TMI Tax Updates e-Newsletter
May 26,2026

Writ maintainability against show cause notice - Alternative statutory remedy - Input Tax Credit - validity of Section 16(2) - fake entity - High Court [2026 (5) TMI 1432 - RAJASTHAN HIGH COURT], held that the availability of an appellate remedy before the prescribed authority justified refusal to exercise writ jurisdiction, and the petition was not entertained. - HELD THAT:- The Court heard the petitioner, directed that a copy of the petition be furnished to the learned Additional Solicitor General and to learned counsel for the State, and directed listing of the matter on the next date.

Summary order. Notice was issued, the matter was directed to be listed along with SLP (C) No. 33594 of 2025, and further proceedings were stayed till the next date subject to the Court being satisfied that the issues are similar.

Application seeking Opportunity to produce material documents - legible copy of the Bill of Lading and any other relevant documents - Principles of natural justice​​​​​​​ - Fresh consideration on merits - HELD THAT: - The Court noted that the appellate authority had allowed the departmental appeal on the ground that the Bill of Lading relied on by the petitioner was not legible and, therefore, the claim regarding the shipping line could not be correlated or substantiated. Since the petitioner expressed readiness to furnish a legible copy, the Court held that, in the facts of the case, such opportunity ought to be granted so that the matter could be considered afresh on merits. The Court therefore directed the appellate authority to reconsider the appeal after permitting production of the legible Bill of Lading and any other documents required for adjudication. [Paras 6, 7]

The matter was directed to be reconsidered by the appellate authority after affording the petitioner an opportunity to file a legible Bill of Lading and other required documents.

Final Conclusion: The writ petition was disposed of by directing the appellate authority to reconsider the departmental appeal afresh on merits after giving the petitioner an opportunity to produce a legible copy of the Bill of Lading and any other necessary documents.

Summary order. On the petitioner's undertaking to pay the admitted GST liability, the Court directed deposit of fifty per cent of the admitted amount within the stipulated time, ordered revocation of the attachment notices on such deposit, permitted payment of the balance in two equated instalments from the date of revocation, and left it open to the authorities to proceed in accordance with law in case of default and for recovery of statutory interest.

Service of notice through GST portal - requirement of effective notice and fair opportunity before an adverse order -Validity of service after cancellation of registration - Common portal service - Audi alteram partem - Principles of natural justice -HELD THAT: - The Court recorded that the show cause notice had been served only by uploading it on the GST portal and by no other mode. Since the petitioner's registration had already been cancelled before issuance of the notice, the petitioner could not be expected to keep monitoring the portal thereafter. On that admitted factual position, the Court held that the principle laid down in the earlier decisions i.e.. Raj Shekhar Pandey vs. State Tax Officer [2026 (2) TMI 1071 - UTTARAKHAND HIGH COURT]. The said judgment and order was passed placing reliance on the law laid down by the Allahabad High Court, in M/s Ahs Steels vs. Commissioner of State Taxes [2024 (10) TMI 1038 - ALLAHABAD HIGH COURT] and M/s Katyal Industries vs. State of U.P. and others[2024 (2) TMI 1447 - ALLAHABAD HIGH COURT], relied on before it squarely applied, and the adjudication founded on such portal-only service could not be sustained. The consequential direction requiring that, if the petitioner seeks it, a personal hearing be granted at the renewed stage of proceedings reinforces the requirement of effective notice and fair opportunity before an adverse order is passed. [Paras 5, 6, 7]

The adjudication order and the appellate order were quashed, with liberty to the Revenue to proceed afresh from the stage of show cause notice and to afford personal hearing if sought by the petitioner.

Final Conclusion: The writ petition was allowed on the ground that, after cancellation of registration, service of the show cause notice only through the GST portal was not sufficient to sustain the adjudication. The impugned adjudication and appellate orders were quashed, with liberty to the Revenue to recommence proceedings from the stage of show cause notice and grant personal hearing if sought.

Validity oforder cancelling GST registration- failure to disclose the precise default in show cause notice - non-compliance with the prescribed cancellation procedure - Non-speaking order - Effective opportunity of hearing - Natural justice - HELD THAT: - The Court held that a show cause notice for cancellation of registration must make the noticee aware of the precise case set up against him so as to afford an effective opportunity of response. In the present case, the notice merely stated failure to furnish returns for a continuous period of six months without mentioning the month from which or the period during which returns were allegedly not filed. The Court further held that Rule 22(3) read with Form GST REG-19 requires the Proper Officer to assign specific reasons for cancellation. The impugned order only referred to the earlier notice and recorded that no reply had been submitted, but did not state any reason for cancelling the registration. The absence of reasons rendered the order a non-speaking order, contrary to the statutory prescription and to the principles of natural justice and fair procedure. The petitioner's non-submission of reply did not absolve the Proper Officer of the obligation to pass a reasoned order. The Court also held that, despite the delayed filing of the writ petition, the illegality arising from failure to meet the statutory requirement of recording reasons outweighed the delay. [Paras 21, 22, 23, 24, 25]

The impugned cancellation order was set aside and quashed, the matter was restored to the stage of the show cause notice, and the petitioner was permitted within one month either to submit a reply to the notice or to furnish pending returns and pay dues, whereupon the Proper Officer was directed to proceed afresh in accordance with Section 29 and Rule 22 and pass an appropriate order in Form GST REG-19 or Form GST REG-20.

Final Conclusion: The writ petition was allowed to the extent that the cancellation order was quashed for want of reasons and for failure to satisfy the statutory and procedural requirements governing cancellation of GST registration. The proceedings were revived from the show cause notice stage with liberty to the petitioner to respond or regularise the default, and with a direction to the Proper Officer to decide the matter afresh in accordance with law.

Binding effect of advance ruling - Non-est show cause notice - Exercise of writ jurisdiction despite alternative remedy

Binding effect of advance ruling - Non-est show cause notice - Exercise of writ jurisdiction despite alternative remedy - A show cause notice issued contrary to an advance ruling which had attained finality between the parties was unsustainable, and the petitioner could invoke writ jurisdiction without being relegated to reply to the notice or pursue the statutory remedy. - HELD THAT: - The Court held that the advance ruling remained valid subject to Sections 103(2) and 104(1) of the CGST Act, and the Department had neither disputed nor assailed it before any forum. Since an advance ruling is binding on the authorities, the impugned notice, issued in disregard of that final and subsisting ruling, lacked foundation. In these circumstances, the notice had to be treated as non-est, and the ordinary course of directing the petitioner to submit a reply and pursue the statutory hierarchy was not warranted. As the invalidity of the notice was apparent on the face of the record, the Court exercised jurisdiction under Article 226 to quash it. [Paras 5, 6, 7, 8]

The impugned show cause notice was quashed as being contrary to the binding advance ruling and therefore without foundation.

Final Conclusion: The writ petition was allowed. The Court quashed the show cause notice on the ground that it had been issued in the face of a binding and unchallenged advance ruling which had attained finality between the parties.

Writ maintainability against show cause notice - Alternative statutory remedy - challenged the show cause notice and the adjudication order -HELD THAT: - The Court held that, since the petitioner had a statutory remedy of appeal under Section 107(1) of the CGST Act against the adjudication order, interference under writ jurisdiction was not warranted. The Court also took note of the principle stated by the Supreme Court in M/s. Trillion Lead Factory Private Ltd. [2026 (3) TMI 835 - SUPREME COURT] that a writ petition does not lie against issuance of a show cause notice, and of the earlier Division Bench decision in Tanushree Logistics Private Limited [2022 (12) TMI 1033 - RAJASTHAN HIGH COURT] recognising the availability of the appellate remedy under the GST enactment. On that basis, the petitioner was relegated to the appellate forum, with liberty to raise all legal and factual grounds there. [Paras 7, 8]

The writ petition was dismissed, leaving the petitioner free to pursue the statutory appeal and urge all available grounds before the appellate authority.

Final Conclusion: The Court declined to entertain the writ petition against the show cause notice and the adjudication order, holding that the petitioner had an effective statutory remedy of appeal. Liberty was reserved to raise all legal and factual grounds before the appellate authority.

Ex parte adjudication - No Opportunity to reply to show cause notice- Violation of natural justice - HELD THAT: - Following its earlier decision [2026 (5) TMI 125 - KARNATAKA HIGH COURT] in connected writ appeals, the Court held that where the Order-in-Original had been passed ex parte in pursuance of a show cause notice issued under Section 74, it was appropriate to restore the show cause notice and afford the respondent an opportunity to submit its reply. The proper course, therefore, was to set aside the ex parte adjudication, revive the show cause notice, and direct consideration of the reply on merits if filed within the time granted. [Paras 2]

The ex parte Order-in-Original was set aside, the show cause notice was restored, and four weeks' time was granted to file a reply for consideration on merits.

Final Conclusion: The writ appeal was allowed. The order of the learned Single Judge and the ex parte Order-in-Original were set aside, the show cause notice was restored, and the respondent was granted four weeks to file its reply for consideration on merits.

Non-payment of GST on sale of cotton seed oil cake during the period of 01.07.2017 to 21.09.2017- Entitlement of exemption notification No. 02/2017-Central Tax (Rate) dated 20.06.2017 - refund claim -HELD THAT: - The Court held that the controversy stood concluded by the earlier judgment of the Coordinate Bench in the identical matter [2024 (10) TMI 123 - GUJARAT HIGH COURT], the applicability of that decision not having been disputed by the respondents. Adopting that view, the Court accepted that cotton seed oil cake, being supplied as cattle feed, fell within the exemption and therefore no GST was leviable on such supplies for the period in question. On that basis, the appropriation of the amount paid through DRC-03 against the demand could not be sustained and the petitioner became entitled to refund. [Paras 6, 7]

The impugned adjudication and appellate orders, together with the consequential DRC-07, were quashed and the respondents were directed to issue the refund within the stipulated time.

Final Conclusion: Following the Coordinate Bench decision on the identical issue, the Court allowed the writ petition and held that GST was not leviable on cotton seed oil cake supplied as cattle feed during the period in question. The demand and consequential orders were quashed, and refund was directed to be granted.

