELD THAT: - Export of services requires satisfaction of all five conditions in Section 2(6) of the IGST Act, including that the place of supply be outside India. The Authority found that although the supplier is in India, the recipient is located outside India, payment was to be in convertible foreign exchange and the parties were not shown to be establishments of a distinct person, the determinative question was the place of supply. Section 13(3) applies where services are supplied in respect of goods (or other objects) that are physically made available to the supplier; such supplies' place is the location where services are actually performed. The applicant's services are performed in relation to vessels physically present in Indian territorial waters and continue until the vessel exits Indian waters; they are therefore services "in respect of" goods/ vessels physically available in India and their place of supply is the location where services are actually performed, i.e., the taxable territory. Consequently the condition that the place of supply be outside India is not satisfied and the supply cannot be treated as export of services. The applicant's contention as to not being an intermediary was not examined further after this conclusion on place of supply. [Paras 9, 10]

The proposed services are not "export of services" under Section 2(6) of the IGST Act because the place of supply is the taxable territory (services are performed in respect of vessels physically present in India).

Final Conclusion: The Authority ruled that the applicant's proposed vessel related end to end services are classifiable under SAC 9967 (supporting services in transport) and are taxable accordingly; further, these services do not qualify as export of services because the place of supply is the Indian taxable territory.

Transitional arrangements for input tax credit - Entitlement to take CENVAT credit carried forward as reflected in returns filed under the existing law - Savings of rights and liabilities under the repeal and savings provision - Timing of payment under reverse charge not determinative of transitional credit entitlement - Procedural compliance with Rule 117 and filing of GST TRAN-1

Entitlement to take CENVAT credit carried forward as reflected in returns filed under the existing law - Timing of payment under reverse charge not determinative of transitional credit entitlement - Transitional arrangements for input tax credit - Assessee entitled to avail CENVAT credit of the service tax reflected in the return for the period immediately preceding the appointed date despite the tax being paid after the appointed date. - HELD THAT: - The Court held that Section 140(1) of the CGST Act must be read in the context of the saved "existing law" and that the entitlement to take transitional CENVAT credit depends on the quantum carried forward in the return furnished under the existing law and in the prescribed manner. The return for the quarter immediately preceding the appointed date (filed in October 2017) reflected the service tax liability; Rule 117 and the GST TRAN-1 filing requirements were complied with within the extended timeline. Consequently, the fact that the service tax under reverse charge was deposited after July 1, 2017 does not defeat the assessee's right to claim credit where the return was filed in accordance with the existing law. The Court rejected the Revenue's construction that payment to the Government prior to the appointed date was a precondition to claiming transitional credit, holding instead that reflection in a duly filed return is determinative of eligibility under Section 140(1). [Paras 14, 16, 18, 19, 20]

Revenue's challenge to denial of CENVAT credit on the ground of post-appointed-date payment fails; appellate order allowing the credit is upheld.

Double benefit / locational exemption and CENVAT credit - Whether the assessee obtained an impermissible double benefit by availing locational exemption and later claiming CENVAT credit. - HELD THAT: - The appellate authority's conclusion that there was no merit in the Revenue's contention of double benefit was endorsed. The Court noted that locational exemption reduced the tax liability and therefore the CENVAT credit available is correspondingly lower; on a plain reading of the applicable provision there was no basis to disallow the credit on the ground of double benefit. [Paras 8, 9]

The finding that no double benefit arose was sustained and does not justify disallowance of the claimed credit.

Final Conclusion: Writ petition dismissed. The appellate order permitting the respondent to claim CENVAT credit of the sum in dispute is unexceptionable; no order as to costs.

Benefit of input tax credit - Section 171(1) of the CGST Act, 2017 - commensurate reduction in price - investigation by Director General of Anti Profiteering under Rule 129 - suo motu power of the Authority to direct investigation of projects on common GST registration - procedure and methodology for determination of profiteering - exclusion of land value from profiteering computation - interest and refund under Rule 133(3)(b) - penalty under Section 171(3A)

Benefit of input tax credit - Section 171(1) of the CGST Act, 2017 - commensurate reduction in price - Whether the Respondent was required to pass on benefit of additional ITC and whether comparison of pre GST CENVAT and post GST ITC ratios is within scope of Section 171 - HELD THAT: - The Authority held that Section 171(1) mandates passing on any reduction in rate of tax or the benefit of input tax credit by way of a commensurate reduction in prices. The transition to GST resulted in ITC becoming available to the Respondent (which was not available earlier), and such additional ITC constitutes a benefit under Section 171 to be passed on. To quantify that benefit the Authority accepted comparison of CENVAT/ITC as percentage of turnover in the pre GST and post GST periods for each project; the difference in those ratios yields the percentage benefit of ITC which must be passed on. The Authority therefore treated the comparison of pre GST and post GST ITC/turnover ratios as a valid basis to determine the quantum of benefit under Section 171. [Paras 27, 62]

Section 171 applies; additional ITC from transition to GST is a benefit under Section 171 and is to be quantified by comparing pre GST CENVAT and post GST ITC ratios for the relevant projects.

Suo motu power of the Authority to direct investigation of projects on common GST registration - investigation by Director General of Anti Profiteering under Rule 129 - Whether the Authority/DGAP lacked jurisdiction to expand investigation to all projects on which the Respondent availed ITC under a common GST registration - HELD THAT: - The Authority concluded that Section 171(2) and the rules (including Rule 129) empower the Authority to examine whether benefits have been passed on and to direct the DGAP to investigate. Because the Respondent was executing multiple projects under a single GST registration and availing ITC from a common pool, the Authority lawfully directed investigation of all such projects to determine passing on of benefit to recipients. The case law cited by the Respondent did not render the direction invalid, and the Standing Committee had prima facie material to refer the matter to DGAP. [Paras 25, 29, 31]

Authority and DGAP had jurisdiction to investigate all projects under the common GST registration; expansion of investigation was lawful.

Procedure and methodology for determination of profiteering - principles of natural justice - Whether absence of a fixed mathematical formula or the methodology in rules rendered the proceedings arbitrary or violative of natural justice and whether Respondent was denied adequate notice or opportunity - HELD THAT: - The Authority held that Section 171 and its Explanation set out the purpose and broad method (commensurate reduction) and that Rule 126 authorises the Authority to determine Procedure & Methodology; a sector specific fixed universal mathematical formula is neither envisaged nor necessary. The DGAP's report, its annexures and the show cause notice furnished the material and grounds relied upon, and the Respondent was given opportunity to submit consolidated written submissions; therefore principles of natural justice were satisfied. The Authority rejected the contention that lack of a single prescribed formula rendered the process arbitrary. [Paras 34, 35, 36, 61]

Proceedings are not arbitrary for want of a single prescribed mathematical formula; procedural fairness was observed and no violation of natural justice is made out.

Procedure and methodology for determination of profiteering - comparison of ITC/turnover ratios - Whether the DGAP's methodology of comparing pre GST and post GST ITC/turnover ratios and using sold area to apportion ITC was correct - HELD THAT: - The Authority found there is a correlation between turnover (demands raised) and construction costs staged across the project lifecycle; for developers raising staged demands and availing ITC, computing ITC proportionate to sold area and comparing pre and post GST ratios is an appropriate mathematical exercise to determine the additional ITC benefit per project. The Authority rejected Respondent's submissions that the methodology ignored lifecycle variation, rate changes, reversals, or market timing, noting that reversal of ITC for unsold units was addressed in the DGAP report and that the comparison focuses on additional ITC actually available in post GST period. [Paras 39, 40, 42, 45]

The DGAP's methodology of project wise comparison of pre and post GST ITC/turnover ratios (with sold area apportionment and reversal adjustments) is sustained as an appropriate basis for computation.

Exclusion of land value from profiteering computation - Whether the value of land must be excluded from calculation of profiteered amount in the present facts - HELD THAT: - The Authority observed that in prior cases land value was excluded where land was separately invoiced; however, in the present case the invoices/demands issued to buyers consolidated land and construction into a single demand and did not separately invoice land (which, if separately invoiced, would attract a different tax treatment). Given the consolidated invoicing, the Authority held the facts differ from precedents relied upon by Respondent and therefore refused to exclude one third land value from the profiteering computation. [Paras 51, 52]

Land value not excluded in this case because the Respondent raised consolidated demands that did not separately invoice land; earlier orders excluding land are distinguishable.

Interest and refund under Rule 133(3)(b) - inclusion of GST collected on excess base price in profiteered amount - Whether the DGAP incorrectly included GST collected on the alleged excess base price (i.e., whether GST component should be excluded since GST was paid to Government) - HELD THAT: - The Authority held that where the supplier collected excess base price and also collected GST on that excess, the additional GST collected was not properly payable by the buyer and its collection defeated the objective of passing on the benefit. Because the excess GST was collected by the Respondent as a consequence of charging excess base price, and the customers thus paid that additional tax, the GST component on the excess is part of the benefit denied and may be included in the amount to be refunded; accordingly, the DGAP's inclusion of GST in the profiteered amount was upheld. The Authority ordered refund of the profiteered amounts with interest under Rule 133(3)(b). [Paras 53, 54, 65]

GST component on the excess base price is includible in the profiteered amount where excess price caused excess tax collection; refund of profiteered amount with interest is directed under Rule 133(3)(b).

Penalty under Section 171(3A) - Whether the Respondent's conduct attracts penalty under Section 171(3A) - HELD THAT: - The Authority found that denial of benefit of ITC to buyers during the investigation period constituted an offence under Section 171(3A) (operative from 01.01.2020) and directed that notice for imposition of penalty be issued to the Respondent in accordance with the Act. [Paras 68]

Notice for penalty under Section 171(3A) to be issued to the Respondent.

Determination of profiteered quantum and refund direction - Quantification of profiteering for each project and directions for refund, interest and compliance - HELD THAT: - After examining DGAP's computations and the Respondent's submissions, the Authority accepted DGAP's project wise calculations of additional ITC benefit and determined the profiteered amounts for the period 01.07.2017 to 30.11.2020 as follows: The Camellias - amount as computed by DGAP; The Crest - amount as computed by DGAP; The Ultima - amount as computed by DGAP. The Authority ordered the Respondent to reduce prices commensurate with ITC benefit, to refund the profiteered amounts to identified buyers along with interest at 18% from date of collection until payment, to do so within three months, and directed the jurisdictional CGST/SGST Commissioner to ensure compliance and report. [Paras 64, 66, 67, 69, 70]

Profiteered amounts as computed by DGAP are accepted; Respondent to refund amounts with 18% interest to buyers within three months and jurisdictional authorities to ensure compliance; compliance report to be submitted.

Final Conclusion: The Authority found that the Respondent failed to pass on additional input tax credit accruing after introduction of GST and, applying the DGAP's project wise comparison of pre and post GST ITC/turnover ratios, determined specific profiteered amounts for the period 01.07.2017 to 30.11.2020 for the three projects. The Respondent was ordered to refund those amounts to identified buyers with interest at 18% within three months, compliance to be ensured by the jurisdictional Commissioners; notice for penalty under Section 171(3A) was directed.

Reconciliation of inter company ledger balances - addition on account of unexplained or inflated credit balances - genuineness of sundry creditors and burden to produce witnesses/evidence - remand for fresh consideration of evidence not earlier examined

Reconciliation of inter company ledger balances - addition on account of unexplained or inflated credit balances - remand for fresh consideration of evidence not earlier examined - Addition of Rs.41,78,650/- as inflated credit balance of Reliance Industries Limited (RIL) held to require fresh examination and remanded to CIT(A). - HELD THAT: - The Court found that materials and reconciliatory statements produced by the Assessee regarding RIL and its agent K.M. Enterprises (KME) were not examined earlier. Relying on authorities that a tribunal or appellate authority must consider material furnished before it, the Court concluded the conclusion of an inflated credit balance could not stand without fresh scrutiny. The matter is remitted to the CIT(A) to examine the evidence afresh, including seeking a remand report from the AO and issuing notice under Section 131 to KME to produce its books for the relevant period. [Paras 16]

Addition of Rs.41,78,650/- set aside for fresh consideration by CIT(A); remand ordered with liberty to obtain further report and call for KME's books.

Addition on account of unexplained or inflated credit balances - stock discrepancy and valuation of finished goods - Addition of Rs.72,478/- on account of fittings included in closing stock confirmed and not interfered with. - HELD THAT: - The Court examined the concurrent findings of the AO, CIT(A) and ITAT on the differential stock issue and, having regard to the modest amount involved, found no reason to interfere with the concurrent factual and evaluative conclusions reached by the authorities below. [Paras 14]

Addition of Rs.72,478/- upheld in favour of the Revenue.

Genuineness of sundry creditors and burden to produce witnesses/evidence - addition on account of unexplained or non existent creditors - Additions totalling Rs.6,62,393/- on account of unexplained/non existent sundry creditors upheld. - HELD THAT: - The Court held that the Assessee was given sufficient opportunity to produce evidence to prove the genuineness of the credit balances and failed to avail that opportunity. The ITAT's conclusion that, where parties did not appear despite notices, the burden was on the Assessee to ensure presentation of witnesses was accepted; consequently the additions were sustained. [Paras 11, 15]

Additions on account of unexplained/non existent creditors affirmed in favour of the Revenue.

Final Conclusion: Appeal disposed: additions of Rs.72,478/- (stock discrepancy) and Rs.6,62,393/- (unexplained creditors) confirmed in favour of the Revenue; addition of Rs.41,78,650/- (inflated RIL credit) remanded to CIT(A) for fresh consideration and verification of evidence, including calling for KME's books.

Refund of wrongly adjusted tax - statutory interest on refund from date of adjustment - factual verification before payment of refund - disposal by reliance on earlier High Court precedents

Refund of wrongly adjusted tax - statutory interest on refund from date of adjustment - Direction to refund the amount adjusted by the respondent together with statutory interest - HELD THAT: - The writ petition was disposed of on the basis that the issues are covered by earlier High Court orders and comparable decisions of other High Courts. The court directed the respondent to refund the sum specified in the petition, subject to the condition of factual verification, and ordered that statutory interest be paid from the date of adjustment until the date of refund. A timeline of eight weeks from communication of the order was fixed for payment.

Respondent directed to refund the amount specified in the petition with statutory interest from the date of adjustment to the date of refund within eight weeks from communication of the order.

Factual verification before payment of refund - disposal by reliance on earlier High Court precedents - Refund ordered subject to factual verification by the respondent - HELD THAT: - Although entitlement to refund was recognised by reference to earlier orders, the court conditioned the direction on the respondent carrying out factual verification prior to effecting the payment. This preserves the respondent's ability to verify factual correctness while mandating payment if verification supports the claim.

The refund is to be made after factual verification by the respondent; once verified, the respondent must pay the refund with interest within the stipulated period.

