TMI Tax Updates e-Newsletter
Jun 12,2026

Limitation for adjudication under GST - tax determination order -barred by limitation - Jurisdictional validity of time-barred assessment order - Best judgment assessment - The order determining tax liability for the period April, 2019 - March, 2020 could be sustained when it was passed and uploaded after the last date of 31.08.2024. - HELD THAT: - The Court held that limitation for passing the order for the tax period 2019-20 expired on 31.08.2024, and the impugned order dated 02.09.2024 was therefore beyond time. The Department's explanation that the Proper Officer was handling a large number of orders for two circles and could not upload the petitioner's order before midnight did not cure the defect, since limitation goes to the root of the jurisdiction to impose tax liability. Once the order-in-original was found to have been passed and uploaded after the statutory cut-off, it was unsustainable in law; the appellate authority also erred in not noticing this jurisdictional infirmity while dismissing the appeal on delay. [Paras 8]

The order-in-original and the appellate order were set aside as the tax determination was barred by limitation and therefore without jurisdiction.

Final Conclusion: The writ petition was allowed. The Court set aside both the original adjudication order and the appellate order on the ground that the tax order for the period in question had been passed beyond the prescribed limitation and was therefore unsustainable.

Entitlement to regular bail - Prolonged judicial custody - Non-filing of complaint - fraudulent availment and passing of input tax credit -Maximum punishment of five years -HELD THAT: - The Court found that the petitioner had remained in judicial custody since 10.04.2026, that the alleged offence was punishable with imprisonment up to five years, that 60 days had elapsed, and that no complaint had yet been filed. Taking into account the nature of the allegations together with the period of incarceration, the Court held that the petitioner should be enlarged on regular bail, subject to conditions ensuring appearance before the authorities and non-interference with witnesses. [Paras 6]

Regular bail was granted subject to execution of bond, periodic appearance before the respondent authorities for the stipulated period, and compliance with the statutory conditions.

Final Conclusion: The Criminal Petition was allowed and the petitioner was released on regular bail, the Court resting its decision on the period of custody, the maximum punishment prescribed for the alleged offence, and the fact that no complaint had been filed.

Cancellation of GST registration for continuous non-filing of returns - Seeking Restoration on furnishing pending returns and payment of dues - Compliance with proviso to Rule 22(4) of the CGST Rules, 2017 - HELD THAT: - The Court found that the controversy was covered by the coordinate Bench decision in Dhirghat Hardware Stores [2025 (10) TMI 1070 - GAUHATI HIGH COURT], which had construed the proviso to Rule 22(4) to mean that where a person, against whom cancellation proceedings were initiated for non-filing of returns, furnishes all pending returns and makes payment of tax dues with applicable interest and late fee, the proper officer may drop the proceedings and pass the prescribed order. Since the present case was similar on facts and law, the petitioner was granted the same relief, namely an opportunity to approach the authority for restoration of registration, subject to compliance with the statutory requirements and payment of arrears including tax, penalty, interest and late fee. The Court also directed that the period under Section 73(10) be computed from the date of the order, except for the financial year 2024-25, for which computation would be as per Section 44. [Paras 11, 12, 13]

The petitioner was permitted to approach the concerned authority within the time granted, and upon compliance with the proviso to Rule 22(4), the authority was directed to consider restoration of GST registration in accordance with law.

Final Conclusion: Following the earlier coordinate Bench view on the same legal position, the Court disposed of the writ petition by permitting the petitioner to seek restoration of GST registration on filing the required application and satisfying the conditions under the proviso to Rule 22(4) of the CGST Rules, 2017. The competent authority was directed to consider such request expeditiously in accordance with law.

Restoration of cancelled GST registration - Non-filing of returns for continuous six months - Entitlement to approach the competent authority for restoration upon furnishing pending returns - Compliance with proviso to Rule 22(4) of the CGST Rules - HELD THAT: - The Court found that the controversy was covered by the earlier decision in Dhirghat Hardware Stores & Anr. Vs. Union of India & 3 Ors. [2025 (10) TMI 1070 - GAUHATI HIGH COURT], rendered on similar facts and law. Accepting that the petitioner had since filed the pending returns up to June, 2023 and was ready to comply with the conditions under the proviso to Rule 22(4), the Court held that the petitioner should be granted the same relief. On that basis, the petitioner was permitted to approach the concerned authority within the stipulated time for restoration of registration, and the authority was directed to consider the application in accordance with law upon compliance with the statutory requirements. The Court also directed that the period under Section 73(10) be computed from the date of the present order, except for the financial year 2024-25, which was to be governed by Section 44, and that arrears including tax, penalty, interest and late fee be paid. [Paras 11, 12, 13]

Relief similar to the earlier coordinate Bench decision was granted, enabling the petitioner to seek restoration of GST registration subject to compliance with proviso to Rule 22(4) of the CGST Rules, 2017.

Final Conclusion: The writ petition was disposed of by permitting the petitioner to apply within sixty days for restoration of GST registration, subject to compliance with the proviso to Rule 22(4) of the CGST Rules, 2017. Upon such compliance, the competent authority was directed to consider restoration in accordance with law.

Seeking Restoration of GST registration - Cancellation for non-filing of returns - Proviso to Rule 22(4) compliance - furnishing pending returns and making full payment of tax dues, interest, penalty and late fee in terms of the proviso to Rule 22(4) - HELD THAT: - The Court found that the petitioner's case was squarely covered by the earlier decision of the Coordinate Bench in the case of Dhirghat Hardware Stores [2025 (10) TMI 1070 - GAUHATI HIGH COURT]on similar facts and law. Proceeding on that basis, it accepted that where registration had been cancelled under Section 29(2)(c) for continuous default in filing returns, and the registered person was ready to comply with the requirements contemplated by the proviso to Rule 22(4), the proper course was to permit the petitioner to approach the competent authority for restoration. The authority was directed to consider such application in accordance with law upon filing of pending returns and payment of arrears with applicable statutory dues. [Paras 11, 12, 13]

The petitioner was permitted to approach the concerned authority within sixty days for restoration of GST registration, and on compliance with the proviso to Rule 22(4), the authority was directed to consider restoration expeditiously.

Final Conclusion: Following the Coordinate Bench decision on the same legal position, the Court disposed of the writ petition by permitting the petitioner to seek restoration of GST registration within the prescribed time on compliance with the conditions under the proviso to Rule 22(4) of the CGST Rules, 2017. The competent authority was directed to consider such request in accordance with law.

Penalty on persons other than taxable person under Section 122(1A) - Alternative and efficacious remedy to file Appeal under Section 112 - Expression "any person" in Section 122(1A) - Statutory definitions of "person", "taxable person" and "registered person" - Retrospective applicability of penalty provision

Whether the Petitioners in both the writ petitions who are admittedly partners of the Firm (the taxable person) can be imposed penalty under Section 122(1A) of the Act of 2017?- Partners of a partnership firm can be proceeded against for penalty under Section 122(1A) where they are found to have retained the benefit of transactions covered by Section 122(1) and the transactions were conducted at their instance. - HELD THAT: - The Court held that the statute consciously uses different expressions such as person, taxable person and registered person, and Section 122(1A) employs the broader expression any person with two specific qualifying conditions: that the person retained the benefit of the transactions covered by clauses (i), (ii), (vii) or (ix) of Section 122(1), and that such transactions were conducted at that person's instance. On that construction, Section 122(1A) is not confined to the taxable person alone. The Court declined to follow the Bombay High Court view in Amit Manilal Haria [2026 (2) TMI 1409 - BOMBAY HIGH COURT] and Shantanu Sanjay Hundekari [2025 (1) TMI 1249 - SC ORDER], and accepted the reasoning in Gurudas Mallik Thakur [2025 (5) TMI 227 - DELHI HIGH COURT] that, in the case of firms, companies and other juridical entities, the provision is intended to reach the natural persons who caused and benefited from the contravening transactions. Since the adjudicating authority and the appellate authority had recorded findings that the petitioners had retained the benefits and that the transactions were carried out at their instance, the jurisdictional challenge to penalty on the petitioners failed, though the factual findings were left open to challenge before the Appellate Tribunal. [Paras 37, 38, 41, 42, 57]

Penalty under Section 122(1A) was held legally maintainable against the petitioners as partners, subject to their right to assail the underlying factual findings before the Appellate Tribunal.

Penalty for pre-01.01.2021 transactions- Complementary nature of Section 122(1A)- Whether the provisions of Section 122(1A) of the Act of 2017 can be applied for the period prior to 01.01.2021 which is the date of coming into force of Section 122(1A) of the Act of 2017? - Section 122(1A) can be invoked against persons who retained the benefit of transactions and at whose instance they were conducted even in relation to transactions prior to 01.01.2021, provided the show cause notice was issued when Section 122(1A) was in force. - HELD THAT: - The Court held that Section 122(1A) does not create a new or independent violation, but is complementary to Section 122(1), identifying the person who benefited from and caused transactions already covered by clauses (i), (ii), (vii) and (ix) of Section 122(1), which existed from the inception of the Act. On that reasoning, the question of retrospective creation of a new penal liability did not arise. The Court further held that Article 20(1) was inapplicable, distinguishing between punishment for an offence and penalty in civil adjudication, and relied on Jawala Ram and Others Vs. State of Pepsu [1961 (4) TMI 94 - SUPREME COURT] for that distinction. The Court agreed with the Delhi High Court view in Bhupender Kumar [2025 (7) TMI 626 - DELHI HIGH COURT] that what is material is that Section 122(1A) was in operation when the show cause notice was issued, and therefore did not accept the contrary view of the Bombay High Court in Amit Manilal Haria [2026 (2) TMI 1409 - BOMBAY HIGH COURT] on retrospective application. [Paras 51, 52, 53, 54, 55]

The challenge to the application of Section 122(1A) for transactions prior to 01.01.2021 was rejected.

