TMI Tax Updates e-Newsletter
Jun 16,2026

Input tax credit on reverse charge self-invoice - liability to pay tax on services from a non-taxable territory - Wrongful availment of the ITC -Scope of Distribution of input tax credit without Input Service Distributor registration - Recipient of imported services - Revenue neutrality

Input tax credit claimed on services received from a foreign supplier under reverse charge - Recipient of imported services - HELD THAT: - In this case, it is evident that, the petitioner being the recipient of services supplied by a foreign company (a non-registered supplier), in fulfilment of its obligations under section 9(3), raised an invoice as required under section 31 of the CGST Act r/w Rule 36 of the CGST Rules, paid the tax based on such invoice, and claimed the ITC for the tax paid, on the strength of Section 16(2)(a) of the CGST, Act. Thus, all such transactions/actions of the petitioner were based on the relevant statutory provisions, and therefore, are perfectly in tune with the statutory requirements. Hence, the ITC availed by the petitioner is legally sustainable.

The Court held that for services received from an unregistered foreign supplier, the relevant document for availing input tax credit was not the foreign supplier's invoice but the self-invoice raised by the registered person liable to discharge tax under reverse charge. Reading section 9(3), section 16(2)(a), section 31(3)(f) and rule 36 together, the Court found that a self-invoice issued for reverse charge payment is a valid tax-paying document for availing credit. Since the petitioner paid the consideration and discharged the tax liability on that basis, it answered the statutory definition of recipient and could not be denied credit merely because the original foreign invoice mentioned the Delhi unit. [Paras 9]

The finding that the input tax credit was wrongly availed was held to be legally unsustainable.

Distribution of input tax credit without Input Service Distributor registration - Revenue neutrality - For the period in dispute, distribution of input tax credit to other distinct persons without obtaining Input Service Distributor registration was not impermissible. - HELD THAT: - As per the findings in Ext.P1, the distribution of ITC among the other units of the petitioner company with separate registrations, could have been affected by the company only through the input service distribution mechanism, which requires registration mandatorily, and since the petitioner had carried out the distribution without such registration, it had violated the relevant provisions in this regard. On the other hand, the specific contention raised by the learned Senior Counsel for the petitioner is that, as on the date of the relevant transactions, it was not mandatory for the petitioner to obtain registration as ISD, for the purpose of distribution of ITC among the other units of the company. According to the learned Senior Counsel, the input service distribution mechanism contemplated under the Act was only an option available to the taxpayer and nothing precluded such taxpayer from distributing the ITC otherwise than through the said mechanism.

The Court held that unamended section 20, as it stood during the relevant period, was only an enabling provision prescribing the manner of distribution of credit through the Input Service Distributor mechanism and did not mandate that all such distribution must be only through a registered ISD. The subsequent amendment making such registration compulsory was treated as indicative that the earlier provision imposed no such requirement. The Court also found that section 24(viii) could not be read as creating a compulsory ISD route in the absence of a specific prohibition against any other mode of distribution. Support was drawn from Micro Labs Limited Ltd v. State of Karnataka [2025 (10) TMI 1426 - KARNATAKA HIGH COURT]. The Court further noted that the transaction was revenue neutral, since tax had already been paid and no revenue loss was caused, and held that denial on a technical ground was unwarranted. [Paras 10]

The finding that the petitioner had illegally distributed credit without ISD registration was set aside, and the consequential demand and penalty were held unsustainable.

Final Conclusion: The writ petition was allowed by quashing the order insofar as it treated the petitioner's input tax credit as ineligible and its distribution of such credit to other units as illegal. The consequential demand and penalty were declared not legally sustainable.

Order against deceased proprietor - Proceedings against proprietary concern after death of proprietor - Notice to legal representative - An order-in-original passed against the deceased sole proprietor of a proprietary concern, without proceeding against the legal representative - HELD THAT: - The Court held that the impugned order was vulnerable because it had been made against a dead person. It declined to enter into the disputed question whether the death had been specifically intimated to the department, but took note that the respondents had already been heard in an earlier writ proceeding where a similar grievance regarding an order against the same deceased proprietor had been raised. The contention that the proprietary firm continued was rejected as immaterial in the circumstances, the Court observing that, at least prima facie, once the proprietor of a proprietary concern dies, the department must at least issue notice to the legal representative if it seeks to proceed further. Since that had not been done, the order could not stand. [Paras 8, 9, 10, 11, 12]

The impugned order-in-original was quashed, with liberty to the respondents to take such steps as may be available in law against the petitioner.

Final Conclusion: The High Court quashed the order-in-original as having been passed against a deceased sole proprietor without notice to the legal representative. Liberty was, however, reserved to the department to proceed afresh in accordance with law.

Restoration of cancelled GST registration for non-filing of returns - Compliance with proviso to Rule 22(4) of the CGST Rules - Full payment of tax dues - seeking restoration by approaching the proper authority - HELD THAT: - The Court found that the controversy was squarely covered by the earlier decision in Dhirghat Hardware Stores [2025 (10) TMI 1070 - GAUHATI HIGH COURT], rendered on similar facts and law. Proceeding on that basis, it accepted that where registration had been cancelled for non-furnishing of returns for a continuous period, and the registered person was ready to furnish all pending returns and make full payment of the tax dues with applicable interest, penalty and late fee, the proper authority was required to consider restoration in accordance with law under the proviso to Rule 22(4). The Court therefore granted the petitioner an opportunity to approach the concerned authority within the time fixed by the order, and directed that the period under Section 73(10) would be computed from the date of the order, except for the financial year 2024-25 which would be governed as indicated in the order. [Paras 11, 12, 13]

The petitioner was permitted to seek restoration of GST registration within sixty days, and on compliance with the requirements of the proviso to Rule 22(4), the authority was directed to consider restoration expeditiously in accordance with law.

Final Conclusion: Following the earlier coordinate Bench decision on the same point, the Court disposed of the writ petition by allowing the petitioner to approach the competent authority for restoration of GST registration within the prescribed time and by directing consideration of such request on compliance with the conditions under the proviso to Rule 22(4) of the CGST Rules.