Continuance of blocking Electronic credit ledger beyond one year from the date of imposition under Rule 86A -Time-limit under Rule 86A(3) - Cessation of restriction by efflux of time - HELD THAT: - The Court held that Rule 86A(3) expressly provides that the restriction on debit of the amount available in the electronic credit ledger ceases to have effect on expiry of one year from the date on which such restriction is imposed. Since the ledger had been blocked on 21.11.2024 and the petitioner asserted that the blocking still subsisted, the continuance of such blocking beyond the statutory period could not be sustained. The statutory command itself brought the restriction to an end on completion of twelve months from the date of blocking. [Paras 4, 5]

The continuance of the blocking was declared illegal, and the restriction was held deemed to have ceased after twelve months from 21.11.2024, with a direction to unblock the electronic credit ledger forthwith.

Final Conclusion: The petition was disposed of by declaring that the blocking of the electronic credit ledger could not continue beyond the one-year period prescribed under Rule 86A(3). The authorities were directed to unblock the ledger forthwith.

Alternative modes of service - Portal service - Speed post - Effect of service of notice of the appeal, through the portal and email as well as by registered post or speed post - HELD THAT:- In view of the absence of response to service through the portal and email, the Tribunal directed that service on the respondents be effected additionally through registered post/speed post in terms of Section 169 of the CGST Act, 2017, on the appellant filing the paper book and duly stamped envelopes, and listed the matter for hearing.

Personal hearing - Principles of natural justice - Reopening of assessment

Personal hearing - Principles of natural justice - Reopening of assessment - Failure to grant the assessee a personal hearing before passing the order for reopening vitiated the proceedings. - HELD THAT: - The Court held that the notice relied on by the revenue was not a notice of personal hearing and that, despite repeated requests, no such opportunity was granted before passing the impugned order. Since the statute contemplates an opportunity to the assessee before reopening the assessment, denial of personal hearing amounted to a gross and flagrant violation of the principles of natural justice. Following Nitin Agarwal Vs Income Tax Officer Ward 4(6)(1) Kolkata and Others 2024 (1) TMI 754 - CALCUTTA HIGH COURT, the Court set aside the impugned reopening action and directed the Assessing Officer to reconsider the matter after granting personal hearing and permitting filing of further documents. [Paras 4, 5, 7, 8]

The impugned order passed under Section 148A and the consequential notice under Section 148 were quashed, and the matter was remanded to the Assessing Officer for fresh decision after granting personal hearing.

Final Conclusion: The writ petition was disposed of by holding that the reopening order could not stand for want of personal hearing. The matter was remitted to the Assessing Officer for fresh consideration in accordance with law after granting such opportunity and permitting further material to be placed.

Reassessment limitation - Applicability of amended Section 149 - Jurisdiction to issue notice under Section 148

Reassessment limitation - Applicability of amended Section 149 - Jurisdiction to issue notice under Section 148 - The reassessment notices and order for Assessment Year 2015-16 were barred by limitation and without jurisdiction under the amended regime applicable from 01.09.2024. - HELD THAT: - The Court held that the question was no longer res integra in view of the Supreme Court decision in The Income Tax Officer & Anr. vs Sri Sai Kumar Mateti, 2026 (5) TMI 855, read with Union of India & Ors. vs. Rajeev Bansal, 2024 (10) TMI 264 - Supreme Court (LB). It held that after the amendment with effect from 01.09.2024, reassessment proceedings must conform to the amended provisions of Section 149, and a notice issued beyond the period prescribed under Section 149(1)(a) would be without jurisdiction unless the conditions of Section 149(1)(b) were satisfied. Since the impugned notice under Section 148 for Assessment Year 2015-16 had been issued beyond three years from the end of the relevant assessment year, and there was no material on record to show that the escaped income amounted to or was likely to amount to the threshold required under Section 149(1)(b), the continuation of proceedings was unsustainable. [Paras 11, 12, 13]

The show-cause notice under Section 148A(b), the order under Section 148A(d), and the notice under Section 148 for Assessment Year 2015-16 were quashed.

Final Conclusion: For Assessment Year 2015-16, the Court held that the impugned reassessment proceedings did not satisfy the limitation requirements of the amended Section 149 and were therefore without jurisdiction. The writ petition was disposed of by quashing the impugned notices and order.

Reassessment limitation - Applicability of amended section 149 - Jurisdiction to issue notice under section 148

Reassessment limitation - Applicability of amended section 149 - Jurisdiction to issue notice under section 148 - The reassessment notices and order for Assessment Year 2015-16 could not be sustained once the amended limitation regime under section 149, effective from 01.09.2024, governed the proceedings. - HELD THAT: - The Court held that the validity of the reassessment proceedings for Assessment Year 2015-16 was covered by the principle stated by the Supreme Court in The Income Tax Officer & Anr. vs Sri Sai Kumar Mateti, 2026 (5) TMI 855. It held that after the amendment effective from 01.09.2024, reassessment proceedings must conform to the amended provisions of section 149, and notices issued beyond the period prescribed in section 149(1)(a) are without jurisdiction unless the conditions of section 149(1)(b) are satisfied. Since the impugned notice under section 148 was issued beyond three years from the end of the relevant assessment year, and there was no material on record to show that the escaped income amounted to or was likely to amount to the statutory threshold required under section 149(1)(b), the jurisdictional condition for invoking the extended period was not met. [Paras 11, 12, 13]

The show-cause notice under section 148A(b), the order under section 148A(d), and the notice under section 148 for Assessment Year 2015-16 were quashed.

Final Conclusion: The Court held that, for Assessment Year 2015-16, the impugned reassessment proceedings were barred under the amended limitation framework applicable from 01.09.2024. As the statutory conditions for invoking the extended period were not shown to exist, the impugned notices and order were quashed.

Allowability of interest provision - Business expenditure - Statutory obligation expenditure - Commercial expediency

Allowability of interest provision - Accrued liability - assessee's claim for deduction of provision for interest arising from the arbitral award - HELD THAT: - The Court held that, after the Supreme Court in National Agricultural Co-operative Marketing Federation of India [2020 (4) TMI 895 - SUPREME COURT] set aside the arbitral award, the very basis for payment of the additional amount and the consequential interest ceased to exist. In that situation, the question of allowing such interest as expenditure, or examining its allowability on the originally framed grounds, no longer arose. The issue of interest was therefore to be considered afresh on the footing that the assessee was not required to pay such interest. [Paras 8, 16, 17]

The deduction claimed towards provision for interest was directed to be disallowed.

Business expenditure - Statutory obligation expenditure - Commercial expediency - Expenditure incurred on gifts, boarding, lodging and allied arrangements for the General Body Meeting - HELD THAT: - The Court held that convening a General Body Meeting of a company or society is a statutory requirement, and expenditure incurred for holding and relating to such meeting bears the character of business expenditure. It rejected a narrow construction of business expenditure confined only to expenditure directly linked with purchase, sale or similar core trading activity, and held that expenditure incurred to discharge statutory obligations or other business needs must be construed purposively under Section 37. The Court further held that, once it was not disputed that the expenditure was incurred for the General Body Meeting, the Assessing Officer could not disallow it merely on the ground that the amount was excessive. [Paras 10, 11, 12, 13, 14]

The Tribunal's view allowing the expenditure as business expenditure was affirmed and the question was answered against the Revenue.

Final Conclusion: The appeal was dismissed. The Court upheld the allowability of expenditure incurred for the General Body Meeting as business expenditure, but held that the deduction claimed towards provision for interest could not stand once the underlying arbitral award had been set aside and directed its disallowance.

Initiating fresh proceedings against the amalgamated company amounted to a "finding" or "direction" for the purposes of section 150 and section 153(6) -Assessment order u/s 143(3)passed on a non-existent entity -Limitation for scrutiny notice - Assessment on amalgamated entity - Judicial discipline -

HELD THAT: - The Court held that the observations in the earlier judgment were only a clarification that the Revenue was not precluded from acting in accordance with law. They did not amount to a finding necessary for disposal of the earlier appeals, nor to a direction contemplated under sections 150 or 153(6).

Relying on Rajinder Nath & Ors. [1979 (8) TMI 3 - SUPREME COURT] Court held that only a finding necessary for disposal of the case in relation to a particular assessee and assessment year can attract those provisions. The earlier decision had merely applied the principle that assessment on a non-existing entity is invalid; it was not required, for disposal of those appeals, to determine the validity or timeliness of any fresh assessment on the successor company.

The Court also followed the view in Shell India Markets Private Limited [2025 (11) TMI 1317 - BOMBAY HIGH COURT] which had construed materially similar observations as containing neither a finding nor a direction. [Paras 14, 21, 22]

The Revenue could not invoke the earlier judgment as a source of jurisdiction to reopen or continue assessment proceedings beyond the statutory scheme.

Limitation for scrutiny notice - Jurisdictional notice - Assessment on non-existing entity - HELD THAT: - The Court held that the proviso to section 143(2) admits of no exception in the present situation and the statutory bar continued to govern the case even in the second round of litigation. Since the impugned notices were issued beyond the prescribed period from the end of the financial year in which the returns had been furnished, they were without jurisdiction. The Court further held that the earlier observations did not authorise arbitrary action or dispense with the statutory requirement that proceedings must be initiated in the manner known to law. The principle that an erstwhile company ceases to exist on amalgamation, recognised in Maruti Suzuki India Ltd. [2019 (7) TMI 1449 - SUPREME COURT] reinforced the earlier ruling that assessment on the transferor entities was void; but that consequence did not relax the limitation governing any fresh action against the successor. Following the co-ordinate Bench decision in Shell India Markets Private Limited [2025 (11) TMI 1317 - BOMBAY HIGH COURT] the Court held that no valid assessment could now be pursued on the basis of the impugned notices. [Paras 17, 18, 19, 20, 23]

The impugned notices under section 143(2) and the proceedings founded on them were quashed.

Final Conclusion: The Court held that its earlier judgment did not furnish any finding or direction authorising fresh assessment proceedings beyond the statutory framework. As the impugned notices under section 143(2) were issued beyond limitation, all three writ petitions were allowed and the notices were quashed.

