TaxTMI Updates e-Newsletter
May 30,2019

Extension of time for filing Form GST-TRANS-I - input tax credit - direction to decide representation expeditiously

Extension of time for filing Form GST-TRANS-I - input tax credit - direction to decide representation expeditiously - Prayer for extension of time to submit Form GST-TRANS-I electronically to avail Input Tax Credit was not granted on merits but the petitioner was directed to prefer a representation and the respondents were directed to consider and decide it expeditiously. - HELD THAT: - The Court, after hearing counsel and having regard to the facts and Annexure 3, did not itself extend the statutory time for submission of Form GST-TRANS-I. Instead, the petitioner was directed to place its request by way of representation before the Goods & Service Tax Council and the State Nodal Officer. The respondents are required to consider and decide the representation in accordance with law and to communicate their decision as early as possible and practicable, preferably within four weeks from receipt of the representation. The order records the exercise of supervisory jurisdiction limited to directing expeditious consideration rather than adjudicating the substantive entitlement to the extension or the Input Tax Credit. [Paras 1, 2, 3]

Petition disposed of with direction to the petitioner to submit a representation to the GST Council and State Nodal Officer and with a direction to the respondents to decide the representation in accordance with law preferably within four weeks.

Final Conclusion: Writ petition disposed of; petitioner to prefer representation seeking extension for filing Form GST-TRANS-I and respondents to decide the representation in accordance with law, preferably within four weeks.

Summary order. The special leave petition SLP(Crl.) No. 4430/2019 is dismissed; pending interlocutory applications, if any, are disposed of; connected matters are listed on 29.5.2019.

Revision of FORM GST TRAN-1 - extension of time under Rule 120A of the CGST Rules, 2017 - competence of the Commissioner to extend time - electronic credit ledger - CENVAT credit claimed as input tax credit

Revision of FORM GST TRAN-1 - CENVAT credit claimed as input tax credit - electronic credit ledger - Effect of omission in the original TRAN-1 and entitlement to submit a revised TRAN-1 declaration - HELD THAT: - The petitioner had filed FORM GST TRAN-1 within the prescribed time but inadvertently omitted the amount of CENVAT credit admissible as input tax credit, resulting in non-reflection of that credit in the electronic credit ledger. Rule 120A permits a registered dealer to revise a TRAN-1 declaration once within the specified period or any further period extended by the Commissioner. The Court recorded these facts and accepted that, if the time for revision is extended by the competent authority, the petitioner would submit the revised FORM GST TRAN-1 to reflect the omitted credit.

The petitioner may submit the revised FORM GST TRAN-1 if the time for revision is validly extended.

Extension of time under Rule 120A of the CGST Rules, 2017 - competence of the Commissioner to extend time - Competent authority to grant extension for submitting a revised TRAN-1 and directions for disposal of the pending application - HELD THAT: - Rule 120A contemplates that any further period for submitting a revised TRAN-1 may be extended by the Commissioner. Consequently, an application seeking extension for submitting a revised TRAN-1 cannot be determined by a subordinate authority but must be considered by the Commissioner. The petitioner had filed an application before the Nodal Officer; the Court directed that the Commissioner call for that application and decide it in accordance with law. The Court prescribed an expeditious timeline, requesting that, if possible, the Commissioner dispose of the application within one month from production of a certified copy of the order.

The Commissioner is directed to consider and pass appropriate orders on the petitioner's application for extension of time for submitting the revised FORM GST TRAN-1, expeditiously and, if possible, within one month of production of a certified copy of this order.

Final Conclusion: The petition is disposed of by directing the Commissioner to call for the application already submitted by the petitioner before the Nodal Officer and to decide the request for extension of time to submit the revised FORM GST TRAN-1 in accordance with law, expeditiously and, if possible, within one month of production of a certified copy of this order; upon such extension the petitioner shall submit the revised declaration.

Jurisdiction of High Court after transfer of cases under Section 127 of the Income Tax Act - territorial jurisdiction based on situs of the assessing officer - binding precedent

Jurisdiction of High Court after transfer of cases under Section 127 of the Income Tax Act - territorial jurisdiction based on situs of the assessing officer - binding precedent - Whether the High Court could entertain the Revenue's appeal in respect of the assessment for Assessment Year 2008-09 notwithstanding the transfer of the assessee's cases - HELD THAT: - The Court applied its prior decision in CIT v. Aar Bee Industries, which holds that where cases are transferred, the territorial jurisdiction for challenging assessment or related orders lies with the High Court within whose jurisdiction the situs of the officer who passed the order is located. That principle is determinative here and is contrary to the view taken by the Punjab and Haryana High Court in a related matter; although that contrary view is the subject of a Special Leave Petition to the Supreme Court, this Court remains bound by its own precedent. In consequence, the present appeal cannot be entertained by this Court and must be dismissed.

Appeal dismissed as not maintainable in this Court; applications dismissed.

Final Conclusion: The High Court, being bound by its earlier decision that territorial jurisdiction after transfer is determined by the situs of the officer who passed the order, dismissed the Revenue's appeal in respect of Assessment Year 2008-09 and refused the ancillary applications.

Validity of notice under Section 143(2) - Proviso to Section 143(2) - six months limitation on service of notice - Section 292BB - deemed service where assessee appears or cooperates - Non-curability of defective notice - Ex-parte assessment invalid if founded on defective notice

Validity of notice under Section 143(2) - Proviso to Section 143(2) - six months limitation on service of notice - Section 292BB - deemed service where assessee appears or cooperates - Non-curability of defective notice - Ex-parte assessment invalid if founded on defective notice - Notice under Section 143(2) served on 19.12.2017 (though dated 24.08.2017) was invalid as it was not served within six months from the end of the financial year in which the return was furnished, and the assessment founded on that notice was liable to be quashed. - HELD THAT: - The proviso to Section 143(2) prohibits service of the notice after expiry of six months from the end of the financial year in which the return is furnished. The e-Portal record reflected service on 19.12.2017 whereas the departmental speed post acknowledgement placed on record did not reliably establish earlier service; it lacked signature and date and was therefore of no avail. Section 292BB operates to deem notice as duly served only where the assessee has appeared in any proceeding or cooperated in any inquiry relating to assessment or reassessment; appearance or cooperation is a sine qua non for attracting Section 292BB. In the present case the assessment was concluded ex parte and the assessee neither appeared nor cooperated, hence Section 292BB is inapplicable. It is a settled principle that omission to issue a proper notice under Section 143(2) is not a curable procedural defect; a notice defective under the proviso goes to the root of the matter and any assessment predicated on such a notice cannot stand. Applying these principles, the impugned assessment order founded on the invalid notice must be quashed. [Paras 7, 8, 9, 10, 11]

The notice under Section 143(2) was invalid for being served beyond the statutory period and Section 292BB did not validate service; the assessment passed on that basis was quashed.

Final Conclusion: Writ petition allowed; the assessment order dated 19.12.2018 under Section 144 for Assessment Year 2016-17 is quashed as it was founded on a notice that was not validly served within the time prescribed and therefore not curable.

Unexplained investment under Section 69 - re-deposit of withdrawn cash - plausibility of explanation for cash deposits - burden of proof for unexplained cash deposits - concurrent findings of fact and appellate interference standard

Unexplained investment under Section 69 - re-deposit of withdrawn cash - plausibility of explanation for cash deposits - concurrent findings of fact and appellate interference standard - Whether the sum deposited in the assessee's bank account was rightly treated as unexplained investment under Section 69 and added to income. - HELD THAT: - The Assessing Officer found cash deposits of Rs.20,79,000/- in the relevant year and, not accepting the assessee's account that the amount represented cash withdrawn earlier for investment and later re-deposited, made an addition under Section 69. The reasons recorded by the authorities below included that the alleged cash was 8-9 months old when deposited, the deposits were made in staggered tranches, and despite the asserted availability of large cash balances the assessee had taken loans and made further withdrawals thereafter. The Tribunal affirmed the CIT(A)'s conclusion that the explanation was not plausible, observing that mere withdrawal earlier does not, without more, satisfactorily explain later deposits and that the totality of facts supported the authorities' view. The High Court examined the material and the concurrent findings of fact and concluded there was no illegality or perversity in those findings that would justify interference. No substantial question of law meriting reversal was shown to exist. [Paras 4, 5]

The addition under Section 69 was sustained; the concurrent findings of the authorities below were not interfered with and the appeal was dismissed.

Final Conclusion: The High Court dismissed the appeal against the Tribunal's order; the addition treating the deposited cash as unexplained investment under Section 69 for Assessment Year 2014-15 was upheld as reflecting non-perverse concurrent findings of fact.

Proper application of section 33AB(7) in adjudicating deduction claims - acquiescence by the revenue to tribunal orders - admission of an appeal for hearing on a question of law

Admission of an appeal for hearing on a question of law - dispensing with service of notice where respondent is represented - Admission of the revenue's intended appeal and directions for its hearing, and dispensation with notice of appeal - HELD THAT: - The Court examined procedural and factual features surrounding earlier proceedings, including the dismissal of a prior appeal on technical grounds and the revenue's failure to take steps to have that earlier appeal heard on merits. On that basis the Court concluded that the appeal should be admitted for determination on the legal question framed. The Court also dispensed with issuance and service of notice because the respondent was represented, and directed filing of informal paper books with specified timelines and listed the matter for hearing. These procedural directions were given to enable adjudication on the substantive legal question and to take into account the conduct of the revenue noted in the order.

Appeal admitted for hearing; notice dispensed with; directions issued for filing of paper books and listing for hearing.