Failure to consider material documents - Fresh opportunity before adjudicating authority - Zero-rated supply - Inter-State supply - Reverse charge mechanism - challenged the respective assessment orders passed under Section 73 - Statutory scheme applicable to SEZ units, including the Special Economic Zones Act, 2005, the Special Economic Zones Rules, 2006, Section 7(5)(b) and Section 16 of the Integrated Goods and Services Tax Act, 2017 - HELD THAT: - The Court found from the counter affidavit and the respondent's submissions that the impugned orders had been passed primarily because the petitioner had not produced the Letter of Undertaking and the SEZ Certificate before the adjudicating authority. Since the SEZ Certificate was produced before the Court and the petitioner stated that the Letter of Undertaking would also be produced, the Court held that the controversy should be reconsidered after giving the petitioner one further opportunity to place those documents before the authority. The Court expressly refrained from deciding the merits of the rival legal or factual contentions, including the claim based on Section 16 of the IGST Act, and directed fresh consideration upon production of the documents. [Paras 12, 13, 14]

The matter was remanded to the adjudicating authority for fresh consideration after permitting the petitioner to file an additional reply and produce the Letter of Undertaking and the SEZ Certificate.

Final Conclusion: The writ petitions were disposed of by setting aside the assessment orders and remanding the matter for fresh adjudication, since the petitioner's claim required reconsideration after verification of the Letter of Undertaking and SEZ Certificate. No opinion was expressed on the merits.

Refund claim reconsideration on curable classification error - Opportunity of Hearing - refund claim arising from EPCG-linked procurement - Rejection of the refund claim on account of the supplier having shown the supply under general turnover instead of deemed exports, without giving the petitioner an opportunity to place supporting material. - HELD THAT: - The Court found that the difficulty in processing the refund claim had arisen from a classification error committed by the supplier and that the claim required reconsideration on merits if proper supporting documents were produced. Since the petitioner expressed willingness to furnish a Chartered Accountant's certificate and the respondent also stated that the claim could be reconsidered on such production, the matter was directed to be examined afresh in accordance with law. [Paras 7, 8]

The impugned order was set aside and the matter was remitted for fresh consideration on submission of a fresh representation with the Chartered Accountant's certificate and supporting documents.

Final Conclusion: The Court did not decide the refund entitlement on merits. It set aside the rejection order and remitted the matter to the authority for fresh consideration upon the petitioner furnishing the required supporting material.

Writ against show-cause notice - Jurisdiction of CGST Assistant/Deputy Commissioner under cess rules - Prematurity of writ remedy - Reasoned and speaking order - Notice suffered from lack of jurisdiction on the ground that the signatory authority was a CGST officer under the Health Security se National Security Cess framework

Challenge to show-cause notice - Prematurity of writ remedy - HELD THAT: - The Court held that the impugned notice merely disclosed the revenue's proposal and did not attain finality. Since the petitioner had the opportunity to file objections and the adjudicating authority was yet to consider those objections, the dispute remained open for determination in statutory proceedings. The proper course, therefore, was to permit the petitioner to submit a further reply to the corrigendum and require the authority to consider all replies by a reasoned and speaking order. [Paras 7, 9, 10]

The writ petition was not entertained against the show-cause notice, and the petitioner was left to pursue objections and other statutory remedies.

Jurisdiction under the Act and Rules - Authority of CGST officer - Defect in rubber stamp description - HELD THAT: - Reading Order No. 01/2026 with Order No. 02/2026, the Court found that the Deputy or Assistant Commissioner under the CGST Act stood vested with jurisdiction under Rule 11 of the Rules. Once such jurisdiction existed in the signatory, no lack of authority arose merely because the stamp below the signature described the officer differently. The objection founded on absence of jurisdiction was, therefore, rejected. [Paras 8]

The jurisdictional challenge failed.

Final Conclusion: The writ petition was dismissed. The petitioner was permitted to file a further reply to the corrigendum notice within the time granted, and the competent authority was directed to decide all replies by a reasoned and speaking order.

Best judgment estimation of business income - Profit estimation based on past history - Estimation of net profit from Custom House Clearing Agency services at 8% of turnover in reassessment proceedings - HELD THAT: - The Tribunal noted that the assessment had been completed on an estimated basis because the assessee did not fully respond to the notices, though certain materials had in fact been furnished during the assessment proceedings, including the audit report, computation, financial statements and other records. It found that the Assessing Officer had proceeded to estimate income at 8% of turnover without giving due weight to the material placed on record.

On examining the assessee's past profit history placed before the Tribunal, it was noticed that the net profit declared in the preceding years ranged between 2.04% and 2.38% of turnover. Taking the totality of circumstances, including the nature of business and the past results, the Tribunal held that estimation at 8% was on the higher side and that estimation at 4% of turnover would meet the ends of justice. [Paras 8, 9]

The addition was reduced by directing estimation of net profit at 4% of total turnover, with corresponding restriction of the addition after giving credit for the income already returned.

Final Conclusion: For Assessment Year 2016-17, the Tribunal partly allowed the appeal and held that the profit estimation adopted in reassessment was excessive. The estimated net profit was reduced from 8% to 4% of turnover and the addition was restricted accordingly.

Limitation for giving effect to appellate order - Mandatory nature of statutory time limit - Refund with statutory interest on time-barred retention of tax

Limitation for giving effect to appellate order - Mandatory nature of statutory time limit - Nullity of belated giving effect order - whether giving effect order passed on the appellate order for assessment year 2017-18 was barred by limitation and without jurisdiction? - HELD THAT: - The Court found the material facts to be undisputed. The appellate order had been received by the Commissioner, and the giving effect order was passed well beyond the period prescribed under section 153(5). No extension had been sought under the proviso before expiry of the prescribed period. On that basis, the Court held that the statutory time limit was mandatory, that failure to pass the giving effect order within time resulted in the appellate order attaining finality, and that the department could not thereafter validly give effect to it. Administrative restructuring was not accepted as a basis to sustain the belated order.