Final Conclusion: Writ petition disposed of by directing refund of the adjusted sum subject to factual verification, with statutory interest from the date of adjustment to date of refund, to be paid within eight weeks from communication of this order.

Show cause notice under Section 148A(b) - order under Section 148A(d) - re-assessment notice under Section 148 - information to suggest escapement of income - duty to consider reply under Section 148A(c) - right to adequate time and effective opportunity to reply - amended re assessment scheme (Finance Act, 2021) - principle of natural justice

Duty to consider reply under Section 148A(c) - order under Section 148A(d) - Whether the Assessing Officer complied with the statutory obligation to consider the assessee's reply before passing an order under Section 148A(d). - HELD THAT: - The Court found that the detailed reply dated 31st March, 2022 was on record prior to the impugned order dated 4th April, 2022 and therefore the Assessing Officer was statutorily obliged to consider that reply. The mandate of Section 148A(c), which uses the term 'shall', casts a duty on the Assessing Officer to consider the assessee's response to the show cause notice before making an order under Section 148A(d). By not considering the detailed reply, the Assessing Officer violated that statutory mandate and failed to exercise the jurisdiction conferred in a reasoned manner. [Paras 14]

Impugned order under Section 148A(d) quashed for failure to consider the assessee's reply; matter remanded for fresh consideration.

Right to adequate time and effective opportunity to reply - principle of natural justice - show cause notice under Section 148A(b) - Whether the assessee was denied an effective opportunity and reasonable time to respond to the show cause notice issued under Section 148A(b). - HELD THAT: - The Court recorded that the information and material relied upon in the show cause notice were not shared with the petitioner despite a specific request, and that the order under Section 148A(d) was passed in haste without granting extension or adequate time to file a considered reply. Given the nature of the material-data culled from returns and exchange filings which required technical scrutiny and explanation-the assessee was entitled to a reasonable opportunity and time to respond. The non sharing of information and the lack of adequate time violated the rationale of prior decisions and principles of natural justice. [Paras 11, 12]

Finding of denial of effective opportunity upheld; order quashed and reassessment notice set aside to be reconsidered after affording adequate opportunity.

Information to suggest escapement of income - amended re assessment scheme (Finance Act, 2021) - re-assessment notice under Section 148 - Whether the materials relied upon in the show cause notice and order were articulated with sufficient clarity to show that information suggested escapement of income, and whether the re assessment scheme's safeguards were observed. - HELD THAT: - The Court observed that the notice and order were cryptic, merely reproducing transactional totals from Form 10DB, GST and TDS data without explaining what was wrong with those transactions or how they indicated escapement of income. The Court emphasised that under the amended scheme the term 'information' cannot be lightly used to re open assessments and that the benchmark of escapement of income remains essential. Where the show cause notice appears to be a request for verification, the Assessing Officer should, at minimum, conduct enquiries under Section 148A(a) and must record reasoned findings before issuing a re assessment notice under Section 148. [Paras 7, 8, 9, 10, 16]

Notice and order quashed for being cryptic and lacking reasoned articulation that the information suggested escapement; matter remanded for fresh, reasoned determination in accordance with the amended scheme.

Remand for fresh consideration - order under Section 148A(d) - What remedial directions are appropriate when the Assessing Officer has failed to consider the assessee's detailed reply and issued a cryptic order. - HELD THAT: - The Court directed that the impugned order under Section 148A(d) and the consequential notice under Section 148 be quashed and remanded the matter to the Assessing Officer to pass a fresh, reasoned order after considering the detailed reply dated 31st March, 2022. The Assessing Officer was permitted, if required, to issue a supplementary notice seeking specific clarifications and was directed to complete the fresh determination within eight weeks. The Court noted that the Assessing Officer may follow statutory procedures including seeking extensions to enable adequate consideration, but must record reasons and afford opportunity. [Paras 17]

Matter remanded to the Assessing Officer to pass a fresh reasoned order under Section 148A(d) after considering the detailed reply; liberty to issue supplementary notice; fresh order to be passed within eight weeks.

Final Conclusion: The order dated 04.04.2022 under Section 148A(d) and the consequential notice dated 04.04.2022 under Section 148 are quashed. The matter is remanded to the Assessing Officer to pass a fresh, reasoned order after considering the assessee's detailed reply and, if necessary, issuing a supplementary notice; the fresh determination is to be completed in accordance with law within eight weeks.

Moratorium under Section 14 of the Insolvency and Bankruptcy Code - overriding effect of the Insolvency and Bankruptcy Code over other laws - keeping tax proceedings in abeyance during Corporate Insolvency Resolution Process - principles of natural justice and requirement of effective personal hearing - expunction of adverse judicial remarks where no opportunity to be heard was given

Moratorium under Section 14 of the Insolvency and Bankruptcy Code - keeping tax proceedings in abeyance during Corporate Insolvency Resolution Process - overriding effect of the Insolvency and Bankruptcy Code over other laws - Assessment proceedings should have been kept in abeyance pending completion of the assessee's Corporate Insolvency Resolution Process (CIRP) and the assessment order passed during CIRP is liable to be set aside. - HELD THAT: - The Court held that the assessing officer failed to consider the legal effect of the moratorium under the IBC and relevant judicial precedents relied upon by the assessee. The Supreme Court's decision in Alchemist Asset Reconstruction Co. (as noted by this Court) establishes that admission of an insolvency petition triggers a moratorium under Section 14(1)(a) which interdicts institution or continuation of proceedings against the corporate debtor. The assessing officer proceeded to complete the assessment and pass an ex parte order without staying proceedings despite a similar request having been acceded to by the PCIT-II for a related assessment, and without addressing the IBC-based submissions. For these reasons the assessment order was set aside, the matter restored to the file of the assessing officer and directed to be kept in abeyance until completion of the insolvency resolution proceedings, with the assessee to inform the assessing officer once those proceedings conclude. [Paras 5, 6, 7, 14]

Assessment order dated 30th March, 2022 set aside; matter restored to assessing officer and to be kept in abeyance until completion of the insolvency resolution proceedings.

Principles of natural justice and requirement of effective personal hearing - ex parte assessment where hearing was inadequate - The opportunity of personal hearing afforded via exchange of chat messages was not an effective hearing and the assessing officer's failure to grant a meaningful hearing rendered the assessment ex parte and vitiated. - HELD THAT: - The Court observed that the assessee had sought an effective personal hearing and had raised the IBC-related contention in its reply, but the so-called hearing by chat messages did not satisfy the tests of fairness or meaningful opportunity to be heard. The assessing officer did not address the IBC submissions or the authorities cited by the assessee before passing the assessment, demonstrating a denial of effective hearing. This procedural deficiency contributed to setting aside the assessment and remitting the matter for further action consistent with the moratorium and need for fair procedure. [Paras 6, 10, 14]

Assessment vitiated for lack of meaningful hearing; assessment set aside and remitted for action consistent with principles of fair hearing and the insolvency moratorium.

Expunction of adverse judicial remarks for lack of opportunity - judicial restraint and requirement to give opportunity before making disparaging remarks - Adverse observations and the imposition of costs against the counsel for the assessee were unwarranted and were expunged/vacated for want of necessity and opportunity to be heard. - HELD THAT: - Relying on the Supreme Court jurisprudence (including Neeraj Garg and the line of authorities addressing Mohammed Naim and its progeny), the Court held that harsh or disparaging remarks against counsel which could affect reputation or career should not be recorded without necessity for the decision and without giving the affected person an opportunity to explain. The learned Single Bench's characterization of the counsel's conduct as rude and the imposition of costs were unnecessary in the circumstances, especially where the core IBC-related submissions were not adjudicated; accordingly the adverse remarks were expunged and the costs vacated. [Paras 8, 9, 12, 14]

Adverse observations against the counsel expunged and the imposition of costs vacated.

Final Conclusion: The appeal is allowed: the assessment order dated 30th March, 2022 is set aside and the matter remitted to the assessing officer to be kept in abeyance until completion of the insolvency resolution proceedings; adverse judicial remarks against the assessee's counsel are expunged and the costs ordered by the Single Bench are vacated.

Appellate tribunal's jurisdiction to consider issues not decided by the Dispute Resolution Panel - effect of DRP non-decision on rate of tax - appeal under Section 253 of the Income Tax Act, 1961 - liberty to prosecute appeal on omitted grounds

Appellate tribunal's jurisdiction to consider issues not decided by the Dispute Resolution Panel - effect of DRP non-decision on rate of tax - liberty to prosecute appeal on omitted grounds - Whether the appellate Tribunal is precluded from considering the petitioners' contention on the applicable rate of capital gains tax because the Dispute Resolution Panel did not decide that question in its directions. - HELD THAT: - The High Court noted that while the DRP issued directions on the arm's length issue, it did not decide the separate question concerning the applicable rate. The respondents (Department) expressly accepted in their statement of objections that the petitioners must avail the statutory remedy, and did not dispute that the question of the rate could be gone into by the Tribunal in the pending appeals. In these circumstances, and to avoid prejudicing the petitioners' appellate remedy, the Court held there was no impediment to the Tribunal considering the petitioners' grounds as regards the rate despite the DRP's non-decision on that point. The Court thus disposed of the writ petitions by granting liberty to the petitioners to prosecute their appeals on the rate issue as well. [Paras 5]

Petitions disposed with liberty to prosecute appeals and for the appellate Tribunal to consider the rate issue notwithstanding that the DRP did not decide it.

Final Conclusion: The writ petitions are disposed of, with the Court granting liberty to the petitioners to pursue their appeals under Section 253 including consideration of the rate issue which the DRP did not decide.

Notice under section 274 read with section 271(1)(c) must specify whether proceedings are for concealment of particulars of income or for furnishing inaccurate particulars - penalty under section 271(1)(c) vitiated by a defective or non specific notice - principles of natural justice - right to know the case to be met - binding precedent: Manjunatha Cotton & Ginning Factory and Sahara India Life line of authorities

Notice under section 274 read with section 271(1)(c) must specify whether proceedings are for concealment of particulars of income or for furnishing inaccurate particulars - penalty under section 271(1)(c) vitiated by a defective or non specific notice - principles of natural justice - right to know the case to be met - Validity of the penalty imposed under section 271(1)(c) where the notice under section 274 did not specify whether proceedings were for concealment of particulars of income or for furnishing inaccurate particulars - HELD THAT: - The Tribunal found that the notice dated 21.12.2016 under section 274 read with section 271(1)(c) did not state which limb of section 271(1)(c) was invoked - concealment of particulars of income or furnishing inaccurate particulars. Reliance was placed on the consistent precedent that initiation of penalty proceedings must specify the ground so that the assessee has an opportunity to meet the case urged against it; a notice failing to do so vitiates the proceedings and the penalty subsequently imposed. The Tribunal noted Delhi and Karnataka High Court authorities (including the Manjunatha Cotton & Ginning Factory line and PCIT v. Sahara India Life) and the Tribunal's own earlier decision in Deloitte Haskins & Sells, holding that where the basis of initiation is not identical with the ground on which penalty is imposed, imposition of penalty offends natural justice and cannot be sustained. In the present facts the notice was defective for want of specification; accordingly the Assessing Officer could not validly assume jurisdiction to levy the penalty.

The penalty imposed under section 271(1)(c) is quashed and deleted for being founded on a defective notice.

Final Conclusion: Assessee's appeal is allowed: the penalty under section 271(1)(c) for assessment year 2009-10 is deleted as the notice under section 274 was non specific and thus vitiated the penalty proceedings.

Entitlement to deduction under section 80-IA(4) for income of a captive power plant - computation of eligible profits for exemption under section 10B treating captive power plant and manufacturing unit as a single unit - remand for recomputation by Assessing Officer

Entitlement to deduction under section 80-IA(4) for income of a captive power plant - Whether the assessee is entitled to claim deduction under section 80-IA(4) in respect of income of the captive power plant. - HELD THAT: - The Tribunal declined to adjudicate the substantive question of entitlement to deduction under section 80-IA(4) for the captive power plant for the assessment year in question. The counsel for the assessee expressly accepted that, for the year under consideration, the assessee is otherwise entitled to exemption under section 10B and requested that the question of section 80-IA(4) entitlement for subsequent years be kept open. The Tribunal recorded that its directions would not affect the assessee's position in previous or subsequent years and accordingly refrained from deciding the issue on merits. [Paras 2]

Issue not decided on merits and left open for determination in other proceedings; the Tribunal did not adjudicate entitlement under section 80-IA(4).

Computation of eligible profits for exemption under section 10B treating captive power plant and manufacturing unit as a single unit - remand for recomputation by Assessing Officer - Whether the Assessing Officer should recompute eligible profits for exemption under section 10B by treating the captive power plant together with the manufacturing unit as a single unit. - HELD THAT: - Accepting the assessee's submission that the manufacturing unit is entitled to exemption under section 10B irrespective of the section 80-IA(4) claim, the Tribunal directed that, for Assessment Year 2005-06, the Assessing Officer should compute the eligible profits by treating the entire unit, including the captive power plant, as a single unit for determining exemption under section 10B. The Tribunal expressly confined this direction to the year under consideration and clarified that this recomputation would not constitute an adjudication on the separate question of section 80-IA(4) entitlement for other years. [Paras 2, 3]

Appeal partly allowed: matter remitted to the Assessing Officer for recomputation of eligible profits for exemption under section 10B treating the captive power plant and manufacturing unit as a single unit for AY 2005-06.

Final Conclusion: The Tribunal partly allowed the appeal for Assessment Year 2005-06 by directing the Assessing Officer to recompute eligible profits for exemption under section 10B treating the captive power plant and manufacturing unit as a single unit; the question of entitlement under section 80-IA(4) was not decided and was left open for other years or proceedings.

Reopening of assessment under the Income-tax Act - estimation of unexplained bank deposits as income - computation of commission income by estimation - use of assessee's statement for estimation - application of earlier Tribunal order in assessee's own case

Reopening of assessment under the Income-tax Act - estimation of unexplained bank deposits as income - Validity of reopening assessment and framing assessment under section 147/148 - HELD THAT: - The Tribunal examined whether the reassessment proceedings were valid given deposits in the assessee's bank account and the fact that no return had been filed. The record shows that deposits were detected from information sources and the Assessing Officer obtained the necessary approval and issued notice under the relevant provisions. In view of the undisputed bank deposits and non-disclosure of income by the assessee prior to reopening, the Tribunal found no infirmity in the reopening and framing of assessment. [Paras 7]

Grounds challenging reopening and validity of proceedings are dismissed; reopening held valid.