Final Conclusion: The Court rejected both jurisdictional challenges and held that the petitioners, though partners of the taxable person, could be visited with penalty under Section 122(1A), and that the provision could be applied in relation to the impugned transactions though some of them related to a period prior to 01.01.2021. The writ petitions were accordingly disposed of with liberty to the petitioners to file appeals before the Appellate Tribunal, and the factual findings on benefit and instance were kept open for challenge there.

Denial of input tax credit to a purchasing dealer solely on the ground that the supplying dealer failed to deposit the tax collected from the purchaser -Bona fide purchase transactions and collusion- wrongly availed and utilized the ITC - Reading down - Natural justice - Vicarious liability - HELD THAT: - The Court held that the controversy stood concluded by the Division Bench decision in National Plasto Moulding [2024 (8) TMI 836 - GAUHATI HIGH COURT], which in turn followed the principle laid down in On Quest Merchandising India Pvt. Ltd. [2017 (10) TMI 1020 - DELHI HIGH COURT] that a bona fide purchasing dealer cannot be punished for the seller's failure to deposit tax with the Government. The determinative principle applied was that, where the purchasing dealer has transacted bona fide with a registered supplier and complied with the statutory requirements, the Department's remedy lies against the defaulting supplier and not by denying the purchaser's input tax credit. At the same time, the Court preserved the Department's liberty to proceed in accordance with law if there is material showing that the transactions were not bona fide or were entered into in collusion with the suppliers. [Paras 15, 16, 17]

The impugned order denying input tax credit and raising consequential demand was set aside, with liberty to the authorities to proceed afresh only if material exists showing lack of bona fides or collusion in the transactions.

Final Conclusion: The writ petition was allowed by setting aside the impugned demand order. The Court held that input tax credit could not be denied to a bona fide purchasing dealer merely because the supplier failed to deposit the tax, while leaving it open to the Department to act in accordance with law if the transactions are shown to be collusive or not bona fide.

Late fee for non-filing of annual return - non-filing of the annual return in Form GSTR-9 - Penalty under Section 125 - General penalty for failure to file annual return - no separate penalty prescribed for that contravention

Late fee for non-filing of annual return - Failure to furnish return by due date - Late fee is leviable under Section 47(2) on failure to furnish the annual return by the due date, and is not confined only to cases of belated filing after eventual submission. - HELD THAT: - The Court held that the text of Section 47(2) makes a registered person liable to late fee where the return required under Section 44 is not furnished by the due date. The statutory expression covers failure to file the return by the due date and the liability continues for the period of default, subject to the prescribed cap. On that construction, the contention that late fee can be imposed only where there is belated filing, and not where there is non-filing, was rejected. [Paras 5, 7]

The levy of late fee for failure to file Form GSTR-9 by the due date was upheld.

General penalty for failure to file annual return - No separate penalty prescribed - HELD THAT: - The Court noted that Section 125 permits imposition of penalty for contravention of the GST enactments or the rules where no separate penalty is prescribed. Upon examining the applicable statutes, it found that no separate penalty had been provided for failure to file the annual return. Therefore, the existence of liability to late fee did not exclude recourse to the general penalty provision in such a case. [Paras 6]

The penalty imposed under Section 125 for failure to file the annual return was held to be valid.

Final Conclusion: The writ petition was dismissed. The Court upheld both the late fee and the penalty imposed for failure to file the annual return in Form GSTR-9 and found no ground for interference with the impugned order.

Ex Parte Adjudication - No Opportunity of personal hearing, granted while passing the order under Section 73- Violation of mandatory procedural safeguard in assessment proceedings- Audi Alteram Partem - HELD THAT: - The Court applied the dictum in Mahaveer Trading Company and held that before passing any adverse adjudication order, an opportunity of personal hearing is a mandatory procedural requirement. On the State's own instructions, the date fixed for personal hearing and the date for filing reply were the same, which showed absence of an effective hearing opportunity. Since that procedural defect went to the root of the adjudication, the impugned order could not be sustained. [Paras 6, 8]

The impugned order was quashed and the matter was remanded to the assessing authority to pass a fresh order after granting an opportunity of hearing.

Final Conclusion: The writ petition was allowed. The adjudication order was quashed on the ground that no effective opportunity of personal hearing had been granted, and the matter was remanded for fresh decision after affording such hearing.

Levy of Late Fee that is payable under Section 47 of the respective GST Enactments - Belated filing of annual returns - Imposition of general penalty for non-filing of returns for the relevant period - specific penalty excluding residuary penalty - HELD THAT: - The Court held that the controversy stood covered by Kandan Hardware Mart vs. Assistant Commissioner [2026 (1) TMI 383 - MADRAS HIGH COURT]. Following that decision, it accepted the principle that where the statute provides for levy of late fee for delayed filing of returns, recourse to general penalty under Section 125 is impermissible, since that provision operates only in the absence of any other specific penalty. On that basis, the levy of general penalty for the relevant period was set aside, while the liability to pay late fee under Section 47 was preserved. [Paras 3, 4]

The general penalty imposed under Section 125 was set aside, but the petitioner remained liable to pay late fee under Section 47 for the relevant period.

Final Conclusion: The writ petition was partly allowed by setting aside the general penalty imposed for the relevant period, while sustaining the petitioner's liability to pay late fee under the GST enactments. The bank attachment was directed to be lifted subject to payment of the late fee demanded.

Availability of the statutory appellate remedy - Maintainability of writ petition against GST appellate order - Appellate authority failed to consider that the suppliers have declared the B2B supplies as B2C supplies or have declared the wrong GSTIN of the recipient and the same are not reflecting

HELD THAT: - The Court held that the petitioner had an effective statutory remedy of appeal under Section 112 of the Central Goods and Services Tax Act, 2017 before the constituted Goods and Services Tax Appellate Tribunal. Since such appellate remedy was available, the Court declined to examine the grounds raised against the impugned appellate order, including the challenge on merits, and left all questions of law and fact open for consideration by the Tribunal. [Paras 4]

The writ petition was disposed of with liberty to the petitioner to approach the Goods and Services Tax Appellate Tribunal on statutory pre-deposit, without any expression on the merits.

Final Conclusion: The Court declined to entertain the writ petition on the ground of availability of the statutory appellate remedy before the Goods and Services Tax Appellate Tribunal and disposed of the matter with liberty to the petitioner to pursue that remedy.

Cancellation of GST registration - Defective show cause notice - Compliance with prescribed procedure for cancellation - HELD THAT: - The fact that both the Rule 21 and Rule 22 of the GST Act which specifically prescribe the mode, procedure, and the manner in which the show cause notice to be issued and final orders are to be passed, and both these provisions specifically provide for the issuance of a detailed show cause notice in respect of the contraventions and the shortcomings said to have been violated by the petitioner. In the absence of which, the show cause notice dated 18.06.2025 and the consequential order of cancellation, dated 30.07.2025 would not be sustainable in the eyes of law. As a consequence, the subsequent appeal and the appellate order, dated 30.03.2026 would also not be sustainable. On this very ground, the impugned show cause notice, the order of cancellation and the subsequent order in the appeal are deserve to be and accordingly set aside.

The matter was therefore left open to the authority to issue a fresh notice and proceed strictly in accordance with the prescribed rules. [Paras 6, 7, 8]

The impugned show cause notice, the cancellation order, and the appellate order were set aside, with liberty to the authority to issue a fresh notice and proceed afresh in accordance with law; till finalisation of such proceedings, the petitioner was directed not to avail ITC.

Final Conclusion: The writ petition was allowed on the ground that the notice proposing cancellation of registration was legally deficient for want of disclosure of the alleged contraventions. The cancellation and appellate orders were consequently set aside, while permitting the authority to initiate fresh proceedings in accordance with the applicable rules.

Maintainability of writ petition in contractual monetary disputes - Disputed questions of fact under Article 226 - Absence of public law element - Petition seeking recovery of alleged dues under a purchase order and a direction to official respondents to withhold and divert amounts payable to the contractor - HELD THAT: - The Court found that the dispute turned on contested factual issues including the extent of supplies made, genuineness of certain invoices, the existence and effect of the alleged settlement, the nature of the relationship between the parties as supplier or sub-contractor, performance of contractual obligations, and the correctness of accounts and payments. Resolution of these matters would require detailed examination of oral and documentary evidence, which is outside the summary scope of proceedings under Article 226. The Court reiterated that, although writ jurisdiction is not absolutely barred in contractual matters, it is ordinarily not exercised for enforcement of purely contractual monetary claims lacking a public law element, particularly where liability is not admitted. The circumstance that the official respondents were beneficiaries of the work did not create an enforceable right in favour of the petitioner to seek payment from amounts otherwise payable to the private contractor. [Paras 11, 12, 13, 14, 15]

The writ petition was held not amenable to adjudication under Article 226 and the petitioner was left to pursue its efficacious remedy in accordance with law.

Final Conclusion: The Court dismissed the writ petition holding that the claim arose from a private contractual dispute involving seriously contested questions of fact and no basis existed to direct the official respondents to divert amounts payable to the contractor. The petitioner was left to work out its remedy in accordance with law.

IGST refund on exports despite higher duty drawback-Circular No. 37/2018-Cus -Executive circular contrary to statutory rules - Rejection of the petitioner's claim by relying on the circular stating that availment of higher drawback amounted to relinquishment of IGST refund claim was held unsustainable. - HELD THAT: - The Court held that the impugned order proceeded on the basis of a circular which had already been found to be in conflict with Rule 96 of the CGST Rules in the case of Amit Cotton Industries vs. Principal Commissioner of Customs[2019 (7) TMI 472 - GUJARAT HIGH COURT] and, therefore, such circular could not govern or defeat the petitioner's claim. Since the rejection rested on an impermissible reliance on the circular instead of the governing rules and the binding decisions noticed by the Court, the matter required fresh consideration in accordance with the relevant statutory provisions after granting reasonable opportunity of hearing. [Paras 4]

The impugned order was set aside and the respondents were directed to pass fresh orders in the light of the governing rules and the decisions referred to by the Court, after affording hearing to the petitioner.