Proper application of section 33AB(7) in adjudicating deduction claims - acquiescence by the revenue to tribunal orders - Whether the tribunal correctly applied section 33AB(7) of the Income Tax Act, 1961, to the facts of the case - HELD THAT: - The Court observed that the question whether section 33AB(7) was correctly applied by the tribunal has not been decided on merits by this Court. Given the prior dismissal of an earlier appeal on technical grounds and the revenue's lack of steps to pursue that appeal, the Court held that the revenue's conduct and possible acquiescence to existing tribunal orders are relevant considerations. The Court therefore admitted the appeal and directed that the question of law be heard on merits, expressly requiring that the hearing take into account the conduct of the revenue referred to in the order rather than deciding the substantive application of section 33AB(7) at this stage.

Substantive question remitted for hearing on merits; appeal to be decided on whether section 33AB(7) was properly applied, taking into account the revenue's conduct.

Final Conclusion: The High Court admitted the revenue's appeal and directed a full hearing on the legal question of whether section 33AB(7) was properly applied by the tribunal, while dispensing with formal service of notice due to respondent's representation and requiring compliance with directions for filing and listing; the substantive issue remains for determination on merits with the revenue's conduct to be taken into account.

Characterisation of asset as capital asset or stock-in-trade - relevance of book entries to tax characterisation - substance over form - holding period for long-term capital asset - indexation benefit for capital gains - taxability of capital receipt versus business income

Characterisation of asset as capital asset or stock-in-trade - relevance of book entries to tax characterisation - holding period for long-term capital asset - indexation benefit for capital gains - Whether the profit/loss on sale of the lands sold in the year relevant to A.Y. 2014-2015 is taxable as short-term capital gain/business income because the lands were shown as stock-in-trade and converted into capital asset on 06.04.2012, or as long-term capital gain/loss with indexation from original acquisition. - HELD THAT: - The Tribunal held that the true nature of the lands must be determined by substance and relevant facts, not merely by book entries. The lands fell within the area restricted by the Ministry of Defence Notification dated 11.11.2004, which barred construction; AHCL had ceased payments and obtained interim injunction proceedings culminating in events up to 2012, and the assessee derived agricultural income from the lands. Applying settled principles that book entries are not determinative and that where an asset ceases to partake of trading character it may be capital in nature, the Tribunal accepted authorities treating the original date of acquisition as the relevant date when the land in substance had the character of capital. The Tribunal further found that, alternatively, the grant of injunction in July 2009 and the surrounding events made clear that the land had ceased to be intended for trading purpose from that earlier date. On these findings, the period of holding for the lands exceeded thirty-six months measured from acquisition (or from the effective date when trading character ceased), so the transfers qualify as long-term capital transfers and are entitled to computation with indexation. The Assessing Officer's treatment treating the sale as short-term/business income and making addition was therefore incorrect and was set aside. [Paras 6, 7]

Assessee's claim that the lands were capital assets held for more than 36 months upheld; the addition treating the sale as short-term/business income deleted and long-term capital treatment with indexation accepted.

Final Conclusion: Appeal allowed: sale of the lands in question is treated as long-term capital transfers (period of holding exceeding 36 months or having ceased to be stock-in-trade earlier), book entries held not determinative, and the addition by the Assessing Officer treating the receipt as business income is deleted.

Penalty under section 271(1)(c) for furnishing inaccurate particulars of income - requirement of recording satisfaction for initiation of penalty proceedings - distinction between a bonafide/legal error and furnishing inaccurate particulars - change of charitable status consequent to amendment to section 2(15)

Requirement of recording satisfaction for initiation of penalty proceedings - penalty under section 271(1)(c) for furnishing inaccurate particulars of income - Whether penalty proceedings under section 271(1)(c) were validly initiated when the assessing officer did not record satisfaction in the assessment order but placed an entry on the order sheet - HELD THAT: - The Tribunal examined the assessment orders (original and post-remand) and noted that no satisfaction for initiation of penalty proceedings was recorded in either assessment order. The assessing officer relied on an order-sheet entry as recording of satisfaction, but the assessee was not made aware of initiation of penalty proceedings during the assessment proceedings. The Tribunal agreed with the view recorded by the CIT(A) that initiation of penalty must be properly reflected in the assessment order and that mere order-sheet entries, in the circumstances of this case, did not cure the procedural defect. On that basis the Tribunal found no infirmity in the appellate authority's conclusion to set aside the penalty on procedural grounds. [Paras 4]

The initiation of penalty proceedings was procedurally defective for want of recorded satisfaction in the assessment order; the view of the CIT(A) upholding deletion of penalty on this ground is upheld.

Distinction between a bonafide/legal error and furnishing inaccurate particulars - change of charitable status consequent to amendment to section 2(15) - penalty under section 271(1)(c) for furnishing inaccurate particulars of income - Whether the assessee furnished inaccurate particulars of income warranting penalty where the accumulated balance was shown in the return but became taxable due to an amendment to section 2(15) - HELD THAT: - The Tribunal noted that the assessee's audited accounts and return reflected the accumulated balance as on 31.03.2008, and that the characterisation of the entity changed as a result of an amendment to section 2(15) of the Act-an event beyond the assessee's control. The appellate authority had held, and the Tribunal agreed, that the claim by the assessee was an incorrect claim in law or a bona fide mistake rather than an act of furnishing inaccurate particulars or attempting to conceal income. Reliance was placed on the appellate authority's analysis and precedents cited therein to support the principle that merely making a claim subsequently found to be incorrect in law does not necessarily amount to furnishing inaccurate particulars. Given these circumstances, the Tribunal found no material to sustain levy of penalty under section 271(1)(c). [Paras 4]

The assessee did not furnish inaccurate particulars of income; the claim was a bona fide or debatable legal position arising from statutory amendment, and penalty under section 271(1)(c) is not warranted.

Final Conclusion: The appeal by the revenue is dismissed; the order of the CIT(A) deleting the penalty is affirmed and the penalty levied under section 271(1)(c) is set aside.

Reopening of assessment beyond four years - failure to make a full and true disclosure of material facts (first proviso to section 147) - reasons to believe - borrowed satisfaction - quashing of notice under section 148

Reopening of assessment beyond four years - failure to make a full and true disclosure of material facts (first proviso to section 147) - reasons to believe - Validity of reopening assessment under section 148/147 where original assessment under section 143(3) was completed and the first proviso to section 147 is attracted - HELD THAT: - The Tribunal found that the assessment for A.Y 2010-11 had been completed under section 143(3) and the reassessment notice was issued beyond four years, thereby invoking the first proviso to section 147. The reasons recorded by the Assessing Officer were examined and reproduced: they alleged receipt and return of a Rs. 50,00,000 donation from a named Kolkata society and linked that transaction to a wider alleged accommodation-entry scheme. However, the reasons recorded did not state or identify any specific material fact which the assessee had failed to disclose nor did they explain in what manner the assessee had omitted to make a full and true disclosure. The Assessing Officer himself recorded that the assessee had furnished its list of donations during assessment proceedings and that no donation from the named society appeared in the assessee's books, undermining the allegation of undisclosed cash payment by the assessee. Relying on the requirement that, where the first proviso applies, the recorded reasons must show how the assessee failed to disclose material facts (as emphasized by the Jurisdictional High Court in HCL Technologies and Unitech), the Tribunal concluded that the reasons did not meet the jurisdictional threshold to sustain reopening. Consequently the belief recorded was not valid for reopening the assessment under section 147/148. [Paras 9, 11, 12]

Notice under section 148 and consequent reassessment are quashed for want of jurisdiction because the reasons recorded do not show failure to make a full and true disclosure of material facts.

Final Conclusion: The appeal is allowed: the notice for reopening under section 148 and the assessment order made thereunder for A.Y 2010-11 are quashed as the reasons recorded do not satisfy the first proviso to section 147; the addition made in reassessment need not be adjudicated.

Validity of penalty proceedings under section 271(1)(c) of the Income tax Act - Requirement and sufficiency of notice issued under section 274 read with section 271(1)(c) - Effect of non striking off inappropriate portions in a printed penalty notice - Doctrine that where two views are possible, the view favourable to the assessee shall be adopted

Validity of penalty proceedings under section 271(1)(c) of the Income tax Act - Requirement and sufficiency of notice issued under section 274 read with section 271(1)(c) - Effect of non striking off inappropriate portions in a printed penalty notice - Penalty levied under section 271(1)(c) is unsustainable where the show cause notice under section 274 is a printed form and the inappropriate portions were not struck off so as to specify the limb under which penalty was initiated. - HELD THAT: - The Tribunal found that the notices issued under section 274 read with section 271(1)(c) for the impugned years were printed forms in which inappropriate words were not struck off and the notices did not specify whether penalty proceedings were for concealment of particulars of income or for furnishing inaccurate particulars. Following the Tribunal's earlier decision in the assessee's own case for A.Y. 2009 10 and the principle in the decision relied upon (SSA's Emerald Meadows and the Division Bench precedent), the initiation of penalty proceedings became null and void when the notice failed to specify the charge. The Tribunal acknowledged contrary decisions of various High Courts and other Benches but held that, in absence of a contrary decision of the jurisdictional High Court and where two views are possible, the view favourable to the assessee must be followed. Applying that determinative reasoning to the facts, the Tribunal set aside the CIT(A)'s orders and directed cancellation of the penalties for the stated assessment years. [Paras 14, 15, 16]

Penalty under section 271(1)(c) deleted for A.Y. 2008 09, A.Y. 2010 11 and A.Y. 2011 12 because the section 274 notices were defective (printed forms with inappropriate words not struck off) and did not specify the limb of section 271(1)(c) relied upon.