Computation of commission income by estimation - use of assessee's statement for estimation - application of earlier Tribunal order in assessee's own case - Correct rate at which commission income should be estimated and the effect of the assessee's statement on that estimation - HELD THAT: - The learned CIT(A) reduced the AO's estimate from 1% to 0.5% relying on the assessee's statement recorded before the AO, and referred to an earlier Tribunal order in the assessee's case which had applied a different rate. The Tribunal observed that the CIT(A) adopted only part of the recorded statement (accepting the 0.5% receipt figure while allowing expenses on actuals). Treating the statement as a whole, which disclosed that the assessee charged 0.5% commission but paid 0.3% as bank charges, the Tribunal concluded that the net commission income is 0.20%. On that basis the Tribunal directed the Assessing Officer to adopt 0.20% as the net commission income. [Paras 10]

Direction modified: Assessing Officer to adopt net commission income at 0.20% (0.5% less bank charges of 0.3%) and compute income accordingly.

Final Conclusion: The appeal is partly allowed: the reopening of assessment is upheld, and the computation of commission income is modified so that the Assessing Officer shall adopt net commission income at 0.20% and proceed accordingly.

Addition under section 69A representing unexplained cash deposits - onus to explain source of cash deposits - acceptance of contemporaneous evidence and affidavit in support of claimed transaction - refusal to record witness statement and its effect on credibility of addition - lump-sum addition for unexplained foreign travel expenditure - rejection of explanation for lack of corroborative evidence

Addition under section 69A representing unexplained cash deposits - onus to explain source of cash deposits - acceptance of contemporaneous evidence and affidavit in support of claimed transaction - refusal to record witness statement and its effect on credibility of addition - Whether the addition of Rs.7,57,450/- under section 69A for alleged unexplained cash deposits in the assessee's bank account was justified. - HELD THAT: - The Tribunal found that the onus to explain the source of the impugned cash deposits lay on the assessee and that the assessee produced documentary evidence in the paper book and an affidavit of the purported purchaser, Shri Kartar Singh, which explained the cash receipt as consideration for sale of the assessee's car. The Tribunal noted that the car was declared in the block return and depreciation on the car was allowed by the AO, so ownership was not disputed. Shri Kartar Singh's affidavit explained non-appearance during remand proceedings, expressed willingness to give statement and produce documents, and was not countered by any affidavit from the Revenue. The CIT(A) had not permitted recording of Shri Kartar Singh's statement and proceeded to confirm the addition on conjecture. Given the contemporaneous documentary material, the uncontroverted affidavit, the assessed treatment of the car in the block proceedings, and the absence of any rebuttal from the Revenue, the Tribunal concluded that the assessee had discharged the onus and that making and confirming the addition without recording the witness statement and without properly considering the evidence was not justified; the addition was deleted. [Paras 6]

Addition of Rs.7,57,450/- under section 69A deleted; grounds Nos.2 to 2.4 allowed.

Lump-sum addition for unexplained foreign travel expenditure - rejection of explanation for lack of corroborative evidence - onus to substantiate third-party borne expenses - Whether the lump-sum addition of Rs.50,000/- on account of unexplained foreign travel expenditure to Dubai was sustainable. - HELD THAT: - The Tribunal held that the assessee bore the onus of proving that the foreign travel expenditure was borne by a third party. The assessee's explanation that the expenses were paid by a friend (named during appeal as Shri Munish Uppal) was not supported by any corroborative documentary evidence, affidavits, or confirmations. In the absence of any supporting material to substantiate that the expenditure was incurred by the friend, the AO and the CIT(A) were justified in making the addition. The Tribunal therefore upheld the addition. [Paras 9]

Addition of Rs.50,000/- towards unexplained foreign travel expenditure sustained; ground No.3 dismissed.

Final Conclusion: The appeal is partly allowed: the addition under section 69A relating to alleged unexplained cash deposits is deleted, while the lump-sum addition for unexplained foreign travel expenditure is sustained; overall the appeal is partly allowed.

Exemption under section 10(38) - addition under section 68 - accommodation entry - genuineness of transactions - preponderance of probabilities (test of human probabilities) - reliance on investigation report - burden of proof and absence of supporting evidence

Exemption under section 10(38) - addition under section 68 - accommodation entry - preponderance of probabilities (test of human probabilities) - reliance on investigation report - burden of proof and absence of supporting evidence - Whether the claimed long term capital gain on sale of shares was liable to be disallowed as income from undisclosed sources by treating the receipt as an accommodation entry and making an addition under section 68, notwithstanding the assessee's claim of exemption under section 10(38). - HELD THAT: - The Tribunal upheld the concurrent factual finding of the Assessing Officer and the Commissioner (Appeals) that the alleged long term capital gain was an accommodation entry. The authorities relied on material gathered including the Directorate of Investigation's probe identifying scrips used in conversion of unaccounted funds, the abnormal and unrealistically steep rise in the share price of the paper company, the poor financial health of the company, and the assessee's lack of a consistent investor profile. The CIT(A) applied the test of human probabilities as articulated by the Apex Court, concluding that the extraordinary profit was not humanly probable and therefore indicative of make believe transactions. The assessee failed to produce any cogent evidence to rebut these findings or to demonstrate the genuine source and economic justification for the sale consideration; the Tribunal found no reason to disturb the conclusion that the sale consideration represented undisclosed income and that the addition under section 68 was justified. Given the absence of contrary material or documentary proof from the assessee, the exemption claim under section 10(38) was rightly declined. [Paras 6, 7, 8]

The finding that the claimed long term capital gain was an accommodation entry and the consequent addition under section 68 is upheld; the appeal is dismissed.

Final Conclusion: The Tribunal dismissed the assessee's appeal for AY 2015-16, upholding the Assessing Officer's and the CIT(A)'s conclusion that the claimed LTCG was an accommodation entry and that the addition under section 68 was justified in the absence of any cogent rebuttal or documentary evidence from the assessee.

Limited scrutiny - Widening scope of scrutiny requires prior approval of the PCIT - Jurisdictional irregularity in assessment - Application of Section 54F - Capital Gains Account Scheme deposit not taxable in year of deposit without considering permitted utilisation period

Limited scrutiny - Widening scope of scrutiny requires prior approval of the PCIT - Jurisdictional irregularity in assessment - Whether the Assessing Officer exceeded the scope of limited scrutiny without obtaining prior approval and whether that amounted to jurisdictional irregularity invalidating the assessment order. - HELD THAT: - The Tribunal found that the assessee's case had been selected for limited scrutiny on specified reasons, but the Assessing Officer proceeded to examine and disallow the claim under Section 54 (and alternatively Section 54F) without recording or relying on the original reasons for selection and without seeking prior approval from the Pr. Commissioner of Income Tax before widening the scope. The Bench noted the settled proposition that an AO may expand the scope of scrutiny only after obtaining prior approval of the PCIT and relied on a coordinate bench decision and CBDT instructions to that effect. The CIT(A)'s brief dismissal of the jurisdictional objection as merely procedural was held to be erroneous because the expansion went to the root of the AO's jurisdiction in the limited scrutiny exercise. Consequently the Tribunal allowed the cross-objection grounds challenging the irregular exercise of jurisdiction. [Paras 6, 7]

Assessment order set aside on jurisdictional ground for having exceeded limited scrutiny without prior PCIT approval; cross-objection grounds 1 and 2 allowed.

Application of Section 54F - Capital Gains Account Scheme deposit not taxable in year of deposit without considering permitted utilisation period - Whether the assessee was entitled to exemption under Section 54F in respect of long term capital gains for AY 2015-16 on account of deposit in the Capital Gains Account Scheme. - HELD THAT: - On merits the Tribunal observed that the Commissioner (Appeals) examined the material facts - dates of purchase, sale and deposit in the capital gains account - and held the assessee eligible for relief under Section 54F. The Bench emphasised that an amount once deposited into the Capital Gains Account Scheme cannot be treated as taxable in the year of deposit without assessing whether the amount was utilised within the period permitted under the scheme. Having considered the facts and the CIT(A)'s findings, the Tribunal found no reason to reverse the allowance of Section 54F relief. [Paras 3, 8]

Claim under Section 54F upheld and the addition disallowing long term capital gain deleted; revenue appeal dismissed on merits.

Final Conclusion: The revenue appeal is dismissed; the cross objections are allowed insofar as the assessment was irregularly expanded beyond limited scrutiny without prior PCIT approval, and on merits the assessee's claim under Section 54F (with deposit in the Capital Gains Account Scheme) is upheld for AY 2015 16.

Unexplained investment - verification of bank withdrawals and third party confirmations - construction expenses in the unorganised sector - estimation of disallowance as percentage of claimed investment - exemption under section 54F

Unexplained investment - verification of bank withdrawals and third party confirmations - construction expenses in the unorganised sector - estimation of disallowance as percentage of claimed investment - Whether the claimed construction expenditure of Rs.97.82 lakhs was to be treated as unexplained investment and, if so, to what extent an estimation-disallowance should be made. - HELD THAT: - The Tribunal noted that in its earlier order the matter was remitted to the Assessing Officer for verification of whether withdrawals were actually applied to purchase of land and construction. On re-examination the assessee produced confirmation letters showing payments to close relatives; summons to those persons produced only one appearance who denied issuing any confirmation and other payees did not appear. The Assessing Officer also noted discrepancies (including purchase of tiles prior to land purchase) and concluded confirmations were fabricated and unsupported. The Tribunal accepted that construction activity in the unorganised sector commonly involves cash payments and that many payees may be unwilling to appear; accordingly the CIT(A) was correct to moderate the AO's complete rejection of the claimed construction outlay. However, given the fabrications, discrepancies and failure of key payees to corroborate the confirmations, the Tribunal found the 30% disallowance applied by the CIT(A) excessive. Balancing the realities of unorganised-sector cash payments against the absence of reliable corroboration, the Tribunal reduced the estimate of unexplained investment to 10% of the claimed construction expenditure and directed the Assessing Officer to give the assessee adequate opportunity before finalising the assessment. [Paras 6, 7]

The appeal is partly allowed by reducing the disallowance of the claimed construction expenditure to 10% of Rs.97.82 lakhs; the Assessing Officer to implement this direction after providing opportunity of hearing.

Final Conclusion: The Tribunal remitted no further factual enquiries but accepted that while some portion of the claimed construction expenditure lacked reliable corroboration, a complete disallowance was unjustified; accordingly the disallowance is quantified at 10% of the claimed construction cost and the appeal is partly allowed.

Levy of fee under section 234E - processing and intimation under section 200A - machinery provision versus charging provision - prospective effect of statutory amendment - privilege to deductor under section 271H - precedent selection where non-jurisdictional High Courts conflict

Levy of fee under section 234E - processing and intimation under section 200A - prospective effect of statutory amendment - Demand of fee under section 234E computed and intimated under section 200A for periods prior to 01.06.2015 is not sustainable. - HELD THAT: - The Tribunal held that section 234E is the charging provision creating liability for fee on failure to furnish TDS statements, but the mechanism to compute and intim ate such fee under section 200A(1)(c)-(f) was inserted only with effect from 01.06.2015. In the absence of that mechanism prior to 01.06.2015, the Department could not, in purported exercise of power under section 200A, compute and issue intimations demanding fee under section 234E for periods before 01.06.2015. The Tribunal followed the view of the Karnataka High Court that the substitution in section 200A is prospective and does not render the post 2015 mechanism retrospective; consequently, intimations under section 200A demanding fee under section 234E for periods prior to 01.06.2015 are without authority of law and are quashed to that extent. The Tribunal clarified that this approach leaves intact the substantive charge in section 234E but denies reliance on section 200A for computation/intimation for pre 01.06.2015 periods, and also noted that the Karnataka High Court applied its decision prospectively (precluding refund claims by those who paid without protest).

Demand for fee under section 234E raised by intimation under section 200A for period prior to 01.06.2015 set aside; appeal allowed to that extent.

Machinery provision versus charging provision - privilege to deductor under section 271H - precedent selection where non-jurisdictional High Courts conflict - Where there are conflicting precedents of non jurisdictional High Courts, the Tribunal may follow the view favourable to the assessee in absence of a decision of the jurisdictional High Court. - HELD THAT: - The Tribunal observed that the Gujarat High Court had upheld levy under section 234E without requiring section 200A for computation, whereas the Karnataka High Court held that the 200A amendment is prospective and precluded demands for pre 01.06.2015 periods. In the absence of any authoritative decision of the Calcutta High Court, the Tribunal followed the Karnataka High Court's view (and coordinate bench decisions following it) in terms of the Supreme Court principle that, where there is a conflict between non jurisdictional High Courts and no contrary decision of the jurisdictional High Court, the view favourable to the assessee may be adopted. The Tribunal thus rejected the revenue plea that section 234E could be validly demanded under section 200A for pre amendment periods and treated section 200A as a machinery provision that cannot override the prospective effect of its amendment.

Followed the Karnataka High Court/coordinate bench precedent favourable to the assessee and applied it to set aside the demand.

Final Conclusion: The Tribunal set aside the demand of fee under section 234E insofar as it was computed and intimated under section 200A for periods prior to 01.06.2015 (AY 2013-14), following the Karnataka High Court and coordinate bench authority; the appeal is partly allowed to that extent.

Burden of proof under Section 68 - Identity, creditworthiness and genuineness of share application - Reliability of documentary and oral verification by tax authorities

Burden of proof under Section 68 - Identity, creditworthiness and genuineness of share application - Reliability of documentary and oral verification by tax authorities - Assessee failed to discharge the onus under Section 68 to prove identity, creditworthiness and genuineness of share capital of Rs.9,30,00,000/- credited in its books - HELD THAT: - The Tribunal earlier remanded the matter to the CIT(A) to examine the three ingredients required under Section 68-identity of the shareholders, their creditworthiness and genuineness of the transaction. On remand the CIT(A) considered the assessment-record verifications: summons issued to ten shareholders produced only one person who denied the transaction; the PAN and existence of M/s. Portal India were found unreliable; bank records showed routing of funds through the same account and opening of accounts only for the impugned transaction; the assessee did not produce the purported transferor or satisfactory substantiating documents despite notices and opportunities. Applying the settled authorities cited, the tribunal held that the assessee must prima facie establish identity, creditworthiness and genuineness and that the AO's adverse conclusion is to be formed on proper appreciation of material on record. In the present facts the CIT(A) rightly found the assessee's explanation unsatisfactory, the surrounding circumstances established the sham nature of the introductions, and the initial onus under Section 68 remained unfulfilled. [Paras 4, 5, 13]

Addition made by the Assessing Officer under Section 68 in respect of the share capital was upheld as the assessee failed to discharge the onus to prove identity, creditworthiness and genuineness of the transaction.

Final Conclusion: The appeal is dismissed; the finding that the share capital credited of Rs.9,30,00,000/- is to be treated as unexplained under Section 68 is upheld for A.Y. 2001-02.