The judgment United Spirits Ltd. [2023 (10) TMI 850 - KARNATAKA HIGH COURT] relied upon by the petitioner which has been recorded in the earlier order[2026 (5) TMI 1838 - CALCUTTA HIGH COURT] squarely applies to the facts of this case. The failure to pass the giving effect order within the prescribed period, results in the appellate order attaining finality and the department cannot subsequently seek to give effect to. [Paras 8, 9, 10]

The impugned giving effect order was held to be a nullity and was quashed along with consequential proceedings.

Refund with statutory interest on time-barred retention of tax - Unjust retention of tax - HELD THAT: - Having held the impugned order to be a nullity, the Court treated refund as the natural consequence. It held that the department could not unjustly enrich itself by retaining the petitioner's tax and directed refund with interest under section 244A from the date specified by the Court until actual payment. [Paras 11, 12, 14]

Refund was directed to be made with statutory interest under section 244A.

Final Conclusion: The writ petition was allowed. The belated order giving effect to the appellate order for assessment year 2017-18 was quashed as time-barred, and the department was directed to refund the retained tax with statutory interest.

Reassessment u/s 148A - Non-consideration of assessee's reply - Violation of principles of natural justice - Reasoned formation of belief of escaped income

HELD THAT: - The Court held that the impugned order recorded only that partial bank statements had been furnished, but did not deal with the explanations given in the replies dated 11th April 2025 and 19th June 2025 in their entirety. Mere reference to circular movement of funds, without analysing the commercial rationale or the materials produced, could not sustain the formation of belief under Section 148A(3).

Since Section 148A mandates consideration of the assessee's reply before deciding whether it is a fit case for issuance of notice u/s 148, such non-consideration vitiated the order. The question of genuineness and creditworthiness of the transactions therefore required fresh examination after affording an opportunity of hearing. [Paras 13, 14, 15]

The impugned order and consequential notice were quashed, and the AO was directed to reconsider the issue afresh by passing a reasoned order after granting an opportunity of hearing.

Final Conclusion: The writ petition was disposed of by quashing the order under Section 148A(3) and the consequential notice u/s 148 for Assessment Year 2019-20. The matter was remitted to the Assessing Officer for fresh consideration of the genuineness of the transactions after giving due opportunity of hearing and passing a reasoned order.

Short deduction of tax at source and disallowance u/s 40(a)(ia) - Corporate guarantee commission for associated enterprises - Disallowance u/s 14A where own funds exceed exempt investments

Short deduction of tax at source - Disallowance u/s 40(a)(ia) - HELD THAT: - The Court held that the controversy raised by the Revenue on disallowance for short deduction of tax was squarely covered by its decision in Media Worldwide Limited [2026 (4) TMI 1792 - BOMBAY HIGH COURT]. Following that decision, which had itself relied on decisions of several High Courts, the Court held that in cases of short deduction of tax at source no disallowance u/s 40(a)(ia) is warranted. On that basis, the questions framed on this controversy did not give rise to any substantial question of law. Having so held, the questions on characterization of carriage fees or channel placement fees as royalty were treated as academic. [Paras 3, 4]

The proposed questions on short deduction and the consequential royalty-based disallowance were not entertained.

Corporate guarantee commission - Arm's length rate for guarantee fee - HELD THAT: - The Court found that the issue was covered in Everest Kento Cylinders Ltd [2015 (5) TMI 395 - BOMBAY HIGH COURT] . It reiterated the principle that a corporate guarantee issued by a company for the borrowing of its associated enterprise cannot be equated with a bank guarantee issued by a commercial bank, since the considerations governing the two are distinct. On that basis, the rate of 0.5% for charging commission on the corporate guarantee, as accepted by the Tribunal, did not give rise to any substantial question of law. [Paras 5]

The proposed questions challenging restriction of corporate guarantee commission to 0.5% were not entertained.

Disallowance u/s 14A - Presumption from own funds - Whether no interest disallowance u/s 14A r/w Rule 8D(2)(ii) could be sustained where the assessee's own and other non-interest-bearing funds exceeded the tax-free investments? - HELD THAT: - The Court held that this issue stood covered in Morgan Stanley India Capital Pvt Ltd [2025 (8) TMI 1283 - BOMBAY HIGH COURT] and South Indian Bank Ltd [2021 (9) TMI 566 - SUPREME COURT] . The governing principle applied was that where the assessee's own funds and other non-interest-bearing funds are more than the investments in tax-free securities, a presumption arises that such investments were made from interest-free funds. Since the Tribunal had recorded that this factual position was not in dispute, the Revenue's challenge did not raise any substantial question of law. [Paras 6]

The proposed question on disallowance u/s 14A read with Rule 8D(2)(ii) was not entertained.

Final Conclusion: The appeal was entertained only on the re-framed question concerning disallowance under section 14A read with Rule 8D(2)(iii) in relation to investments which actually yielded exempt income during the relevant year. All other proposed questions were held either to be covered by binding precedent or to be academic, and were therefore not entertained.

Reasonable opportunity of hearingfastened with liability - Reassessment on grounds beyond prior show cause notice - assessee was required to answer, at the stage of the later show cause notice, allegations relating to sale of multiple units though the earlier proceedings u/s 148A referred only to sale of one unit, and the time granted before completion of assessment was inadequate

HELD THAT: - The Court recorded that the proceedings u/s 148A referred only to sale of one unit, whereas the later show cause notice referred for the first time to multiple units sold by the petitioner. It further noticed that the interval between that later notice and the assessment order gave the petitioner insufficient time to collate the material and respond. In these circumstances, the Court held that limited interference was just and reasonable so that the petitioner could be afforded an effective opportunity to submit a detailed response, with all other questions left open for fresh decision by the Assessing Officer. [Paras 3, 4]

The assessment order and subsequent penalty show cause notices were quashed, and the petitioner was granted liberty to file a detailed response within the time fixed by the Court for fresh consideration by the Assessing Officer.