Final Conclusion: All three appeals are allowed and the penalties imposed under section 271(1)(c) for A.Y. 2008 09, A.Y. 2010 11 and A.Y. 2011 12 are quashed because the section 274 notices were defective for not specifying the limb of section 271(1)(c).

Initiation of assessment proceedings under section 153C - Validity of search and seizure under section 132 - Ex parte assessment under section 144 - Remand for fresh adjudication of additions

Initiation of assessment proceedings under section 153C - Validity of search and seizure under section 132 - Whether initiation of assessment proceedings under section 153C in the assessment years was sustainable - HELD THAT: - The CIT(A) examined the search records and bank statements revealed during the search under section 132 and found that incriminating information had been obtained from the assessee's bank statements. On that basis the CIT(A) confirmed the initiation of assessment proceedings under section 153C for the relevant assessment years. The Tribunal records those findings and treats the question of jurisdiction as considered and confirmed by the first appellate authority. [Paras 3, 18]

The initiation of assessment proceedings under section 153C in the assessment years is upheld as having been properly initiated in view of incriminating material in the search records.

Ex parte assessment under section 144 - Remand for fresh adjudication of additions - Whether the additions made by the Assessing Officer were to be adjudicated on merits or remitted for fresh consideration - HELD THAT: - The Assessing Officer's orders in the assessment years were passed ex parte under section 144 and the CIT(A) did not adjudicate the substantive additions on merits. Given the absence of adjudication on merits by the lower authorities and the ex parte nature of the assessment, the Tribunal directed that the additions for all three assessment years be remitted to the file of the Assessing Officer for fresh consideration. The Tribunal therefore did not decide the merits of the additions but required fresh adjudication by the Assessing Officer. [Paras 18, 19]

Additions are remitted to the Assessing Officer for fresh consideration in all three assessment years; appeals are partly allowed for statistical purposes.

Final Conclusion: The Tribunal upheld the initiation of assessment proceedings under section 153C (finding incriminating material in search records) but remitted the substantive additions in assessment years 2004-05, 2005-06 and 2007-08 to the Assessing Officer for fresh adjudication because the assessments were passed ex parte and the CIT(A) did not decide the merits; appeals are partly allowed for statistical purposes.

Retrospective application of administrative circular - recall of appellate order - preclusion of revenue from pursuing appeal based on tax-effect threshold - exception for information from law-enforcement agencies

Retrospective application of administrative circular - recall of appellate order - Miscellaneous application by the revenue to recall the ITAT order dated 10.08.2018 in ITA No.1707/M/2018 in light of an amendment to CBDT Circular No.3/2018. - HELD THAT: - The ITAT had dismissed the revenue's appeal on 10.08.2018 by applying CBDT Circular No.3/2018 which precluded the revenue from pursuing appeals where the tax effect was below the specified threshold. The CBDT subsequently amended paragraph 10 of the circular on 20.08.2018 to exclude cases where additions were based on information from specified law-enforcement agencies. The Amendment came into effect after the ITAT's order. The Tribunal held that the amendment is not retrospective and therefore cannot be invoked to reopen or recall an order already pronounced on 10.08.2018. In these circumstances the original decision applying the circular was held to be judicious and not liable to recall.

Miscellaneous application dismissed; ITAT order dated 10.08.2018 shall not be recalled.

Final Conclusion: The miscellaneous application filed by the revenue seeking recall of the ITAT order dated 10.08.2018 is dismissed because the subsequent amendment to CBDT Circular No.3/2018 is not retrospective and cannot be applied to reopen an order already pronounced.

Weighted deduction under section 35(1)(ii) - genuineness of donation - onus on the assessee to prove genuineness - fictitious bank account / sham transaction - verification by investigation wing - assessment under section 143(3) - remand for verification

Weighted deduction under section 35(1)(ii) - genuineness of donation - onus on the assessee to prove genuineness - fictitious bank account / sham transaction - verification by investigation wing - Whether the donation claimed by the assessee was actually received by the donee and supported by valid evidence so as to entitle the assessee to weighted deduction under section 35(1)(ii) for AY 2011-12 - HELD THAT: - The Tribunal upheld the findings of the Assessing Officer and the CIT(A) that the alleged donation of Rs.25,00,000/- was deposited into an Axis Bank account which, on departmental verification, was found not to belong to the real society and was opened with forged documents. The investigation by the ADIT (Inv.) established that the real society had no Axis Bank account and that the Axis Bank account was fraudulently opened and used by third parties; parallel inquiries by police and RBI were underway. The assessee did not produce evidence that the donee had received the donation or that the funds were remitted to the bona fide account of the society; the society when examined denied holding the Axis Bank account. Given these findings, the Tribunal accepted that the transaction was prima facie sham and incomplete, and that mere passage of funds through banking channels does not, without more, establish genuineness. The Tribunal applied the legal principle that the onus lies on the claimant of the deduction to prove, beyond doubt, the genuineness of the donation; in the absence of confirmation or documentary proof that the donee received the donation, the claim for weighted deduction could not be allowed. The directions previously issued for verification were held to have been complied with and the investigative report was treated as determinative on the factual issue of receipt by the donee. [Paras 6, 8, 9]

The disallowance of the weighted deduction claimed under section 35(1)(ii) was confirmed as the donation was not shown to have been received by the donee and the transaction was held to be sham.

Final Conclusion: The appeal is dismissed; the Tribunal affirms the disallowance of the weighted deduction under section 35(1)(ii) for AY 2011-12 because the alleged donation was not received by the bona fide donee and the claim was not substantiated.

Revisionary jurisdiction under section 263 - limited scrutiny under CASS / notice under section 143(2) - conversion of limited scrutiny into complete scrutiny with Pr. CIT approval - order erroneous and prejudicial to the interest of the revenue - payment of on money in property transactions - burden on Revenue to prove taxable receipt

Limited scrutiny under CASS / notice under section 143(2) - conversion of limited scrutiny into complete scrutiny with Pr. CIT approval - revisionary jurisdiction under section 263 - order erroneous and prejudicial to the interest of the revenue - Validity of Pr. CIT's exercise of revisionary jurisdiction under section 263 where the assessment was framed after limited scrutiny and AO did not convert it into complete scrutiny - HELD THAT: - The Tribunal examined whether a limited scrutiny (CASS/notice under section 143(2)) can be expanded by the Assessing Officer without converting it into complete scrutiny with the approval of the Principal CIT, and whether the Pr. CIT could hold the assessment order erroneous and prejudicial on grounds outside the AIR-limited scope. Applying co-ordinate Bench authority (Sanjeev Kr. Khemka) and higher court principles, the Tribunal found that limited scrutiny cannot be expanded arbitrarily; if the AO after considering submissions does not find potential escapement necessitating conversion, the Pr. CIT cannot retrospectively treat the order as erroneous for matters beyond the limited scope. The Tribunal reviewed the assessment record and concluded that the AO had applied his mind and made conscious adjustments where warranted; therefore the Pr. CIT's setting aside of the assessment on the ground of inadequate inquiry was not justified and amounted to an impermissible replacement of the AO's view under section 263.

Pr. CIT's revision under section 263 quashed for lack of jurisdiction in treating the limited-scrutiny assessment as erroneous and prejudicial on matters beyond the scope of limited scrutiny.

Payment of on money in property transactions - burden on Revenue to prove taxable receipt - order erroneous and prejudicial to the interest of the revenue - Merits of the allegation of receipt of on money by the assessee in purchase of two shops from the builder - HELD THAT: - On the substantive contention that the assessee paid cash as 'on money', the Tribunal considered the DDIT (Inv.) information and the terms of the assessee's sale agreements. The inquiry showed that the agreements in the assessee's case recorded a rate of Rs. 26,000 per sq. ft., which was not lower than the rate used by the investigating authority to compute alleged on money; consequently there was no arithmetic basis to infer additional 'on money' in the assessee's transaction. The Tribunal also noted an appellate decision in favour of the seller on the same issue. Applying the principle that the Revenue bears the burden to prove taxable receipts, the Tribunal held that on the merits the revisionary direction to inquire afresh on on-money lacked foundation.

The on-money allegation did not sustain against the assessee on the facts and law; this reinforced the view that the revisionary order was without jurisdiction and must be quashed.

Final Conclusion: The Tribunal allowed the appeal, quashed the Pr. CIT's order under section 263 as beyond jurisdiction in a case selected for limited scrutiny and, on merits, found no basis for treating the assessee's purchase price as containing undisclosed 'on money'.

Revisionary jurisdiction under section 263 of the Income tax Act - erroneous order prejudicial to the interests of the Revenue - reopening under section 147 of the Income tax Act

Revisionary jurisdiction under section 263 of the Income tax Act - erroneous order prejudicial to the interests of the Revenue - reopening under section 147 of the Income tax Act - Validity of exercise of revisionary jurisdiction under section 263 in respect of assessment for A.Y. 2008-09 - HELD THAT: - The Tribunal held that the Principal Commissioner wrongly invoked section 263 to set aside the assessment. The Assessing Officer had issued specific enquiries (including a notice under section 142(1)) and called for documentary evidence regarding the foreign investor and share issue, and the assessee furnished detailed submissions and supporting documents which the AO considered before passing the assessment order. Applying the settled tests in Max India Ltd. and Malabar Industrial Co. Ltd., exercise of jurisdiction under section 263 requires that the order sought to be revised be both erroneous and prejudicial to the interests of the Revenue. A difference of opinion between the Commissioner and the Assessing Officer, or the Commissioner being dissatisfied with the extent of enquiries, does not by itself establish that the AO's order is erroneous and prejudicial. On the facts, the AO had conducted inquiries and taken a view open to him; there was no demonstration that the order was legally unsustainable or caused prejudice to revenue. Accordingly, the revision was not justified.