Faceless reassessment - Jurisdiction of Jurisdictional Assessing Officer - Notices u/s 148A(d) and section 148 outside statutory scheme - Section 151A scheme - notice under section 148 issued by the Jurisdictional Assessing Officer instead of the Faceless Assessing Officer for A.Y. 2020-21

HELD THAT: - The Court found that the controversy stood covered by its earlier decision in Smt. Parameela Pasumarthi [2025 (11) TMI 51 - ANDHRA PRADESH HIGH COURT] Adopting that ruling, it held that where the statutory scheme of faceless reassessment under section 144B read with section 151A and the notified E-Assessment Scheme of Income Escaping Assessment, 2022 applies, notices and orders cannot be issued by the Jurisdictional Assessing Officer outside that mechanism. The governing principle applied was that the Jurisdictional Assessing Officer/JAO lacks authority to issue such reassessment notices and orders when the faceless mechanism is mandated. [Paras 4, 5]

The writ petition was allowed in terms of the earlier order, and the impugned order and notice were treated as invalid for want of jurisdiction.

Final Conclusion: Following its earlier decision on the same point, the Court allowed the writ petition and held that the reassessment order and notice issued by the Jurisdictional Assessing Officer, instead of through the faceless mechanism, were unsustainable in law.

Penalty for furnishing inaccurate particulars - Scope of section 153C in unabated assessment year - Routine disallowance of disclosed business claims

Penalty for furnishing inaccurate particulars - Scope of section 153C in unabated assessment year - Routine disallowance of disclosed business claims - Penalty under section 271(1)(c) could not be sustained on disallowance of society charges and depreciation where the claims were fully disclosed and the additions in an unabated year were not founded on any incriminating material. - HELD THAT: - The Tribunal found from the assessment order itself that the disallowance of society charges was made only for want of supporting evidence and the depreciation disallowance was made by following earlier years, without reference to any seized or incriminating material. Since the year was an unabated assessment year, such additions were beyond the permissible scope of assessment under section 153C. The Tribunal further held that the expenditure and depreciation claims were disclosed in the books of account and return of income, and there was no finding that the particulars furnished were false or inaccurate. Mere disallowance of such disclosed claims, without independent material showing concealment or deliberate misstatement, did not amount to furnishing inaccurate particulars so as to attract penalty. [Paras 23, 24, 26, 27, 28]

The deletion of penalty by the Commissioner (Appeals) was upheld and the Revenue's challenge failed.

Final Conclusion: The Tribunal upheld deletion of the penalty under section 271(1)(c), holding that routine disallowances of disclosed claims, made in an unabated year without any incriminating material in proceedings under section 153C, could not support penalty for furnishing inaccurate particulars. The Revenue's appeal was dismissed, and the assessee's cross-objection was dismissed as infructuous.

Confrontation of adverse material - Natural justice in assessment - Off-market share transactions

Confrontation of adverse material - Natural justice in assessment - Off-market share transactions - The deletion of additions arising from the assessee's claimed exempt long-term capital gain on sale of shares could not be sustained where the appellate findings were returned without factual verification of the assessment record, the precedents relied upon related to stock-exchange purchases and sales and not to purchases through off-market preferential allotment, and the assessee had not been confronted with the material proposed to be relied upon by the Assessing Officer. - HELD THAT: - The Tribunal held that the impugned appellate order was unsustainable because the finding that the Assessing Officer had not properly confronted the assessee with the responses to notices under section 133(6) was accepted without calling for and verifying the assessment record. It further found that the authorities below had referred to SEBI material, but the relevant report or order was not placed on record, and the judicial precedents relied upon by the appellate authority dealt with cases where both purchase and sale were through the stock exchange, unlike the present case of purchase in an off-market transaction by way of preferential allotment. At the same time, the Tribunal accepted the assessee's contention that all material sought to be relied upon in assessment had to be confronted to the assessee. On that basis, the additions were set aside and the matter was restored to the Assessing Officer for de novo adjudication after confronting the assessee with all relied-upon material, including replies from purchasers or exit providers and the SEBI report or order, while keeping all rights and contentions open. [Paras 11, 12]

The issue was remanded to the Assessing Officer for fresh adjudication after supplying and confronting the assessee with all material proposed to be relied upon; the Revenue's grounds were partly allowed to that extent.

Final Conclusion: The Tribunal held that the appellate relief could not be sustained in its existing form and that the assessee was entitled to be confronted with all material proposed to be relied upon in assessment. The additions were therefore set aside and the matter was restored to the Assessing Officer for de novo adjudication, with all contentions kept open.

Deduction of interest expenditure u/s 57(iii) - Direct and proximate nexus with earning of interest income - Personal or non-income-earning use of borrowed funds - Wholly and exclusively for earning income

HELD THAT: - The Tribunal held that deduction under section 57(iii) is available only where the expenditure is incurred wholly and exclusively for earning the income in question and there is a direct and proximate nexus between the borrowing and the interest income earned. On the facts found, the assessee failed to establish such nexus, and the material on record instead showed use of borrowed funds for investment in shares and purchase of plots/residential property for other purposes. Mere assertion of intention to earn income, unsupported by adequate documentary evidence, was held insufficient to satisfy the statutory requirement. The earlier order in the assessee's own case was treated as factually distinguishable because, in that year, direct nexus had been established. [Paras 8, 9, 10, 11, 12]

The disallowance of the interest expenditure was upheld and the connected grounds were dismissed.

Final Conclusion: The Tribunal upheld the disallowance of the interest expenditure claimed under section 57(iii), holding that the assessee had failed to prove a direct nexus between the borrowed funds and the earning of interest income. The appeal was accordingly dismissed.

Addition made u/s 56(2)(x)(b)(B) - difference between the purchase consideration and the stamp duty value -Retrospective operation of curative amendment - Tolerance band in stamp duty valuation - Strict construction of deeming fiction

HELD THAT: - The Tribunal held that the enhancement of the tolerance band from 5% to 10% was curative and beneficial and intended to remove hardship arising from marginal differences between actual consideration and stamp duty valuation. Relying on the consistent view of coordinate benches, it held that such beneficial relaxation applies to A.Y. 2018-19 as well.

The general presumption against retrospectivity did not assist the Revenue, since the amendment neither created a new charge nor imposed a fresh burden, but merely relaxed the rigour of a deeming provision. As the variation between the purchase consideration and the stamp duty value was only 7.44%, which was below 10%, the deeming fiction could not be invoked. [Paras 26, 27, 28, 29, 30]

The addition made under section 56(2)(x)(b)(B) was directed to be deleted.

Final Conclusion: The Tribunal held that the 10% tolerance band under the deeming provision was applicable to A.Y. 2018-19 as a curative and beneficial amendment. Since the variation between the purchase consideration and the stamp duty value was only 7.44%, the addition was deleted and the assessee's appeal was allowed.

Penny stock transactions u/s 68 - Unexplained income - Disallowance of loss - Suspicion versus evidence - general investigation report relied upon - HELD THAT: - The Tribunal found it undisputed that the assessee purchased the shares through recognised stock exchange, sold them through the exchange, and actually suffered a loss in the transaction. The transactions were supported by contract notes, demat statements and banking records.

No direct material was brought on record to show receipt of unaccounted cash, any concealed benefit, or any nexus between the assessee and alleged operators or accommodation entry providers.

Revenue's reliance on decisions concerning bogus exempt capital gains from abnormal appreciation in penny stocks was held distinguishable because, in the present case, no exempt gain or artificial tax-free income was claimed; the assessee had instead incurred an actual loss. Tribunal held that mere suspicion founded on a general investigation report could not displace the documentary evidence produced by the assessee. [Paras 15, 16, 17, 18, 19]

The addition treated as unexplained income and the disallowance of the loss were rightly deleted, and the consequential recomputation of interest was left undisturbed.

Final Conclusion: The Tribunal dismissed the Revenue's appeal and upheld deletion of the addition and the loss disallowance. It held that, in the absence of direct evidence linking the assessee to any accommodation entry arrangement, the impugned share transactions could not be treated as sham merely on the basis of a general investigation report.

Bogus purchases - Disallowance of expenditure not claimed as deduction - Ad hoc disallowance of labour charges

Bogus purchases - Disallowance of expenditure not claimed as deduction - Verification of purchase reversal entries - The addition in respect of alleged bogus purchases was not finally sustainable without verifying the assessee's claim that the major part of those purchases had been reversed and was never claimed as a deduction in the Profit and Loss account. - HELD THAT: - The Judicial Member held that, though the assessee's conduct in booking large purchases on the basis of invoices and later reversing them after scrutiny and GST proceedings raised serious doubt, no disallowance could be made of an expenditure that had in fact never been claimed while computing income. Since the assessee had consistently asserted that purchases of about Rs. 11.07 crore did not form part of the purchases debited in its Trading and Profit and Loss account, the authorities below had failed to examine the controversy from the correct perspective and ought to have verified the actual purchases debited in the books and whether the disputed amount was claimed under any expenditure head. The matter was therefore remitted to the Assessing Officer to verify the purchases debited under cost of material consumed, examine confirmations and carry out further inquiry; if the disputed purchases were not claimed as deduction, the addition was to be vacated, and the separate claim of genuine purchases from the four parties was also to be verified. The concurring Accountant Member agreed with the remand, but additionally observed that the Assessing Officer should also examine, in accordance with law, disallowability of any GST penalty or interest, any expenditure debited in relation to purchases that never took place, the assessee's plea that no consideration was paid, and the contractual position regarding sub-contracting. [Paras 22, 23, 24, 25]

The addition on account of alleged bogus purchases was set aside for fresh verification by the Assessing Officer in the light of the assessee's claim that the amount had not been claimed as deduction, and the connected claim of genuine purchases from four parties was also remanded for verification.

Ad hoc disallowance of labour charges - Burden to substantiate business expenditure - The disallowance of 50 per cent of labour charges was justified for want of reliable evidence supporting the claim. - HELD THAT: - The Tribunal found the assessee's explanation that it completed a time-bound subcontract work by engaging casual labourers picked up from local sites or market yards to be inherently difficult to accept. Apart from ledger accounts and cash vouchers, no material was produced to establish the identity of the labourers or otherwise substantiate the claim by credible documentary evidence. In these circumstances, the Assessing Officer's decision to restrict the disallowance to 50 per cent was treated as a fair and liberal approach, and no interference was warranted. [Paras 26, 27]

The disallowance of 50 per cent of the labour charges was upheld.