Final Conclusion: The writ petition was allowed in part. The Court set aside the assessment order and consequential penalty show cause notices on the ground of inadequate opportunity arising from introduction of a wider basis at the later stage, while leaving all other questions open for fresh consideration on the petitioner's response.

Payment to self- interest received by the Indian branches from assessee (Head Office) and/or overseas branches -Specific provision prevailing over general provision - Head office expenditure vis-a-vis direct operational expenditure - Broken period interest on banking securities - Mark-to-market loss on unmatured foreign exchange contracts - Valuation of banking securities as stock-in-trade - Section 14A disallowance

Payment to self - Taxability of intra-entity interest - Specific provision prevailing over general provision - Interest received by the Indian branch from its head office and overseas branches taxability in India - HELD THAT: - The Tribunal held that the head office and the Indian branch were only different establishments of the same legal entity and, therefore, the impugned interest represented an internal allocation and not real income. Since interest income is specifically governed by the deeming provision relating to interest, its taxability could not be tested under the more general business-connection provision. The statutory conditions for deeming such interest to accrue in India were not satisfied, as the transaction did not involve borrowing by a distinct person or a debtor-creditor relationship between separate entities. The separate-enterprise fiction under the DTAA was held to be limited to profit attribution and incapable of creating a tax charge on a transaction with oneself. The Tribunal also noted that the later statutory amendment covered only outbound interest payable by the Indian permanent establishment, and not interest receivable by it from the head office or overseas branches. [Paras 5, 6, 7]

The addition on account of interest received from the head office and overseas branches was directed to be deleted.

Hub service charges - Head office expenditure vis-a-vis direct operational expenditure - Business expenditure - Hub expenses for centralized banking support services allowable as business expenditure or governed by the restriction applicable to head office expenditure - HELD THAT: - The Tribunal found that the impugned expenditure related to identifiable operational services such as data processing, transaction monitoring, risk management support and system control directly used by the Indian branch in its banking business. On the material on record, including regulatory approvals, agreements and allocation workings, the services were shown to be genuine, business-linked and allocated on identifiable parameters. The objection as to imperfections in allocation could not justify disallowance once the nexus with business and commercial necessity stood established. The Tribunal further held that the statutory restriction on head office expenditure applies only to common executive and administrative overheads incapable of direct attribution, whereas the present expenditure consisted of direct charges for specific operational services actually rendered to the Indian branch. [Paras 9]

The disallowance of hub expenses was deleted and the claim was allowed under the general provision for business expenditure.

Broken period interest on banking securities - Business income from securities - whether Broken period interest paid on purchase of securities in the course of banking business was deductible and did not form part of the cost of acquisition? - HELD THAT: - The Tribunal held that, in banking transactions, securities are acquired on a cum-interest basis and the broken period component represents reimbursement of accrued interest to the seller for the pre-acquisition period. Where the Revenue itself taxed the corresponding broken period interest received as business income, the matching payment could not be denied as capital outlay. The earlier authority treating such payment as part of capital cost was held inapplicable because that decision arose in a different statutory context concerning taxation under the former head of interest on securities. In the present case, the securities income was assessed as business income and, on that footing, the broken period interest paid remained a revenue deduction. [Paras 12]

The Revenue's challenge failed and the allowance of broken period interest was upheld.

Expatriate salary reimbursement - Head office expenditure vis-a-vis direct operational expenditure - Salary reimbursed to the head office in respect of an expatriate working for the Indian branch allowability considering head office expenditure subject to restriction - HELD THAT: - The Tribunal held that the impugned payment was only reimbursement of an identifiable personnel cost attributable to services rendered for Indian operations, even though the salary had initially been paid abroad through the head office. Such reimbursement did not assume the character of common executive or administrative overhead of the head office. The fact that the expatriate's full salary had already been subjected to tax in India reinforced the conclusion that the payment was merely a pass-through of branch-specific cost and not an allocable head office expense. The preconditions for applying the restrictive provision on head office expenditure were therefore absent. [Paras 15]

The deletion of disallowance of expatriate salary was upheld.

Mark-to-market loss on unmatured foreign exchange contracts - Mercantile system of accounting - Loss on year-end revaluation of unmatured foreign exchange forward contracts allowability as a business loss - HELD THAT: - The Tribunal accepted that the assessee consistently followed the mercantile system and valued outstanding forward contracts at year-end in accordance with recognised accounting principles and banking guidelines. On that basis, the resultant mark-to-market loss was not contingent or merely notional, but reflected an accrued liability under a consistently followed accounting method. The Tribunal treated the controversy as covered by settled precedent permitting deduction of such valuation loss when computed on a scientific and recognised basis. [Paras 17]

The Revenue's ground against allowance of the revaluation loss was dismissed.

Valuation of banking securities as stock-in-trade - Depreciation in value of current investments - Diminution in the value of securities classified as current investments - HELD THAT: - The Tribunal held that, for a banking company, securities forming part of the trading or investment portfolio maintained in the course of banking business assume the character of stock-in-trade. Once so treated, the settled rule of commercial accounting permitting valuation at cost or market value, whichever is lower, had to be applied. The resulting diminution was therefore a real and ascertained business loss and could not be rejected merely by describing the securities as capital investments. [Paras 19]

The allowance of loss on depreciation in value of current investment securities was upheld.

Section 14A disallowance - Additional legal ground - disallowance of expenditure in relation to non-taxable intra-entity interest - HELD THAT: - The Tribunal admitted the additional ground as a pure question of law arising from facts already on record. On merits, it accepted the assessee's submission that the controversy stood concluded by the Special Bench decision rendered in the assessee's own case for the earlier year [2025 (10) TMI 1425 - ITAT MUMBAI [LB]], held answered the reference against the Revenue and held that section 14A is confined to expenditure relating to exempt income under the Act, and does not extend to receipts which, by reason of mutuality, are not income at all, and no distinguishing feature was shown for the year under consideration. [Paras 20, 21, 23]

Though admitted, the additional ground under section 14A was dismissed.