Final Conclusion: The writ petition was disposed of by setting aside the rejection order. The respondents were directed to reconsider the petitioner's claim afresh in accordance with the governing rules and the decisions noticed by the Court, after granting an opportunity of hearing.

Maintainability of writ petition against GST adjudication order - availability of the statutory remedy - Delay in invoking writ jurisdiction - petition filed more than two years after the order - HELD THAT: - The Court held that it was not inclined to entertain the writ petition assailing the adjudication order, having regard to the ratio in Glaxo Smith Kline Consumer Health Care Limited [2020 (5) TMI 149 - SUPREME COURT] and the fact that the challenge had been brought after more than two years. It left it open to the petitioner to approach the statutory authority against the impugned order, if permissible in law. [Paras 5]

The writ petition was dismissed, leaving the petitioner to pursue the statutory remedy if available in law.

Final Conclusion: The Court declined to entertain the writ petition against the GST adjudication order and consequential recovery proceedings in view of the delay and the availability of the statutory remedy. The petition was dismissed, with liberty to the petitioner to approach the statutory authority if permissible in law.

Reassessment on erroneous assumption of non-filing of return - Failure to reconsider assessment after return was filed - Exclusion of writ pendency in computing reassessment limitation

Reassessment on erroneous assumption of non-filing of return - Failure to reconsider assessment after return was filed - HELD THAT: - The Court found that the assessing officer had recorded in the draft assessment order that no return of income had been filed by the assessee till date, but the materials on record showed that, pursuant to the notice u/s 142(1), the petitioner had filed its return on 28.03.2023 for the relevant assessment year. Once the return had been filed, the assessment could not validly proceed on the basis that no return existed.

The subsequent corrigendum merely noted the filing of the return while retaining the earlier conclusions, and therefore did not cure the foundational error. On that ground, the assessment required reconsideration and the Department was left free to proceed afresh in accordance with law. [Paras 4, 6]

The impugned draft assessment order and corrigendum were set aside, and fresh proceedings were permitted in accordance with law.

Exclusion of writ pendency in computing reassessment limitation - The period during which the writ petition remained pending with interim protection was liable to be excluded while computing limitation for completing reassessment. - HELD THAT: - The Court noted that, u/s 153(2), reassessment was required to be completed within the prescribed period reckoned from the end of the financial year in which notice u/s148 was served. Since the petitioner had filed the writ petition and obtained interim protection before expiry of that period, the time spent in prosecuting the writ petition was directed to be excluded for the purpose of computing limitation. This enabled the Department to undertake fresh proceedings after the impugned order was set aside. [Paras 5, 6]

The pendency of the writ petition was directed to be excluded in computing the limitation period for reassessment.

Final Conclusion: The writ petition was disposed of by setting aside the draft assessment order and corrigendum because the assessment had proceeded on an incorrect assumption that no return had been filed. The Department was permitted to initiate fresh proceedings in accordance with law, with exclusion of the period during which the writ petition remained pending for limitation purposes.

Reassessment notice based on seized material - Live link between incriminating material and assessee - Scope of information that pertains to or relates to the assessee - Allegation of on-money payment - escapement of income was founded on a loose paper seized from a broker during search proceedings and was linked to the assessee only through a later sale deed

HELD THAT: - The Court held that, though at the stage of reopening it is not concerned with the sufficiency of evidence, there must still exist prima facie material having a live link with the assessee and the alleged escapement of income. The seized chit was dated much prior to the assessee's purchase, did not contain the assessee's name or identifiable particulars connecting him with the alleged cash component, and the rate mentioned therein was sought to be applied after several years by using information gathered from the government sale-deed record.

The statement of the broker also did not connect the assessee with the document, and no link was shown with the entities searched. In these circumstances, the expressions that the information "relates to" or "pertains to" the assessee could not be invoked in the abstract; the Revenue was required to analyse the seized material with attendant circumstances and record prima facie relevance showing escapement of income in the assessee's hands. Since the material was vague, irrelevant and non-specific, Section 148 was held not to be attracted. [Paras 17, 18]

The reassessment notice was quashed as the seized material did not establish the requisite nexus or live link with the assessee for reopening the assessment.

Final Conclusion: The High Court allowed the writ petition and quashed the notice issued under Section 148. It held that the reopening was founded on vague and non-specific third-party search material which lacked any prima facie live link with the assessee or the alleged escapement of income.

Writ maintainability against faceless appellate order - Alternative Remedy -Exhaustion of second appellate remedy - HELD THAT: - The Court held that an effective alternative remedy was expressly available under the statute against the order of the Commissioner of Income Tax (Appeals), and the petitioner, having already availed the first appellate remedy, could not bypass the second appellate forum and directly invoke writ jurisdiction.

The fact that the assessment and appellate orders were passed under the faceless mechanism, or that the Tribunal procedure was said to be cumbersome and to require pre-deposit, was held insufficient to justify entertainment of the writ petition. [Paras 5, 6]

The writ petition was disposed of as not maintainable, with liberty to the petitioner to avail the statutory remedy before the competent Tribunal.

Final Conclusion: The High Court declined to entertain the writ petition on the ground of availability of an effective statutory appeal before the Income Tax Appellate Tribunal and left it open to the petitioner to pursue that remedy.

Accrual of income - Interest on fixed deposits under prohibitory orders - Real income theory - Uncertainty of receipt - assessee had earlier offered such interest on accrual basis and had subsequently shifted to receipt basis - HELD THAT: - The Court proceeded on the footing that the governing principle recognised in the CBDT Circular dated 28.12.2015 was that interest can be recognised as income only when there is certainty and a definite possibility of receipt. In the present case, the fixed deposits and the accruing interest were subject to prohibitory directions and pending criminal proceedings, and the uncertainty over entitlement to the deposits continued. In that situation, the mere fact that the assessee had earlier returned such interest, or that TDS might have been effected, did not make the uncredited and uncertain interest taxable on accrual. The Court further held that if the assessee is ultimately held entitled to the fixed deposits in the pending proceedings, appropriate additions would then be permissible. [Paras 8, 9]

The Tribunal was right in deleting the addition of accrued interest on the fixed deposits for the assessment years in question.

Final Conclusion: The appeals were disposed of in favour of the assessee. The Court upheld the Tribunal's view that, during the subsistence of the prohibitory order and the uncertainty in the pending criminal proceedings, the accrued interest on the fixed deposits could not be brought to tax as income.

Deduction u/s 80M on dividend income - Disallowance of expenditure against exempt income where investments are from own funds - Bad debts of banks and scope of the proviso to section 36(1)(vii) - Securities held by banks as stock-in-trade - Broken period interest as revenue expenditure

Deduction u/s 80M on dividend income - Expenditure relatable to dividend income - Own funds for investment - HELD THAT: - The Court held that the legal position that deduction under section 80M is to be computed on a net basis stands settled by Distributors (Baroda) Pvt. Ltd. vs Union Of India [1985 (7) TMI 1 - SUPREME COURT] and is consistent with the scheme of Chapter VIA. At the same time, on the facts found by the Assessing Authority, the assessee had adequate surplus funds and the investments were not made out of interest-bearing borrowings. Once such factual finding stood, there was no justification for any further disallowance or for the Department to estimate expenditure against the dividend income. [Paras 11, 12, 13]

The question was answered in favour of the assessee and against the revenue.

Bad debts of scheduled banks - Distinct operation of clauses (vii) and (viia) - Proviso confined to rural advances - HELD THAT: - Recording the common submission of both sides, the Court followed Catholic Syrian Bank Ltd.[2012 (2) TMI 262 - SUPREME COURT] . It accepted that deduction for actual write-off under section 36(1)(vii) is distinct from deduction for provision under section 36(1)(viia), and that the proviso was introduced only to prevent double deduction in relation to rural advances. The revenue's objection was therefore rejected. [Paras 15]

The question was answered in the affirmative in favour of the assessee.

Securities held by banks as stock-in-trade - Interest on purchase of securities - Broken period interest - Revenue expenditure - whether Securities held by the assessee-bank were to be treated as stock-in-trade, and consequently the interest paid on purchase of such securities, including broken period interest, was allowable as revenue expenditure? - HELD THAT: - The Court followed the earlier decision in the assessee's own case, holding that bank securities are stock-in-trade and not capital outlay. On that footing, expenditure and interest incurred in their purchase and realization retained the character of revenue expenditure. The same reasoning was applied to broken period interest as well, since the securities were held as stock-in-trade and income from their sale had been offered as business income. [Paras 17, 22, 23]

These questions were answered in favour of the assessee and against the revenue.

Disallowance of proportionate expenditure on tax-free bonds - Exempt income investments from own funds - disallowance of proportionate expenditure relatable to tax-free bonds - HELD THAT: - On the statement of both sides, the Court answered the issue in favour of the assessee in the light of South Indian Bank Ltd. [2021 (9) TMI 566 - SUPREME COURT] . The basis was that where the investments yielding exempt income stood supported by own funds, proportionate expenditure could not be disallowed on the footing adopted by the revenue. [Paras 19]

The question was answered in favour of the assessee.

Final Conclusion: All the substantial questions were answered against the revenue. The batch of departmental appeals was dismissed, the Court holding in favour of the assessee on dividend-related disallowance, bad debts, treatment of securities as stock-in-trade, purchase and broken period interest, and disallowance relating to tax-free bonds.

Shorter period to respond - 3 days instead of 7 minimum days - No reasonable opportunity to respond to show cause notice in faceless assessment - Violation of principles of natural justice by curtailment of response time - Non-consideration of assessee's reply before completing assessment

Validity of assessment order passed after giving only three days to respond to the show cause notice and without considering the reply later furnished through the grievance mechanism - HELD THAT: - The Court held that, even according to the departmental SOP governing faceless assessment, the Assessing Officer had no justification to curtail the normal seven-day response period from the date of the show cause notice to only three days when the limitation for completing the assessment was still available up to 31.03.2026. The earlier adjournments sought by the assessee in response to notices under Section 142(1) could not justify restricting the time for reply to the show cause notice in the scrutiny assessment. The Court further found that, though the assessee had furnished its reply through the Income Tax Grievance Cell, that reply was not taken into account while passing the assessment order. On that basis, the Court treated the order as suffering from breach of natural justice and requiring fresh consideration. [Paras 10, 11, 13]

The impugned assessment order was set aside and the matter was remanded to the Assessing Officer to pass a fresh order in accordance with law after considering the assessee's reply, without any expression on the merits.