Final Conclusion: The appeal was partly allowed for statistical purposes. The addition relating to alleged bogus purchases was remanded to the Assessing Officer for fresh verification, while the disallowance of 50 per cent of labour charges was sustained.

Reassessment for want of valid notice - Mandatory notice u/s 143(2) - Jurisdictional validity of reassessment - Consequential penalty - reassessment framed without issuance of notice u/s 143(2) after the return filed in response to notice u/s 148

HELD THAT: - The Tribunal found on verification of the record that during the reassessment proceedings only notices under sections 148 and 142(1) were issued and no notice under section 143(2) was issued. It held that issuance of notice u/s 143(2) is a mandatory condition for the AO to assume jurisdiction to frame a reassessment, and omission to issue such notice is not a procedural irregularity curable under section 292BB.

Since the reassessment order had been passed without complying with this mandatory requirement, it was held to be void ab initio. In view of this finding, the other grounds challenging reopening and the addition on merits were treated as academic and infructuous. [Paras 9, 10, 11]

The reassessment order under section 147 was quashed as void ab initio.

Penalty under section 271(1)(c) - Consequential penalty - HELD THAT: - The Tribunal held that the penalty imposed u/s 271(1)(c) had no independent foundation once the reassessment order itself had been set aside. Since the very basis of the penalty ceased to exist, the consequential penalty proceeding also failed. [Paras 13]

The penalty was deleted as consequential to the quashing of the reassessment.

Final Conclusion: Both appeals were allowed. The reassessment for assessment year (AY) 2013-14 was quashed for want of mandatory notice under section 143(2), and the connected penalty was deleted as having no surviving foundation.

Assessment based on third-party search material - Mandatory recourse to reassessment procedure - Approval requirement under Explanation 2 to section 148 - Third-party seized documents - Section 143(3) versus reassessment procedure - Prior approval requirement -

HELD THAT: - The Tribunal found that the impugned addition was not based on any material found from the assessee, but on documents retrieved during search in the case of another person. On a plain reading of Explanation 2 to section 148, where documents seized in the case of another person pertain to or relate to the assessee, the statutory route is to proceed under the reassessment framework after recording the prescribed satisfaction and obtaining the required approval.

Assessing Officer, instead of invoking that procedure, used such third-party search material in a regular assessment under section 143(3). Following Ace Mega Structures Pvt. Ltd. . [2025 (12) TMI 652 - ITAT DELHI] and Homelife Buildcon P Ltd. [2025 (7) TMI 1231 - ITAT CHANDIGARH] the Tribunal held that such use of third-party seized material without adopting the mandated statutory mechanism rendered the assessment invalid. [Paras 8, 9, 10, 11]

The assessment order passed under section 143(3) was held to be bad in law and was quashed; the remaining grounds were treated as academic.

Final Conclusion: Both appeals for A.Y. 2022-23 were allowed. The Tribunal quashed the assessments on the ground that additions founded on material seized from a third person could not be made in proceedings under section 143(3) without following the reassessment procedure and obtaining the statutory approval.

Estimation of business income - Net profit rate based on past history - Reasonable net profit rate - assessee's business income from contract receipts to be estimated by adopting a net profit rate consistent with its past audited results OR higher rate applied by the AO

HELD THAT: - The Tribunal found that though the assessee had neither got its accounts audited nor filed the return for the year under consideration, the turnover and the nature of contractual business were not in dispute. It further noted that in the preceding years, where the books were regularly audited and turnover was in a comparable range, the net profit disclosed by the assessee was consistently between 5% and 5.5%. On these facts, the estimation at 8% was held to be excessive, and a fair estimation of income required adoption of a rate aligned to the past trend. The Tribunal therefore fixed the net profit rate at 5.75% for the relevant year. [Paras 5]

Business income was directed to be estimated by applying a net profit rate of 5.75%, and the addition was reduced accordingly.

Final Conclusion: The appeal was partly allowed. The Tribunal held that the assessee's income should be estimated on a reasonable net profit rate having regard to its consistent past results, and substituted the rate of 8% with 5.75% for A.Y. 2019-20.

Demand of Customs duty along with interest and imposition of penalty invoking Section 135 - non-fulfilment of export obligation after the Export Obligation Discharge Certificates - contemporaneous departmental proceedings - Approbate and Reprobate​​​​​​​ -Denial of cross-examination - extrapolation from a partial vehicle enquiry - Extended period of limitation - fraud, collusion, wilful misstatement, or suppression with intent to evade duty.

Whether the Customs authorities can demand duty on the ground of non-fulfilment of export obligation when EODCs have been issued by DGFT, Kolkata after due verification in respect of all 29 licences and have not been revoked? - HELD THAT: - The Tribunal found it undisputed that the assessee had obtained EODCs from DGFT in respect of all 29 licences and that the bonds executed at the time of import had also been discharged. Once the licensing authority had certified fulfilment of export obligation and the customs authorities themselves had released the bonds, the foundation for alleging breach of the exemption conditions ceased to exist. On that basis, the confirmed demand, and the consequential interest and penalty resting on the same allegation, were held unsustainable. [Paras 8, 9, 10]

The issue was answered in favour of the assessee and the demand based on alleged non-fulfilment of export obligation was held not sustainable.

Whether the demand can be sustained when the Central Excise Department, in five contemporaneous SCNs to THPL, has itself proceeded on the footing that goods were received by THPL — squarely contradicting the DRI's hypothesis of no-movement ? - HELD THAT: - The Tribunal relied on the contents of the show cause notice issued to THPL, which expressly recorded procurement of the goods in question from the assessee without payment of duty. That contemporaneous departmental record directly contradicted the customs case that the goods were never sent to THPL and were instead diverted in the domestic market. Since both positions could not stand together, the allegation of diversion was held unsustainable. [Paras 11]

The issue was answered in favour of the assessee and the diversion allegation was rejected.

Denial of cross-examination - Principles of natural justice - Extrapolation of demand - HELD THAT: - The Tribunal held that no cross-examination had been granted of the transporters whose statements were relied upon by the adjudicating authority, despite those statements being used to support the allegation of diversion. It held that reliance on such statements without first examining the witnesses and affording cross-examination amounted to a gross violation of natural justice, and that the statements therefore could not be relied upon. As the case of diversion across the consignments rested on those statements, the demand built on that basis could not stand. [Paras 12]

The issue was answered in favour of the assessee; the statements were held not fit to be relied upon and the demand founded thereon could not be sustained.

Extended period of limitation - Suppression of facts - HELD THAT: - The Tribunal found that the assessee's obtaining of EODCs from DGFT and the discharge of bonds were all within the knowledge of the revenue. In those circumstances, the essential basis for invoking the extended period, namely suppression or other positive misconduct, was absent. The demand was therefore also held barred by limitation. [Paras 13]

The issue was answered in favour of the assessee and the demand was held time-barred.

Section 135 proceedings - Confiscation and redemption fine - HELD THAT: - The Tribunal held that, once it stood established for the purpose of adjudication that the assessee had obtained EODCs and that THPL had received the goods, proceedings under Section 135 were not warranted. It further held that, having already found in favour of the assessee on the question of export obligation and movement of goods, the goods were not liable to confiscation. The consequence was that no redemption fine could be imposed. [Paras 14, 15]

The recommendation under Section 135 was held unwarranted, and confiscation as well as redemption fine were held not imposable.

Final Conclusion: The Tribunal held that, in view of the subsisting EODCs, discharge of bonds, the department's own contrary record showing receipt of goods by THPL, and denial of cross-examination, the duty demand, interest and penalties were unsustainable, including on limitation. The assessee's and co-noticees' appeals were allowed, the recommendation under Section 135 and the confiscation-related consequences were set aside, and the Revenue's appeal for redemption fine was dismissed.

Penalty on Customs Broker - Controlled substance covered under Schedule-B of NDPS - Product exported as MIGRAN, containing Ergotamine in preparation form - Preparations of notified substances - No objection certificate requirement - exporter failed to provide required NOC issued by the Narcotic Commissioner to export Ergotamine - Due diligence by customs broker - reasonable belief - misdeclaration - confiscation under Section 113​​​​​​​ - Residuary penalty - Principle of specific penalty overriding general penalty - imposition of penalty under the provisions of Section 117.

Controlled substance - Preparations of notified substances - No Objection Certificate - HELD THAT: - Following M/s Videojet Technologies (I) Private Ltd. [2025 (5) TMI 2015 - CESTAT NEW DELHI], the Tribunal held that Schedule-B specifically covers only 'Ergotamine and its salts' and does not extend to preparations thereof. Since the product in question contained Ergotamine only as a constituent and was at most a preparation of Ergotamine, it was outside the scope of the notified entry. The foundation for treating the export as requiring NOC on that count therefore failed, and penalty on the Customs Broker for alleged violation arising from such non-obtaining of NOC could not be sustained. [Paras 8, 9]

No penalty was sustainable against the Customs Broker on the ground of export without NOC in respect of the medicine containing Ergotamine.

Customs Broker diligence - Undeclared goods - HELD THAT: - The Tribunal found that the exporter had pleaded ignorance regarding the packing of the additional medicine, and in those circumstances it was too much to attribute knowledge of the excess goods to the Customs Broker. It was also noticed that the issue concerning the Ergotamine content itself had required clarification from multiple authorities, making it unreasonable to fasten on the broker a positive responsibility involving technical analysis beyond ordinary compliance expectations in the facts of the case. [Paras 10, 11]

The finding of penal liability based on the undeclared Ledifos and alleged lack of diligence was rejected.

Residuary penalty - Specific penalty under Regulations -HELD THAT: - The Tribunal held that Section 117 is a residuary penal provision and operates only where no express penalty is otherwise provided. Since Regulation 18 of the CBLR is a self-contained provision specifically authorising penalty for contravention of the Regulations, resort to Section 117 for the alleged violation of Regulation 10(d) was impermissible. [Paras 12]

Penalty imposed under Section 117 for alleged breach of the CBLR was legally unsustainable.