Final Conclusion: The assessee's appeal was allowed in full and the Revenue's appeal, including the additional ground, was dismissed. The Tribunal deleted the additions relating to intra-entity interest and hub expenses, and upheld the relief granted by the Commissioner (Appeals) on broken period interest, expatriate salary, mark-to-market loss on unmatured forward contracts, and diminution in value of current investment securities.

Computation of block period u/s 153C for non-searched person - Deemed date of search as date of receipt of seized material by jurisdictional AO - Jurisdiction for assessment beyond permissible ten assessment years

HELD THAT: - The Tribunal held that the controversy stood concluded by the Supreme Court in CIT Vs. Jasjit Singh [2023 (10) TMI 572 - Supreme Court] and Ojjus Medicare Pvt Ltd [2024 (4) TMI 268 - DELHI HIGH COURT]. It accepted that, by virtue of the first proviso to section 153C, the commencement point for computing the six-year or extended ten-year block in the case of a non-searched person is shifted from the date of search to the date on which the seized books, documents or assets are received by the jurisdictional AO of such person.

Applying that principle, the deemed date of search in the assessee's case was taken as the date on which satisfaction was recorded by the Assessing Officer of the non-searched person. Consequently, the assessment year relevant to that previous year was A.Y. 2023-24, and A.Ys. 2010-11 and 2011-12 fell beyond the permissible ten assessment years. The assessments were therefore without legal and valid assumption of jurisdiction. [Paras 8, 9, 10, 11]

The Tribunal upheld the order of the Commissioner (Appeals) and quashed the assessments for A.Ys. 2010-11 and 2011-12 as being beyond the block period permissible under section 153C.

Final Conclusion: The Revenue's appeals were dismissed. The Tribunal held that, in the case of a non-searched person, the block period under section 153C must be computed with reference to the date of receipt of the seized material by the jurisdictional Assessing Officer, and on that basis the impugned assessment years were outside the permissible jurisdictional period.

Depreciation on goodwill - Unregistered and unsigned business transfer agreement - Legal sanctity of transfer document - Goodwill arising from business acquisition

HELD THAT: - The Tribunal found that the assessee's claim of goodwill was founded entirely on the business transfer agreement placed in the paper book. On examination, it held that the agreement was unregistered and unsigned on behalf of the buyer and that no other duly executed or registered agreement was produced. Applying the principle drawn from Prahalad Singh [2020 (3) TMI 884 - PUNJAB AND HARYANA HIGH COURT] Tribunal held that an unsigned document is only an anonymous piece of paper lacking legal sanctity. It further held, with reference to CIT vs. Balbir Singh Maini [2017 (10) TMI 323 - SUPREME COURT] that an unregistered agreement has no enforceable effect in law.

Tribunal also noticed that the agreement was stated to have been entered into before formation of the LLP and that the assertion that there was no relationship between seller and buyer was contrary to the record, since the proprietor of the seller concern was also a designated partner of the assessee LLP. On that basis, it concluded that the goodwill allegedly emerging from such document had no value in law and depreciation thereon was liable to be disallowed. [Paras 11, 12, 13]

Depreciation on the claimed goodwill was rightly disallowed and the disallowance was sustained.

Final Conclusion: The Tribunal upheld the disallowance of depreciation on goodwill for Assessment Year 2017-18, holding that the alleged goodwill arose from an unregistered and unsigned business transfer agreement which had no legal sanctity. The assessee's appeal was accordingly dismissed.

Addition based on Uncorroborated WhatsApp chats and electronic notings - Incomplete promissory notes and dumb documents - Brokerage income in real estate intermediary transactions - Double taxation of the same income - Telescoping of unexplained receipts against application of funds

Unaccounted cash payment through WhatsApp message - Corroboration of electronic evidence - solitary WhatsApp message stating that money was given to a named person treated as undisclosed income - HELD THAT: - The Tribunal held that the message merely recorded that the amount was "given" and did not state that it was paid in cash. The assessee had consistently explained that it related to cheque transactions and had furnished the recipient's identity particulars and ledger. Once such primary explanation was furnished, the burden shifted to the Assessing Officer to verify the same, but no statement of the recipient was recorded and no cash trail, withdrawal, receipt, acknowledgement, or other incriminating material was brought on record. An isolated WhatsApp message, without corroboration, could at best raise suspicion and could not constitute proof of undisclosed income. [Paras 12]

The addition based on the WhatsApp message for Assessment Year 2018-19 was deleted.

Unexplained Unsecured Loan in lieu of Promissory Notes - Images of incomplete promissory notes found in a mobile phone of the assessee considered as receipt of money or any credit in the books as unexplained cash credit - HELD THAT: - The Tribunal found that the alleged promissory notes were incomplete, lacked complete particulars of lenders, did not specify the mode of payment, and did not establish that any enforceable transaction had occurred. No corroborative evidence such as lender confirmations, cash trail, bank deposits, or statements was produced. It further held that invocation of section 68 presupposes a credited amount in the books of account, whereas the addition here rested only on incomplete images recovered from a mobile phone. In the absence of evidence of actual receipt of money, the basic condition for such addition remained unfulfilled. [Paras 16]

The deletion of the addition on account of alleged unsecured loans represented by promissory note images for Assessment Year 2018-19 was upheld.

Unexplained investment in land - Proposed land deal through broker - Brokerage on unmaterialised transaction - Where a land transaction reflected in seized material never materialised - HELD THAT: - The Tribunal noted that the property continued in the names of the original owners and remained under litigation, showing that the proposed land transaction never culminated in transfer. No evidence of actual investment, source of funds, cash movement, or execution of sale was brought on record. While the first appellate authority restricted the addition to brokerage, the Tribunal held that when the deal itself had not materialised, there could be no addition even on account of brokerage. Mere electronic notings and the rebuttable presumption u/s 132(4A) could not replace proof of an actual investment or concluded brokerage transaction. [Paras 18]

The Revenue's challenge to deletion of the token payment addition failed, and the assessee's challenge to the sustained brokerage addition succeeded for Assessment Year 2018-19.