Order under section 263 set aside and the assessee's appeal allowed.

Final Conclusion: The Tribunal allowed the appeal, setting aside the Principal Commissioner's order under section 263 for A.Y. 2008-09 on the ground that the assessment order was not shown to be erroneous and prejudicial to the interests of the Revenue.

Approval under section 80G(5) - Registration under section 12AA as a conclusive premise for charitable status - Examination restricted to the objects of the trust for grant of 80G approval - Prohibition on re-probing objects of a trust after registration under section 12A/12AA

Approval under section 80G(5) - Registration under section 12AA as a conclusive premise for charitable status - Examination restricted to the objects of the trust for grant of 80G approval - Validity of rejection of the assessee's application for approval under section 80G(5)(vi) on the ground that the society was not engaged in charitable activities despite continuing registration under section 12AA. - HELD THAT: - The Tribunal found that the ld. CIT(Exemptions) rejected the 80G(5) application on the basis that the society was not engaged in charitable activity and had not worked towards the objects in its memorandum. The assessee, however, holds continuing registration under section 12AA(1)(b)(i). The Tribunal applied the settled principle that at the stage of granting approval under section 80G the primary inquiry is the object of the trust, and that factual aspects relating to income can be examined by the assessing officer at assessment proceedings. The Tribunal relied on precedent holding that once registration under section 12A/12AA is granted it is a fait accompli and the income-tax authorities cannot undertake a fresh probe into the objects to refuse statutory benefits. Accordingly, rejection of the 80G(5) application on the stated ground was not sustainable. [Paras 5, 6, 7, 8]

Rejection of the application for approval under section 80G(5)(vi) on the ground that the society was not engaged in charitable activities was set aside.

Approval under section 80G(5) - Prohibition on re-probing objects of a trust after registration under section 12A/12AA - Remand for readjudication of the assessee's request for approval under section 80G(5)(vi). - HELD THAT: - In view of the conclusion that registration under section 12AA continues and that the 80G inquiry is confined to the trust's objects, the Tribunal directed that the matter be set aside and restored to the file of the ld. Commissioner of Income-tax (Exemptions) for readjudication of the 80G(5) application in accordance with law. The Tribunal did not finally grant 80G approval itself but required the authority to reconsider the application consistent with the legal principles identified. [Paras 9]

Matter remitted to the ld. Commissioner of Income-tax (Exemptions) for readjudication of the application for approval under section 80G(5)(vi) as per law.

Final Conclusion: The order of the ld. CIT(Exemptions) refusing approval under section 80G(5)(vi) was set aside; the matter is remitted to the ld. Commissioner of Income-tax (Exemptions) for fresh adjudication of the 80G(5) application in accordance with law, and the appeal is allowed for statistical purposes.

Short-term capital gains under section 50 - block of assets - written down value - depreciable asset versus income from house property - date of actual use for claiming depreciation

Short-term capital gains under section 50 - block of assets - written down value - depreciable asset versus income from house property - Excess sale consideration on sale of flats in Amarnath Towers is taxable as short-term capital gain under the machinery of section 50 as the depreciable block stood extinguished. - HELD THAT: - The Tribunal upheld the findings of the Assessing Officer and the CIT(A) that the flats sold were part of a depreciable block where depreciation had been claimed and the written down value of that block was low compared to sale consideration; once the assets on which depreciation was allowable are transferred and other properties (Namah bungalow and Lakhani Centrium) had not entered the block because income from them was offered as income from house property and no depreciation was ever claimed, the block is treated as extinguished. Applying the statutory scheme defining a block of assets and written down value, the excess of consideration over the WDV is to be treated as short-term capital gain under the non-obstante machinery of section 50. The Tribunal found the assessee's attempts to treat the other properties as part of the depreciable block to be unsustainable, including the contention that mere user or passive use would bring those properties into the depreciable block absent prior claim of depreciation. [Paras 4, 8, 11, 12]

Ground relating to short-term capital gain dismissed; excess sale consideration is hit by section 50.

Date of actual use for claiming depreciation - claim of depreciation and user - Depreciation claimed on Audi car in A.Y.2010-11 is allowable because the assessee proved delivery and first use in the relevant year; authorities below erred in disbelieving delivery without independent enquiry. - HELD THAT: - The Assessing Officer and CIT(A) doubted the genuineness of the delivery document because invoice and registration pre-dated the delivery challan, and adjusted the written down value accordingly. The Tribunal found that the lower authorities rejected the delivery evidence on mere surmise and conjecture without making enquiries from the dealer, despite the availability of a delivery checklist and other supporting documents. The Tribunal held that the authorities below thus acted without sufficient basis and that the assessee's evidence of first delivery/use on 19-06-2009 should have been accepted. On that basis the Tribunal set aside the orders below and decided the depreciation issue in favour of the assessee. [Paras 14, 16, 17]

Orders of authorities below set aside; depreciation claim on the car allowed in favour of the assessee.

Final Conclusion: Appeal partly allowed: the addition under section 50 on sale of Amarnath flats is sustained, while the disallowance/adjustment of depreciation on the car is set aside and the issue decided in favour of the assessee.

Confiscation under Section 111(d) of the Customs Act - redemption on payment of fine under Section 125 of the Customs Act - penalty under Section 112(a) of the Customs Act - no power to compel re-export as a condition for redemption - statutory authority's power exercisable only if conferred by the Act or Rules

Redemption on payment of fine under Section 125 of the Customs Act - no power to compel re-export as a condition for redemption - statutory authority's power exercisable only if conferred by the Act or Rules - Whether the adjudicating authority could make redemption of confiscated goods conditional upon their re-export. - HELD THAT: - The Tribunal correctly held that Section 125 must be read according to its statutory scope and that neither the Act nor the Rules confers on the adjudicating authority a power to compel the importer to re-export goods as a pre-condition for redemption. The court agreed that authorities and the Tribunal are creatures of statute and may exercise only such powers as are expressly or by necessary implication conferred; absent a specific provision authorising conditional redemption that mandates re-export, the condition directing re-export could not be sustained. The High Court limited its interference to setting aside the condition in the order-in-Original requiring re-export, endorsing the Tribunal's narrower conclusion and finding no substantial question of law warranting further interference under Section 130-A.

Condition in the adjudicating authority's order requiring re-export as prerequisite for redemption is set aside; Tribunal's conclusion on this point is upheld.

Redemption on payment of fine under Section 125 of the Customs Act - confiscation under Section 111(d) of the Customs Act - Whether the adjudicating authority may, after the Tribunal's deletion of the re-export condition, pass afresh an order refusing redemption. - HELD THAT: - The Tribunal did not consider nor decide whether the adjudicating authority, in the exercise of its powers, may revisit the question and refuse redemption altogether. The High Court declined to express any opinion on that question in proceedings under Section 130-A, observing it would be inappropriate to decide a matter not examined by the Tribunal. The court clarified that neither its order nor the Tribunal's would disable the adjudicating authority from exercising its statutory powers in accordance with law.

Left open for the adjudicating authority to consider and decide in accordance with law; no opinion expressed by this Court.

Final Conclusion: The petition is dismissed; the Tribunal's order holding that the adjudicating authority could not condition redemption upon re-export is upheld and the limited deletion of the re-export condition is confirmed, without preventing the adjudicating authority from exercising its powers afresh in accordance with law.

Authorized Courier - door-to-door delivery basis - obligations of an Authorised Courier - sub-contracting/outsourcing of functions - prior permission to outsource - prior intimation for non-core activities - expeditious clearance facility rationale

Authorized Courier - door-to-door delivery basis - obligations of an Authorised Courier - Entitlement of the petitioner to be regarded as an Authorized Courier under the Courier Imports and Exports (Clearance) Regulations, 1998 and the Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010. - HELD THAT: - The Court examined the statutory definitions which characterise an Authorized Courier as a person engaged in international transportation of goods or time sensitive documents on a door to door delivery basis and registered by the Commissioner of Customs. The obligations under Regulation 13 of the 1998 Regulations and Regulation 12 of the 2010 Regulations require, inter alia, that an Authorised Courier maintain the operational infrastructure and customer interface necessary to perform collection and delivery as part of the courier business. The material placed on record - the workflow chart and the MoU with Budget Courier Pvt. Ltd. - demonstrated that petitioner confined its activity principally to customs clearance and did not have customer interfacing, pick up or final delivery responsibilities, which were performed by Budget. The arrangement evidenced a principal to principal relationship and invoices showed that petitioner provided customs clearance services rather than acting as a courier carrying out door to door transport and delivery. Given that customs clearance was incidental to couriering while collection and delivery form the core courier business, the Court found the petitioner was not engaged in the business of an Authorized Courier as contemplated by the Regulations. [Paras 22, 25, 26, 27, 28]

Petitioner is not entitled to be treated as an Authorized Courier under the 1998 and 2010 Regulations; revocation of licence was legally sustainable on this ground.