Final Conclusion: The writ petition was allowed on the ground of procedural unfairness in the faceless assessment. The assessment order was set aside and the matter was remitted for fresh assessment after considering the reply already furnished by the assessee.

TDS u/s 194J not conclusive of professional income-Independent determination of nature of receipts for presumptive taxation - Eligibility for presumptive taxation - authorities treated the assessee's receipts as professional income falling outside section 44AD solely because tax had been deducted at source u/s 194J - HELD THAT: - The Tribunal held that the tax deductor's implicit characterization of the payment by deducting tax u/s 194J is not binding on the income-tax authorities. AO and the appellate authority were required to examine the true nature of the receipts on the basis of the material on record and arrive at an independent conclusion instead of proceeding solely on the basis of the TDS provision applied by the payer.

Since that exercise had not been undertaken, the dispute regarding whether the receipts were covered by section 44AD required fresh examination by the Assessing Officer. Tribunal also noted the assessee's non-compliance during assessment and therefore remitted the matter for a de novo assessment after reasonable opportunity of hearing.

The appellate order was set aside and the matter was restored to the Assessing Officer for fresh adjudication in accordance with law.

Final Conclusion: For assessment year 2024-25, the Tribunal held that deduction of tax under section 194J by itself could not justify treating the receipts as professional income for denying the assessee's claim under section 44AD. The matter was remanded to the Assessing Officer for fresh examination and de novo assessment after giving reasonable opportunity to the assessee.

Rectification of mistake apparent from record - Scope of record for rectification proceedings - Recomputation of long-term capital gains on mutual fund redemption acquired before 31.01.2018 - An inadvertent error in the return in showing the mutual fund units as acquired on or after 31.01.2018, though the record showed acquisition prior to that date

HELD THAT: - The Tribunal held that rectification is available where the mistake is apparent from the record, and the expression record is not confined to the assessment order or intimation alone. On the evidence produced, the mutual fund units were shown to have been acquired before 31.01.2018 and to have existed as on that date.

Since the error arose from incorrect filling of the relevant column in the return itself, and the supporting material formed part of the assessee's record for the purpose of rectification, the authorities were not justified in refusing correction merely because the rectification would alter the total income. The proper course was to verify the evidence and recompute the capital gains accordingly. [Paras 6]

The matter was restored to the Assessing Officer to consider the evidence and recompute the capital gains by treating the assets as acquired prior to 31.01.2018.

Final Conclusion: The Tribunal held that the error in the return relating to the date of acquisition of the mutual fund units constituted a mistake apparent from the record capable of rectification. The appeal was partly allowed for statistical purposes, with a direction to the Assessing Officer to verify the evidence and recompute the capital gains accordingly.

Bogus purchases from accommodation entry provider - Taxability of embedded profit element - Estimation of profit on unverifiable purchases

HELD THAT: - The Tribunal held that the consistent view of the jurisdictional High Court is that, where purchases are found to have been made from accommodation entry providers, the whole purchase amount is not to be added as income and only the profit margin embedded in such purchases can be taxed.

Applying that principle, the addition confirmed on the entire alleged bogus purchases was found excessive. The proper course was to estimate the profit attributable to such purchases, and the Tribunal considered it reasonable to direct estimation at a rate 5% higher than the normal net profit rate disclosed by the assessee for the current year. [Paras 7, 8]

The addition was restricted to the estimated profit on the disputed purchases, to be computed by applying a net profit rate 5% higher than the assessee's normal net profit rate for the year.

Final Conclusion: The Tribunal partly allowed the appeal and held that, in respect of purchases treated as bogus accommodation entries, only the embedded profit element was taxable. The Assessing Officer was directed to recompute the addition by applying a net profit rate 5% higher than the assessee's normal net profit rate for the year.

Transfer pricing adjustment for intra-group management services - Transfer pricing adjustment for royalty on sales to associated enterprises and third parties - Interest on outstanding receivables from associated enterprises - Employees' contribution to PF and ESI deposited beyond the due date under the welfare enactments

TP adjustment on payment of management charges to associated enterprises - Intra-group management services - Arm's length price determined at nil - Aggregation under TNMM - HELD THAT: - The Tribunal followed the co-ordinate Bench decision in the assessee's own case for an earlier assessment year [2024 (8) TMI 1176 - ITAT DELHI] and accepted that determination of the value of management services at nil by applying CUP was untenable. Proceeding on that binding factual and legal position, it directed that the assessee's benchmarking under TNMM in respect of management charges be accepted and the adjustment be deleted. [Paras 5]

The adjustment relating to intra-group management services was quashed and the assessee's grounds on this issue were allowed.

Royalty on sales to associated enterprises and third parties - Licensed manufacturer - Nil arm's length price for royalty - Transfer pricing adjustment on royalty paid in relation to sales to associated enterprises and to third parties - HELD THAT: - Following the co-ordinate Bench ruling in the assessee's own case [2025 (5) TMI 2293 - ITAT DELHI] for the subsequent assessment year, the Tribunal held that the authorities were not justified in disallowing the entire royalty payment or in treating the assessee as a contract manufacturer for this purpose. Adopting the same approach as in that earlier order, it directed that royalty be allowed at 5 per cent on sales to associated enterprises as well as on sales to non-associated enterprises. [Paras 6]

The royalty adjustment was restricted by directing allowance of royalty at 5 per cent on all sale transactions, and the related grounds were partly allowed.

Outstanding receivables from associated enterprises - Working capital adjustment - Deemed interest adjustment - Arm's length price of interest on outstanding receivables determination - HELD THAT: - The Tribunal followed its earlier orders in the assessee's own case as relying on the decision of Kusum Healthcare Pvt. Ltd. [2017 (4) TMI 1254 - DELHI HIGH COURT] and held that, in light of the governing principle applied therein, working capital adjustment must first be given while examining delayed realization of receivables from associated enterprises. Only thereafter, if any shortfall remains, can the arm's length price of interest on outstanding receivables be determined afresh. [Paras 7]

The matter was restored for fresh determination after granting working capital adjustment, and the ground on outstanding receivables was allowed.

Employees' contribution to PF and ESI - Deposit beyond statutory due date - Disallowance of deduction - HELD THAT: - The Tribunal upheld the disallowance by following the law laid down by the Supreme Court [2022 (10) TMI 617 - SUPREME COURT (LB)] that employees' contribution deducted by the employer and deposited beyond the due date prescribed under the PF and ESI enactments is not allowable merely because payment was made before the due date under the Income-tax Act. [Paras 8]

The disallowance of employees' contribution to PF and ESI was sustained and the corresponding ground was dismissed.

Final Conclusion: The appeal was partly allowed. The Tribunal deleted the transfer pricing adjustment on management charges, directed restricted allowance of royalty at 5 per cent on all sales, restored the issue of interest on outstanding receivables for fresh determination after working capital adjustment, and sustained the disallowance relating to delayed deposit of employees' contribution to PF and ESI.

Transfer pricing benchmarking - Functional comparability of ITES and software development services - Fresh benchmarking analysis

Whether TP adjustment on provision of services was not sustainable on the existing benchmarking where the assessee had characterised itself as an ITES company but the TPO adopted comparables engaged in software development services? - HELD THAT: - The Tribunal held that the benchmarking exercise required reconsideration because the assessee's functional profile was that of an ITES company, whereas the TPO had selected comparables belonging to software development services. Since the comparability analysis proceeded on a mismatched functional characterization, the arm's length determination could not be sustained and a fresh benchmarking exercise was necessary. [Paras 5]

The matter was restored to the Assessing Officer/TPO for de novo assessment after giving the assessee an opportunity of being heard.

Final Conclusion: For A.Y.2022-23, the Tribunal set aside the transfer pricing benchmarking and remitted the matter for fresh determination on the ground that the comparables adopted were functionally inconsistent with the assessee's characterisation as an ITES provider. The appeal was partly allowed for statistical purposes.

Assessment on non-existent entity - assessment order and DRP directions, passed in the name of an amalgamated company that had ceased to exist pursuant to merger

HELD THAT: - The Tribunal found from the record that the transferor company had merged with another company with effect from the stated date under an order of the NCLT, and that this fact, along with the subsequent change of name of the successor company, had been specifically intimated to the DRP, the TPO and the AO before the impugned directions and final assessment order were passed. Despite such intimation, both the DRP directions and the final assessment order continued to be issued in the name of the erstwhile company, which had ceased to exist.

Applying the principle laid down in Maruti Suzuki India Limited [2019 (7) TMI 1449 - SUPREME COURT] Tribunal held that an assessment made thereafter in the name of a non-existing entity is without jurisdiction and cannot be sustained. The additional legal ground was entertained as it arose from facts already on record, in terms of National Thermal Power company Ltd. [1996 (12) TMI 7 - SUPREME COURT (LB)] [Paras 6]

The additional ground was admitted and allowed; the DRP directions and the final assessment order passed in the name of the non-existing amalgamating company were set aside.

Final Conclusion: The appeal was allowed on the legal ground that the impugned DRP directions and final assessment order had been passed in the name of a non-existing entity after amalgamation. In consequence, the remaining grounds were treated as academic and left open, and the stay application was dismissed as infructuous.