Ambiguous loan notings in seized images - Opening balance and year identification - seized image does not clearly indicate whether the amount represented cash paid or cash received - HELD THAT: - The Tribunal held that the seized images did not specify whether the entries represented loans advanced, loans received, investments, or some other transactions, nor did they mention any year linking them to the relevant assessment year. The amount shown as opening balance as on 1st April could not be treated as income arising during the year. As regards the separate figure of fifty lakhs, the seized image did not clearly show whether it was cash paid or received, and no supporting evidence existed to characterise it as undisclosed income. Ambiguous electronic notings, without corroboration, were insufficient to sustain additions. [Paras 22]

The deletion of the additions based on such seized images for Assessment Year 2018-19 was upheld.

Notional interest and repeated/double taxation - Real income under cash system - same income had already been taxed in the hands of another person - addition already substantively dealt with in the hands of another person taxed again in the assessee's hands - HELD THAT: - Relying on Prakash Misrimal Sanghvi -[2025 (6) TMI 618 - ITAT AHMEDABAD] Tribunal accepted that notional interest entries could not be brought to tax on accrual basis where actual interest received had separately been taxed following the cash system and where no principal recovery had taken place over a long period. It further noticed that substantial additions in respect of the same underlying transactions had already been confirmed in the hands of Shri Prakash Misrimal Sanghvi. Taxing the same income again in the assessee's hands would amount to impermissible double taxation. [Paras 24]

The deletion of the addition on account of alleged unaccounted transaction and related notional interest for Assessment Year 2018-19 was upheld.

WhatsApp chats as sole basis of addition - Unproved cash collection through Angadiya - WhatsApp chats referring to proposed reconciliation of RTGS and cash, and to picking up cash from Angadiya relied to make addition - HELD THAT: - The Tribunal held that no corroborative material was brought on record to prove either the alleged cash transaction of eight lakhs or the alleged pickup of cash of fifty lakhs from Angadiya. There was no cash recovery relatable to the entries, no corresponding books or diaries, no statement of the counter-party, and no fund trail. The messages were vague and incomplete and, at best, referred to contemplated or proposed adjustments. In search assessments, additions must rest on credible incriminating material; uncorroborated chats alone could not establish undisclosed income. [Paras 35, 36]

The addition of fifty-eight lakhs sustained by the first appellate authority for Assessment Year 2019-20 was deleted.

Telescoping of unexplained receipts and applications - Prevention of double addition - HELD THAT: - The Tribunal reiterated that once the source of funds has already been taxed, the same amount cannot ordinarily be taxed again in a different form as its application unless the Revenue shows independent and distinct unexplained sources. Since the assessee had furnished a chart correlating additions representing source and application of funds, the lower authorities ought to have examined the claim. The matter required verification only as to nexus and overlap, the governing principle being that the same income cannot be taxed twice. [Paras 38]

The Assessing Officer was directed to grant telescoping or set-off, after verification, in respect of additions sustained for Assessment Year 2019-20.

Real estate intermediary receipts - Estimation of brokerage income - Business income and section 115BBE - Amounts reflected in seized material as transactions handled on behalf of Riddhi Siddhi Group assessed in full in the assessee's hands - HELD THAT: - The Tribunal accepted the first appellate finding that the assessee was acting as an intermediary or broker for Riddhi Siddhi Group and that the substantive transactions did not belong to him in his individual capacity. Since corresponding additions had already been considered in the hands of the group concerns, taxing the entire transaction value again in the assessee's hands would result in double addition. However, the Tribunal found the estimate of brokerage at five per cent excessive and ad hoc, especially when the material did not support such rate. Considering the nature of services rendered and prevailing practice, it restricted brokerage to two per cent and held that such income was assessable as business income, excluding application of section 115BBE. [Paras 44, 45, 46]

For Assessment Year 2019-20, the deletion of the substantive addition was upheld, and the brokerage addition was reduced to two per cent of the transaction value as business income.

Brokerage on unsubstantiated land deal - Incomplete seized image - image relating to a land deal relied to conclude transaction was concluded, even brokerage addition could not be sustained against the assessee acting only as a supposed broker - HELD THAT: - The Tribunal found that the seized image lacked particulars of buyer, seller, property, date, year, and execution of any agreement. No registered document, bank movement, or enquiry with any alleged purchaser or seller was brought on record. The very existence and completion of the transaction remained unproved. The mere circumstance that the assessee attempted to explain the image as a brokerage transaction did not conclusively show that the underlying deal had materialised. In the absence of corroborative evidence, even the brokerage addition could not stand. [Paras 50]

The brokerage addition sustained by the first appellate authority for Assessment Year 2019-20 was deleted, and the Revenue's challenge to deletion of the substantive addition failed.

Proposed property deal and estimated profit - Accrual of real income - Rough calculations and estimated profit in a seized image relied upon - HELD THAT: - The Tribunal held that the seized image did not contain complete particulars of the transaction or establish the relevant year, purchaser, property identification, execution, or receipt of consideration. No registered sale deed, agreement, confirmation, bank trail, or other evidence was produced. Detailed calculations or references to cheque and cash could not by themselves prove that the deal materialised or that real income accrued. Both the sale consideration addition and the separate profit addition were therefore founded on presumption rather than proof. [Paras 54]

For Assessment Year 2019-20, the deletion of the sale consideration addition was upheld and the addition sustained as unaccounted profit was also deleted.

Failed flat transaction through WhatsApp negotiation - Broker not taxable on unmaterialised sale consideration - HELD THAT: - The Tribunal noted that the relied upon chat itself ended with the expression indicating that the offer was not acceptable, demonstrating that the sale did not materialise. The assessee was neither shown to be the buyer nor the seller, and no evidence was produced to show that any flat stood in his name or that consideration had changed hands. When the very material relied upon showed failure of the transaction, further inquiry with the buyer was necessary, but was not undertaken. [Paras 57]

The deletion of the addition for alleged unexplained investment in the flat transaction for Assessment Year 2019-20 was upheld.