Sub-contracting/outsourcing of functions - prior permission to outsource - prior intimation for non-core activities - expeditious clearance facility rationale - Whether outsourcing/sub contracting of functions without written permission of the Commissioner disqualified the petitioner, and whether Circular No. 59 of 2016 (relaxing permission for certain non core activities) aided the petitioner. - HELD THAT: - Clause (j) of Regulation 13 prohibits an Authorised Courier from sub contracting or outsourcing functions required to be carried out by it without the Commissioner's written permission. The Court observed that the petitioner had not obtained such permission. The Court, however, noted that it was unnecessary to decide the licensing issue solely on the ground of absence of permission because the petitioner in substance carried out only customs clearance services and lacked the core courier functions. Turning to Circular No. 59 of 2016, the Court construed it as exempting the need for permission only for certain non core activities (pick up, local delivery, transportation for officials and housekeeping) by way of prior intimation, and not as permitting a person whose principal business is customs clearance to masquerade as an Authorised Courier. The Circular therefore did not assist the petitioner, since the petitioner did not maintain the required courier business integrity, customer interface or infrastructure which justify extension of expeditious clearance facilities. [Paras 23, 24, 31, 32, 33]

Absence of written permission reinforced the finding against the petitioner, and Circular No. 59 of 2016 did not entitle the petitioner to recognition as an Authorised Courier.

Final Conclusion: The petition is dismissed: the revocation of the petitioner's Authorised Courier licence, forfeiture of security and penalty were sustainable because the petitioner did not perform the door to door courier functions required by the Regulations, and the Circular relaxing permission for certain non core outsourcing did not validate the petitioner's position.

Review petition - Condonation of delay - Recall of order - Restoration of appeals

Review petition - Exemption applications in the review proceedings were allowed. - HELD THAT: - The Court recorded that the exemption applications (CM 11032/2019 and CM 11039/2019) filed in the respective review petitions were allowed subject to all just exceptions. The order demonstrates the Court's acceptance of the requests for exemption from personal attendance or other procedural formalities as prayed in those applications. [Paras 1]

Exemption applications allowed.

Condonation of delay - Delay in filing the review petitions was condoned. - HELD THAT: - Having considered the reasons set out in the delay applications (CM 11033/2019 and CM 11040/2019), the Court found those reasons sufficient and condoned the delay in filing the review petitions. The Court granted the applications allowing the review petitions to proceed notwithstanding the delay. [Paras 2]

Delay in filing review petitions condoned.

Recall of order - Restoration of appeals - The common order dated 20th July, 2018 was recalled and the appeals restored to the file for fresh consideration by allowing the review petitions. - HELD THAT: - The Court noted that the Supreme Court, in disposing of related Special Leave Petitions, had indicated that the grievance - that proceedings had occurred without furnishing relevant documents and without denial of cross examination - had not been specifically considered by the High Court and granted liberty to approach the High Court by way of review. On that basis the High Court concluded that the points urged warranted detailed consideration. Consequently, the Court recalled its common order of 20th July, 2018, allowed the review petitions, and restored the two appeals along with pending applications to the Court's file for further adjudication. [Paras 6, 7]

Order of 20th July, 2018 recalled; review petitions allowed and appeals restored to the file.

Final Conclusion: The Court allowed exemption applications, condoned the delay in filing the review petitions, recalled the common order dated 20th July, 2018, allowed the review petitions, and restored the two appeals with pending applications to the file for further consideration; matters are to be listed in due course.

Ratification by Norms Committee - advance licence - exemption from customs duty - show cause notice - administrative decision in light of Norms Committee ratification

Ratification by Norms Committee - advance licence - exemption from customs duty - Norms Committee has ratified that the imported goods - Copper in unrefined copper blister and Copper in copper anode - fall within the goods covered by the petitioner's advance licence and are exempt from payment of customs duty. - HELD THAT: - The Court recorded the minutes of Norms Committee-II Meeting No.01/81-ALC2/2019 dated 10.04.2019 placed on record by respondents 1 to 4, which ratified that the specified copper goods are covered by the advance licence. In view of that ratification, the legal consequence is that those goods fall within the advance licence entitling the petitioner to exemption from customs duty. The Court treated the Norms Committee's ratification as determinative of the coverage of the advance licence for the goods in question. [Paras 3, 4]

Recorded that the Norms Committee has ratified that the said copper goods are covered by the advance licence and therefore are exempt from customs duty.

Show cause notice - administrative decision in light of Norms Committee ratification - The validity of the show cause notice and any demand for customs duty is to be finally decided by the fifth respondent in light of the Norms Committee's ratification. - HELD THAT: - Although the Court observed that, in view of the Norms Committee's ratification, no customs duty is payable and the show cause notice issued by the fifth respondent 'may have to necessarily go', the Court did not itself quash the show cause notice. Instead, the Court directed the fifth respondent to take a final decision on the show cause notice and any consequent levy of customs duty after considering the Norms Committee minutes, within four weeks from receipt of the order. The matter of enforcement or withdrawal of the notice is thus left to the administrative authority for decision on merits in the light of the ratification. [Paras 4]

Directed the fifth respondent to decide the show cause notice and any demand for customs duty in the light of the Norms Committee ratification within four weeks.

Final Conclusion: The petition is disposed of with the Court recording the Norms Committee's ratification that the specified copper goods are covered by the advance licence (and thereby exempt from customs duty) and directing the fifth respondent to take final administrative decision on the show cause notice and any demand for duty in light of that ratification within four weeks; no order as to costs.

Admissibility of electronic/audio evidence - forensic voice comparison - relevance of post-event communications - proof of conspiracy and abetment in customs contravention - penalty under Section 112 of Customs Act, 1962 - burden of proof in customs penalty proceedings

Admissibility of electronic/audio evidence - forensic voice comparison - Admissibility and probative value of audio files extracted from the I phone seized from a conspirator. - HELD THAT: - The Tribunal examined the circumstances of seizure, forensic examination and CFSL report regarding two audio files extracted from the I phone surrendered by Shri Rupender Singh Chadha. It noted defects in the chain and examination - absence of independent panch witness at forensic retrieval, discrepancies in records of proceedings, CFSL opinion limited to similarity with the respondent's voice without identification of other speakers or recording date, transcript showing multiple inaudible or unclear portions, and an independent audiometric report (relied on by respondent) alleging tampering which the Commissioner had discounted for being privately obtained. Crucially, the Tribunal accepted that the recordings were dated after the import, examination and clearance of the consignment and found the CFSL report inconclusive on key queries. On these facts the Tribunal held that the audio files lacked sufficient reliability and probative value to establish the respondent's culpability in the import/clearance of contraband. [Paras 7, 9, 10]

The audio recordings were not a sufficiently reliable or admissible basis to hold the respondent liable for the alleged customs contravention.

Relevance of post-event communications - proof of conspiracy and abetment in customs contravention - Whether the audio conversation and other material proved that the respondent had conspired or abetted the import/clearance of the prohibited R 22 cylinders. - HELD THAT: - The Tribunal found that the recorded conversation, even if partly attributable to the respondent, was dated after the clearance and detention of the consignment and therefore could not be treated as evidence of actions that caused or facilitated the import or clearance. The record showed no evidence that the respondent influenced officers, participated in assessment or examination, or communicated with co noticees in a manner shown in the Show Cause Notice. Allegations based on statements of another witness (Rakesh Kumar) related to events after import/seizure and did not demonstrate instrumental involvement in the import or clearance. In absence of direct or indirect evidence connecting the respondent to the act of importation or clearance, findings of conspiracy or abetment were not made out. [Paras 10]

The material did not establish that the respondent conspired with or abetted the import/clearance of the contraband.

Penalty under Section 112 of Customs Act, 1962 - burden of proof in customs penalty proceedings - Whether the adjudicating authority erred in dropping penalty proceedings under Section 112 against the respondent. - HELD THAT: - Applying the foregoing conclusions on admissibility and absence of evidence of involvement, the Tribunal upheld the adjudicating authority's finding that no case was made out to impose penalty under Section 112. The Tribunal emphasized that there was no evidence of the respondent's involvement in assessment, examination or supervision relating to the consignment, and that reliance on the disputed audio recordings to sustain a penalty would be unjustified. The Tribunal expressly limited its review to the respondent's case and did not adjudicate matters pertaining to other noticees. [Paras 7, 10, 11]

The adjudicating authority correctly dropped the penalty proceedings against the respondent; the Revenue's appeal is dismissed insofar as it concerns him.

Final Conclusion: The appeal by the Revenue against the adjudicating authority's order dropping penalty proceedings under Section 112 of the Customs Act against the respondent is dismissed; the Tribunal found the audio evidence unreliable and that there was no proof of the respondent's involvement in importation or clearance of the contraband (other noticees not considered).

Restoration of company name under Section 252(3) - Carrying on business or in operation at the time of striking off - Striking off of name for default in filing under Section 248(5) - Discretion of Tribunal to restore name and issue consequential directions - Restoration subject to compliance with filing of outstanding statutory documents and deposit of costs

Restoration of company name under Section 252(3) - Carrying on business or in operation at the time of striking off - Tribunal directions on filing outstanding documents and costs - Whether the company was carrying on business or in operation at the time its name was struck off and whether its name should be restored to the Register of Companies - HELD THAT: - The petition filed under Section 252(3) was within the twenty year period. The Tribunal examined material placed on record by the company to show it was carrying on business at the time of striking off, namely audited financial statements for financial years 2012-13 to 2017-18 showing year wise revenue, income tax returns for assessment years 2014-15 to 2018-19 (returns for four assessment years filed before the date of striking off), and the bank statement covering the period up to February 2019. The Registrar of Companies raised no objection to restoration and the ROC's report recorded striking off under Section 248(5) for non filing. Applying the statutory test in Section 252(3), the Tribunal found that the company was carrying on business or in operation at the relevant time and that it was just to restore the company's name. The Tribunal exercised its discretionary power to restore the name while directing compliance measures: deposit of costs, filing of outstanding balance sheets and annual returns with applicable fees and additional fees, delivery of certified copy to the ROC for publication, and permitting the ROC and Income Tax Department to take action for delayed filing or recovery as per law. [Paras 14, 15, 16, 17, 18]

Petition allowed; name of the company restored to the Register of Companies subject to deposit of costs and directions to file outstanding statutory documents and comply with applicable fees, and with liberty to ROC and Income Tax Department to take further action as per law.