TP Adjustment - comparable selection - SWD Segment - Cherry picking of comparables - Transfer pricing comparables for captive ITeS servicesNegative working capital addition - non adjudicate specific plea for inclusion of two comparables by CIT(A)

Comparable selection for SWD Segment - HELD THAT:- CG-VAK Software & Exports Ltd. is to deselected as comparable on functional dissimilarity, absence of reliable segmental data and abnormal financial results. No infirmity in order of the Ld. CIT(A) in directing exclusion of said company. [ Para 21]

Larsen & Toubro Infotech Ltd cannot be regarded as a valid comparable to the assessee considering ownership of significant intangibles, brand value, lack of reliable segmental information and difference in risk profile. [Para 22]

Tech Mahindra Ltd. (Segmental) is to deselected as comparable as reliance on consolidated segmental data, failure of RPT filter, existence of extraordinary events and issues in margin computation.[Para 24]

Persistent Systems Ltd. cannot be regarded as a valid comparable considering factors, namely involvement in software product development, diversified and IP-led business activities, presence of R&D and intellectual property and existence of extraordinary events during the year.[Para 24]

Mindtree Ltd. (Segment) is to be excluded as relying on Meritor CVS India (P.) Ltd. turnover was held to be a relevant criterion for comparability analysis and companies having substantially high turnover were directed to be excluded.[Para 27]

M/s Akshay Software Technologies Ltd. - cherry picking in the context of transfer pricing analysis - Rejection of Akshay Software Technologies Ltd. merely by describing its services as ERP implementation, support and maintenance, without examining whether such activities are in substance part of software development services, is not a proper FAR analysis. The TPO was required to examine the actual functions performed by the company, its revenue profile, assets employed and risks assumed before rejecting the comparable. Mere difference in description of services cannot be the basis for exclusion, if the company is otherwise engaged in software development-related services. Accordingly, we hold that its inclusion cannot be treated as cherry picking. However, since the TPO had rejected the said company on the basis of information obtained u/s. 133(6) of the Act, and the functional comparability and margin computation require factual verification, we deem it appropriate to restore this comparable to the file of the AO/TPO for fresh examination. [Para 36]

Spry Resources India Pvt. Ltd. rejected on high trade receivables - TPO has not brought any material on record to show that the high receivables have distorted the operating margin of Spry Resources India Pvt. Ltd. or that the revenue recognition of the said company is unreliable. No adverse finding has been recorded by the TPO on its functional profile. The assessee has also pointed out that Spry Resources India Pvt. Ltd. is engaged in software development services and was accepted as comparable in assessee’s own case for earlier assessment year. Thus, once the company is otherwise functionally comparable, mere high receivables cannot be a sole ground for exclusion. [Para 45]

M/s Harton Communication Ltd fails the 75% core function filter at entity level - TP comparability is not merely a mechanical filter exercise. A company may pass numerical filters, but if the relevant segment itself reflects abnormal business circumstances, its margin cannot be blindly adopted. The TPO has not brought any material to show that the abnormal rise in BPO segment revenue did not affect the margin or that the segmental results represented normal business conditions. In view of the above, while we do not approve exclusion merely on the ground that Hartron fails the 75% core function filter at entity level, we uphold the exclusion of Hartron Communications Ltd. on the ground that its BPO segment results for the year are affected by abnormal business circumstances and are not reliable for benchmarking the assessee’s routine captive ITeS services. [ Para 55]

Capgemini Business Services (India) Pvt. Ltd. fails the RPT filter and cannot be retained as a valid comparable in the ITeS segment. [Para 56]

Infosys BPO Ltd. is not a valid comparable for benchmarking the assessee’s routine captive ITeS services considering the functional dissimilarity, brand value, scale of operations, group synergy advantage and failure of export revenue filter.[ Para 57]

Negative working capital - HELD THAT:- We find that this issue is covered by the decision of GXS India Technology Centre (P.) Ltd [2021 (11) TMI 1144 - ITAT BANGALORE] wherein it has been held that negative working capital adjustment is not appropriate in the case of a captive service provider operating on cost-plus basis and rendering services only to its AEs. The said decision also follows the principle laid down in Lam Research India (P.) Ltd. [2021 (9) TMI 1379 - ITAT BANGALORE] and considers the position that where the assessee does not bear working capital risk, negative working capital adjustment should not be made.

If the computation of working capital adjustment results in a positive adjustment to neutralise differences, the same may be considered in accordance with law. However, in the case of a captive cost-plus service provider not bearing working capital risk, negative working capital adjustment cannot be made so as to increase the arm’s length margin. Accordingly, we find no infirmity in the order of the Ld. CIT(A) directing the AO/TPO not to make negative working capital adjustment.

CIT(A) has not adjudicated the specific plea for inclusion of two comparables, namely Sasken Communication Technologies Ltd. and Informed Technologies India Ltd. - HELD THAT:- Once a specific claim is raised before the first appellate authority and supporting material is placed on record, the Ld. CIT(A) is required to adjudicate the same by recording a speaking finding. Non-adjudication of such claim cannot be sustained. At the same time, inclusion of a comparable requires verification of functional profile, applicable filters, availability of reliable segmental data and correct margin computation. Therefore, it would not be appropriate for us to straightaway direct inclusion of these comparables without factual verification - We restore the issue of inclusion of Sasken Communication Technologies Ltd. and Informed Technologies India Ltd. to the file of the AO/TPO for fresh examination. The AO/TPO shall examine the functional comparability, segmental data, applicable filters and margin computation of these companies in accordance with law. [ Para 76]

Final Conclusion: The Revenue's appeal was dismissed. The Tribunal upheld the exclusion or inclusion findings on the decided SWD and ITeS comparables and sustained the direction against negative working capital adjustment, while restoring Akshay Software Technologies Ltd. and, in the assessee's cross-objection, Sasken Communication Technologies Ltd. and Informed Technologies India Ltd. to the AO/TPO for fresh examination.

TP Addition - Arm's length price of franchise fee - Arm's length price of intra-group services - TP adjustment on purchase of goods comparables - Benefit test and commercial expediency in transfer pricing

Franchise fee for bundle of rights - Nil ALP based on benefit test - Commercial expediency u/s 37(1) - whether TP adjustment on payment of franchise fee to the associated enterprise could not be sustained where the payment was for a composite bundle of franchise rights and services, and the authorities had determined the arm's length price at nil by applying a benefit test? - HELD THAT: - The Tribunal held that the foundation of the DRP's reasoning failed because it had merely repeated the view taken for earlier years, which had already been overturned in the assessee's own case. On the material on record, the franchise agreement granted the assessee exclusive rights in India to use the franchisor's System, comprising manufacturing and marketing IP rights, marks and services. The payment therefore could not be treated as a double payment merely because the assessee also paid for purchase of goods from associated enterprises.

Tribunal further held that the TPO had exceeded his jurisdiction in determining the arm's length price at nil on the footing that the assessee did not need the arrangement or had not derived sufficient benefit. Such an approach impermissibly questions business prudence rather than determining arm's length price under Chapter X. Since the franchise fee was incurred for business purposes and the assessee's benchmarking approach for this year was the same as that accepted in its own cases for earlier years, the transfer pricing addition and the alternate disallowance under Section 37(1) were liable to be deleted. [Paras 5]

The addition on account of franchise fee was deleted, and the alternate denial of deduction under Section 37(1) in respect of that payment was rejected.

TP adjustment on payment for intra-group services - Nil ALP based on need and benefit test - Deductibility of business expenditure - As argued assessee had furnished supporting agreements and records of services received, and the arm's length price had been taken at nil on the ground that the services were not needed - HELD THAT: - The Tribunal noted that the assessee operated under the franchise model and was entitled to receive services from associated enterprises for its Indian operations. The record contained inter-company agreements, invoices, screenshots and cost allocation details for the various services received, and the assessee's contention that only allocated cost without mark-up had been charged was not controverted. The TPO's determination of nil arm's length price rested on the view that the services were unnecessary, but there was nothing to show that the assessee had equivalent in-house expertise or resources in India. Following the assessee's own cases for earlier years on identical facts, the Tribunal held that the tax authorities could not disallow the payment by invoking a benefit test or by questioning commercial necessity once the services were shown to have been received for business purposes. On that basis, the transfer pricing addition and the alternate disallowance under Section 37(1) were unsustainable. [Paras 6]

The addition on account of intra-group services was deleted, and the alternate denial of deduction under Section 37(1) in respect of that payment was rejected.

Purchase of goods benchmarking under TNMM - Selection and exclusion of comparables - Working capital adjustment - HELD THAT: - The Tribunal found merit in the assessee's objection that Abis (Exports) India Private Limited had been included by the DRP despite having been rejected by the TPO on turnover filter, and accordingly directed its exclusion. Zeus Biotech Pvt. Ltd. was also directed to be excluded because the assessee's objection that it failed the related party transaction filter had been specifically raised and accepted by the TPO, yet ignored by the DRP. As regards the assessee's request for inclusion of Godrej Agrovet Limited - Animal Feed and Simran Farms Limited, no finding had been returned by the DRP; the matter was therefore restored to the TPO/Assessing Officer for de novo adjudication with all contentions left open. For the same reason, the Tribunal also directed reconsideration of the assessee's submissions on computation of margins and grant of working capital adjustment in accordance with law. [Paras 7]

Two comparables were ordered to be excluded, while the issues of inclusion of two further comparables, computation of margins and working capital adjustment were restored to the TPO/Assessing Officer for fresh adjudication.

Final Conclusion: The appeal was partly allowed. The Tribunal deleted the transfer pricing additions on franchise fee and intra-group services, rejected the corresponding alternate disallowances under Section 37(1), and partly restored the purchase-of-goods benchmarking issue to the TPO/Assessing Officer for fresh consideration on the unresolved comparability and adjustment aspects.

Addition made u/s. 56(2)(viib) read with Rule 11UA -Valuation of subsidiary investment - Fair market value of unquoted shares - Substitution of book value in NAV by intrinsic value of subsidiary investment - Permissibility of DCF or other recognised valuation methods to substantiate higher FMV

HELD THAT: - The Tribunal held that the controversy stood covered by its decision in the assessee's own case [2024 (9) TMI 362 - ITAT DELHI] and found no reason to depart from that view. It noted that the earlier decision had accepted that, under the Explanation to section 56(2)(viib), the assessee is not confined to the book figures appearing in the balance sheet while applying the NAV method, if a higher value is substantiated on a rational basis with proof or competent evidence.