Angadiya code message - Decoding of WhatsApp reference to dry fruits - WhatsApp message containing name, PAN, mobile number, and coded currency reference was treated as evidencing money transfer through Angadiya, and the explanation that it related to dry fruits was rejected for want of supporting proof - HELD THAT: - The Tribunal disagreed with the first appellate authority on this issue. It held that the message contained particulars such as the recipient's identity details and a currency note reference, which, in the Tribunal's view, matched the normal Angadiya practice of using coded identification for transactions. The assessee failed to substantiate the alternative explanation that the message concerned gifting dry fruits by producing bills for purchase or corresponding payment evidence. On that basis, the Revenue's interpretation of the message as reflecting a money transfer was accepted. [Paras 60]

The deletion of the addition based on the Angadiya-related WhatsApp message for Assessment Year 2019-20 was reversed, and the addition was sustained.

Jewellery found in locker - CBDT Instruction No. 1916 - HELD THAT: - The Tribunal found no reason to disturb the first appellate finding that the quantity and value of jewellery found were consistent with ordinary holding for a person of the assessee's status and with the explanation that it represented streedhan and gifts. Since the jewellery did not exceed the limits recognised in CBDT Instruction No. 1916, the deletion was justified. [Paras 63]

The deletion of the addition on account of jewellery for Assessment Year 2019-20 was upheld.

Alleged unaccounted loan from seized images - Loan receipt not automatically income - Assessing Officer himself treated seized entries as loan transactions and the material did not identify the assessee as borrower or show any corroborative fund flow - HELD THAT: - The Tribunal held that once the Revenue proceeded on the basis that the impugned entries represented borrowing or receipt of loan, the amount received could not automatically assume the character of income. The seized images lacked names, dates, confirmations, repayment details, and supporting documents identifying the assessee as borrower. The assessee's explanation that the images had been forwarded in connection with recovery of another person's dues was not disproved by any independent enquiry. With no corroborative material showing actual flow of funds to the assessee, the addition failed. [Paras 66]

The deletion of the addition relating to alleged unaccounted loan for Assessment Year 2019-20 was upheld.

Dumb document - Unidentified loan notation - An image containing no name, date, year, or indication whether the amount was given or received was only a dumb document and could not support addition - HELD THAT: - The Tribunal accepted the assessee's contention that the image did not disclose any identifying particulars linking it to the assessee or to the relevant year, nor did it show the character of the transaction. Such unelaborated notings could not be used as substantive evidence of taxable income. [Paras 69]

The deletion of the addition based on the unidentified image for Assessment Year 2019-20 was upheld.

On-money on proposed land sale - Transfer under section 2(47) - Alleged on-money on sale of jointly owned land taxed where the land continued in the names of the co-owners - no transfer or handing over of possession was shown - HELD THAT: - The Tribunal treated it as decisive that the revenue records continued to show ownership with the assessee and the other co-owners up to the relevant period, and no registered sale deed, agreement to sell, transfer document, or possession letter was brought on record. It held that income from transfer of immovable property can arise only upon the taxable event of transfer within the meaning of section 2(47). Since the proposed sale never materialised and no buyer, cash movement, or utilisation of funds was established, the allegation of receipt of on-money remained unsupported. [Paras 73]

The deletion of the addition on account of alleged on-money from sale of Chandkheda land for Assessment Year 2019-20 was upheld.

Final Conclusion: For Assessment Year 2018-19, the assessee succeeded on the surviving disputed addition based on WhatsApp message, while the Revenue's challenges to the deletions largely failed and the brokerage addition sustained by the first appellate authority on the proposed land deal was also deleted. For Assessment Year 2019-20, most additions resting only on uncorroborated electronic material were deleted or remained deleted, brokerage on intermediary transactions was restricted to two per cent as business income, telescoping was directed to be allowed on verification, and only the addition based on the Angadiya-coded WhatsApp message was restored.

Maintainability of appeal against assessment order with no adverse variation - Doctrine of merger between intimation u/s 143(1) and assessment u/s 143(3)

Non-consideration and dismissal of assessee’s appeal by the Ld. CIT(A) on the premise that as the Ld. AO has not made any addition in the order u/s 143(3) - HELD THAT: - The Tribunal held that the statutory right of appeal is order-specific and arises only where the assessee is aggrieved by the particular order appealed against. Under section 246(1)(a), an intimation under section 143(1), an assessment u/s 143(3), and an assessment u/s 144 operate independently, and a grievance against one cannot be pursued by appealing against another.

Since the assessment u/s 143(3) merely accepted the income already determined u/s 143(1) and did not itself make any fresh addition or other adverse variation, no cause of grievance arose from that assessment order. The Tribunal further rejected the plea of merger and held that the earlier order u/s 143(1) did not merge into the later assessment u/s 143(3); consequently, any challenge to the adjustments made u/s 143(1) had to be taken in proceedings against that order itself and not indirectly through appeal against the assessment order. [Paras 9, 10, 11, 12]

The appeal against the order under section 143(3) was not maintainable, and the dismissal of the assessee's appeal by the Commissioner (Appeals) was upheld.

Final Conclusion: The Tribunal held that no appeal lay against the assessment order under section 143(3) where that order itself created no fresh grievance and merely adopted the income already determined under section 143(1). Rejecting the plea of merger between the two orders, it affirmed the dismissal of the assessee's appeal.

Addition for alleged on-money payment in property purchase - addition made on the basis of seized electronic data and recorded statement - Denial of effective opportunity to rebut or cross-examine - proof of material specifically linking the assessee to any admitted on-money payment - HELD THAT: - The Tribunal found that the excel file relied upon by the Assessing Officer merely contained extracted data for which a factor of 100 was applied, while the agreement for sale reproduced in the assessment order did not itself contain details of the alleged cash transaction. The dates in the agreement and the excel entries did not correspond, and the statement referred to in the assessment order was not shown to contain any specific admission concerning the assessee's property transaction or payment of on-money.