Provisions written back as part of business income - deduction under section 80HHC - rectification of typographical error in tribunal order

Rectification of typographical error in tribunal order - Typographical error in figures in the earlier Tribunal order corrected from Rs.11.07 crores to Rs.1.107 crores. - HELD THAT: - The Tribunal acknowledged that its earlier order in ITA No.2446/AHD/2007 contained a typographical misstatement of the figure in paragraphs 27 and 30. The Tribunal held that the merit of the adjudication need not be disturbed but directed correction of the wrongly quoted amount so that the figure in those paragraphs should read as Rs.1.107 crores. The correction is limited to rectifying the numerical error and does not affect the substantive reasoning previously recorded by the Tribunal. [Paras 3]

The order is corrected to read Rs.1.107 crores in paragraphs 27 and 30 of the Tribunal's earlier order.

Provisions written back as part of business income - deduction under section 80HHC - Whether provisions written back are eligible to be included in manufacturing profits for computing deduction under section 80HHC. - HELD THAT: - The Tribunal examined the nature of amounts represented by provisions written back and followed the view that such write-backs operate to reduce previously claimed business expenditure and therefore form part of business/manufacturing profits. Relying on earlier coordinate tribunal authority and the binding decision of the Gujarat High Court in Mistu Ltd., the Tribunal held that provisions written back are not receipts of a miscellaneous nature disconnected from export/manufacturing business but restorative adjustments to business profit. Applying that principle, the Tribunal directed the Assessing Officer to treat the provision written back amount sustained by the Commissioner (Appeals) as part of manufacturing profit eligible for deduction under section 80HHC. [Paras 10]

Provisions written back to the extent sustained (Rs.22,70,062) are to be treated as part of manufacturing profit and allowed for deduction under section 80HHC.

Final Conclusion: The Tribunal corrected the typographical error in its earlier order to read Rs.1.107 crores and allowed the Revenue's recalled issue by holding that the sustained provisions written back are part of manufacturing profits and eligible for deduction under section 80HHC; accordingly the part of ground No.7 challenged by the Revenue is dismissed as indicated.

Pre-execution judicial review of detention orders - vitiation of subjective satisfaction by non-placement of material - failure to serve detention order promptly and diligence in execution - preventive detention as distinct from punitive detention - requirement of promptitude and compliance with procedural safeguards in COFEPOSA matters - delegation of powers under Section 7(1) of the COFEPOSA Act to Joint Secretary (COFEPOSA)

Vitiation of subjective satisfaction by non-placement of material - non-placement of Denied Entry List (DEL) orders before the detaining authority - Non-placement of DGFT orders placing the subject firms on the Denied Entry List before the Detaining Authority vitiates the subjective satisfaction for issuing the detention order. - HELD THAT: - The Court found that the DGFT orders dated 21.12.2018 and 24.12.2018 placing the exporter entities on the Denied Entry List were vital to the question of necessity for preventive detention because they foreclosed the possibility of the petitioner indulging in future prejudicial activity. These facts had a significant and direct bearing on the subjective satisfaction of the Detaining Authority. The omission to place such material before the Detaining Authority demonstrates lack of application of mind and defeats the necessary link between the detention order and the preventive purpose it purports to serve. On this ground alone the Court held that the subjective satisfaction was vitiated and decided the issue in favour of the petitioner. [Paras 20, 35]

The non-placement of the DEL orders vitiated the subjective satisfaction of the Detaining Authority; issue decided for the petitioner.

Failure to serve detention order promptly and diligence in execution - requirement of promptitude and compliance with procedural safeguards in COFEPOSA matters - preventive detention as distinct from punitive detention - The detaining, sponsoring and executing authorities were not diligent in serving and executing the detention order; unexplained delay and casual approach vitiate the detention order. - HELD THAT: - The Court held that preventive detention requires urgency and strict compliance with procedural safeguards. Despite the petitioner's presence before the magistrate on dates after the detention order was passed, no serious effort was made to serve or execute the order. The authorities failed to offer a satisfactory explanation for non-service on 28.03.2019 and 05.04.2019, and the subsequent publication and actions evinced a casual approach. Relying on established precedents and procedural instructions directing close monitoring and prompt service, the Court concluded that the inordinate and unexplained delay undermines the genuineness of the subjective satisfaction and is fatal to the validity of the detention order. [Paras 21, 22, 26, 27, 35]

The authorities failed to act with promptitude and diligence in serving and executing the detention order; this unexplained delay vitiates the detention order.

Delegation of powers under Section 7(1) of the COFEPOSA Act to Joint Secretary (COFEPOSA) - pre-execution judicial review of detention orders - Delegation of the Central Government's powers under Section 7(1) to the Joint Secretary (COFEPOSA) by Gazette notification did not render the Section 7(1)(b) order invalid; the Detaining Authority did not usurp the Appropriate Government's powers in the facts of this case. - HELD THAT: - The Court examined the notification dated 16.08.2018 delegating certain powers vested in the Central Government to officers in the Department of Revenue, including the Joint Secretary (COFEPOSA). Applying the law concerning specially empowered officers (as discussed in Ankit Ashok Jalan and related authorities), the Court found no irregularity in the delegation relied upon by respondents and accordingly was not persuaded that the Detaining Authority had unlawfully assumed the role of the Appropriate Government for issuing the Section 7(1)(b) order. Thus, challenge to validity of the Section 7 order on the ground of lack of delegated power failed. [Paras 31, 33, 34]

The delegation in the Gazette notification validated the exercise of powers by the Joint Secretary (COFEPOSA); the Section 7(1)(b) order was not vitiated on delegation grounds.

Final Conclusion: The writ petition is allowed. The preventive detention order No.PD-12001/07/2019-COFEPOSA dated 26.03.2019 is quashed because (i) material placing the firms on the Denied Entry List was not placed before the Detaining Authority and vitiated subjective satisfaction, and (ii) there was an unexplained, undue delay and lack of promptitude in serving and executing the detention order; the challenge to delegation of Section 7 powers to the Joint Secretary (COFEPOSA) was rejected.

Penalty under Section 112 of the Customs Act - Confiscation and improper importation under Section 111 - Applicability of Customs Brokers Licensing Regulations (CBLR) violations to penal provisions under the Customs Act - Appropriation of duty and interest and its effect on impropriety of import

Appropriation of duty and interest and its effect on impropriety of import - Confiscation and improper importation under Section 111 - Whether appropriation of duty and interest by Revenue precludes classification of the import as 'improper' and thereby bars imposition of penalty under Section 112. - HELD THAT: - The Tribunal held that Sections 111 and 112 operate only where goods are found to be 'improperly imported' and liable for confiscation. Once the Revenue has appropriated the duty along with interest, the import ceases to be 'improper' because the deficiency has been remedied by payment; in that circumstance there remains no basis for confiscation and consequently Sections 111 and 112 do not apply. On the facts, the Revenue had collected duty and interest, and therefore the ingredient of 'improper importation' necessary to attract Section 112 was absent. [Paras 8, 9]

Appropriation of duty and interest by the Revenue removes the impropriety of the import and, accordingly, Section 112 is not attracted.

Penalty under Section 112 of the Customs Act - Applicability of Customs Brokers Licensing Regulations (CBLR) violations to penal provisions under the Customs Act - Whether penalty under Section 112 can be imposed on a Customs House Agent for alleged violations of Regulations 13(d) and (e) of the CBLR where no specific act causing improper importation is attributed. - HELD THAT: - The Tribunal found that Section 112 does not contemplate penal action for mere violations of provisions or regulations under another statutory code such as the CBLR unless the act or omission results in improper importation of goods and confiscation. The Show Cause Notice alleged contravention of Regulations 13(d) and (e) but did not attribute any specific act or omission by the appellant that produced an improper import and consequent confiscation. On these peculiar facts, imposing penalty under Section 112 for a CBLR violation was held unsustainable. [Paras 8, 9]

Penalty under Section 112 cannot be sustained for alleged violations of the CBLR in the absence of any specific act by the appellant causing improper importation and confiscation.

Final Conclusion: The penalty imposed under Section 112(a) was set aside as not in accordance with law; the appeal is allowed.

Penalty under section 114(i) of the Customs Act, 1962 - confiscation under section 113 of the Customs Act, 1962 - show cause notice - corrigendum to Order in Original - abetment - due diligence of customs broker - Customs Broker Licensing Regulations

Penalty under section 114(i) of the Customs Act, 1962 - confiscation under section 113 of the Customs Act, 1962 - show cause notice - corrigendum to Order in Original - Penalty under section 114(i) could not be sustained where the Show Cause Notice did not contain a proposal for confiscation and the authority's subsequent corrigendum could not cure that substantive omission. - HELD THAT: - The Show Cause Notice, while stating generally in an earlier paragraph that the goods are liable for confiscation, contained no concrete proposal for confiscation from paragraph 35 onwards. Section 114(i) is consequential on invocation of confiscation under section 113; absent a valid proposal for confiscation in the notice, a penalty under section 114(i) is not sustainable. The original authority attempted to rectify this omission by issuing a Corrigendum to the Order in Original purporting to order confiscation; however, a corrigendum is impermissible for correcting substantive defects in adjudication and cannot be used to supply a material proposal that was absent from the Show Cause Notice. Consequently the penalty based on the defective proceedings cannot stand. [Paras 12, 13, 14]

Penalty under section 114(i) set aside as unsustainable for failure to propose confiscation in the Show Cause Notice and for being impermissibly corrected by corrigendum.

Abetment - due diligence of customs broker - Customs Broker Licensing Regulations - No evidence was found to establish that the customs broker appellant abetted the attempted export of the prohibited goods. - HELD THAT: - The appellant had only filed the shipping bill and did not pursue registration because KYC and authorization from the exporter were not furnished. The record does not establish that the appellant connived with the exporter or aided the export of Star Tortoises. Allegations that the manager failed to exercise due diligence, did not furnish KYC documents, or lent the broker card, fall within the ambit of Customs Broker Licensing Regulations and were not proved as constituting abetment of smuggling. On the material before the Tribunal there is no evidentiary foundation for attributing criminal or quasi-criminal liability to the appellant for abetment. [Paras 11]

Findings of abetment not sustained; no penalty can be predicated on proved connivance by the broker.

Final Conclusion: Both appeals are allowed: the penalties imposed under section 114(i) are set aside for want of a valid confiscation proposal in the Show Cause Notice and because the subsequent corrigendum could not cure the substantive defect; additionally, there is no evidence of abetment by the customs broker, and consequential relief follows.

Assignment versus security interest - escrow and proprietary/equitable interest in escrowed funds - interim moratorium arising from orders under Sections 241-242 of the Companies Act - enforcement of assigned receivables by assignee/beneficiary - contempt and wilful disobedience of interim court orders - reversal of amounts debited in excess of assigned sums

Assignment versus security interest - escrow and proprietary/equitable interest in escrowed funds - rights of assignee to assigned receivables - Whether IL&FS retained any claim or proprietary right in the receivables deposited in the escrow account that were the subject matter of the Assignment Agreement in favour of the lender. - HELD THAT: - The transaction documents (Facility Agreement, Escrow Agreement, Assignment and Administration Agreement and Power of Attorney) plainly provide that a portion of the lease rentals sufficient to meet principal and interest was assigned to the lender and set aside in the escrow account as the lender's exclusive property for repayment. The escrow arrangement and assignment operate such that the assigned portion vested beneficial interest in the lender in presenti; the borrower had no continuing proprietary right over the assigned portion. Any excess receipts in the escrow account (amounts beyond that sufficient to cover principal and interest) remained with the borrower or constituted residual security. Consequently the character of the transaction must be read holistically and the use of terms like "pledge" or "security" in certain documents does not alter the operation of the express assignment in favour of the lender. [Paras 25, 27, 31, 32, 39]

The portion of receivables deposited in the escrow account that was expressly assigned to the lender is the lender's property and IL&FS has no proprietary claim on that assigned portion; only amounts in excess of principal and interest remain with or are otherwise available to the borrower.

Interim moratorium arising from orders under Sections 241-242 of the Companies Act - enforcement of assigned receivables by assignee/beneficiary - contempt and wilful disobedience of interim court orders - reversal of amounts debited in excess of assigned sums - Whether the lender and the escrow bank, by debiting the assigned monies from the escrow account after the interim order dated 15.10.2018, violated that interim order or committed contempt requiring reversal/purging. - HELD THAT: - The interim order of 15.10.2018 stayed institution/continuation of suits, enforcement or foreclosure of security over assets of IL&FS, acceleration/withdrawal of financial facilities and exercise of set-off/lien by banks against IL&FS accounts. That prohibition did not, however, negate or override an express, in presenti assignment of certain receivables to the lender which vested exclusive proprietary interest in those assigned sums. The lender, on the basis of the transaction documents, was entitled to instruct the escrow bank to debit amounts sufficient to cover principal and interest; the escrow bank acted per the escrow agreement and instructions of the lender. Given the existence of bona fide and debatable disputes as to contractual interpretation, the acts were not found to be wilful disobedience amounting to contempt requiring purging. Nonetheless, any amounts debited in excess of the portion assigned for principal and interest (after adjusting any prior shortfalls) are not covered by the assignment and must be reversed to the borrower. [Paras 41, 43, 44, 45, 46]

Debiting of sums by the lender/escrow bank that corresponded to the assigned portion for repayment did not contravene the interim order and does not attract contempt; amounts debited in excess of the assigned sums (after adjusting shortfalls) must be identified and reversed to the borrower within the directed timeframe.

Final Conclusion: The Tribunal held that the transaction effected a present assignment of that portion of lease receivables sufficient to meet principal and interest, vesting beneficial ownership in the lender; debiting of such assigned sums by the lender through the escrow bank did not breach the interim order of 15.10.2018 nor constitute contempt. The escrow bank is directed to re-examine debits made after 15.10.2018 and, after adjusting any shortfalls, reverse within one month any amounts debited in excess of the assigned sums; the remaining applications are disposed of accordingly.

Validity and effect of One Time Settlement (OTS) Default Clause - Proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016 upon default under OTS - Right of the financial creditor to cancel compromise and revive pre-OTS remedies on default - Admissibility of Section 7 application following breach of settlement

Validity and effect of One Time Settlement (OTS) Default Clause - Proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016 upon default under OTS - Whether the existence of an OTS dated 28.05.2020 precluded the Financial Creditor from filing and securing admission of a Section 7 application after an alleged default on the scheduled payment of 30.06.2020. - HELD THAT: - The OTS dated 28.05.2020, placed on record as Annexure-B, incorporated a clear 'Default Clause' (Clause 6) which reserved to the Bank the right to cancel the compromise settlement and to exercise against the borrowers/guarantors all rights and remedies available prior to the compromise settlement, including making the entire pre-compromise amount due forthwith, in the event of failure to honour any terms of the compromise. The Financial Creditor established that the first instalment scheduled for 30.06.2020 was not paid (no material on record indicating payment). In consequence, the Default Clause operated to render the compromise cancellable and to revive the creditor's remedies. The Adjudicating Authority therefore correctly proceeded with and admitted the Section 7 application filed after the default. The appellant's contention that absence of a formal cancellation of the OTS precluded initiation of insolvency proceedings was rejected in view of the explicit contractual entitlement conferred on the Bank by Clause 6 and the admitted non-payment on 30.06.2020. [Paras 6, 7, 9, 10, 11]

The OTS Default Clause entitled the Financial Creditor to treat the settlement as breached on non-payment and to proceed under Section 7; the Adjudicating Authority's admission of the Section 7 application was upheld and the appeal dismissed.