The valuation of the subsidiary's underlying asset for reworking the value of the subsidiary investment in the hands of the holding company was treated as permissible, and use of DCF or any other known method was also held to be acceptable so long as the correctness of the valuation is established through the valuation report and supporting material. Since the Commissioner (Appeals) had followed that binding decision on identical facts, the Tribunal found no valid reason to interfere. [Paras 8, 9, 10]

The Revenue's challenge to the deletion of the addition under section 56(2)(viib) failed, and the order of the Commissioner (Appeals) was sustained.

Final Conclusion: The Tribunal upheld the order deleting the addition under section 56(2)(viib) for A.Y. 2017-18, holding that the issue was covered by the assessee's own earlier case and that no interference with the Commissioner (Appeals)'s decision was warranted. The Revenue's appeal was dismissed.

Withdrawal of writ petition - Alternate remedy - Challenged the show cause notices and provisional attachment orders - HELD THAT:- The writ petitions challenging the show cause notices and provisional attachment orders under the Prohibition of Benami Property Transactions Act, 1988 were dismissed as withdrawn with liberty to the petitioners to approach the adjudicating authority, and the adjudicating authority was requested to decide the reference expeditiously.

Challenged to the show cause notice - rejection of thepreferential rates of duties under the Association of Southeast Asian Nations-India Free Treaty Agreement (AIFTA) on the import of copper tubes and pipes - Non- compliance of the condition of the Regional Value Content (RVC) of 35% on the goods - preferential tariff treatment - Certificate of Origin - Regional Value Content - Retroactive check - HELD THAT:- In a challenge to the show cause notice denying preferential duty treatment under AIFTA, the Court issued notice, directed the Union to file an affidavit, and ordered that no final order be passed by the adjudicating authority meanwhile, though antecedent steps may continue.

Re-Export of Detained Goods - Consideration of pending representation - Reasoned order and hearing - Judicial restraint during pending customs investigation - principle of natural justice - Writ petition seeking a direction for re-export of the detained Nepal-bound transit consignment - bona fide packing error - legality of detention of the transit cargo - HELD THAT: - The Court found that, although the petitioner had made out a prima facie case, it was not appropriate to examine the legality of detention or the claim for re-export at that stage because the investigation was still pending and allegations concerning prohibited goods had been raised. Applying the requirement that State action must be reasoned, as noticed in Maneka Gandhi vs. Union of India [1978 (1) TMI 161 - SUPREME COURT], the Court held that the petitioner's representation had to be considered in accordance with law. On that basis, the Court required the petitioner to submit a comprehensive representation and directed the authority to dispose of it by a reasoned order after affording hearing to the petitioner and the Nepal importer. [Paras 13, 14]

The matter was disposed of with a direction to the respondent authority to consider and decide the representation after hearing the concerned parties, without any adjudication on the merits of the claim for re-export.

Final Conclusion: The Court declined to decide the merits of the challenge to detention and refusal of re-export while the customs investigation was pending. It disposed of the writ petition by directing the competent authority to consider the petitioner's representation and pass a reasoned order after granting hearing to the affected parties.

Extended period of limitation - demand on re-imported silk fabric - Imposition of Penalty - non-payment of duty and interest - collusion, wilful misstatement, or suppression of facts - Expression “relevant date” - Adjustment of available physical stock against shortage - requirements and conditions of Notification Nos. 53/1997 -

Extended period of limitation for customs demand - Relevant date under duty recovery proceedings - HELD THAT: - The Court held that Section 28 permits issuance of notice only within five years from the relevant date as defined in Explanation 1. Since the show cause notice was issued in 2008 and covered the period from 1998-99 to 2007-08, only the period from 2003-04 to 2007-08 fell within the permissible span of five years. Consequently, the demand referable to 1998-99 to 2002-03 was not sustainable in law, while the finding regarding violation of the exemption notifications and liability to duty and interest for the remaining period was maintained. [Paras 7]

The demand for 1998-99 to 2002-03 was held barred by limitation, and the demand survived only for 2003-04 to 2007-08.

Penalty for suppression of facts in duty demand - Consequential penalty - Penalty under Section 114A was leviable once the Tribunal had accepted that non-payment of duty was attributable to collusion, wilful misstatement or suppression of facts. - HELD THAT: - The Court found that the Tribunal had upheld the demand by accepting the requirements for invoking the extended period under Section 28, which necessarily rested on findings of collusion, wilful misstatement or suppression of facts. Having recorded such findings, the Tribunal could not delete the penalty on the ground that the goods had earlier been cleared by the officers. The Court held that the penalty provision was consequential to such findings and that the Tribunal's deletion of penalty was contrary to the mandate of law. [Paras 7]

The Tribunal's deletion of penalty was set aside, and penalty under Section 114A was restored to the extent of the duty and interest determined.

Adjustment of available physical stock against shortage - Re-computation of duty liability on re-imported silk fabric - The available physical stock of re-imported silk fabric had to be adjusted against the shortage relatable to the surviving period before re-determining duty and penalty. - HELD THAT: - The Court noted the assessee's contention that part of the re-imported silk fabric was physically available at inspection and that the barred period had to be excluded. Although there was no material to identify the specific period to which the available stock related, the Court accepted that the physical stock should be adjusted against the shortage determined for the period that remained legally recoverable, namely 2003-04 to 2007-08. On that basis, the shortage, duty liability, and the quantum of penalty were directed to be recomputed after granting adjustment for the available stock. [Paras 8, 9]

The proper officer was directed to re-assess the shortage for 2003-04 to 2007-08 after adjusting the available physical stock, and to re-determine the duty and corresponding penalty accordingly.

Final Conclusion: Both appeals were partly allowed. The demand was confined to the period 2003-04 to 2007-08, penalty under Section 114A was held leviable, and the matter was directed to be worked out by re-computing shortage, duty, and penalty after giving adjustment for the physical stock found available.

Maintainability of writ petitions challenging the customs adjudication order after the statutory period - Alternative statutory remedy - Principles of Natural Justice - Extended period limitation -Expiry of statutory limitation for appeal - Challenged the impugned orders on the denial of the 4th respondent the adjudicating authority to cross-examine the panch witness who was witness to the panchanama at the time of seizure. - HELD THAT: - The Court held that where the statute provided an efficacious appellate remedy with a prescribed limitation period and an additional condonable period, the writ jurisdiction ought not to be invoked as a matter of course after the assessee failed to avail that remedy within the permissible time.

No hesitation to reach to the conclusion that the facts of the present case squarely fits into the observations made by the Hon’ble Supreme Court in the case of Glaxo Smith Kline Consumer Health Care Ltd. [2020 (5) TMI 149 - SUPREME COURT] i.e. the petitioners herein at the first instance having not availed the statutory remedy of appeal, secondly, the petitioners do not state the reason of being prevented in preferring any appeal under in compelling circumstances. Neither it is the case of the petitioners that they were not aware of the impugned order having passed by the adjudicating authority and it is also not the case of the petitioners that this Court may condone the delay and permit them to resort to remedy of appeal while challenging the impugned order dated 30.09.2025. What is also glaringly apparent from the facts of the case is that even though the case of the petitioners is based upon the denial of principles of natural justice, the fact that case against them is of not having approached the writ court primarily upon receiving the impugned order.

Although violation of principles of natural justice is a recognised exception to the rule of alternate remedy, that exception did not assist the petitioners in the facts of the case because they neither pursued the statutory appeal within time nor disclosed any compelling reason for not approaching the appellate forum or the writ court earlier. Entertaining the writ petitions after expiry of the entire statutory appeal period would defeat the legislative scheme governing redressal. [Paras 10, 11, 12, 13]

The writ petitions were held not maintainable and were rejected.

Final Conclusion: The Court declined to entertain the writ petitions against the customs adjudication order, holding that the petitioners had allowed the entire statutory appeal period, including the extended period, to expire without any explained cause. The petitions were therefore rejected as not maintainable.

Condonation of delay - appeal filed beyond the ordinary period and beyond the appellate authority's condonable extension - Sufficient cause - Right of appeal - delay in filing the statutory appeal against the order of confiscation of foreign currency - Whether the Commissioner (Appeals) was justified in not condoning the delay on the part of the petitioner in filing the appeal ? - HELD THAT: - Taking into consideration the fact that the petitioner would be remediless, in the opinion of this Court, though the appellate authority has limited jurisdiction to condone the delay of 60 days + 30 days under the Act, in the circumstances, particularly when the delay is not exorbitantly or inordinately delayed, the delay can be condoned keeping in view of the facts of the instant case without this being a binding precedent for any other case.

The Court held that, although the explanation accompanying the delay petition was not elaborate and the appellate authority's statutory power to condone delay was limited, the delay recorded in the impugned order was not so exorbitant or inordinate as to justify shutting out the appeal altogether. The determinative consideration was that refusal to condone the delay would leave the petitioner remediless against the confiscation order, whereas the right of appeal is a right recognised under the Act. On that consideration, the Court found that the appeal ought to be entertained on merits, while making it clear that the order was being passed on the facts of the case and would not operate as a binding precedent in other matters. [Paras 14, 15, 16]

The order dismissing the appeal on the ground of delay was set aside, subject to payment of costs, and the appellate authority was directed to consider and decide the appeal on merits.

Final Conclusion: The writ petition was allowed to the extent that the dismissal of the statutory appeal as time-barred was set aside. Subject to payment of costs, the appellate authority was directed to entertain the appeal and decide it on merits.