Final Conclusion: The Tribunal set aside the impugned order and allowed the appeal. It held that the medicine exported was only a preparation containing Ergotamine and not 'Ergotamine and its salts' under Schedule-B, that knowledge of the excess medicine could not be attributed to the Customs Broker on the facts, and that in any event penalty under Section 117 was unavailable where the CBLR itself contained a specific penalty provision.

Validity of the adjudication order, where the communication for filing reply and for personal hearing was sent to the earlier address despite prior intimation of change of address - breach of natural justice - Denial of Opportunity to reply to show cause notice - Defective service of hearing notice - Email communication was also sent to an email address different from the appellant's official email address -HELD THAT: - The Tribunal found that the letter calling upon the appellant to file a reply to the show cause notice and to attend personal hearing mentioned the old address, though the change of address had already been brought to the notice of the adjudicating authority. The Tribunal also noted the appellant's assertion that the communication had not been sent to its official email address. On that basis, it held that no effective opportunity had been granted to the appellant to submit a reply to the show cause notice or to appear for hearing, resulting in violation of principles of natural justice. The matter was therefore required to be restored so that the appellant could file its reply and the show cause notice could thereafter be adjudicated afresh after hearing. [Paras 7, 8, 9, 10]

The impugned order was set aside on the ground of denial of reasonable opportunity, and the appellant was permitted to file a reply within three weeks, after which the show cause notice was directed to be adjudicated afresh after fixing a hearing.

Final Conclusion: The Tribunal held that the impugned adjudication was vitiated by breach of natural justice since effective notice for reply and hearing had not been served at the correct address and email. The order was set aside and the matter was remitted for fresh adjudication after permitting the appellant to file its reply.

Smuggling of foreign-origin goods - Seizure of gold bars - Burden of proof - Corroborated statements under customs law - Prohibited goods -Reasonable belief - Denial of Cross-examination and natural justice - violation of principles of natural justice​​​​​​​ - Preponderance of probability​​​​​​​ -objections based on section 138B.

Burden of proof in case of seized gold - Smuggled foreign-origin gold - Confiscation and penalty - HELD THAT: - The Tribunal held that recovery of gold bars of very high purity from specially created cavities in the vehicle, absence of any document showing lawful possession, and the surrounding circumstances gave the officers reasonable ground to believe that the goods were of foreign origin and smuggled. Once such belief arose, the burden shifted to the appellants under the statutory reverse burden to establish that the gold was not smuggled. That burden remained undischarged, since the claim that the bars had been made by melting old jewellery was not proved, the documents produced in support were found fabricated, and the electronic material, including call detail records and WhatsApp chats, directly connected the carriers with the alleged supplier and intended recipient. The Tribunal further held that customs proceedings are governed by the rule of preponderance of probability, and the cumulative circumstantial and documentary evidence was sufficient to sustain confiscation and penalties. [Paras 6, 7, 8, 10]

The findings invoking the reverse burden, treating the gold as smuggled goods, and upholding confiscation of the gold and vehicle together with the penalties were affirmed.

Corroborated statements under customs law - Section 138B objection - Independent documentary evidence - HELD THAT: - The Tribunal held that the case did not rest merely on the statements recorded from the occupants of the vehicle. The panchnama, recovery from concealed cavities, assay report showing gold of 99.5% purity, and the unrebutted documentary and electronic evidence constituted independent material corroborating the admissions. In that factual setting, the challenge founded on Section 138B did not assist the appellants, since the statements were not the sole basis of the findings and the appellants had failed to dislodge the corroborative record despite the burden cast on them. [Paras 9]

The plea that the statements could not be relied upon was rejected.

Cross-examination and natural justice - Admissions of guilt - No prejudice -HELD THAT: - The Tribunal held that where the appellants' own statements amounted to admissions and the case was otherwise supported by sufficient independent evidence, cross-examination of the DRI officers was not a mandatory requirement of natural justice. The admissions did not require proof in the manner contended by the appellants, and in the presence of corroborative evidence no prejudice was shown to have been caused by refusal of cross-examination. [Paras 10]

The plea of violation of natural justice on account of refusal of cross-examination was rejected.

Final Conclusion: The Tribunal upheld the impugned order in full, holding that the seized gold was rightly treated as smuggled, the appellants had failed to discharge the statutory burden cast on them, and neither the objection under Section 138B nor the complaint of denial of cross-examination disclosed any prejudice. All six appeals were accordingly dismissed.

Nature of amount deposit during investigation - Pre-deposit and excess deposit - Refund interest - determining the amount of duty to be paid on the imported goods or export goods -Statutory interest under section 129EE.

Statutory interest - Compensation versus statutory refund interest - HELD THAT: - The Tribunal held that the claim for interest at 12% could not be accepted because, as clarified by the Supreme Court in Commissioner of Income Tax, Gujarat versus Gujarat Fluoro Chemicals [2015 (9) TMI 862 - SUPREME COURT], Sandvik Asia Ltd. versus Commissioner of Income Tax - I, Pune and Ors [2006 (1) TMI 55 - SUPREME COURT] did not lay down a general rule for payment of interest beyond the statute. The principle applied was that an assessee can claim only such interest as the statute provides, and no additional rate could be awarded on that basis. [Paras 7]

Interest at 12% was rejected, and only statutory interest was held to be payable.

Whether every rupee which has been deposited under the head of duty will automatically become duty or something more is required for the amount to be the duty ? -HELD THAT: - The Tribunal held that for an amount to assume the character of duty, it must not only be credited under the relevant revenue head but must also be referable to an assessment or permissible modification of assessment, and must be due at that time. The amount deposited by the appellant during investigation was paid before any assessment, reassessment, adjudication creating an enforceable demand, or crystallised liability; therefore, it remained only a deposit and not duty. The Customs Act does not authorise officers to compel payment in anticipation of liabilities that may arise after investigation and adjudication. Further, once an appeal is filed after making the mandatory pre-deposit, recovery of the balance adjudged amount remains stayed, and such balance cannot be appropriated or treated as duty. In these circumstances, where the amount deposited during investigation had not been refunded except to a limited extent, the entire amount had to be treated as pre-deposit and refunded with interest under section 129EE from the date of deposit till the date of refund. The bifurcation of the amount into 7.5% as pre-deposit and the balance as duty was held to be legally incorrect. [Paras 22, 23, 24, 26, 27]

The Supreme Court held in Tata Refractories and Another versus Sales Tax Officer and Others -[2002 (11) TMI 89 - SUPREME COURT], that the amount deposited would not became sales tax even though the application for refund was filed under Orissa Sales Tax Act.

The entire amount deposited during investigation was directed to be treated as pre-deposit and refunded with applicable statutory interest from the date of deposit; the matter was remanded only for calculation of such interest.

To sum up:

(i) Taxing statutes specify the taxable event, the rate of tax, the measure of tax, the person or property chargeable with the tax, the time when tax will become due and also provide for mechanisms through which the tax can be recovered if they are not paid voluntarily when they are due.

(ii) Customs duties are chargeable on import or export at the rates specified in the customs tariff and they are charged on the goods imported or exported and must be paid by the person seeking to clear the goods across the customs frontiers; duties, as assessed, must be paid on imports before the goods are cleared for home consumption. The only exception is where the importer is eligible for deferred payment of duties in which case, the duties are payable after removal of the goods.

(iii) Customs duties confirmed, fines and penalties imposed through any adjudication order have to be paid within the appeal period if no appeal is filed and if an appeal is filed after making the mandatory pre-deposit, do not have to be paid till the appeal is decided.

(iv) Customs Act does not empower any officer to ask any assessee to pay any amount to cover any future liabilities that may arise after investigation and adjudication.

(v) Any amount paid under any head including the head of duty of customs during investigation or at any stage before the adjudication order is only a deposit. The person who so deposited the amount can seek refund of the amount deposited because there is no assessed liability and the officer is bound to refund the amount. It is not necessary to establish that the amount was deposited under pressure or duress in order to seek refund. Even if it was paid under misunderstanding, the person can seek refund because the amount so paid was not against any assessed liability. If the refund is rejected, the person can avail appellate remedies.

(vi) In cases where the amount deposited during investigation or at any stage before filing the appeal is in excess of the mandatory pre-deposit and the excess amount has not been refunded, the entire amount so deposited has to be treated as pre-deposited.

(vii) However, if the amounts deposited in excess of the mandatory amount have not been refunded, then the entire amount must be treated as pre-deposit. It is not correct to treat 7.5% or 10% as pre-deposit and the rest as duty because once the assessee files an appeal the rest of the amount cannot be appropriated towards or treated as duty. This is for the reason that the department has no right to recover the amount as duty.

Maintainability of appeal against ex parte ad interim order - Director without shareholding - Bar of civil court jurisdiction in corporate governance matters - Definition of director under Section 2(34) - Statutory removal of director - absence of locus standi before the NCLT revives civil court jurisdiction - Reasoned satisfaction of prima facie case, balance of convenience and irreparable injury - Oppression and mismanagement remedy - Waiver of eligibility requirements - Balance of convenience - Irreparable injury - Clean hands doctrine.

Appeal against ex parte ad interim injunction - Maintainability of appeal - HELD THAT: - Following the ratio laid down in the A. Venkatasubbiah Naidu vs. S. Chellappan & Ors. [2000 (9) TMI 1001 - SUPREME COURT].The Court held that an appeal under Order XLIII Rule 1(r) CPC is maintainable even against an ex parte ad interim injunction. The impugned order being an ex parte ad interim restraint order, the appeal could validly be entertained. [Paras 33]

The appeal was held to be maintainable.

Director without shareholding - Functional definition of director - Removal of director - HELD THAT: - The resolution of this question hinges on an inquiry into the legal status of Respondent No. 1 within the corporate matrix of the Appellant Company. The primary jurisdictional defence mounted by Respondent No. 1 rests upon a proprietary and formalistic premise; that because he holds zero physical equity and his name has not been inscribed upon the Register of Members, he cannot be categorized as a “director in the real or structural sense.” Consequently, he argues that he remains outside the disciplinary, administrative, and ouster mechanisms of the Companies Act, 2013, thereby leaving the Civil Court's common-law jurisdiction active under Section 9 of the Code of Civil Procedure, 1908. This argument is legally untenable and fails to survive a literal or purposive construction of the Act.