Final Conclusion: The Tribunal found that the company was carrying on business at the time its name was struck off and, exercising its discretion under Section 252(3), ordered restoration of the company's name subject to deposit of costs and compliance with directions to file outstanding statutory documents and payment of applicable fees.

Inter-corporate deposits evidenced in company balance-sheets - continuing cause of action and bar of limitation - siphoning of funds / misapplication of group funds - just and equitable ground for winding up - prejudicial conduct towards shareholders - appointment of provisional liquidator and protective directions

Inter-corporate deposits evidenced in company balance-sheets - The respondent company is indebted to the petitioners on account of inter-corporate deposits as reflected in its balance-sheets. - HELD THAT: - The Court found that the respondent's balance-sheets for the years ending 31st March 1997 to 31st March 2004 recorded inter-corporate loans from the petitioners in clearly identifiable entries. The documents and accounts were held to demonstrate the dues payable to the petitioners and the statement relied upon by the respondent's director (dated 1.1.2007) did not, in the Court's view, suffice to extinguish or absolve those liabilities. The Court accordingly treated the recorded inter-corporate deposits as establishing a prima facie indebtedness of the respondent to the petitioners. [Paras 12, 15]

The inter-corporate deposits shown in the respondent's balance-sheets are accepted as demonstrating dues payable to the petitioners.

Siphoning of funds / misapplication of group funds - continuing cause of action and bar of limitation - The respondent company received funds from JVG Finance Ltd. which were used to purchase land in Gurgaon and continues to hold the land or the consideration, giving rise to a continuing liability not barred by limitation. - HELD THAT: - The Court relied on the SFIO report extracts which record payments made from JVG Finance Ltd. for acquisition of land in District Gurgaon and identify land purchased in the name of JVG Industries Ltd. (respondent) for which consideration of Rs. 19,42,500/- was paid from group funds. The Court concluded that the respondent continues to occupy the land and remains liable either to return the land or to repay the consideration, and treated this as a continuing cause of action so that the defence of limitation does not apply to bar the claim. [Paras 16, 17, 18]

The claim relating to the land purchase is a continuing cause of action and the respondent remains liable to return the land or repay the consideration; limitation does not bar the petition on this point.

Prejudicial conduct towards shareholders - just and equitable ground for winding up - The affairs of the respondent company are being conducted in a manner prejudicial to the interests of the petitioners and other shareholder companies of the JVG group, and it is just and equitable to wind up the respondent. - HELD THAT: - The Court noted that substantial shareholding in the respondent is held by companies of the JVG group (including petitioner No.1) which are under liquidation, yet notices, accounts and meeting communications were not being sent to the Official Liquidator acting for those companies. The respondent was found to have been hived off and taken over under circumstances creating serious disputes about the takeover and management, including allegations of forgery and mismanagement in the change of control. Applying the principles governing the 'just and equitable' jurisdiction, the Court concluded that the combination of the respondent's close link to the JVG group, the prejudicial conduct towards major shareholders, and the respondent's retention of substantial funds formerly belonging to the group collectively justify winding up on equitable grounds. [Paras 20, 21, 22, 24]

Winding up on the ground that it is just and equitable is warranted given the respondent's conduct prejudicial to the petitioners and the circumstances of takeover and management.

Appointment of provisional liquidator and protective directions - A provisional liquidator (the Official Liquidator) is to be appointed and directed to take possession of assets, books and records and to take protective steps pending further proceedings. - HELD THAT: - Having admitted the petition, the Court appointed the Official Liquidator as Provisional Liquidator and directed immediate takeover of all assets, books of account and records of the respondent, sealing of premises, preparation of an inventory, valuation by a valuer, publication of citations in specified newspapers and the Gazette, and permitted the Official Liquidator to seek police assistance if necessary. Costs of publication were directed to be drawn from the common pool subject to adjustment. [Paras 25]

The Official Liquidator is appointed Provisional Liquidator with directions to secure assets, prepare inventory and take protective measures as specified.

Final Conclusion: The petition for winding up is admitted: the Court found prima facie inter-corporate debts and a continuing liability in respect of land acquired with group funds, held that the respondent's conduct is prejudicial and that it is just and equitable to wind up the company, and appointed the Official Liquidator as Provisional Liquidator with immediate protective directions; matter listed for further hearing.

Exclusion of provident fund, pension fund and gratuity dues from the liquidation estate - workmen's dues as assets of workmen - waterfall mechanism under Section 53 of the Insolvency and Bankruptcy Code, 2016 - overriding effect of section 238 of the Code

Exclusion of provident fund, pension fund and gratuity dues from the liquidation estate - waterfall mechanism under Section 53 of the Insolvency and Bankruptcy Code, 2016 - The provident fund, pension fund and gratuity dues of workmen do not form part of the liquidation estate and therefore are not subject to distribution under the waterfall mechanism of Section 53 of the Code. - HELD THAT: - The Tribunal applied the definition of "liquidation estate" in Section 36(4)(a)(iii) to hold that sums due to any workman or employee from provident fund, pension fund and gratuity fund are excluded from the liquidation estate. Once so excluded, such dues cannot be realised or distributed under the Section 53 waterfall provisions. The liquidator's reliance on the explanation to Section 53 and on Section 326 of the Companies Act, 2013 to treat these dues as part of the liquidation estate was rejected as contrary to the explicit exclusion. The Tribunal endorsed the reasoning in the co ordinate Mumbai Bench decision in Asset Reconstruction Company (India) Ltd. v. Precision Fasteners Ltd., which held that these dues are to be treated as assets of the workmen lying with the corporate debtor and hence not amenable to distribution under Section 53 despite the general overriding provision in Section 238 of the Code.

The application is allowed insofar as provident fund, pension fund and gratuity dues of workmen are excluded from the liquidation estate and are not to be distributed under Section 53.

Fresh consideration of workmen's claims - availability of funds to meet provident fund, pension fund and gratuity deficiencies - treatment of bonus and compensation claims - Claims of workmen (including any deficiency in provident fund, pension fund and gratuity accounts) are to be reconsidered afresh by the liquidator; bonus and compensation claims are to be decided in accordance with the Tribunal's observations and applicable law. - HELD THAT: - Following the conclusion that PF, pension and gratuity dues do not form part of the liquidation estate, the Tribunal directed the liquidator to revisit and adjudicate the workmen's claims afresh in conformity with the law stated in this order and the Mumbai Bench decision. If there is any deficiency in the relevant funds, the liquidator must ensure that the requisite amounts are made available in the statutory accounts, even if the employer has not diverted the sums. The Tribunal left the questions concerning bonus and compensation to be decided by the liquidator in light of the observations made and applicable legal provisions.

The liquidator shall consider the workmen's claims afresh and ensure funds are made available to meet any deficiencies; bonus and compensation claims to be decided in accordance with the Tribunal's observations and law.

Final Conclusion: The application is allowed: provident fund, pension and gratuity dues of workmen are excluded from the liquidation estate and not subject to the Section 53 waterfall; the liquidator must reconsider the workmen's claims afresh and ensure availability of funds to meet any deficiencies, and decide bonus and compensation claims in accordance with the Tribunal's directions and applicable law.

Applicability of proviso to Section 31(4) requiring Competition Commission approval - Prospective application of procedural amendments - Commercial wisdom of the Committee of Creditors - Limited role of the Adjudicating Authority to examine procedural compliance - Validity of CoC's amendment of its process document

Applicability of proviso to Section 31(4) requiring Competition Commission approval - Prospective application of procedural amendments - Proviso to Section 31(4) of the Code (mandating CCI approval prior to CoC approval) is not applicable to the CIRP which commenced on 20.04.2018. - HELD THAT: - The proviso introducing mandatory prior CCI approval came into force on 17.08.2018, after initiation of the CIRP on 20.04.2018. Procedural amendments are generally applied prospectively unless clearly intended otherwise. Authorities and earlier decisions of this Bench indicate that provisions existing on the date of admission govern the stage of submission of resolution plans. The added obligation to obtain CCI approval before the CoC's approval is an additional procedural burden and therefore the amendment does not apply to the present CIRP. Consequently, non-furnishing of CCI approval on the date of the CoC meeting was not a legal bar to consideration of RPIF's plan. [Paras 18, 19, 20]

The proviso to Section 31(4) does not apply to the present CIRP and absence of CCI approval on 10.01.2019 was not a legal impediment to the CoC considering RPIF's resolution plan.

Applicability of proviso to Section 31(4) requiring Competition Commission approval - Prospective application of procedural amendments - Even if the proviso were assumed applicable, both competing resolution applicants lacked CCI approval on the date of the CoC meeting, and RPIF subsequently obtained CCI approval. - HELD THAT: - Assuming arguendo that the proviso applied, the Applicant itself did not have CCI approval on 10.01.2019 (received on 11.01.2019), so the Applicant could not claim a special right to have its plan considered while displacing RPIF. RPIF later furnished the requisite CCI approval. The object of the proviso is to ensure implementability of approved plans; courts should avoid constructions that defeat that object by producing absurd or impractical results. Belated CCI approval was therefore acceptable in the practical context of achieving resolution. [Paras 21, 22]

Even on the alternate assumption of applicability, the objection fails because the Applicant also lacked CCI approval on the meeting date and RPIF later obtained the approval.