Immediate suspension of Customs Cargo Service Provider approval - Pending or contemplated inquiry under HCCAR - Indefinite prohibition on fresh receipt of cargo - Smuggling of Chinese Origin “Fireworks/ Firecrackers” - Violations under clauses (b), (f), (g), (i) and (q) of Regulation 6 of HCCAR -Legality of the Continuation of suspension of the appellant's approval to operate the container freight station as a Customs Cargo Service Provider, with prohibition on fresh receipt of import or export cargo - absence of substantiated grounds for immediate suspension and without a pending or contemplated inquiry in terms of the prescribed procedure

HELD THAT: - The Tribunal held that the power of immediate suspension under Regulation 11(2) of HCCAR, 2009 is an exceptional power and can be invoked only where the case is appropriate for such immediate action and where an inquiry against the Customs Cargo Service Provider is pending or contemplated. The scheme of HCCAR read with the Customs Act requires suspension or revocation to be founded on the procedure under Regulation 12, including issuance of notice and inquiry. On the material placed, there was no show cause notice, nor was it shown that any inquiry had already been contemplated or was pending for obtaining an inquiry report. The Tribunal also noted that the inspection reports placed on record did not record inadequacy of security and access control, and the allegations emerging from the ongoing DRI investigation still required detailed inquiry and factual substantiation.

The licensing authority should be able to take a decision on suspension of the appellants only on obtaining an inquiry report in terms of Regulation 12 of HCCAR. Since, the overall objective of HCCAR being expeditious clearance of goods, reduction of dwell time, transaction cost and to safeguard revenue, and the specific provision of Regulation 7(2) ibid in regulating the entry of import/export cargo is only for a temporary period of 15 days, we find that indefinitely not permitting the entry/exit of import/export goods out of the appellant CFS is not in conformity with the legal provisions of HCCAR. On the other hand, the allegations duly supported by evidences and facts on the various activities leading to attempted removal of imported goods, that too ‘Restricted goods’ under the guise of house hold goods, brought out by the investigating agency/DRI also leaves no room for complacency in handling the aspect of safety and security of the imported/export goods in safeguarding the interest of Revenue.

On the basis of inquiry report and the representation to be submitted by the appellant CFS/CCSP, the learned Commissioner of Customs is to come to a conclusion on the nature of the violations against the conditions that are required to be fulfilled as a custodian under Regulation 5 ibid and failure to comply with the responsibilities of CCSP as provided under Regulation 6 of the HCCAR, 2009. Such detailed inquiry would also bring out the facts and evidences on the various allegations levelled against the appellants CFS for organized smuggling of fireworks/fire crackers by facilitation unauthorized removal; unauthorized entry of vehicles, goods and labourers; unauthorized seal cutting; fraudulent recording of scanning, lack of entry/exit control or gate control; and security mandates required for goods stored in CFS, and the allegation of involvement of management and lack of supervision by the management officials of appellant CFS.

The Tribunal therefore refrained from expressing any view on the merits of the allegations and left the licensing authority free to initiate regular proceedings under Regulation 12. [Paras 9, 10, 11, 12, 13]

The order continuing suspension until further orders and prohibiting fresh receipt of cargo was set aside, with liberty reserved to the Commissioner to take action in accordance with HCCAR, 2009 by initiating regular inquiry proceedings.

Final Conclusion: The Tribunal set aside the impugned order continuing suspension of the appellant's Customs Cargo Service Provider approval, holding that continuation of immediate suspension beyond a reasonable period without substantiated grounds and without the requisite inquiry framework under HCCAR, 2009 was unsustainable. It, however, left open the licensing authority's power to proceed in accordance with Regulation 12.

Classification of rough dolomite blocks and rough marble blocks - Rejection of cross-examination opportunity - Violation of principles of natural justice - classifiable as rough dolomite blocks under CTI 2518 1000 or as rough marble blocks under CTI 2515 1210 - Burden of proof in tariff reclassification - Primacy of test reports of the imported consignment - HELD THAT: - The Tribunal held that where representative samples of the very imported consignments had been tested by the departmental laboratory and the reports described the goods as composed of carbonates of calcium and magnesium, i.e. dolomite, those reports constituted the primary factual basis for classification. In the absence of any finding that those reports were incorrect or forged, the department could not ignore them and instead classify the goods on the strength of test reports relating to similar consignments of other importers. The burden to establish the reclassification proposed by the department lay on the department, and that burden was not discharged.

In the case of Junaid Kudia Vs. Commissioner of Customs, Mumbai Import-II [2023 (9) TMI 22 - CESTAT MUMBAI], this Bench of the Tribunal have set aside the order confirming the adjudged demands on the ground that various evidences in form of computer printouts, statements etc., recovered during course of investigation could not be admitted in the absence of certificate from responsible person in relation to operation of relevant laptop/computer as required by Section 138C(2) of Customs Act, 1962.

Against the aforesaid order, the department filed an appeal before the Hon’ble Supreme Court of India [2024 (3) TMI 570 - SC ORDER]. In the judgement delivered, the Hon’ble Supreme Court after carefully perusing the material placed on record, have held that they are not inclined to entertain the present Civil Appeals, and accordingly dismissed the same. Therefore, the view that rejection of cross-examination opportunity to the appellants and deciding the classification of goods solely on the basis of various documents received by DRI, is not proper and does not stand the legal scrutiny.

Once the proposed reclassification failed, the demand of differential duty, confiscation, redemption fine, interest and penalties, being consequential to that foundation, also failed. [Paras 8, 10]

The classification adopted in the impugned order was rejected; the goods were held classifiable under CTI 2518 1000, and the consequential duty demand, confiscation, fine and penalties were set aside.

Final Conclusion: The Tribunal set aside the impugned order and allowed the appeals. It held that the department could not reclassify the goods as rough marble blocks by disregarding the test reports of the imported consignments themselves and relying instead on material relating to other importers; consequently, the duty demand, confiscation, fine and penalties did not survive.

Condonation of the delay in filing and re-filing an appeal - Limitation under section 62 of the Insolvency and Bankruptcy Code - sufficient cause - Defective appeal - Primacy of the Insolvency and Bankruptcy Code over procedural rules - HELD THAT: - The decision in CA Ramchandra Dallaram Choudhary [2025 (5) TMI 1844 - SC ORDER], reiterates the principle which must guide the exercise of judicial discretion in matters of condonation of delay. The present case stands on an entirely different pedestal, wherein the appellant seeks condonation not merely of delay in re-filing but also of delay in invoking the appellate jurisdiction of this Court under Section 62, IBC. Importantly so, the appellant approaches this Court after having availed the benefit of a liberal construction of “sufficient cause” at the previous stage of the same litigation. A litigant who has once secured indulgence in relation to delay cannot legitimately proceed on the assumption that further defaults engendered at the next appellate stage would automatically attract a similar exercise of discretion. To hold otherwise would render the law of limitation under the IBC progressively elastic at every successive stage of challenge, defeating the legislative objective of expedition and finality.

The Court held that the limitation regime under the IBC is strict, time-bound and jurisdictional. For an appeal under section 62 to be treated as instituted within time, it must be filed in a defect-free form capable of being acted upon by the Registry. A defective appeal remains only a defective presentation and cannot enable a litigant to circumvent the statutory outer limit by curing defects at leisure. The Court further held that, although the Supreme Court Rules provide 28 days for removal of defects and ordinarily contemplate condonation of delay in re-filing, those procedural rules cannot override the statutory scheme of the IBC. Where the 60-day outer limit under section 62 and the 28-day period for curing defects both stand exhausted, the right of appeal itself is extinguished and no application for condonation of re-filing delay survives. The appellant's status as liquidator and the plea for a liberal approach, including invocation of Article 142, were rejected since the statute does not create a separate threshold for such officers. The earlier order between the same parties condoning delay before the NCLAT was held to turn on its own peculiar facts and not to justify repeated indulgence at a subsequent appellate stage. The Court consequently found no jurisdiction to condone the delays and also recorded that sufficient cause had not been shown in any event. [Paras 24, 25, 26, 27, 28]

The applications for condonation of delay in filing and re-filing were rejected, and the defective appeal was dismissed as time-barred.

Final Conclusion: The Supreme Court held that a defective appeal under section 62 of the IBC does not arrest limitation unless defects are cured within the permissible period, and that the procedural power relating to re-filing under the Supreme Court Rules cannot be used to dilute the Code's strict timeline. The appeal was therefore dismissed as time-barred.

Territorial jurisdiction under Article 226(2) - Maintainability of Writ Petition, challenging the NCLT, Delhi order initiating personal insolvency proceedings against the personal guarantor -Invocation of writ jurisdiction where a part of the cause of action arises within the State - HELD THAT: - The Court held that, though Article 226(2) permits a writ petition where part of the cause of action arises within the State, the impugned proceedings were not founded on the place where the credit facility was availed, but on proceedings initiated under the Insolvency and Bankruptcy Code. Under Section 60, the Adjudicating Authority in relation to insolvency resolution and liquidation for corporate persons, including personal guarantors, is the NCLT having territorial jurisdiction over the place where the registered office of the corporate person is located. As the registered office of the corporate person was at New Delhi and not in Kerala, the cause of action relevant to the impugned IBC proceedings did not arise in Kerala. The mere fact that the credit facility had been availed in Kerala did not confer territorial jurisdiction on the Kerala High Court to entertain the writ petition. [Paras 6, 7]

The writ petition was dismissed as not maintainable for want of territorial jurisdiction; the objection regarding alternate remedy was left unconsidered.

Final Conclusion: The Court dismissed the writ petition on the ground that the challenge to the NCLT, Delhi order under the IBC did not give rise to any part of the relevant cause of action within Kerala. Since maintainability failed on territorial jurisdiction, the plea of alternate remedy was not examined.

Petition seeking for an appropriate direction to initiate appropriate proceedings - tax evasion and also for the offence punishable under the Prevention of Money Laundering Act, 2002 in the course of selling of over more than 120 plots - HELD THAT:- The writ petition seeking directions for initiation of proceedings was closed on the statement that proceedings had already been initiated, including FIRs, attachment orders and a prosecution complaint, and that the authorities would proceed in accordance with law.