Final Conclusion: The Tribunal upheld the Adjudicating Authority's admission of the Section 7 petition: the OTS contained an operative Default Clause allowing the Bank to cancel the compromise and revive pre-OTS remedies upon non-payment on 30.06.2020, and no merit was found in the appeal.

Investigation into company's affairs under Section 213(b) of the Companies Act, 2013 - Prima facie evidence requirement for referral to the Central Government/SFIO - Discretionary power to order investigation - Circumstances suggesting intent to defraud, fraud, misfeasance or withholding of information - Tribunal's authority to refer matters to Central Government under Section 213

Investigation into company's affairs under Section 213(b) of the Companies Act, 2013 - Prima facie evidence requirement for referral to the Central Government/SFIO - Circumstances suggesting intent to defraud, fraud, misfeasance or withholding of information - Application under sections 210(2) and 213(b) seeking direction to the Central Government/SFIO to investigate the affairs of the corporate debtor dismissed for want of prima facie evidence. - HELD THAT: - The Tribunal examined the statutory scheme of section 213(b) and the settled principle that an order for investigation is discretionary and can only be made where circumstances exist which suggest inferences of intent to defraud, fraudulent or unlawful purpose, fraud, misfeasance or withholding of material information. Reliance was placed on earlier decisions holding that the existence of such circumstances must be shown at least prima facie and the applicant must place evidence sufficient to enable the Tribunal to form an opinion that an investigation is necessary. The liquidator's averments-relating to shifting of plant and machinery, inter-company linkages, certain bills and claim queries-were found not to constitute prima facie evidence of the kinds of circumstances contemplated by section 213(b). The Tribunal held that the application must "stand on its own feet" and that no single or cumulative documentary evidence was produced to prima facie satisfy the statutory threshold for referring the matter to the Central Government for appointment of inspectors. In consequence, the Tribunal declined to exercise its discretionary power to direct an investigation under section 213(b). [Paras 13, 14]

Application dismissed for failure to demonstrate prima facie circumstances warranting investigation under section 213(b).

Final Conclusion: The application under sections 210(2) and 213(b) of the Companies Act, 2013 seeking directions to the Central Government/SFIO to investigate the corporate debtor is dismissed for lack of prima facie evidence; no referral for investigation is ordered.

Admission of petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 - Acknowledgement of debt in corporate balance sheet as extending period of limitation under Section 18 of the Limitation Act, 1963 - Bankers' books and statement as evidence of default under Section 7(3)(a) - Appointment of Interim Resolution Professional meeting requirements of Section 7(3)(b) - Moratorium and its consequences under Section 14(1) of the Code - Duties and powers of Interim Resolution Professional and cooperation by management under Sections 13(2), 15, 17, 18, 19 and 20 of the Code

Acknowledgement of debt in corporate balance sheet as extending period of limitation under Section 18 of the Limitation Act, 1963 - Admission of petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 - Balance sheet entries of the Corporate Debtor and bank statements constitute acknowledgement and evidence of continuing default for the purpose of limitation and sufficiency of cause of action for admission under Section 7. - HELD THAT: - The Tribunal accepted the Financial Creditor's contention that the Corporate Debtor's balance sheet for FY 2018-19 records defaults to banks, including dues to the Financial Creditor, and that such entries amount to an acknowledgement under Section 18 of the Limitation Act, thereby extending the period of limitation. Further, the Bank produced a certificate with account transactions under the Bankers' Books Evidence Act showing transactions and default for the period 01.01.2014 to 15.03.2020. On consideration of these documents, the Tribunal found that there was sufficient evidence of debt and continuing default to entertain and admit the Section 7 application despite the earlier date of classification as NPA. [Paras 7, 8, 11, 12, 13]

The Tribunal held that the balance sheet entry and bankers' books evidence established acknowledgement and default, rendering the petition not barred by limitation and suitable for admission under Section 7.

Admission of petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 - Initiation of Corporate Insolvency Resolution Process (CIRP) - Whether the Section 7 application should be admitted and CIRP initiated against the Corporate Debtor. - HELD THAT: - On the material on record - loan sanction and consortium agreement, classification of account as NPA, demand notices under SARFAESI Act and subsequent possession and failed auctions, banker statements evidencing default, and the acknowledgement in the balance sheet - the Tribunal was satisfied that the Corporate Debtor was unable to pay its debts. Taking these factors together, the Tribunal found the test for admission under Section 7 met and was inclined to accept the application. [Paras 1, 2, 4, 13, 14]

The Section 7 petition was admitted and the Corporate Insolvency Resolution Process was ordered to be initiated against the Corporate Debtor.

Appointment of Interim Resolution Professional meeting requirements of Section 7(3)(b) - Whether the proposed Interim Resolution Professional satisfies the statutory requirements and should be appointed. - HELD THAT: - The Financial Creditor proposed an individual as IRP and placed on record the written communication, declaration of no pending disciplinary proceedings, and other disclosures as required by the IBBI Regulations. The Tribunal examined these disclosures and found that the nominee complied with the requirements of Section 7(3)(b) of the Code. [Paras 15]

Mr. Reetesh Kumar Agarwal was appointed as Interim Resolution Professional.

Moratorium and its consequences under Section 14(1) of the Code - Duties and powers of Interim Resolution Professional and cooperation by management under Sections 13(2), 15, 17, 18, 19 and 20 of the Code - Operational directions to be issued on admission including public announcement, moratorium, IRP duties, cooperation by management and interim funding deposit. - HELD THAT: - The Tribunal directed the IRP to make the public announcement within three days as mandated by the Regulations and held that moratorium under Section 14(1) shall follow on admission, with the consequential application of Sections 14(2) and 14(3). The IRP was directed to comply with statutory provisions relating to his functions and the management, promoters and persons associated with the Corporate Debtor were ordered to extend cooperation under the relevant Sections. The petitioner was directed to deposit an interim sum to meet IRP expenses, subject to adjustment by the Committee of Creditors. [Paras 16, 17, 18, 19]

Directions issued for immediate public announcement, operation of moratorium, compliance by IRP with statutory duties, cooperation by the Corporate Debtor's management, and deposit of interim expenses by the petitioner.

Final Conclusion: The Tribunal admitted the Section 7 petition against the Corporate Debtor, holding that the balance sheet entry and bankers' books evidence established acknowledgement and continuing default not barred by limitation; CIRP was ordered to commence, the nominated IRP was appointed, statutory public announcement and moratorium were directed, and ancillary directions (cooperation by management and interim expense deposit) were issued.

Maintainability of Section 9 application under IBC - pre-existing dispute / notice of dispute - privity of contract between operational creditor and corporate debtor - validity of demand notice issued by authorised advocate - appointment of Interim Resolution Professional and initiation of CIRP - moratorium under Section 14

Privity of contract between operational creditor and corporate debtor - maintainability of Section 9 application under IBC - The Section 9 petition by the operational creditor against the corporate debtor is maintainable because direct communication and a purchase order created privity of contract between the parties. - HELD THAT: - The Tribunal found on evidence that although supplies were negotiated through an intermediary, a purchase order dated 04.01.2017 was sent by the corporate debtor directly to the operational creditor and invoices were raised thereon. That direct communication established privity of contract and therefore the applicant was entitled to file the petition under Section 9 against the corporate debtor. The contention that the intermediary alone was liable was rejected as inconsistent with the documentary record and communications between the parties. [Paras 6, 7]

The Section 9 application is maintainable as privity of contract exists between the operational creditor and the corporate debtor.

Pre-existing dispute / notice of dispute - Mobilox standard for prima facie dispute - There was no genuine pre-existing dispute between the parties that would bar admission of the Section 9 application. - HELD THAT: - Applying the standard that a record or notice must show a plausible dispute (as in Mobilox Innovations), the Tribunal examined the respondent's claim of defect and related correspondence. The notice of defect was sent to the intermediary, was allegedly ante-dated, was dispatched after a long lapse and the consignment was not returned. There was no corroborative evidence that defects had been notified to the operational creditor within a reasonable time. On these facts the Tribunal concluded the dispute was contrived and not a bona fide pre-existing dispute sufficient to reject the Section 9 petition. [Paras 7, 8, 10]

The plea of a pre-existing dispute is rejected as spurious; it does not bar admission of the petition.

Validity of demand notice issued by authorised advocate - The demand notice issued by the advocate pursuant to the applicant's authorisation was valid. - HELD THAT: - The Tribunal noted an email authorising the advocate to issue the demand notice and held that the subsequent execution of a General Power of Attorney in favour of another person did not negate the earlier authorisation. Relying on the principle that an advocate may act for a party when authorised and that such authority should be recognised to avoid procedural injustice, the Tribunal held the demand notice under Section 8 was valid and properly served. [Paras 11, 12]

The demand notice was validly issued and served; the respondent's contention of defective notice is rejected.

Appointment of Interim Resolution Professional and initiation of CIRP - On admission of the Section 9 application, an Interim Resolution Professional is appointed and CIRP is initiated. - HELD THAT: - Having admitted the application under Section 9(5), the Tribunal accepted the proposed nominee as Interim Resolution Professional, noted his written consent in the prescribed form, and directed deposit to meet IRP expenses in accordance with regulation 6. The Tribunal further directed communication of the order to relevant authorities and provision of documents to the IRP. [Paras 13, 14, 15, 17]

The CIRP is initiated; Mr. Vijender Sharma is appointed as IRP and the applicant is directed to deposit the specified amount for IRP expenses.

Moratorium under Section 14 - A moratorium under Section 14(1) of the Code follows upon admission of the Section 9 application. - HELD THAT: - The Tribunal declared that consequences of admission under Section 9(5) include the moratorium as prescribed by Section 14(1), with the provisos (a)-(d) operating accordingly and other provisions of Section 14 (2)-(4) in force during the moratorium period. [Paras 16]

A moratorium under Section 14 is imposed in relation to the corporate debtor for the period specified by the Code.

Final Conclusion: The Section 9 application is admitted: the Tribunal held there was privity of contract and no genuine pre-existing dispute, validated the demand notice issued by the authorised advocate, appointed the nominated IRP, directed deposit for IRP expenses, and declared the moratorium under Section 14 consequent to admission.

Decree-holders as a separate class of creditors under the IBC - Operational Creditor - Financial Creditor - persons entitled to initiate CIRP under Section 6 of the IBC - moratorium under Section 14 of the IBC - maintainability of a Section 9 petition

Decree-holders as a separate class of creditors under the IBC - Operational Creditor - Financial Creditor - persons entitled to initiate CIRP under Section 6 of the IBC - Decree holder is neither a Financial Creditor nor an Operational Creditor and therefore is not entitled to initiate CIRP under Section 6 of the IBC. - HELD THAT: - The Tribunal applied the principle in Subhankar Bhowmik which recognises decree-holders as a distinct class of creditors created by virtue of a decree; such recognition protects the interest in the decree because execution of a decree is subject to the moratorium under Section 14. The decree-holder's claim, being amenable to challenge in appellate or execution proceedings, does not convert the decree-holder into a Financial Creditor or an Operational Creditor. Section 6 confines the right to initiate CIRP to a financial creditor, an operational creditor or the corporate debtor itself. Since the petitioner before the Tribunal is a decree-holder and not a financial or operational creditor, it lacks the statutory locus to invoke CIRP under Section 6. Consequently the Section 9 petition (and the interim application seeking injunctive relief connected to the petition) are not maintainable and must be dismissed.

CP(IB)-141/(MB)/2020 and IA 853/2020 are dismissed for want of jurisdiction to initiate CIRP by a decree-holder who is not an operational or financial creditor.

Final Conclusion: The petition filed by the decree-holder to initiate CIRP was dismissed because a decree-holder, being a separate class of creditor under the IBC, does not qualify as a financial or operational creditor and therefore cannot invoke the CIRP initiation provisions of Section 6; the connected interim application was dismissed accordingly.

Maintainability of writ petition where statutory alternative remedy under the PMLA is available - provisional attachment under the PMLA and adjudication by the Adjudicating Authority under Section 8 - effect of partial discharge in criminal proceedings on proceedings under the PMLA / substratum of offence - predicate offence requirement and continuity of scheduled offences (Sections 120B and 420 IPC) for PMLA liability - forum conveniens and territorial limitations on exercise of writ jurisdiction - discretionary nature of writ jurisdiction when alternative remedy exists

Maintainability of writ petition where statutory alternative remedy under the PMLA is available - discretionary nature of writ jurisdiction when alternative remedy exists - provisional attachment under the PMLA and adjudication by the Adjudicating Authority under Section 8 - Whether the writ petition is maintainable in view of the alternative remedies provided under the PMLA and related statutory scheme - HELD THAT: - The Court held that the PML Act constitutes a self-contained code providing for provisional attachment under Section 5, adjudication under Section 8, appeal to the Appellate Tribunal and further remedy to the High Court under Section 42. When such alternative and efficacious remedies exist, exercising the High Court's extraordinary jurisdiction under Article 226 is a matter of discretion and ordinarily will be refused. The Madras High Court had earlier dismissed a writ on the ground that efficacious remedies under the PMLA were available and that the bulk of the cause of action arose in Kerala; that judgment properly emphasised forum conveniens and availability of statutory remedies. The petitioner did not invoke any exceptional circumstances (such as breach of fundamental rights, failure of natural justice, or excess of jurisdiction) that would justify bypassing the statutory remedies. In these circumstances the writ was not maintainable and discretionary interference was refused. [Paras 27, 28, 29, 30]

Writ petition not maintainable as alternative efficacious statutory remedies under the PMLA exist; discretionary relief under Article 226 refused.

Effect of partial discharge in criminal proceedings on proceedings under the PMLA / substratum of offence - provisional attachment under the PMLA and adjudication by the Adjudicating Authority under Section 8 - Whether partial discharge in the criminal trial removes the substratum for PMLA proceedings and precludes attachment or adjudication under the PMLA - HELD THAT: - The Court rejected the contention that partial discharge of some charges in the criminal proceedings eliminated the substratum for PMLA action. The Chief Judicial Magistrate had granted only a partial discharge in respect of certain provisions of the Lotteries Act, while other serious charges (including Sections 120B and 420 IPC and remaining Lotteries Act/Rules provisions) continued to be proceeded with; the Sessions Court and this Court upheld framing of charges on those remaining counts. Given that predicate offences remain alleged and are subject to trial, the contention that all proceedings under the PMLA are wiped out by the partial discharge was not tenable. Questions about whether assets are proceeds of crime and the factual connection between alleged offences and assets are matters for trial/adjudication under the statutory procedure, not for summary determination in this writ. [Paras 20, 21, 26, 36]

Partial discharge in the criminal trial did not obliterate the substratum for PMLA proceedings; the petitioner is not entitled to quash or stay PMLA attachment on that basis.