Validity of CoC's amendment of its process document - Commercial wisdom of the Committee of Creditors - Limited role of the Adjudicating Authority to examine procedural compliance - The CoC's amendment of its process document and its approval of RPIF's resolution plan do not invite interference by this Tribunal; the CoC applied its evaluation matrix and exercised commercial wisdom which is not ordinarily subject to judicial review by the Adjudicating Authority. - HELD THAT: - The RP and CoC explained that certain procedural requirements in the process document were waived or amended by the CoC (including timing and scope of performance guarantees) for practical reasons and to avoid liquidation. The CoC evaluated both plans, recorded reasons for rejection and approval, and approved RPIF's plan with requisite voting share above the statutory threshold. The Adjudicating Authority's role is confined to examining compliance with statutory and procedural requirements; it is not empowered to re-appraise the commercial decision or replace the CoC's commercial judgment. The Tribunal found prima facie compliance with procedural requirements and no basis to disturb the CoC's commercial decision. [Paras 15, 16, 23, 24, 25]

The CoC's amendment of the process document and approval of RPIF's plan are not interfered with; the Tribunal will examine procedural compliance further at the approval stage but dismisses the challenge to the CoC's commercial decision.

Final Conclusion: The miscellaneous application is dismissed. The tribunal declines to set aside the CoC's approval of RPIF's resolution plan, finding the proviso to Section 31(4) inapplicable to this CIRP (and in any event not a basis for relief), and concluding that the CoC acted within its commercial domain and amended its process document for pragmatic reasons; procedural compliance will be examined at the plan-approval stage.

Availability of Cenvat credit for inputs, capital goods and input services used in construction of an immovable property - nexus between inputs/capital goods/services and the ultimate output service of renting of immovable property - precedential effect of a High Court reversal of a Tribunal decision - followership of earlier Tribunal and High Court decisions on entitlement to credit for construction used for taxable renting services

Availability of Cenvat credit for inputs, capital goods and input services used in construction of an immovable property - nexus between inputs/capital goods/services and the ultimate output service of renting of immovable property - followership of earlier Tribunal and High Court decisions on entitlement to credit for construction used for taxable renting services - Entitlement to Cenvat credit of duty paid on inputs, capital goods and input services used in construction of a mall which was subsequently rented out and taxed under 'Renting of Immovable Property'. - HELD THAT: - The appellants constructed the mall for the purpose of letting it out and were registered and discharging service tax under the category of 'Renting of Immovable Property'. The Tribunal, following the judgment of the Hon'ble Andhra Pradesh High Court and consistent Tribunal precedents, held that where inputs, capital goods and services are used in construction of an immovable property that is put to a taxable output service (renting of immovable property), the duty paid thereon is available as Cenvat credit provided there is nexus with the output service. The demand confirmed by the adjudicating authority was set aside because the admitted factual position and the authorities relied upon support availability of credit and utilization towards the assessee's service tax liability for renting. [Paras 6]

Credit availed by the appellant in respect of inputs, capital goods and input services used for construction of the mall is available and the demand is set aside; appeal allowed with consequential relief.

Precedential effect of a High Court reversal of a Tribunal decision - Appropriateness of relying upon the Tribunal decision in Mundra Port when that decision had been reversed by the Gujarat High Court. - HELD THAT: - The adjudicating authority had relied upon a Tribunal decision which denied credit for construction inputs. However, that Tribunal view had been reversed by the Hon'ble Gujarat High Court. The Tribunal in the present appeal observed that reference to the now-reversed Tribunal decision was not called for and proceeded to follow binding/ persisting precedents favorable to the assessee. Consequently, the reliance on the earlier Tribunal decision could not sustain the demand. [Paras 5]

Reference to the Mundra Port Tribunal decision was inappropriate in view of its reversal by the Gujarat High Court; the adjudicating authority's reliance on it is not tenable.

Final Conclusion: The appeal is allowed on merits; the Cenvat credit claimed in respect of inputs, capital goods and input services used for construction of the mall and utilized for discharge of service tax under 'Renting of Immovable Property' is held to be available and the demand is set aside (alternative plea on limitation not decided).

Aggregate value - small scale exemption - reverse charge - Notification No. 6/2005-ST

Aggregate value - reverse charge - Notification No. 6/2005-ST - small scale exemption - Whether amounts of service tax paid by the appellant on reverse charge basis are includible in the "aggregate value" for determining entitlement to exemption under Notification No. 6/2005-ST, and whether the appellant is entitled to the small scale exemption for the year 2005-06. - HELD THAT: - The definition of "aggregate value" in Notification No. 6/2005-ST is limited to the sum total of value of taxable services charged in the first consecutive invoices issued or required to be issued during a financial year and expressly excludes value charged in invoices issued towards services which are exempt under other notifications. Amounts paid by the appellant under reverse charge represent consideration paid by the appellant to service providers and are not amounts "charged" by the appellant in its invoices. Consequently, such payments on reverse charge cannot be treated as part of the appellant's "aggregate value" for the purpose of determining the threshold for exemption under the notification. Applying this construction, the appellant's taxable services (as charged by it) fell within the exemption limit and the denial of small scale exemption on account of service tax paid under reverse charge was incorrect. [Paras 5]

Amounts paid by the appellant under reverse charge are not includible in the "aggregate value" for Notification No. 6/2005-ST; the appellant is entitled to the small scale exemption and the impugned order is set aside.

Final Conclusion: The appeal is allowed: reverse charge payments do not form part of the aggregate value under Notification No. 6/2005-ST, and the appellant is entitled to the small scale exemption for the relevant period; the impugned order is set aside.

Deemed closure of proceedings under Section 73(1) and (3) - penalty under Section 78 - availability of Cenvat credit on Goods Transport Service (GTA) - ineligible Cenvat credit - vehicle insurance - Cenvat credit claimed on misplaced invoices - negative list applicability from 01.04.2011 - remand for de novo adjudication and speaking order

Deemed closure of proceedings under Section 73(1) and (3) - penalty under Section 78 - Whether penalty could be imposed where tax and interest were paid and the proceedings fall within the scope of Section 73(1) and (3). - HELD THAT: - The Tribunal found no dispute as to liability for service tax but observed that the assessee had remitted the tax with interest into the Government account, demonstrating bonafides. Having regard to the provision that voluntary payment of tax with intimation to the proper officer results in deemed completion of proceedings under Section 73(1) and (3), further punitive proceedings under Section 78 could not be sustained. The circumstances and the prior payment led the Tribunal to conclude that the assessee was entitled to the benefit of Sections 73(1) and (3) and therefore penalty could not be imposed. [Paras 4]

Penalty set aside; assessee entitled to benefit of Sections 73(1) and (3).

Availability of Cenvat credit on Goods Transport Service (GTA) - ineligible Cenvat credit - vehicle insurance - Cenvat credit claimed on misplaced invoices - negative list applicability from 01.04.2011 - remand for de novo adjudication and speaking order - Adjudication of contested Cenvat credit claims and period-specific applicability remitted for fresh consideration. - HELD THAT: - The Tribunal noted that certain liabilities were stamped only after introduction of the negative list from 01.04.2011 and that the demand had been raised for periods prior to that date which could not be sustained without fresh scrutiny. In view of these factual and legal contentions, and because the adjudicating authority had not finally passed a speaking order on the merits, the matter was remitted for de novo adjudication. The assessee is to be given an opportunity to place supporting documents and plead its defence, and the adjudicating authority must thereafter pass a reasoned speaking order on merits. [Paras 4]

Matter remanded to the adjudicating authority for de novo adjudication and passing of a speaking order after giving the assessee an opportunity to defend and produce evidence.

Final Conclusion: The appeal is partly allowed and partly remanded: penalty under the relevant provisions is set aside in favour of the assessee, while the contested Cenvat credit and period-related demands are remitted for fresh adjudication with opportunity to the assessee and a speaking order by the adjudicating authority.

Manufacture - assembling as a process of manufacture - deeming fiction of manufacture (Note 6 of Section XVI) - incidental or ancillary processes amounting to manufacture (Section 2(f)) - exclusion from area-based exemption where only non-manufacturing processes are undertaken - finality of assessment at supplier's end and its effect on recipient's liability

Assembling as a process of manufacture - incidental or ancillary processes amounting to manufacture (Section 2(f)) - Assembling of components and manufacture of switches at the Roorkee units amount to 'manufacture' within the meaning of Section 2(f) and Note 6 of Section XVI. - HELD THAT: - The Tribunal accepted the appellants' case that the Roorkee units performed assembly of head and body components, moulded switches and fitted battery cells, activities which are incidental or ancillary to completion of the finished torch. Note 6 of Section XVI treats conversion of an incomplete article having the essential character of the finished article into the complete article as manufacture. Applying these provisions, the Tribunal concluded that the processes undertaken at Roorkee were manufacturing operations and not merely the limited processes listed in the amending paragraph which would exclude exemption. [Paras 8, 12]

The assembly and switch-manufacture at Roorkee constitute manufacture.

Exclusion from area-based exemption where only non-manufacturing processes are undertaken - deeming fiction of manufacture (Note 6 of Section XVI) - Applicability of the amending paragraph which denies exemption where only non-manufacturing processes (preservation, packing, labelling, sorting etc.) are undertaken. - HELD THAT: - The amending provision inserted para 4 to deny exemption when a unit has undertaken only the specified non-manufacturing processes and no other process amounting to manufacture. The Tribunal held that the amending paragraph operates only where the activities do not amount to manufacture. Since the Roorkee units' activities were held to be manufacturing, the exclusionary limb of the amendment did not apply and the area-based exemption remained available to them. [Paras 6, 12]

The amending paragraph does not bar exemption where the unit in fact undertakes manufacturing processes.