Construing Section 2(34), the Court held that the status of director is functional and status-based, not dependent on equity ownership. Once respondent No. 1 accepted appointment as director through filing of Form DIR-12, he assumed a statutory office and became subject to the regulatory and disciplinary framework of the Act, including removal under Section 169. The absence of shareholding could not be used to deny that status or to avoid the statutory removal process. [Paras 36, 37, 39, 50, 82]

The Court answered the issue against respondent No. 1 and held that lack of shareholding did not insulate him from removal under Section 169.

Bar of civil court jurisdiction in corporate governance matters - Collateral contract and statutory corporate process - Availability of remedy before NCLT - HELD THAT: - The Court held that Section 430 creates a dual bar: civil courts cannot entertain matters within the domain of the Tribunal, and cannot grant injunctions against actions taken or to be taken under statutory powers conferred by the Act. A notice for removal of a director under Section 169 is part of internal corporate administration under the statute, and therefore could not be interdicted by a civil court. The existence of an unexecuted MoU or possible contractual claims did not confer ancillary power on the civil court to freeze a statutory corporate process. The Court further held that the plea of lack of locus before the NCLT was misconceived, since the proviso to Section 244(1) enabled a substantial investor to seek waiver and invoke the Tribunal's jurisdiction. Consequently, inability to proceed as a registered shareholder under Sections 241 and 242 did not vest or revive jurisdiction in the civil court. [Paras 69, 70, 81, 82, 83]

The Court held that Section 430 barred the civil court from granting the injunction, and that respondent No. 1 had an adequate statutory avenue before the NCLT.

Ex parte temporary injunction - Triple test for injunction - Unreasoned exercise of discretion - HELD THAT: - The Court held that an ex parte ad interim injunction is an exceptional equitable remedy and can be granted only upon an express and reasoned consideration of prima facie case, balance of convenience, and irreparable injury. The impugned order merely reproduced formulaic expressions without analysis of maintainability, competing facts, or the legal basis for restraining the statutory corporate process. Such boilerplate recital was held insufficient and amounted to arbitrary exercise of discretion. The Court therefore treated the order as suffering from material irregularity and as unsustainable in law. [Paras 75, 78, 79, 80, 84]

The impugned injunction order was held to be legally unsustainable for want of reasoned satisfaction on the mandatory triple test.

Final Conclusion: The appeal was allowed and the ex parte ad interim injunction restraining the statutory process under Section 169 of the Companies Act, 2013 was set aside. The Court held that the civil court could not interdict such internal corporate action and that the impugned order was also vitiated by absence of reasoned satisfaction on the requirements for grant of injunction.

Impleadment of necessary and proper parties - Locus standi of minority shareholders - High Court held that the minority shareholders had a substantial, direct and independent interest in the controversy, and that the result of the writ petitions would vitally affect them - impleadment applications allowed and the applicants were added as party respondents. - HELD THAT:- The Special Leave Petitions were dismissed, the Court declining to interfere with the impugned order(s) passed by the High Court, and the accompanying interlocutory application(s), if any, were disposed of.

Delay in filing the appeal against the order approving the resolution plan -Computation from uploading of order - Sufficient cause - Exemption from filing certified copy - Condonation of delay - HELD THAT: - The Appellate Tribunal held that, although Rule 22 casts an obligation on a litigant to apply for and file the certified copy, the judgments in Angelwoods Apartment Allottees Association [2026 (5) TMI 809 - SUPREME COURT] and V. Nagarajan [2021 (10) TMI 941 - SUPREME COURT (LB)] also recognise that an application seeking exemption from filing such certified copy can be entertained. Since the appellant had filed an application seeking exemption, that request as well as the delay condonation application required consideration together. On the facts, there was no dispute that the impugned order, though dictated earlier, was uploaded only on 28.10.2025, and another appeal arising from the same order had also proceeded on that basis. Following Omkara Assets Reconstruction Private Limited [2026 (1) TMI 335 - SC ORDER], the Tribunal accepted the explanation for the delay and held that, if computed from the date of uploading, the appeal was within the condonable period. [Paras 12, 16, 17, 18, 19]

The delay was condoned, the appeal was entertained without the certified copy for the present, and time was granted to place the certified copy on record.

Final Conclusion: The Appellate Tribunal allowed the delay condonation application, holding that the appellant was entitled to have limitation considered from the date of uploading of the order and that the exemption application regarding the certified copy could be entertained. The appeal was accordingly taken on file, with time granted to place the certified copy on record.

Authority of co-developers to execute registration deeds - Interpretation of master agreement - Occupancy Certificate -Entitlement of co-developer's to execute registration documents in favour of homebuyers/allottees for the completed Doon Square project under the Master Agreement - HELD THAT: - The Tribunal noted that the Doon Square project had already been kept outside the projects handed over to NBCC, had proceeded under a separate project-wise resolution mechanism, and stood completed with occupancy certification and discharge of the sole lender's dues. On construction of Clause 6 of the Master Agreement dated 08.10.2024, executed between the company through the IRP, the lender and the co-developers, the Tribunal held that the co-developers had been expressly empowered to sign, execute and present for registration sub-lease deeds, flat buyers' agreements and other documents required for transfer in favour of allottees. Since the Agreement had already been noticed and directed to be implemented by the Tribunal, no further impediment survived to execution of registration documents, and the co-developers could jointly nominate the authorised person for that purpose before the statutory authority. [Paras 13, 14, 15]

The applicants were held fully entitled to execute registration deeds in favour of the homebuyers/allottees in accordance with the Master Agreement, and their authorised representatives were permitted to do so.

Final Conclusion: The application was disposed of by holding that, under the Master Agreement already accepted and directed to be implemented, the co-developers were competent to execute registration documents in favour of the homebuyers/allottees of the Doon Square project.

Authorisation to file section 7 application - transaction between the parties - Financial debt - Commercial effect of borrowing - Debt and default - related party of the financial creditor - requirements for invoking Section 65 against the financial creditor - Fraudulent or malicious initiation of proceedings - Imposition of penalty on the financial creditor Section 65.

Whether the Board Resolution dated 21.11.2014 can be treated to be sufficient to authorise Mr. Ram Avtar Aggarwal to file Section 7 application on behalf of the Financial Creditor ? - HELD THAT: - The Appellate Tribunal held that the board resolution conferred a general authority on the managing director to sign, prepare, submit and execute documents and to represent the company before any court in India. The Adjudicating Authority erred in treating the authorisation as obsolete merely because it pre-dated enactment of the Code. Relying on Rajendra Narottamdas v. Chandra Prakash Jain [2021 (10) TMI 144 - SUPREME COURT] and approving the principle in Palogix Infrastructure (P) Ltd. v. ICICI Bank Ltd [2017 (10) TMI 913 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] the Tribunal held that a general authorisation or power of attorney in favour of an officer is sufficient for filing a section 7 application and no separate post-Code authorisation was necessary. [Paras 15]

The finding that the applications were unauthorised was set aside.

Whether transaction in question involves any financial debt or not ? - HELD THAT: - The Tribunal found that the loan agreement distinctly separated the amount payable towards land from the amount advanced for construction as an unsecured loan carrying interest, with a repayment schedule for principal and penal interest on default. The Adjudicating Authority considered only the land component and failed to examine the loan component recorded in the agreement. Since the building component was advanced as an interest-bearing unsecured loan and was also reflected in the corporate debtor's balance sheet as unsecured borrowing, the transaction had the commercial effect of a borrowing and answered the description of financial debt. [Paras 20, 21]

The finding that no financial debt existed was held unsustainable.

Related party - Section 5(24) - HELD THAT: - The Tribunal held that the impugned order did not identify the specific clause of section 5(24) under which the relationship was said to arise. The pleadings relied on by the Adjudicating Authority, such as friendship, employment links, guarantees, or familial connections of some individuals, were not correlated to the statutory ingredients necessary to establish a related-party relationship. In the absence of a clear finding satisfying any sub-clause of section 5(24), the conclusion that the section 7 petitions were collusive on that basis could not be sustained. [Paras 25]

The finding that the financial creditor and the corporate debtors were related parties was set aside.

Fraudulent or malicious initiation of proceedings - Section 65 - Strict pleading and proof - HELD THAT: - The Tribunal held that section 65, being penal in nature, requires strict pleading and proof. The minority shareholder's grievances arising from proceedings for oppression and mismanagement could not by themselves justify a finding that the insolvency proceedings were initiated fraudulently or with malicious intent. Equally, the fact that the secured creditor had initiated SARFAESI measures and conducted auction proceedings did not bar the financial creditor from invoking the independent statutory remedy under section 7, nor did the timing of such filing establish mala fides. Since financial debt and default were shown, and no other material satisfying section 65 was proved, the conclusion that the petitions were collusive and malicious was unsustainable. [Paras 26, 27, 28, 29]

The basis for invoking section 65 against the financial creditor failed.

Penalty under section 65 - Person initiating proceedings - HELD THAT: - Following Rakesh Arora & Anr. vs. Acute Daily Media Pvt. Ltd. & Ors. [2025 (3) TMI 438 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI - LB], the Tribunal held that section 65 targets the person who initiates the insolvency resolution process. The provision, being penal, must be strictly construed, and does not extend to penalising a corporate debtor which has not initiated the process. In any event, since fraudulent or malicious initiation was not proved, the very foundation for penalty disappeared. [Paras 30, 31]

The penalty imposed on the corporate debtors was held impermissible and was set aside.

Admission of section 7 application - Debt and default - HELD THAT: - The Tribunal held that debt and default were established and were not denied. As the reasons assigned by the Adjudicating Authority for rejection were found to be unfounded, the applications could not be dismissed. Applying Innoventive Industries v. ICICI Bank [2017 (9) TMI 58 - SUPREME COURT] and E.S. Krishnamurthy v. Bharath Hi-Tech Builders [2021 (12) TMI 683 - SUPREME COURT], the Tribunal directed admission of the section 7 applications and consequential orders by the Adjudicating Authority. [Paras 32, 33]

The rejection of the section 7 applications was set aside and the Adjudicating Authority was directed to admit them and pass consequential orders.