Predicate offence requirement and continuity of scheduled offences (Sections 120B and 420 IPC) for PMLA liability - effect of amendment bringing offences into schedule and temporal scope - Whether the petitioner can be proceeded against under the PMLA in respect of alleged acts occurring after the amendment (bringing Sections 120B and 420 IPC into the schedule) and whether the timing defeats PMLA proceedings - HELD THAT: - The Court found that offences under Sections 120B and 420 IPC were included in the schedule by amendment effective 01.06.2009 and that the petitioner remained associated with the lottery business until 13.06.2010. The prosecution's case alleges continuing conspiracy and cheating extending into the period after the amendment, and the Additional Sessions Judge and this Court have held that charges under Sections 120B and 420 IPC are attracted. Questions as to when assets were acquired, whether they constitute proceeds of scheduled offences, and the precise temporal link between alleged acts and the amendment are factual matters to be examined at trial or in the statutory adjudication; they cannot be decided in this writ petition. The Court noted that predicate offences may be continuing and thus support PMLA proceedings if the alleged conduct falls within the post-amendment period. [Paras 22, 31, 32, 33]

Allegations that scheduled offences continued into the post-amendment period are matters for trial/adjudication; the timing of the amendment does not preclude PMLA proceedings at this stage.

Final Conclusion: The writ petition is dismissed. The High Court refused to interfere because effective alternative remedies under the PMLA are available and because partial discharge in the criminal proceedings did not eliminate the remaining charges or the statutory basis for provisional attachment and adjudication; the petitioner must pursue remedies under the PMLA. Dismissed with costs.

Clarificatory circular operating retrospectively - pre-show cause notice consultation - exception for suppression of facts in pre-show-cause consultation - statutory jurisdiction to issue show cause notice - administrative reassignment of adjudicating authority and mode of hearing

Clarificatory circular operating retrospectively - pre-show cause notice consultation - Whether the Circular dated 11.11.2021 is clarificatory of the Master Circular dated 10.03.2017 and operates retrospectively. - HELD THAT: - The Court examined the Circular dated 11.11.2021 and concluded that it merely clarifies the Board's earlier instructions of 21.12.2015 reiterated in the Master Circular dated 10.03.2017 regarding the concept and application of pre-show cause notice consultation. The Circular does not introduce a new principle but explains that exclusion from pre-show cause consultation is case-specific and reiterates the exceptions in Clause 5. Applying the principle that a clarificatory notification operates retrospectively, the Court held that the Circular is clarificatory and to be read as operative from the date of the Board's instructions/Master Circular. [Paras 11]

The Circular dated 11.11.2021 is clarificatory and applies retrospectively to the Master Circular dated 10.03.2017.

Exception for suppression of facts in pre-show-cause consultation - statutory jurisdiction to issue show cause notice - Whether issuance of the Demand-cum-Show-Cause Notice dated 31.12.2020 without a pre-show cause consultation rendered the notice without jurisdiction. - HELD THAT: - Having held the Circular to be clarificatory, the Court applied Clause 5 exceptions and observed that the stand taken in the impugned notice alleging suppression of material facts falls within the exceptions (notably Clause 5(d)). Further, the power to issue a show cause notice is a statutory power conferred under Section 73 of the Finance Act, 1994. The existence of statutory power and applicability of the Clause 5 exceptions meant that absence of pre-show cause consultation did not render the notice beyond jurisdiction. The Court therefore declined to quash the show cause notice on the ground of absence of pre-show cause consultation. The Court expressly refrained from adjudicating the underlying allegation of suppression of facts on merits at this stage. [Paras 11, 12]

The Demand-cum-Show-Cause Notice is not vitiated for want of pre-show cause consultation and is not without jurisdiction; the question of suppression of facts is not decided in this writ petition.

Administrative reassignment of adjudicating authority and mode of hearing - Legality of the Corrigendum dated 21.02.2022 reassigning the adjudicating authority and the consequence for the petitioner's opportunity to be heard. - HELD THAT: - The Court noted the administrative nature of fixing the adjudicating authority and observed that the Corrigendum reassigning the authority to Aizawl did not call for interference. The Court took into account the communication allowing the petitioner to appear for personal hearing either online, physically, or through an authorised representative, and held that this safeguarded the petitioner's opportunity of hearing despite the geographic reassignment. [Paras 13, 14]

No interference with the Corrigendum; the petitioner may appear for hearing online, in person, or through an authorised representative.

Procedure for adjudication following writ proceedings - Directions as to further procedure and determination of merits including allegation of suppression of facts. - HELD THAT: - Recognising that the writ petition does not decide the merits of the demand, the Court directed that the petitioner be permitted to file his show cause reply within 30 days from the date of the judgment before the adjudicating authority named in the Corrigendum. The adjudicating authority was directed to afford an opportunity of hearing (online or physical or through authorised representative) and to decide the matter uninfluenced by the Court's observations on jurisdiction and retrospectivity. The Court expressly refrained from expressing any view on the legality or validity of the demand itself, leaving determination of suppression of facts and other merits to the adjudicating authority. [Paras 15, 16]

Petitioner permitted to file reply within 30 days; adjudicating authority to hear the petitioner and decide the matter on merits without being influenced by the Court's observations; merits (including suppression) to be considered afresh by the adjudicating authority.

Final Conclusion: The Court held the Circular dated 11.11.2021 to be clarificatory and retrospective, concluded that the show cause notice dated 31.12.2020 was not without jurisdiction in view of the statutory power and applicable exceptions, refused to interfere with the Corrigendum reassigning the adjudicating authority, and directed the petitioner to file a show cause reply within 30 days and be afforded a hearing; the merits of the demand, including the allegation of suppression of facts, are to be decided afresh by the adjudicating authority.

Voluntary Compliance Encouragement Scheme (VCES) - pendency of enquiry as bar to acceptance of VCES declaration - one year limitation for action against false declaration under Section 111(2) - Circular cannot override statutory provisions - requirement of documentary proof of pending enquiry/investigation - immunity under Section 108 of the Finance Act, 2013

Pendency of enquiry as bar to acceptance of VCES declaration - requirement of documentary proof of pending enquiry/investigation - Validity of rejection of the appellant's VCES declaration on the ground that an enquiry was pending as on the cut off date. - HELD THAT: - The Tribunal examined the record and found no documentary evidence of an enquiry, as contemplated by the statutory definitions, pending against the appellant on the relevant cut off date. The material relied upon by the Department consisted of an authorisation letter dated 20.02.2013 for verification and a summons issued on 18.11.2013, the latter being after the VCES deadline. In absence of proof of an enquiry/investigation pending as on the prescribed date, the designated authority was not entitled to reject the declaration on that ground. The Tribunal therefore quashed the rejection which rested on the asserted pendency of enquiry. [Paras 4]

Rejection of the VCES application on the ground of alleged pendency of enquiry was unsustainable and is set aside.

One year limitation for action against false declaration under Section 111(2) - Circular cannot override statutory provisions - immunity under Section 108 of the Finance Act, 2013 - Whether the proceedings to reject the declaration were time barred having regard to the one year limitation in Section 111(2) and the legal effect of CBEC Circular prescribing a 30 day timeline. - HELD THAT: - The Tribunal held that Section 111(2) prescribes a one year limitation for taking action against a false declaration and that this statutory limitation cannot be bypassed by administrative circulars. While the CBEC Circular recommending issuance of a notice within 30 days is an advisory measure, it cannot override the statute. The record showed that the notice proposing rejection was issued after the expiry of one year from filing of the declaration, and therefore proceedings under Section 111(2) were time barred. The Tribunal also noted the appellant's immunity under Section 108 from other proceedings under the Chapter, making the time bar decisive in the appellant's favour. [Paras 3, 4, 5]

Proceedings initiated and the rejection order issued after the one year period were time barred and therefore unsustainable.

Final Conclusion: The appeal is allowed; the order rejecting the VCES application is set aside because there was no statutory proof of a pending enquiry on the cut off date and the action taken after the one year limitation under Section 111(2) is time barred.

Place of Provision of Service Rules, 2012 - export of service - transportation of goods - rule 10 of Place of Provision of Service Rules, 2012 - services in respect of goods - rule 4 of Place of Provision of Service Rules, 2012 - destination based consumption tax - taxable territory and determination of place of provision - definition of service - section 65B(44) - levy on services - section 66B - determination of place - section 66C - CBEC Circular No. 197/7/2016 ST dated 12th August 2016

Transportation of goods - rule 10 of Place of Provision of Service Rules, 2012 - export of service - taxable territory and determination of place of provision - Whether the services rendered by the appellant in relation to carriage of goods to destinations outside India were taxable in India or were exports falling outside the levy under the Finance Act, 1994 - HELD THAT: - The Tribunal held that the transaction was fundamentally transportation of goods destined outside India and that, in the context of an identifiable recipient located abroad, the default location rule yields to the specific treatment for transportation in rule 10 of the Place of Provision of Service Rules, 2012. Having regard to the composite nature of the contractual engagement and the existence of recipient outside India, the activity was to be treated as provided at the destination of the goods and therefore outside the taxable territory. The adjudicating authority's reliance on internal accounting segregation and a truncated geographic segmentation did not supplant the statutory rule for transportation. Applying the statutory scheme (including the role of section 66B as a destination based consumption tax and section 66C empowering rules to determine place), the Tribunal concluded that the services were exports and not liable to service tax under the impugned charging provisions. [Paras 7, 11, 16, 18, 19]

The services constitute transportation to a place outside India and fall under rule 10 of the Place of Provision of Service Rules, 2012; they are not taxable in India and the demand is unsustainable.

Services in respect of goods - rule 4 of Place of Provision of Service Rules, 2012 - definition of service - section 65B(44) - taxable territory and determination of place of provision - Whether rule 4 (services in respect of goods) applies so as to render taxable the segment of activities performed in India (ex works / pre shipment) by treating the appellant as acting on behalf of the provider or as a service to a recipient in India - HELD THAT: - The Tribunal found that rule 4 addresses special contingencies where services in respect of goods might otherwise escape tax and operates by reference to the goods being made physically available by the recipient to the provider or a person acting on behalf of the provider. In the present facts the identifiable recipient was located outside India, goods were not 'provided by recipient' in a manner attracting rule 4, and there was no evidential basis for recharacterising the principal to principal contract as principal agent or for truncating the transaction at the port of shipment. The adjudicating authority's conclusions rested on presumptions and accounting treatment rather than on demonstration that each disaggregated segment satisfied the statutory definition of a separate taxable service under section 65B(44). Consequently rule 4 was not attracted. [Paras 11, 12, 13, 15, 18]

Rule 4 is not applicable on the facts; the adjudicating authority erred in treating the ex works/pre shipment segment as taxable under rule 4.

CBEC Circular No. 197/7/2016 ST dated 12th August 2016 - Place of Provision of Service Rules, 2012 - Whether the clarification in CBEC Circular dated 12th August 2016 (regarding place of provision for transportation and treatment of freight forwarders as agent/principal) should have been given effect by the adjudicating authority - HELD THAT: - The Tribunal observed that the Circular specifically explains that the place of provision for carriage by air/sea is the destination and distinguishes intermediary (agent) and principal (provider of transportation) roles for freight forwarders. The Circular was available at the time of adjudication and materially supported the view that transportation from India to outside India is outside the taxable territory and that accounting entries alone cannot override the legal characterization. The adjudicating authority ought to have considered the Circular in letter and spirit and it could not be quashed or overridden by resort to accounting treatment in a quasi judicial order. [Paras 14, 17]

The Circular should have been applied; its clarification favours the appellant and undermines the demand.

Definition of service - section 65B(44) - disaggregation of composite service - taxable territory and determination of place of provision - Whether the service could be disaggregated for taxability on the basis of accounting segregation of consideration without identifying separate recipients for each alleged segment - HELD THAT: - The Tribunal emphasised that taxability depends on the statutory conception of 'service' as an activity carried out by one person for another for consideration; mere accounting disaggregation of receipts does not establish separate taxable services unless each segment independently meets the definition (including having an identifiable 'another' who is the recipient). The impugned order failed to demonstrate that the alleged in India segment had a distinct recipient within India or otherwise satisfied the statutory test for separate taxability. [Paras 15, 16]

Accounting segregation of consideration is not a substitute for statutory identification of separate services; disaggregation was impermissible on the facts.

Final Conclusion: The impugned order confirming service tax demand, interest and penalties was set aside; appeal allowed, the Tribunal finding that the activities fall under rule 10 as export of transportation services, that rule 4 and accounting segregation could not sustain the demand, and that the CBEC clarification supported dismissal of the proceedings.

Overriding effect of Section 142(3) and Section 142(8)(b) of the CGST Act enabling cash disbursement of refunds of pre GST dues - limitation under Section 11B of the Central Excise Act - unjust enrichment exception - refund of duty paid under reverse charge mechanism - entitlement to interest under Section 11BB of the Central Excise Act

Overriding effect of Section 142(3) and Section 142(8)(b) of the CGST Act enabling cash disbursement of refunds of pre GST dues - limitation under Section 11B of the Central Excise Act - unjust enrichment exception - refund of duty paid under reverse charge mechanism - Whether the refund claim for service tax paid prior to or around the introduction of GST is barred by limitation when filed after the appointed day. - HELD THAT: - The Tribunal followed earlier decisions (Jai Mateshwaari Steels Pvt. Ltd. and Punjab National Bank) and held that Section 142(3) of the CGST Act directs that claims for refund under the existing law, made after the appointed day, shall be disposed of in accordance with the provisions of the existing law and any amount accruing shall be paid in cash, notwithstanding contrary provisions of the existing law, except for the proviso dealing with unjust enrichment. Section 142(8)(b) similarly preserves disbursement of refunds arising from assessment or adjudication, subject to the unjust enrichment exclusion. Applying these provisions, the Tribunal concluded that the limitation period prescribed by Section 11B(1) of the Central Excise Act cannot operate to bar the refund merely because the claim was filed after introduction of GST; the only substantive bar preserved is the prohibition rooted in unjust enrichment. The adjudicating authority's rejection of the refund on the ground of limitation was therefore not justified, and the appellant is entitled to the refund (limited to the amount claimed excluding cess) with consequential reliefs including interest as provided under the Central Excise law.

Rejection of the refund claim on the ground of limitation set aside; appeal allowed and the refund claim remitted for disbursement with consequential reliefs including interest, subject to the unjust enrichment exception.

Final Conclusion: The appeal is allowed: the refund claim filed after the introduction of GST is not barred by limitation due to the overriding effect of Section 142(3) and 142(8)(b) of the CGST Act, and the impugned order rejecting the refund on limitation grounds is set aside; disbursement to be made with consequential reliefs subject only to the unjust enrichment exclusion.