CENVAT credit on input services - Business support services by automobile dealers - Entitlement to CENVAT credit of service tax charged by automobile dealers and allied service providers for support services rendered in connection with sale of insurance policies - No Assessment at service provider end - HELD THAT: - The Tribunal treated the controversy as covered by its earlier decision in Cholamandalam MS General Insurance Co. Limited [2021 (3) TMI 24 - CESTAT CHENNAI] It accepted the principle that where the dealers had charged service tax on the consideration recovered from the appellant and such tax payment at the service provider end had not been disturbed, credit could not be denied at the recipient's end on the ground that no service had in fact been rendered or that the description of service was incorrect. The determinative reasoning was that, unless the assessment of the service providers was reopened, the Department could not, in proceedings against the recipient, recharacterise the transaction and refuse the corresponding credit. [Paras 6, 7]

The appellant was held entitled to avail CENVAT credit of the service tax charged by the automobile dealers in the course of rendering support services to it.

Final Conclusion: Following its earlier decision, the Tribunal held that CENVAT credit of the service tax charged by the automobile dealers for support services could not be denied when the tax paid by the service providers had not been questioned. The impugned order was accordingly set aside and the appeal was allowed with consequential relief.

Independent appraisal by Commissioner (Appeals) - Challenged to disallowance of quantity discount and price support/price difference discount - Non-speaking appellate order - Appellate jurisdiction confined to subject-matter of appeal - Reformatio in peius - Commissioner (Appeals) failed to independently examine the grounds and evidence and also made adverse observations on deductions not under challenge before him. - HELD THAT: - The Tribunal held that the appellate authority was required to consider the grounds raised, examine the material placed on record and record independent findings on the controversy arising in appeal. A bare statement that there was no reason to interfere with the adjudicating authority's view, without dealing with the assessee's submissions or the relevant material, was a non-speaking order and violated the requirement of reasoned quasi-judicial adjudication. The Tribunal further held that, in the assessee's own appeal, the Commissioner (Appeals) could not travel beyond the subject-matter of challenge and cast doubt on deductions such as freight and insurance already allowed in the original orders and not disputed by Revenue. An appellate authority may confirm, modify or annul the order appealed against within the scope of the appeal, but cannot place the appellant in a worse position by introducing new adverse issues. As the factual aspects relevant to valuation had not been examined by the first appellate authority, the Tribunal declined to decide the merits and directed fresh disposal by a speaking order after considering all grounds, submissions and evidence, while leaving the deductions already allowed in the original orders undisturbed. [Paras 18, 20, 21, 22, 23]

Both impugned appellate orders were set aside to the extent challenged and all appeals were remanded to the Commissioner (Appeals) for fresh decision on merits in accordance with law, without disturbing deductions already allowed in the original orders.

Final Conclusion: The Tribunal did not decide the admissibility of the disputed discounts on merits. It set aside the appellate orders as unreasoned and beyond the permissible appellate scope, and remanded the matters for fresh adjudication by the Commissioner (Appeals) through a speaking order.

Limitation for reassessment of escaped turnover - Prospective operation of amendment extending limitation - Notice and assessment under Section 25(1) - barred by limitation - HELD THAT: - The Court held that the amendment made by the Kerala Finance Act, 2017, substituting the expression concerning the power to proceed to determine, operates only prospectively from 01.04.2017 and does not revive or retrospectively extend proceedings for periods already governed by the earlier limitation. Reading the third proviso in the light of the binding decision in Assistant Commissioner (Asst) v. Cholayil Pvt. Ltd. [2023 (9) TMI 801 - SUPREME COURT] the Court found that for the assessment year 2011-12 the permissible period expired on 31.03.2017. Since the notice reopening the assessment was issued only on 25.01.2018, the impugned proceedings lacked jurisdiction on account of limitation. [Paras 21, 22]

The impugned assessment order was held unsustainable as the reopening notice for 2011-12 had been issued beyond the permissible period.

Final Conclusion: The Court held that the amendment extending the limitation under Section 25(1) of the KVAT Act operates prospectively and does not validate reopening for the assessment year 2011-12 after 31.03.2017. As the notice was issued only on 25.01.2018, the impugned assessment was treated as without jurisdiction.

Review jurisdiction - Error apparent on the face of the record - Right of Children to Free and Compulsory Education Act, 2009 [RTE Act] - retrospective application of the RTE Act - Teacher Eligibility Test for in-service teachers - Minimum qualifications under the Right to Education regime - Extension of compliance time under Article 142 - NCTE Act VIS-À-VIS RTE Act - Scope of first proviso to section 12A of the National Council for Teacher Education Act, 1993 (NCTE) - future appointments and teachers already in service under section 23 of the RTE Act - Audi alteram partem - Pragmatic approach - Child-centric legislation

In-service teachers imparting lessons to students recruited prior to enactment of the RTE Act, and having more than 5 (five) years to retire on superannuation, were held to be under an obligation to qualify the TET within 2 (two) years from 1 st September, 2025

Review jurisdiction - Teacher Eligibility Test for in-service teachers - Prospective operation of minimum qualification requirement - HELD THAT: - The Court held that Section 23 of the RTE Act itself makes a clear distinction between future appointees and teachers already in service. While sub-section (1) speaks of "any person" eligible for appointment, the provisos to sub-section (2) specifically refer to "a teacher" and "every teacher" in position at the relevant dates, thereby showing a legislative intent that existing teachers must also acquire the prescribed minimum qualifications within the time allowed. The 2017 amendment was treated not as retrospective disqualification, but as a further statutory window recognising existing appointments and extending time for compliance. The Court further held that subordinate legislation or notifications could not override the parent statute, and that the provisos to Section 12A of the NCTE Act, when read together, reinforced rather than displaced the obligation to acquire the minimum qualifications within the period specified under the RTE framework. On that construction, the TET requirement was not regarded as an impermissible alteration of service conditions but as part of the statutory scheme meant to secure quality elementary education. Since the earlier judgment had correctly interpreted the statutory framework, no ground for review was made out. [Paras 22, 23, 25, 28, 29]

The review challenge to the applicability of TET to in-service teachers was rejected, and the earlier interpretation was affirmed as free from error apparent on the face of the record.

Extension of compliance time under Article 142 - Continuity of elementary education - Pragmatic relief - Although no error warranting review was established, the time earlier granted to in-service teachers to acquire TET was extended in order to protect continuity in elementary education and mitigate practical disruption. - HELD THAT: - The Court held that the statutory requirement of TET could not be diluted, particularly because the legislation is child-centric and the educational future of children could not be subordinated to continuance of unqualified teachers. At the same time, bearing in mind the practical repercussions of a large number of in-service teachers becoming vulnerable within a short period, the Court considered it appropriate to mould relief pragmatically. Exercising power under Article 142, it extended the compliance period from two years to three years and expected the competent authorities to conduct the TET periodically so that eligible teachers have a reasonable opportunity to qualify. The Court also made clear that no further extension would be entertained. [Paras 31, 32, 33, 34, 35]

The earlier timeline was modified by extending the period for acquiring TET from two years to three years, with no scope for any further extension.

Final Conclusion: The Court found no error apparent in the earlier ruling that in-service teachers must acquire TET as part of the statutory minimum qualifications under the RTE regime. However, in exercise of Article 142, it extended the time for compliance from two years to three years and, subject to that modification, dismissed all the review petitions.

Dishonour of cheques - Acquittal of accused - Statutory presumptions as to legally enforceable debt - stop payment instructions - misapplication of law and perversity in appreciation of evidence - Appellate interference with acquittal for misapplication of settled legal principles

Reverse onus in cheque dishonour proceedings - Presumption of legally enforceable debt - In proceedings for dishonour of cheque, once issuance of the cheque and signature thereon are admitted or proved, the statutory presumptions under the Negotiable Instruments Act operate in favour of the holder and the burden shifts to the accused to rebut them by a probable defence. - HELD THAT: - The Court held that the Trial Court had approached the complaint as if the entire burden remained on the complainant throughout, even after the issuance of the cheques and the signatures thereon stood established. It held that the legislative scheme incorporates a reverse onus, under which a mandatory presumption arises that the cheque was issued towards discharge of a legally enforceable debt or liability, and that such presumption can be displaced only by a probable defence supported by cogent material. Mere denial, vague explanation or bald assertion was held insufficient in law. Since the acquittal proceeded on a misapplication of this settled standard and without a finding of effective rebuttal, the impugned judgment was set aside and the matter was remanded for fresh consideration in the light of the statutory presumptions. [Paras 18, 20, 22, 23, 24]

The Trial Court's acquittal was held legally unsustainable for failure to apply the statutory presumptions and burden of proof correctly, and the complaint cases were remanded for fresh adjudication.

Stop payment dishonour under cheque dishonour law - Foundational ingredients of cheque dishonour offence - Dishonour of a cheque on account of stop payment instructions attracts the penal consequences of the Negotiable Instruments Act when the foundational requirements of the offence are otherwise satisfied. - HELD THAT: - The Court found that the cheques had been presented within their validity period, were returned unpaid with the endorsement "Stop Payment", legal notices were issued within time and payment was not made despite notice. It held that the Trial Court had failed to appreciate the legal effect of dishonour on account of stop payment instructions, which does not by itself extinguish liability arising from issuance of the cheque towards discharge of debt or liability. Relying on M/S Laxmi Dyechem V. State of Gujarat & Ors. [2012 (12) TMI 106 - SUPREME COURT], the Court held that stop payment dishonour also falls within the ambit of the offence if the other foundational requirements stand satisfied. The matter was therefore remanded for fresh adjudication in accordance with this settled principle. [Paras 16, 19, 24]

The Trial Court's contrary approach to dishonour on stop payment instructions was held erroneous, and the matter was remanded for reconsideration on that legal basis.

Final Conclusion: The High Court held that the acquittal was vitiated by failure to apply the statutory presumptions under the Negotiable Instruments Act and by erroneous appreciation of dishonour on stop payment instructions. The acquittal was set aside and the complaint cases were remanded to the Trial Court for fresh adjudication in accordance with law.