Final Conclusion: All appeals were allowed. The orders dismissing the section 7 petitions and imposing penalty under section 65 on the financial creditor and the corporate debtors were set aside, and the Adjudicating Authority was directed to admit the section 7 applications and pass consequential orders.

Proceeds of crime - transactions made through warehouse receipts without physical movement of the goods - criminal activity relating to a scheduled offence - foundational facts required for establishing an offence - Exoneration in scheduled offence investigation - Statement of co-accused - Prima facie case for trial - Abuse of process.

Independent offence of money-laundering - Proceeds of crime - Exoneration in scheduled offence investigation - HELD THAT: - The Court held that an offence under Section 3 of the PMLA is independent and it is not mandatory that the accused must also be an accused in the scheduled offence. However, the sine qua non remains the existence of proceeds of crime derived from criminal activity relating to a scheduled offence and the accused's involvement in a process or activity connected therewith. In the present case, the very letters of credit and the petitioner's role therein had already been investigated in the predicate case, and the investigating agency in that case concluded that the petitioner was not a beneficiary and that diversion of funds by the petitioner was not established. Since the PMLA case proceeded on the same factual premise, and no independent material showed that the amounts received by the petitioner were tainted proceeds of crime, the petitioner could not be proceeded against for money-laundering on a notional or assumptive basis. [Paras 14, 16, 17, 18, 19]

On the materials noticed by the Court, the essential link between the petitioner and proceeds of crime was not prima facie established, and the PMLA prosecution against the petitioner was held unsustainable.

Statement of co-accused - Prima facie case for trial - HELD THAT: - The Court found that the Enforcement Directorate had primarily relied on the statement of the co-accused recorded under Section 50 of the PMLA. Such a statement, by itself, could not form the foundation of the prosecution and could at best lend support to other evidence. The Court further noted that the petitioner's transactions, conducted through warehouse receipts, could not prima facie be treated as mere paper transactions; that the alleged intermediary entity had not been arraigned as an accused either in the predicate case or in the money-laundering case; and that no independent material was shown to support the allegation that the petitioner was a beneficiary. Applying the test that even at the stage of charge there must exist some material capable of translating into evidence and giving rise to a strong suspicion, the Court concluded that the available material did not make out a case for the petitioner to stand trial. [Paras 13, 15, 20, 21, 22]

The Court held that continuation of the proceedings against the petitioner would amount to abuse of process, and the money-laundering case was liable to be quashed insofar as the petitioner was concerned.

Final Conclusion: The revisional application was allowed and the money-laundering case was quashed insofar as the petitioner was concerned. The Court held that, on the material placed, no prima facie case of involvement in proceeds of crime was made out against the petitioner, though the proceedings were directed to continue against the remaining accused.

Maintainability of writ petition challenging a provisional attachment under the PMLA - Premature attachment before the adjudicating authority passed an order under Section 8 - HELD THAT: - The Court found that the impugned attachment was only a provisional measure under Section 5(1) of the PMLA. It held that the enforceable right to challenge the attachment arises only after the adjudicating authority passes an order under Section 8. Since the petition sought to nullify the provisional attachment at that anterior stage, the Court declined to exercise writ jurisdiction. [Paras 4, 5]

The writ petition was dismissed as premature, with liberty reserved to the petitioners to challenge the order that may be passed by the adjudicating authority in accordance with law.

Final Conclusion: The Court dismissed the writ petition on the ground that the impugned order was only a provisional attachment under the PMLA and that the challenge could be raised only after the adjudicating authority passed an order under Section 8.

Cenvat credit on running account bills - Suppression of facts - Intent to evade tax - Reverse charge mechanism - Substantial compliance with prescribed documents - Extended period of limitation - Suppression of facts.

Whether Cenvat credit can be availed based on running account bills/measurement books? - HELD THAT: - The Tribunal held that service tax paid under reverse charge through GAR-7 challans was supported by a prescribed document under Rule 9(1) of the Cenvat Credit Rules, 2004, and the impugned order had given no specific finding to deny such credit. As regards running account bills, the Tribunal found that, read with the payment orders, they contained the material particulars relating to the service provider, service recipient, description of service, registration particulars and tax amount. Since receipt of input services and payment of service tax were not in dispute, credit could not be denied merely on documentary or nomenclature-based technicalities. The Tribunal applied the principle that where substantial particulars are available and the transactions are genuine, procedural infirmity in the form of the document does not defeat substantive entitlement to credit. [Paras 7, 8, 9]

The denial of credit for the normal period was unsustainable, and the credit on GAR-7 challans as well as on running account bills read with payment orders was allowed.

Extended period of limitation - Wilful suppression - Self-assessment - Audit objection - HELD THAT: - The Tribunal found that the appellant was registered, had filed ST-3 returns regularly disclosing the availment of Cenvat credit, and had furnished details during audit. It held that detection during audit and the fact that the assessee functioned under self-assessment were, by themselves, insufficient to attract the extended period. The Revenue had produced no evidence of fraud, wilful misstatement or suppression with intent to evade tax; and, the appellant being a state instrumentality, the allegation of suppression or fraud was held unsustainable in the facts noticed by the Tribunal and in its earlier orders in the appellant's own case. [Paras 6]

The demand for the extended period was held unsustainable.

Final Conclusion: The Tribunal held that the extended period of limitation was not available to the Revenue and that the credit availed on GAR-7 challans as well as on running account bills read with payment orders was admissible. The impugned order was therefore set aside and the appeal was allowed with consequential relief.

Relegation to show-cause notice stage - Ex parte adjudication - Dismissal of the appeal solely on limitation - Doctrine of merger - Validity of the Order-in-Original - demand of Service Tax initiated on the basis of inputs received from the Central Board of Direct Taxes -HELD THAT:- The Court found that the appellate order had dismissed the appeal solely as time barred and had not entered upon the merits. On that basis, it held that there was no merger of the Order-in-Original with the appellate order. The adjudication order was also found to be ex parte, since no written reply had been filed by the petitioner. Following the course adopted in the earlier order in M/S KARNATAKA CHINMAYA SEVA TRUST [2024 (9) TMI 64 - KARNATAKA HIGH COURT] and connected petitions, the Court set aside the Order-in-Original and remitted the matter to the stage of reply to the show cause notice, directing the authority to keep in view the observations extracted from that earlier order, while leaving all contentions open. [Paras 8, 11]

The Order-in-Original was set aside and the matter was remitted to the show cause notice stage for fresh adjudication after permitting the petitioner to file a reply.

Final Conclusion: The writ petition was disposed of by setting aside the ex parte Order-in-Original and remitting the matter for fresh consideration from the stage of reply to the show cause notice. Since the statutory appeal had been dismissed only on limitation, the Court held that the original order did not merge in the appellate order, and all merits were left open.

Relegation to show-cause notice stage - Ex parte adjudication - Failure to consider applicable service tax exclusions and defences - Validity of the Order-in-Original - HELD THAT: - The Court noted that, in identical matters in M/S KARNATAKA CHINMAYA [2024 (9) TMI 64 - KARNATAKA HIGH COURT], it had already directed reconsideration where service tax proceedings had been initiated on the basis of declarations in income-tax returns, while requiring the authorities to examine the relevant statutory exclusions, exemptions, reverse-charge liability and limitation. Since the impugned order had been passed ex parte and the petitioner sought an opportunity to place material and answer the show-cause notice, the same course was adopted. The Court did not adjudicate the merits and directed that all contentions remain open, with the authority to reconsider the matter in light of the earlier observations as applicable. [Paras 6]

The Order-in-Original was set aside and the matter was remitted to the show-cause notice stage, permitting the petitioner to file a fresh reply and requiring the authority to reconsider the case keeping the earlier observations in view.

Final Conclusion: The writ petition was disposed of by setting aside the impugned Order-in-Original and remitting the matter for fresh adjudication from the stage of reply to the show-cause notice. No view was expressed on the merits, and all contentions were kept open.

Validity of the service tax adjudication and the appellate order - Ex parte adjudication -Fresh consideration of show-cause notice -Service tax proceedings based on income-tax return inputs- HELD THAT: - The Court noticed that the adjudication relating to service tax had proceeded on the basis of inputs received from the Central Board of Direct Taxes and that the proceedings before the adjudicating authority had gone ex parte in the absence of any reply to the notice or participation in personal hearing. It further took note that, in an earlier order passed in M/S KARNATAKA CHINMAYA SEVA TRUST [2024 (9) TMI 64 - KARNATAKA HIGH COURT], in an identical factual matrix, such matters had been remitted for fresh consideration so that the competent authority could examine the assessee's contentions on taxability, exclusion, exemption, liability and limitation at the post show-cause notice stage. Following the same course, the Court did not adjudicate the merits of the service tax demand, but directed restoration of the matter to the stage of reply to the show-cause notice, with all contentions left open. [Paras 4, 8, 9]

The order-in-original and the order-in-appeal were set aside, and the matter was remitted to the stage of reply to the show-cause notice for fresh consideration in light of the earlier order in the identical factual matrix.

Final Conclusion: The writ petition was disposed of by setting aside both the appellate and original service tax orders and remitting the matter for fresh consideration from the show-cause notice stage. A copy of the show-cause notice was directed to be furnished, and all contentions were kept open.

Entitlement to 67% abatement under Notification No. 1/2006-ST - construction and works contract services, despite not claiming the abatement in the ST-3 returns -Excess tax payment​​​​​​​ - Substantive benefit not deniable for non-claim in returns- Penalty for non-filing of ST-3 returns.