Finality of assessment at supplier's end and its effect on recipient's liability - Effect of finalized assessments at the Mumbai (supplier) unit on the Revenue's claim against the Roorkee (recipient) units. - HELD THAT: - The Tribunal noted that the Mumbai unit had been assessed and had paid duty on parts; those assessments were finalized and were not reopened in the impugned proceedings. It observed that if the supplier's clearances had been assessed as parts, the goods received by the Roorkee units must be treated as parts for purposes of liability. The Tribunal therefore found the Revenue's contention-that fully manufactured torches were transported to Roorkee and exemption was wrongly availed-untenable in the absence of any demand or re-opening against the Mumbai unit. [Paras 11]

Finalized assessments at the supplier preclude the Revenue from re- characterising the same clearances at the recipient's end to sustain the demand.

Final Conclusion: The impugned orders confirming duty and imposing penalties on the Roorkee units and their directors were set aside. All four appeals are allowed and consequential relief granted to the appellants.

Rectification under Section 35C(2) of the Central Excise Act - mistake apparent on the face of the record - limitation of six months for rectification - rectification power not a substitute for review - non-extension of limitation for prolonged delay

Limitation of six months for rectification - non-extension of limitation for prolonged delay - Entitlement to invoke Section 35C(2) after a lapse of over 17 years. - HELD THAT: - The Tribunal's dismissal of the second application filed after more than 17 years was upheld. Section 35C(2) permits the Appellate Tribunal to amend its order to rectify a mistake apparent from the record within six months from the date of the order. The appellant's reliance on delayed service did not permit extension of the statutory six-month period nor validate a fresh attempt to invoke rectification nearly two decades later. The application was therefore rightly rejected as time-barred and not amenable to condonation given the statutory prescription.

Application filed after over 17 years could not be entertained under Section 35C(2); dismissal on limitation grounds was justified.

Rectification under Section 35C(2) of the Central Excise Act - mistake apparent on the face of the record - rectification power not a substitute for review - Whether the second application sought permissible rectification or impermissible review of the Tribunal's earlier order. - HELD THAT: - The Tribunal correctly examined the nature of the grievance and found that the appellant sought substantive reconsideration of the earlier order rather than correction of an error apparent on the face of the record. Section 35C(2) is confined to amending orders to correct mistakes apparent from the record and does not vest the Tribunal with power to review its decisions on merits. Because the asserted defect did not constitute a mistake apparent on the face of the record, the recourse invoked was inappropriate and properly rejected.

Rectification power under Section 35C(2) cannot be used as a vehicle for review; the application was rightly treated as seeking impermissible review and dismissed.

Final Conclusion: The Tribunal's order dismissing the rectification application was affirmed: the attempt to invoke Section 35C(2) after more than 17 years was time-barred and the plea improperly sought review rather than correction of a mistake apparent on the face of the record; the appeal is dismissed.

Entitlement to Cenvat credit where supplier issues invoices through fictitious firms - Burden of proof on Revenue to establish non-receipt of inputs - Rule 9(2) of Cenvat Credit Rules, 2004 - due diligence in examining invoices - Imposition of penalty for availing inadmissible Cenvat credit

Entitlement to Cenvat credit where supplier issues invoices through fictitious firms - Burden of proof on Revenue to establish non-receipt of inputs - Rule 9(2) of Cenvat Credit Rules, 2004 - due diligence in examining invoices - Cenvat credit allowed to the appellants despite supplier's confession of issuing invoices through fictitious firms, where appellants and intermediate dealers admitted receipt and use of inputs and appellants had examined invoices in terms of Rule 9(2). - HELD THAT: - The Tribunal found that appellants and the intermediate dealers had admitted receipt of the goods against the invoices and that the inputs were used in manufacture of final goods which were cleared on payment of duty. Given those admissions, the burden lay on the Revenue to prove that the appellants had not actually received the inputs. Further, in terms of Rule 9(2) of the Cenvat Credit Rules, 2004, the appellants had taken proper care to examine the invoices; the Tribunal held that an assessee is not required to investigate the genuineness of the manufacturer beyond the particulars furnished in an invoice which complies with Rule 9(2). On this basis, the Tribunal concluded that the allegation of non-receipt was not sustainably established and that the benefit of doubt must go to the appellants. [Paras 3]

Impugned orders denying Cenvat credit were set aside and Cenvat credit was allowed to the appellants.

Imposition of penalty for availing inadmissible Cenvat credit - Burden of proof on Revenue to establish mens rea or culpability for penalty - Penalty imposed on the appellants was held not imposable where demand itself for denial of Cenvat credit was unsustainable on the materials on record. - HELD THAT: - Having held that the Revenue failed to establish non-receipt of inputs and that the appellants had complied with the invoice examination requirements under Rule 9(2), the Tribunal found no foundation for imposing penalty on the appellants. Where denial of credit is not sustained, the element warranting imposition of penalty was absent and therefore penalty was not exigible. [Paras 3]

Penalties imposed by the adjudicating authority were set aside and held not imposable on the appellants.

Final Conclusion: Both appeals are allowed: the orders denying Cenvat credit and imposing penalties are set aside; Cenvat credit is allowed to the appellants and no penalty is imposable.

Disallowance of input tax credit - predeposit for admission of appeal - stay of recovery pending adjudication - reliance on negative cross check / assessment of vendors - requirement to establish tax unpaid in respect of the same goods

Predeposit for admission of appeal - stay of recovery pending adjudication - Whether the first appellate authority and the Tribunal were justified in directing the petitioners to make predeposit as a condition for admission of appeal and stay of recovery. - HELD THAT: - The court examined the record and found the petitioners had a strong prima facie case because material showing the state of assessments against the vendors was not furnished to the petitioners at the time of assessment and was only obtained thereafter. Given that the petitioners had not had an opportunity to prove the genuineness of transactions, directing payment of a large predeposit for admission and to obtain a stay was not justified. In view of the established prima facie case, the Tribunal's order directing deposit and the first appellate authority's order dismissing the appeal for non-payment were quashed. The matter was restored to the file of the first appellate authority to be heard on merits without insisting on any predeposit, and recovery of the demand was stayed until final disposal by the first appellate authority. [Paras 6, 12, 15, 16]

The orders directing payment of predeposit were quashed and set aside; the appeal was restored to the first appellate authority to be heard on merits without any predeposit and recovery stayed until final disposal.

Disallowance of input tax credit - reliance on negative cross check / assessment of vendors - requirement to establish tax unpaid in respect of the same goods - Whether input tax credit can be disallowed by proportionately denying credit based on purchases from dealers whose registrations were cancelled without first establishing that tax was not paid in respect of the very goods purchased. - HELD THAT: - The court interpreted subsection (7A) of section 11 of the GVAT Act to mean that tax credit can be denied only to the extent that the tax in respect of the same goods was not actually paid into the Government treasury. Therefore, disallowing input tax credit by merely computing a percentage of purchases from dealers with cancelled registrations, without establishing that the vendor had not paid tax in respect of the goods sold to the purchaser, is impermissible. Because the petitioners were not furnished the assessment material of the vendors at the assessment stage, they had no opportunity to establish that tax in respect of those sales was paid; consequently the matter requires adjudication on the merits by the first appellate authority in light of the statutory test in section 11(7A). [Paras 12, 13, 14]

Input tax credit cannot be disallowed merely by proportionate computation based on vendor registration cancellation; it must be shown that tax was not paid in respect of the same goods, and the matter is to be considered afresh by the first appellate authority.

Final Conclusion: The petition is allowed: the Tribunal's and the first appellate authority's orders directing predeposit are quashed and set aside; the matter is remitted to the first appellate authority to decide the appeal on merits without insisting on predeposit, and recovery of the assessment demand is stayed until final disposal.

Writ of certiorari - extraordinary writ jurisdiction under Articles 226/227 - SARFAESI Act Section 13(2) notices - maintainability of writ petition - bonafides of the petitioner - dishonour of cheque

Writ of certiorari - maintainability of writ petition - bonafides of the petitioner - SARFAESI Act Section 13(2) notices - Writ petition seeking quashing of notices issued under Section 13(2) of the SARFAESI Act was dismissed for want of bona fides and lack of grounds for exercise of extraordinary writ jurisdiction. - HELD THAT: - The petitioners challenged notices dated 27.10.2017 and 18.06.2018 issued under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The record shows that petitioner No.1 had issued a cheque which was dishonoured and the fact of dishonour was not disputed by learned counsel for the petitioners. A cheque for an amount was produced in Court and criminal proceedings under the Negotiable Instruments Act were pending, with an exemption from personal appearance recorded in the criminal court in view of a possible settlement. In these circumstances the Court found that the petitioners lacked bona fides and that no exceptional circumstances were made out to invoke the extraordinary jurisdiction under Articles 226 and 227. Accordingly the challenge to the SARFAESI notices could not be sustained and the writ petition was dismissed. [Paras 3, 4]

Petition dismissed for want of bona fides and for failure to establish grounds for exercise of extraordinary writ jurisdiction; challenge to Section 13(2) notices not allowed.

Final Conclusion: The writ petition under Articles 226/227 seeking quashing of the Section 13(2) notices is dismissed on the ground that the petitioners lack bona fides and have not established any ground to invoke the extraordinary jurisdiction of the High Court.