Relevance of statements under Section 9D of the Central Excise Act, 1944 - retraction of statement alleged to be under duress - corroboration for clandestine removal - admissibility of documents recovered from factory/residential premises and vehicle - remand for fresh examination of evidentiary material - imposition of duty, interest and penalty under central excise provisions

Relevance of statements under Section 9D of the Central Excise Act, 1944 - retraction of statement alleged to be under duress - Whether the statements of the proprietor and other witnesses could be relied upon without being tested for relevance under Section 9D of the Central Excise Act, 1944. - HELD THAT: - The proprietor, Shri Alok Agarwal, made multiple admissions in statements recorded on various dates, but also filed a retraction alleging that the initial statement dated 15/06/2012 was recorded under duress. The Tribunal found that, in view of these conflicting statements and the claim of coercion, reliance on those statements could not be placed unless their relevance and admissibility are examined in terms of Section 9D. Given the absence of such testing in the adjudication impugned, the Tribunal held that the matter required fresh consideration by the original adjudicating authority to determine whether and to what extent the recorded statements may be relied upon. [Paras 5, 6, 7]

The issue of admissibility and reliance on the statements is remanded to the original adjudicating authority for examination under Section 9D; the impugned order is set aside on this ground.

Admissibility of documents recovered from factory/residential premises and vehicle - corroboration for clandestine removal - remand for fresh examination of evidentiary material - Whether documentary material recovered from the factory, residence and a vehicle could be read against the appellant and whether such material sufficiently corroborates clandestine manufacture/clearances. - HELD THAT: - The Tribunal noted that some documentary evidence was recovered from the factory premises and from the vehicle found on site. However, since the primary challenge to the adjudication concerned the reliance on statements not tested under Section 9D, the Tribunal concluded that documentary evidence and its probative value could not be finally treated in isolation. The adjudicating authority is directed on remand to examine the recovered documentary material in conjunction with tested admissibility of statements and to determine whether the documents independently or cumulatively provide sufficient corroboration for the allegations of clandestine removal. [Paras 5, 6, 7]

Reliance on the recovered documents and their use as corroboration is to be re-examined by the original authority on remand; the impugned order is set aside and all issues are kept open for fresh consideration.

Final Conclusion: The Tribunal set aside the impugned adjudication and remanded the matter to the original adjudicating authority to test the relevance and admissibility of the recorded statements under Section 9D and to reassess the probative value of the documentary evidence recovered; all issues are left open for fresh consideration, with the Tribunal's prior order recalled.

Similar goods - Paragraph 6.8 of Foreign Trade Policy - permission of the Development Commissioner - Chartered Engineer certificate as technical evidence - exemption under Notification No.23/2003-CE for DTA clearances - demand for differential excise duty confirmed by adjudication

Similar goods - Paragraph 6.8 of Foreign Trade Policy - permission of the Development Commissioner - Chartered Engineer certificate as technical evidence - exemption under Notification No.23/2003-CE for DTA clearances - Whether goods cleared to Domestic Tariff Area are 'similar' to goods exported so as to avail exemption under Notification No.23/2003-CE and whether the confirmed demand based on dissimilarity is sustainable. - HELD THAT: - The Tribunal examined the permissions, licence and prior adjudications and concluded that the appellants were authorised to manufacture 'precision optical components, instrument assemblies/sub-assemblies' and obtained Development Commissioner permission for DTA clearances under Paragraph 6.8 of the FTP. The earlier Order in Original in the appellant's own case and subsequent Tribunal precedent had held such goods to be 'similar' where they broadly fall within the category of optical components and where Revenue produced no evidence to show dissimilarity. A Chartered Engineer certificate produced by the appellant, opining that the goods fall within the licensed category, could not be summarily discarded as an afterthought when the Department offered no rebuttal evidence; such expert opinion merits due weight unless impeached. Reliance on authorities establishing that grouping by the Development Commissioner is sufficient and that 'similar' has a broad meaning supported the view that difference in physical characteristics or value alone does not defeat similarity. On the facts and in absence of contrary technical evidence, the allegation of dissimilarity failed and the demand confirmed solely on that basis could not be sustained. [Paras 15, 16, 17, 18, 19]

The allegation that the goods cleared to DTA are not 'similar goods' is without basis; the confirmed demand is set aside and the appeals are allowed.

Final Conclusion: The Tribunal set aside the impugned order confirming demand on the ground of alleged dissimilarity of goods, allowed the appeals and granted consequential relief, the decision resting on Development Commissioner permissions, prior binding findings and the unrebuffed Chartered Engineer evidence.

Acceptance of Form D - concessional rate of tax on inter-state sales - rate of tax on sales in the course of inter-state trade or commerce - interpretation of Section 8(1)(a) of the Central Sales Tax Act - distinction between Form C and Form D - Doctrine of legitimate expectation - factual verification of genuineness of transaction

Acceptance of Form D - concessional rate of tax on inter-state sales - interpretation of Section 8(1)(a) of the Central Sales Tax Act - distinction between Form C and Form D - Doctrine of legitimate expectation - Validity of respondents' refusal to accept the Form D submitted by the purchaser (Diesel Locomotive Works) and consequent denial of concessional rate of tax for inter-state sales. - HELD THAT: - The Court held that on a plain and harmonious reading Section 8(1)(a) applies to inter state sales made to Government (whether registered or not) and that a selling dealer is entitled to the concessional rate where the statutory requisites are met. The petitioner established that the purchaser was a unit of the Indian Railways, that Form D had been issued and accepted by sales tax authorities in earlier years (2001-02 and 2002-03), and that similar claims had been allowed previously by the respondents. Having regard to these admitted facts and the persuasive reasoning in the Karnataka High Court decision relied upon by the petitioner, the Court found the respondents' fresh refusal to accept the Form D arbitrary and unjustified. The Court therefore quashed the impugned assessment, appellate and revisional orders insofar as they disallowed the Form D and denied the concessional rate, and directed acceptance of the Form D and grant of consequential benefit.

Impugned orders disallowing the Form D and denying concessional rate quashed; respondent directed to accept the Form D and allow consequential concessional tax benefit.

Factual verification of genuineness of transaction - Extent and manner of relief: requirement of verification before granting consequential benefit. - HELD THAT: - While directing acceptance of the Form D and allowance of the concessional rate, the Court qualified its relief by requiring the respondents to carry out factual verification of the genuineness of the transaction. The Court entrusted the assessing authority with the limited task of verifying the transaction and, subject to such verification, to allow the consequential benefits within three months from communication of the order.

Relief granted subject to factual verification of the genuineness of the transaction; respondents to complete verification and grant benefits within three months.

Final Conclusion: Writ petition allowed; impugned assessment, appellate and revisional orders quashed to the extent they disallowed the Form D and denied concessional rate for the period specified; respondents directed to accept the Form D and grant consequential benefits after factual verification within three months.

Deemed allowance of objections under Section 74(9) of the Delhi Value Added Tax Act, 2004 - timeline for disposal of objections under Section 74(7) and (8) of the Delhi Value Added Tax Act, 2004 - service requirements and prescribed Form for notice under Section 74(8) read with Rule 56 of the Delhi Value Added Tax Rules, 2005 - duty to pass a speaking order after hearing the authorized representative - administrative obligation to adopt electronic/portal mechanism for service and intimation

Timeline for disposal of objections under Section 74(7) and (8) of the Delhi Value Added Tax Act, 2004 - deemed allowance of objections under Section 74(9) of the Delhi Value Added Tax Act, 2004 - duty to pass a speaking order after hearing the authorized representative - Respondents' delay in adjudicating objections filed under Section 74 and the consequent direction to decide the objections within a specified short period and to pass a speaking order after hearing the authorized representative. - HELD THAT: - The Court noted that objections to the notice under Section 32 were filed on 20.06.2014 and that statutory sub-sections (7), (8) and (9) of Section 74 prescribe a three-month period for decision, a further 15 day period following a statutory notice, and deeming provisions if no decision is taken. The respondents conceded the statutory timelines but the record showed no movement for an extended period (eight years), which the Court held constituted unjustified procrastination. Rather than delving into contested mechanics of service, the Court directed immediate adjudication: the objections must be disposed of within 15 days of receipt of the judgment copy, the authorized representative of the petitioner shall appear for hearing on the specified date and the Commissioner is required to pass a speaking order after hearing the authorized representative. The direction implements the statutory scheme embodied in Section 74(7)-(9) and ensures the assessee's rights are not defeated by undue delay. [Paras 7, 8, 9]

Objections filed under Section 74 shall be disposed of by the Commissioner within 15 days of receipt of the judgment; the petitioner's authorized representative to appear on the appointed date and the Commissioner to pass a speaking order after hearing.

Service requirements and prescribed Form for notice under Section 74(8) read with Rule 56 of the Delhi Value Added Tax Rules, 2005 - administrative obligation to adopt electronic/portal mechanism for service and intimation - Court declined to investigate past compliance with the prescribed form and personal service mechanics but directed respondents to create an online portal/mechanism for intimation of notices under Section 74(8) read with Rule 56. - HELD THAT: - Although the respondents raised a point about the prescribed Form (DVAT 41) and Rule 56's personal service requirement, the Court observed that attempting to ascertain past receipt or personal service would only delay relief. Emphasising modern administrative convenience and the need to prevent future delay, the Court directed the respondents to set up a portal/online mechanism for intimation of notices issued under Section 74(8) read with Rule 56 of the 2005 Rules, thereby addressing systemic deficiencies that contribute to procrastination in adjudication. [Paras 6, 8]

Respondents to create a portal/online mechanism for intimation of notices under Section 74(8) read with Rule 56 to obviate delay and ensure effective communication with the Commissioner.

Award of costs for unjustified delay - Imposition of costs on the respondents for undue delay in adjudication. - HELD THAT: - Having found inordinate delay and procrastination on the part of the respondents, the Court imposed costs on the respondents to reflect the failure to adhere to statutory timelines. The costs are to be deposited with the Juvenile Justice Fund within two weeks and proof of payment filed. [Paras 7, 10]

Respondents directed to pay costs of Rs. 7,500/-, to be deposited with the Juvenile Justice Fund within two weeks and proof of payment to be filed.

Final Conclusion: Writ petition disposed of: respondents directed to decide the objections filed under Section 74 within 15 days of receipt of this judgment, hear the petitioner's authorized representative on the appointed date and pass a speaking order; respondents directed to establish an online portal/notification mechanism for notices under Section 74(8) read with Rule 56; respondents ordered to pay costs to the Juvenile Justice Fund.

Overriding preferential payment - Preferential payments in winding up - First charge under State VAT Act - Non-obstante clause - Priority of workmen and secured creditors over State dues - Conflict between State law and Companies Act - Federal supremacy under Article 246

First charge under State VAT Act - Conflict between State law and Companies Act - Federal supremacy under Article 246 - Whether the first charge created by Section 47 of the Rajasthan Value Added Tax Act, 2003 entitles the State to priority over claims under Sections 529A and 530 of the Companies Act, 1956 in winding up of a company. - HELD THAT: - The Court held that although Section 47 of the State VAT Act creates a first charge and itself begins with a non obstante clause, that State enactment cannot prevail where it is irreconcilable with the priority scheme enacted by Parliament in the Companies Act. Article 246 and the constitutional scheme require that, in case of an unavoidable conflict between a Union enactment governing winding up and a State enactment creating a statutory first charge, the Parliamentary legislation will prevail. Sections 529A and 530 of the Companies Act, 1956 - which allocate priority to workmen and certain secured creditors and make payments to Central/State revenues subject to that priority - will therefore prevail over Section 47 of the State VAT Act to the extent of such conflict. The Court emphasised that this does not render Section 47 void or without operation outside the field of winding up, but where distribution of proceeds of a wound up company is governed by the Companies Act, the State's first charge cannot defeat the statutory priority under Sections 529A/530. [Paras 42, 43, 44, 46, 48]

Section 47 of the Rajasthan VAT Act does not override or take priority over the preferential scheme of Sections 529A and 530 of the Companies Act in winding up; the Companies Act provisions prevail where there is irreconcilable conflict.

Overriding preferential payment - Preferential payments in winding up - Priority of workmen and secured creditors over State dues - Non-obstante clause - Whether Sections 529A and 530 of the Companies Act, 1956 give priority to workmen's dues and certain secured creditors and thereby make payment of taxes subject to that priority in winding up. - HELD THAT: - The Court interpreted Section 529A as commencing with a non obstante clause and giving overriding preferential payment to (a) workmen's dues and (b) debts due to secured creditors (to the extent specified), which are to be paid in priority to all other debts. Section 530 is to operate subject to Section 529A and contemplates payment of revenues, taxes and similar dues only after the priority obligations under Section 529A are satisfied (or to the extent surplus remains). The combined reading demonstrates that the statutory scheme accords precedence to workmen and qualifying secured creditors over State revenue claims in the distribution of assets in winding up. [Paras 31, 32, 33, 42, 46]

Sections 529A and 530 must be read together to accord priority to workmen and specified secured creditors; taxes and other revenues are payable thereafter and are subject to the priority embodied in Section 529A.

Final Conclusion: The Company Applications by the State (Commercial Taxes Department) seeking priority and release of tax dues were dismissed; the State's claim cannot be preferred over the workmen's dues and qualifying secured creditors in the winding up, because Sections 529A and 530 of the Companies Act, 1956 prevail in the event of an irreconcilable conflict.

Offence of infringement of copyright - Classification of offences under Part II of the First Schedule of the Cr.P.C. - Cognizable offence - Non-cognizable offence - Non-bailable offence - Maximum sentence as determinant of cognizability - Quashing of FIR

Offence of infringement of copyright - Classification of offences under Part II of the First Schedule of the Cr.P.C. - Cognizable offence - Non-bailable offence - Maximum sentence as determinant of cognizability - Whether the offence under Section 63 of the Copyright Act is a cognizable and non-bailable offence and whether the High Court erred in quashing the FIR on the ground that the offence is noncognizable. - HELD THAT: - Section 63 prescribes imprisonment which shall not be less than six months but which may extend to three years. The maximum sentence that can be imposed therefore is three years. Part II of the First Schedule of the Cr.P.C. classifies offences punishable with imprisonment for three years and upwards but not more than seven years as cognizable and non-bailable. Applying that classification, an offence punishable up to three years falls within the category of offences cognizable under Part II. The decision in Rakesh Kumar Paul (relied upon by the respondent) is not applicable to the present statutory language and facts, and does not alter the clear operation of the classification in the First Schedule. Consequently the High Court was in error in treating the Section 63 offence as noncognizable and in quashing the FIR on that basis. [Paras 5, 6, 7]

Offence under Section 63 of the Copyright Act is cognizable and non-bailable; the High Court's order quashing the FIR on the ground of non-cognizability is set aside and the criminal proceedings shall continue.