Abatement on composite construction service - Substantive benefit not deniable for procedural lapse - Service tax demand - Penalty under Section 78 -HELD THAT: - The Tribunal recorded that the use of materials in rendering the construction and works contract services was an admitted fact and had also been noticed by the adjudicating authority in the impugned order. Once that factual basis stood accepted, denial of abatement under Notification No. 1/2006-ST solely because the appellant had not claimed it in the returns was held to be unjustified. The Tribunal applied the principle that a substantive benefit cannot be refused for a minor procedural lapse and that the proper officer is required to determine the correct tax liability after considering the abatement legally available. On recalculation after allowing 67% abatement, the tax payable for the disputed period was found to be lower than the service tax already paid by the appellant; consequently, the confirmed demand with interest was held unsustainable. Since the tax demand itself did not survive, the penalty imposed under Section 78 also could not be sustained. [Paras 6, 7, 8]

The demand of service tax with interest was set aside, and the penalty under Section 78 was also set aside.

Penalty for non-filing of ST-3 returns - HELD THAT: - While setting aside the tax demand and the consequential penalty under Section 78, the Tribunal made it clear that the separate penalty imposed for non-filing of ST-3 returns for the specified periods was unaffected by that finding and was therefore maintainable. [Paras 8, 9]

The penalty imposed under Section 77(2) read with Rule 7C for non-filing of ST-3 returns for 2011-12 and 2012-13 was upheld.

Final Conclusion: The Tribunal held that the appellant was entitled to the 67% abatement on the composite construction and works contract services and, after such abatement, no further service tax demand survived. The demand with interest and the penalty under Section 78 were set aside, but the separate penalty for non-filing of ST-3 returns was upheld.

Duty demand - Claim based on actual production and clearances - Statutory records in departmental custody - Abatement of duty - Determination under compounded levy scheme - HELD THAT: - The Tribunal found that the adjudicating authority had recorded no finding disputing the correctness of the production and clearance figures furnished by the appellant for the period under dispute. It noted that the appellant had placed on record the statement of production, clearances and duty paid, and that these figures were not shown to be false. The Tribunal further held that RT-12 returns, duty payment challans and other statutory records for the relevant period were documents available with the department itself; hence, there was no justification for rejecting the claim solely on the ground that the appellant did not produce those records. On that basis, the details of actual production and clearances furnished by the appellant were accepted, and since duty had already been paid on that basis, no further liability survived. [Paras 11, 12]

The demand was unsustainable, as no further central excise duty was payable for the period from 01.04.1998 to 31.03.2000.

Final Conclusion: The Tribunal held that, in the absence of any finding discrediting the appellant's disclosed figures of actual production and clearances, the demand could not be sustained by insisting upon statutory records that were available with the department itself. The impugned demand was therefore set aside and the appeal was allowed with consequential relief.

Demand under Rule 6 on the value of electricity wheeled out to the sister concern and the electricity distribution company - Proportionate reversal of CENVAT credit- Reversal treated as non-availment of credit -Rule 6 demand on electricity wheeled out - HELD THAT: - The Tribunal held that the controversy stood covered by the principle that reversal of credit amounts to non-availment of credit. Following the earlier orders in the appellant's own cases [2026 (1) TMI 951 - CESTAT NEW DELHI], [2025 (11) TMI 1694 - CESTAT NEW DELHI], [2020 (10) TMI 376 - CESTAT NEW DELHI] and the decisions in Chandrapur Magnets Private Limited versus Collector of Central Excise, Nagpur [1995 (12) TMI 72 - SUPREME COURT] and Commissioner of Central Excise and Customs versus Precot Meridian Limited [2015 (11) TMI 323 - SUPREME COURT], it held that once the proportionate CENVAT credit attributable to electricity sold or wheeled out had been reversed, no further amount was payable under Rule 6 on the value of such electricity. The Revenue's attempt to distinguish the earlier decisions on the ground that Rule 14 had been invoked was rejected, as the Tribunal found that those decisions rested on the settled jurisprudential principle regarding effect of reversal and not merely on absence of a recovery provision. The reliance placed by the Revenue on Commissioner of Central Excise, Thane-I versus Nicholas Piramal (India) Limited [2009 (8) TMI 224 - BOMBAY HIGH COURT] was also not accepted in view of the Tribunal's earlier view that the said decision related to the unamended position and had no bearing after the amendment to the CENVAT Credit Rules, 2004. [Paras 8, 9, 10, 11]

The impugned order was held unsustainable and the three appeals were allowed.

Final Conclusion: Following the settled principle that proportionate reversal of CENVAT credit is equivalent to non-availment, the Tribunal held that no Rule 6 demand could survive in respect of electricity wheeled out after such reversal. The impugned order was therefore set aside and all three appeals were allowed.

Denial of CENVAT credit based solely on the statements of vehicle owners or transporters - No opportunity to cross-examination - absence of corroborative evidence - breach of natural justice - HELD THAT: - The Tribunal found that the allegation of non-receipt of inputs was founded solely on statements of vehicle owners or authorised persons said to relate to transportation of the goods. Since those statements formed the basis of the case and there was no independent corroborative material on record, the appellant was entitled to cross-examine the makers of those statements. The Tribunal accepted the objection that, in the absence of such cross-examination, the statements could not be relied upon, and held that the adjudication suffered from breach ofnatural justice. [Paras 6, 7, 8, 9, 10]

The impugned order was set aside and the matter was remanded to the adjudicating authority to permit cross-examination of the vehicle owners or authorised persons whose statements were relied upon and thereafter pass a fresh order.

Final Conclusion: The Tribunal held that the adjudication was vitiated by denial of cross-examination of the witnesses whose statements alone were relied upon. The order denying credit, with interest and penalty, was therefore set aside and the matter was remanded for fresh adjudication after permitting such cross-examination.

Demand based on trading allegation - Clearance of cenvat-availed granules to the job worker for conversion into PPCP containers, after reversal of credit under Rule 3(5) - trading of goods - Extended period of limitation - suppression or intent to evade duty​​​​​​​.

Removal of inputs as such - Job work conversion - Cenvat credit reversal - HELD THAT: - The Tribunal held that Rule 3(5) required reversal of the credit availed when the inputs were removed as such, and there was no dispute that the appellant had reversed such credit while sending the granules to the job worker. On the facts found, the granules were not cleared as traded goods but only for conversion into PPCP containers, which were thereafter received and used in manufacture of dutiable batteries. The premise adopted by the Department that the transaction was one of trading was therefore unsustainable, and in the absence of any such trading activity, no contravention was made out. [Paras 10]

The demand was held unsustainable on merits and the impugned order was set aside on this ground.

Extended period of limitation - Suppression of facts - HELD THAT: - The Tribunal found that the clearances and reversals had been properly reflected in the monthly returns and that the quantum of credit reversed was not in dispute. In these circumstances, the Revenue had not produced any proper evidence of suppression or intent to evade duty. The condition necessary for invoking the extended limitation period was therefore absent, and the notice issued for the period in dispute was barred by limitation. [Paras 11]

The confirmed demand was also set aside on the ground of limitation.

Final Conclusion: The Tribunal allowed the appeal and set aside the impugned order. It held that reversal of credit on clearance of granules to the job worker satisfied Rule 3(5), the transaction was not trading, and the demand was in any event barred for want of any proved suppression.

National Green Tribunal (‘NGT’) concerning environmental compliances by the Bhopal Municipal Corporation under the Solid Waste Management Rules, 2016 (“SWM Rules, 2016”) -Right to clean and healthy environment - Implementation of Solid Waste Management Rules, 2026 - Legacy Waste Management -Environmental compliance and executive directions -Public Duty to Protect the Environment - Right guaranteed under Article 21 of the Constitution of India​​​​​​​ - HELD THAT: - The Court held that the right to a clean and healthy environment forms an inseparable part of Article 21, and that persistent gaps in solid waste management require immediate institutional preparation before the 2026 Rules come into force. Noting that the new Rules, framed under the Environment (Protection) Act, 1986, provide a comprehensive statutory framework, the Court considered that implementation could not be left to fragmented local responses and required coordinated action across the country. On that basis, it issued binding directions for a multi-level enforcement and monitoring structure, including the role of elected local representatives in source-segregation awareness, infrastructure audits through District Collectors, oversight by Pollution Control Boards, communication of obligations to bulk waste generators, inclusion of waste management in school curricula, translation and dissemination of citizen-facing requirements, and a tiered enforcement mechanism for non-compliance. The Court also directed the setting up of monitoring task forces and filing of compliance affidavits to ensure readiness before the effective date of the 2026 Rules, while clarifying that legacy and other pending issues under the 2016 Rules would continue before the NGT. [Paras 10, 14, 15, 17, 18]

Nationwide preparatory and enforcement directions were issued to secure effective implementation of the Solid Waste Management Rules, 2026, with continued adjudication by the NGT of pending matters under the 2016 Rules.

Final Conclusion: The appeals were disposed of by issuing comprehensive pan-India directions for institutional, infrastructural and enforcement readiness under the Solid Waste Management Rules, 2026. Insofar as Bhopal Municipal Corporation was concerned, limited additional time was granted to complete the tender process relating to legacy waste at the Adampur Chawni dumpsite.

Validity of the impugned order, passed by a successor Additional Commissioner without the petitioner's personal hearing and without available hearing notes of the predecessor officer - Violation of principles of natural justice - Maintainability of writ despite alternative remedy - HELD THAT: - The Court found that the personal hearing had been granted by one officer, whereas the impugned order was passed after his transfer by another officer of the same rank. The respondents were unable to satisfy the Court that any hearing notes of the earlier officer were available to the incumbent officer for consideration. On that factual position, the Court held that the order had been passed in breach of the principles of natural justice, since hearing by one officer and decision by another rendered the hearing meaningless. The Court further held that, where the impugned order itself is vitiated by violation of natural justice, the rule of alternative statutory remedy does not operate as a bar to exercise of writ jurisdiction. The matter was therefore directed to be reconsidered afresh, with liberty to the petitioner to appear and file written submissions, and with a further direction that the respondent should consider the request for supply of documents while dealing with the claim afresh. [Paras 6, 9, 11, 12, 13]

The writ petitions were entertained and allowed; the impugned order was set aside and the matter was directed to be considered afresh after giving the petitioner an opportunity to appear and pursue its request regarding documents.

Final Conclusion: The Court held that the impugned order was vitiated by breach of natural justice because the officer who decided the matter had not granted the personal hearing. Since such violation was established, the writ petitions were maintainable notwithstanding the alternative remedy, and the matter was directed to be reconsidered afresh.