Final Conclusion: The appeal is allowed to the extent that the High Court's quashing of the FIR under Section 63 of the Copyright Act is set aside; the offence is held to be cognizable and non-bailable and the criminal proceedings shall proceed in accordance with law. No order as to costs.

Expeditious trial of cases under Section 138 of the Negotiable Instruments Act - Special Magistrate's Courts under Section 18 Cr.P.C. - Pilot study for operationalising Special NI Courts - Use of retired judicial officers and retired court staff as presiding officers - Case selection limited to matters with complete service and accused appearance - Time bound online mediation for settlement - Training and fixed honorarium for contract presiding officers - Restrictions on routine adjournments and use of online examination of outstation witnesses - Data collection, weekly and quarterly reporting and judicial supervision

Pilot study for operationalising Special NI Courts - Number and location of Special Courts - Duration of study - Institution and parameters of a pilot study to operationalise Special Courts for trial of NI Act cases - HELD THAT: - The Court directed a time limited pilot study to test a scheme for Special Courts to address pendency in Section 138 NI Act cases. The pilot is to run for one year from 01.09.2022 to 31.08.2023. Twenty five Special Courts are to be established in total, with one Special Court in each of the five judicial districts identified by each of the five High Courts having the highest pendency of NI Act cases. The directive follows consideration of the Expert Committee report, the amici curiae suggestions and the High Courts' responses identifying districts with highest pendency. [Paras 3, 6, 7, 10]

A one year pilot study of 25 Special Courts in specified high pendency districts is instituted to evaluate operational measures for expeditious disposal of Section 138 NI Act cases.

Use of retired judicial officers and retired court staff as presiding officers - Special Magistrate's Courts under Section 18 Cr.P.C. - Fixed honorarium and contractual engagement - Appointment, status and remuneration of presiding officers and staff for the Special Courts during the pilot study - HELD THAT: - The Court authorised operationalisation of the Special Courts, for the pilot period, by engaging retired judicial officers and retired court staff (preferably those retired within the past five years) on a contractual basis. The High Courts are to ensure no vacancy arises during the period. The presiding officers and staff are to be engaged for one year on contract and paid a fixed honorarium aligned with their pre retirement standing. The Court noted statutory authority to constitute Special Magistrate's Courts under Section 18 Cr.P.C. and precedent for employing retired public servants in such roles. [Paras 3, 5, 10]

Retired judicial officers and retired court staff may be engaged on one year contractual terms with a fixed honorarium to preside over and staff the Special Courts during the pilot study.

Case selection limited to matters with complete service and accused appearance - Restrictions on routine adjournments and online examination of outstation witnesses - Time bound online mediation for settlement - Scope of jurisdiction and working procedure of the Special Courts in the pilot study - HELD THAT: - The Special Courts are to adjudicate only those cases where summons have been duly served and the accused has entered appearance in person or through counsel. The oldest pending cases with complete service are to be prioritised; cases with incomplete service must not be transferred to the Special Courts. To ensure expedition, routine adjournments-particularly for lack of notice-are discouraged. Outstation witnesses may be examined online under appropriate protocol. Where the accused expresses willingness to settle at trial stage, the presiding officer must refer the matter to time bound online mediation before an identified mediator to prevent further delay. [Paras 10]

Special Courts will try only cases with complete service and appearance, will avoid routine adjournments, permit online examination of outstation witnesses and refer willing parties to time bound online mediation.

Training and ready reckoner for presiding officers - Data collection, weekly and quarterly reporting and judicial supervision - Facilitation Officer and monitoring by Registrar General - Capacity building, monitoring and reporting mechanisms for the pilot Special Courts - HELD THAT: - The Court directed specialised training: a four week programme by the State Judicial Academies on substantive law, procedure and evidence related to NI Act offences, and circulation of a detailed ready reckoner. Infrastructural and IT requirements (including video conferencing) must be identified and secured by July 2022. Weekly disposal statements are to be sent to the Registrar General of the concerned High Courts, quarterly disposal statements to the Supreme Court, and a Facilitation Officer may be appointed to assist with data collection, cause lists and weekly review meetings to identify bottlenecks. [Paras 10, 11]

Presiding officers are to receive targeted training and ready reckoners; infrastructure must be readied; and systematic data collection and judicial supervision through weekly and quarterly reporting are mandated for the pilot.

High Court supervision and compliance affidavit - Implementation timeline and reporting to Supreme Court - Immediate administrative steps and reporting obligations to implement the pilot study - HELD THAT: - The Secretary General of the Supreme Court will communicate the order to the Registrar Generals of the five High Courts, who must place it before their Chief Justices for immediate action. Each of the five High Courts is directed to file an affidavit reporting progress and compliance by 21.07.2022. The matter is listed for review on 26.07.2022. These directions fix short administrative timelines to operationalise the pilot. [Paras 11]

Registrar Generals must act on the order and the five High Courts shall file affidavits by 21.07.2022; the Court will review progress on 26.07.2022.

Final Conclusion: The Court has directed a focused one year pilot study to operationalise 25 Special Courts in designated high pendency districts, to be manned by retired judicial officers and court staff on contractual terms with prescribed training, case selection rules, procedural safeguards (including limits on adjournments and online witness examination), time bound mediation and a mandatory monitoring and reporting regime, with immediate steps for High Court compliance and review.

Sum for which the award is made - interest pendente lite - unless otherwise agreed by the parties - party autonomy in arbitration - pre-award interest included in award sum - post-award interest on the award sum

Sum for which the award is made - pre-award interest included in award sum - Whether the 'sum' awarded under Clause (a) of Sub-section (7) of Section 31 of the Arbitration and Conciliation Act, 1996 includes interest for the pre-award period. - HELD THAT: - Applying the plain language of Clause (a) of Sub-section (7) and the majority view in Hyder Consulting (UK) Limited, the Court recognises that the word 'sum' denotes the total amount directed to be paid by the arbitral award and may include interest for the period between the date on which the cause of action arose and the date on which the award is made. The provision confers discretion on the Arbitral Tribunal to include such pre-award interest, but that discretion operates only in the absence of an agreement to the contrary between the parties. [Paras 13, 14, 15]

Clause (a) permits inclusion of pre-award interest in the 'sum' of the award where parties have not agreed otherwise.

Unless otherwise agreed by the parties - party autonomy in arbitration - Whether an agreement between the parties about interest (Article 29.8 of the Concession Agreement) overrides the Arbitral Tribunal's discretion under Clause (a). - HELD THAT: - The Court emphasises the statutory phrase 'unless otherwise agreed by the parties' and the principle of party autonomy under the 1996 Act. Where parties have contractually agreed the manner and rate of payment of termination amounts and interest, the Arbitral Tribunal's discretion to include or determine pre-award interest is curtailed and must yield to the contractual stipulation. On the facts, Article 29.8 of the Concession Agreement prescribes how the Termination Payment and interest for delay are to be computed (SBI PLR plus two percent from the specified date), and the Arbitral Tribunal applied that contractual provision. Having upheld the award, this Court finds the tribunal acted consistently with Clause (a)'s saving for party agreements. [Paras 15, 22, 25, 28, 35]

A contractual agreement on payment of interest governs and displaces the tribunal's discretionary power under Clause (a); the Arbitral Tribunal correctly applied Article 29.8 here.

Post-award interest on the award sum - pre-award interest included in award sum - Whether post-award interest under Clause (b) is to be computed on a sum that already includes pre-award interest. - HELD THAT: - Following the interpretative approach in Hyder Consulting, the Court notes that if pre-award interest is included in the 'sum' by virtue of Clause (a), the post-award interest under Clause (b) operates on that aggregate sum. However, this statutory scheme is subject to any contractual agreement between the parties which may specify different terms for interest. In the present case the tribunal awarded interest in accordance with the contract and therefore post-award interest, if applicable, would be governed by the award as framed. [Paras 7, 13, 35]

Post-award interest under Clause (b) applies to the award sum as constituted (including pre-award interest where awarded), subject to any contrary contractual agreement.

Final Conclusion: The appeal is dismissed. While Clause (a) of Section 31(7) permits inclusion of pre-award interest in the award 'sum', that discretion yields to any contractual agreement between the parties; on the facts the Arbitral Tribunal correctly applied Article 29.8 of the Concession Agreement to compute interest and the High Court's enforcement directions are upheld.

Maintainability of criminal complaint under IPC for cheating after initiation of proceedings under the Negotiable Instruments Act - distinct ingredients and mens rea requirement in IPC offences vis-a -vis the civil-remedial scheme under the Negotiable Instruments Act - effect of prior or concurrent proceedings under the Negotiable Instruments Act on subsequent prosecution under IPC - compliance with the mandate in Priyanka Srivastava regarding prior efforts to lodge complaint with police and accompanying affidavit when seeking investigation under Section 156(3) Cr.P.C. - scope of Article 20(2) (double jeopardy) and Section 300(1) Cr.P.C. in relation to successive proceedings under NI Act and IPC

Maintainability of criminal complaint under IPC for cheating after initiation of proceedings under the Negotiable Instruments Act - distinct ingredients and mens rea requirement in IPC offences vis-a -vis the civil-remedial scheme under the Negotiable Instruments Act - scope of Article 20(2) (double jeopardy) and Section 300(1) Cr.P.C. in relation to successive proceedings under NI Act and IPC - A private complaint for offence punishable under Section 420 IPC is maintainable notwithstanding pending proceedings under Section 138 of the Negotiable Instruments Act. - HELD THAT: - The Court accepted the distinction drawn by the Apex Court in Sangeetaben Mahendrabhai Patel that prosecutions under the NI Act and offences under the IPC operate in different fields: the NI Act proceeds on a presumption concerning antecedent liability and aims at recovery/penalty without requiring proof of mens rea, whereas an offence under Section 420 IPC requires proof of fraudulent or dishonest intention and carries different penal consequences. Overlapping facts do not equate to identical statutory ingredients, and successive or concurrent proceedings do not automatically infringe Article 20(2) or Section 300(1) Cr.P.C. The complaint impugned therefore cannot be quashed solely because proceedings under the NI Act are pending; the question of mens rea and other ingredients is a matter for trial. [Paras 10, 11]

The complaint for offence under Section 420 IPC is maintainable and the petitioners' challenge on the ground of pendency of Section 138 NI Act proceedings is rejected.

Compliance with the mandate in Priyanka Srivastava regarding prior efforts to lodge complaint with police and accompanying affidavit when seeking investigation under Section 156(3) Cr.P.C. - Whether the private complaint and the consequent direction under Section 156(3) Cr.P.C. complied with the requirements laid down in Priyanka Srivastava. - HELD THAT: - The Court examined the impugned private complaint and found that it specifically narrated efforts made to register a crime with the police and was accompanied by the complainant's affidavit as required by the precedent. Because the complaint satisfied the procedural mandates identified in Priyanka Srivastava, there was no basis to interfere under Section 482 Cr.P.C. in the absence of any unimpeachable contrary material. [Paras 12, 13]

The complaint and the 156(3) direction were in conformity with the Priyanka Srivastava requirements, and no interference under Section 482 Cr.P.C. is warranted.

Final Conclusion: The petition is dismissed: the High Court held that initiation of proceedings under the Negotiable Instruments Act does not bar a subsequent criminal complaint for cheating under Section 420 IPC, and that the impugned private complaint complied with the procedural requirements laid down in Priyanka Srivastava; no interference under Section 482 Cr.P.C. was justified.

Supervisory jurisdiction under Article 227 - arbitral proceedings - exceptional circumstances - recommencement after termination under Section 25(a) - show cause/sufficient cause - right to be heard - recall of termination order - remand for fresh consideration

Supervisory jurisdiction under Article 227 - arbitral proceedings - exceptional circumstances - Maintainability of petitions under Article 227 against arbitral orders terminating proceedings and for failure to exercise jurisdiction. - HELD THAT: - The Court held that petitions under Article 227 are not to be mechanically rejected merely because the orders arise in arbitral proceedings. Recent Supreme Court authority recognises that Article 227 remains available, but must be exercised sparingly and only in "exceptional circumstances" or where an arbitral tribunal has acted without jurisdiction or neglected to exercise vested jurisdiction. Where the grievance is not simply re examination of merits but the tribunal's failure to decide applications (i.e., neglect to exercise jurisdiction) and where intervention would aid rather than interdict the arbitral process, the High Court's supervisory jurisdiction is available. The Court therefore concluded that these petitions fall within the narrow band permitting invocation of Article 227 to ensure the tribunal performs its duty. [Paras 27, 28, 29, 30, 31]

Petitions under Article 227 are maintainable in the present cases as exceptional circumstances exist where the Arbitrator neglected to exercise jurisdiction and intervention would assist rather than derail the arbitral process.

Recommencement after termination under Section 25(a) - show cause/sufficient cause - right to be heard - Whether an Arbitral Tribunal has jurisdiction to recall an order terminating proceedings under Section 25(a) on sufficient cause being shown and to accept a belated statement of claim. - HELD THAT: - Following and applying Srei Infrastructure, the Court observed that Section 25 contemplates termination where a claimant, without showing sufficient cause, fails to communicate the statement of claim. The statute and Srei permit acceptance of a statement of claim after termination if the claimant shows sufficient cause, and the Arbitral Tribunal retains jurisdiction to recall its termination order and permit filing or grant further time. The Court emphasised the requirement of providing an opportunity to show cause and the obligation to afford the claimant a hearing before or even after termination if sufficient cause is shown. [Paras 21, 22, 23, 24, 33]

The Arbitral Tribunal has jurisdiction to recall an order under Section 25(a) and to permit filing of the statement of claim on sufficient cause being shown; denial of that jurisdiction was erroneous.

Recall of termination order - remand for fresh consideration - Whether the Arbitrator failed to exercise jurisdiction by not disposing of the Union's recall applications and the appropriate remedy. - HELD THAT: - The Court found on the uncontroverted pleadings that the Arbitrator had not passed any order on the Union's applications to recall the termination orders and had returned those applications without decision. The Arbitrator had also failed to note that no hearing in fact occurred on the date fixed by her last order and had not issued the show cause notice required by the principles in Srei Infrastructure. These factors manifested a perversity of approach and neglect to exercise jurisdiction. Rather than permanently interdicting the arbitral process, the Court directed that the Arbitrator consider the recall applications afresh, hear the parties and decide the matter on merits within a limited timeframe. [Paras 32, 33, 34, 38]

Arbitrator is directed to consider afresh the Union's applications for recall of the orders dated 19.02.2021 and to dispose of them after hearing the parties within three months.

Final Conclusion: The petitions are partly allowed: the High Court, exercising its narrow supervisory jurisdiction under Article 227, has directed the Arbitrator to consider and decide the Union's recall applications against the termination orders under Section 25(a) (in light of Srei Infrastructure and the absence of a show cause/hearing), and to dispose of those applications after hearing the parties within three months; no comment was made on the merits and there is no order as to costs.