Assessee had also given an explanation that the original allotment and payments related to an earlier period and that the later unit was only an adjustment in another project, but this explanation was not properly appreciated. The authorities below had thus proceeded only on extracted electronic data and the investigation report, without corroborative material and without giving the assessee opportunity to test the statement through cross-examination.

Following the coordinate bench view in Saima Sarwat Malik [2026 (3) TMI 1712 - ITAT DELHI] Tribunal held that such material collected behind the back of the assessee could not validly form the sole basis of the addition. [Paras 4]

The addition was deleted and the assessee's appeal was allowed.

Final Conclusion: The Tribunal held that the impugned addition for alleged on-money payment was based on uncorroborated electronic material and statements not effectively put to the assessee for rebuttal or cross-examination. The addition was therefore deleted and the appeal was allowed.

Maintenance ofRedemption fine - Re-export of confiscated goods - Set-off of deposited amounts - Compounding of offences - HELD THAT:- The Court declined to interfere with the Tribunal's [2026 (5) TMI 1174 - CESTAT NEW DELHI] maintenance of redemption fine and reduction of penalties, directed release of the confiscated goods for re-export with set-off of the amount already deposited towards fine and penalties in terms of the Tribunal's order, and directed expeditious disposal of the pending compounding application.

Seeking release of the seized imported goods - illegal and arbitrary confiscation - Conditional Release - petitioner failed to produce the requisite DGFT authorization/license. - HELD THAT:- The writ petition was allowed by following the earlier order of the Court in [2026 (4) TMI 1876 - TELANGANA HIGH COURT], and the respondents were directed to act in terms of that order.

Scope of cancellation of the Customs Duty Exemption Certificates by the DGHS - failure to comply with the mandatory post-import conditions - Continuing post-importation obligations - Strict construction of exemption notifications - Confiscation for breach of exemption conditions -Entitlement to exemption under Notification No. 65/88-Cus. or Notification No. 208/81-Cus. - Sufficient proof of non-compliance - imported components, accessories, and spares - Burden of Proof - Exclusion Clause

Exemption under Notification No. 65/88-Cus. - Cancellation of Customs Duty Exemption Certificates - Continuing obligation to provide free treatment - HELD THAT: - The Tribunal held that exemption under Notification No. 65/88-Cus. was not unconditional, but rested on strict compliance with the social obligations built into the notification. The record showed that the competent authorities found non-compliance with the requirements relating to free treatment of the prescribed category of outdoor patients and reservation of beds for weaker section indoor patients, and the appellant failed to rebut those findings by convincing evidence. Once the certificates issued by DGHS were cancelled on that ground, the appellant lost the essential qualification for the exemption, and the customs authorities were justified in proceeding to recover the duty foregone. [Paras 13, 14, 15, 16]

Exemption under Notification No. 65/88-Cus. was rightly denied after cancellation of the certificates for breach of the mandatory post-import conditions.

Alternative exemption for separately imported component parts - Exclusion clause in exemption notification - Strict interpretation of specified medical equipment entries - Entitlement to the alternative exemptions claimed for component parts of Angioscope and for Multi Channel Cardio Scope Monitors, Spares and Accessories. - HELD THAT: - The Tribunal accepted the adjudicating authority's finding that the imported Angioscope item was only a component part imported separately and not the specified equipment covered by the relevant entry. It further held that the claim relating to Multi Channel Cardio Scope Monitors, Spares and Accessories failed because the applicable notification specifically excluded cardioscopes and cardiac monitors. Applying the principle that exemption notifications must be construed strictly, the Tribunal held that the benefit could be extended only where the goods clearly answered the language of the notification, and the appellant had failed to establish such eligibility. [Paras 17, 18, 19, 20]

The alternative exemption claims under Notification Nos. 65/88-Cus. and 208/81-Cus. were rightly rejected.

Recovery of duty foregone - Confiscation under Section 111(o) - Redemption fine and penalty for breach of exemption conditions - HELD THAT: - The Tribunal held that the goods had been cleared duty free subject to fulfilment of post-import conditions and that, upon failure to satisfy those conditions, they became liable to action under Section 111(o) of the Customs Act, 1962. Since the exemption had been availed subject to specific statutory conditions which stood violated, the demand of duty foregone was legally sustainable. On the same basis, the order of confiscation, as well as the redemption fine and penalty, called for no interference. [Paras 21, 23]

The consequential demand, confiscation, redemption fine and penalty were upheld as legally sustainable.

Final Conclusion: The Tribunal upheld the denial of exemption under Notification No. 65/88-Cus. on account of failure to comply with the mandatory post-import conditions and consequent cancellation of the certificates. It also rejected the alternative exemption claims and sustained the duty demand, confiscation, redemption fine and penalty, dismissing the appeal.

Re-import exemption for exported goods- Simultaneous availment of exemption -Cancellation of bond and post-clearance demand - Repayment of drawback on re-import - Re-import correlation - imported frozen buffalo meat - simultaneously availment of exemption on re-import under Notification No. 158/95-Customs and the drawback-linked exemption under Notification No. 94/96-Customs as amended

Re-import exemption for frozen buffalo meat - Compliance with re-export conditions - Repayment of drawback on re-import - Alternative claim under exemption notification - HELD THAT: - The Tribunal held that goods re-imported after export are liable to customs duty under Section 20, but can avail exemption granted under notifications issued under Section 25(1). On the facts, the appellant had disclosed the earlier shipping bill particulars in each bill of entry, repaid the drawback amount with interest before clearance, moved the goods under bond and customs sealing to its factory, and thereafter re-exported them after the required processes under departmental supervision. The documentary trail and official certifications established correlation between the originally exported goods, the re-imported goods and their subsequent re-export. Since the bonds executed at the time of re-import had been cancelled by the department after being satisfied about compliance, proceedings alleging breach of the bond conditions could not be sustained; in that context, the Tribunal accepted the principle relied upon from Bank of India v CC-[2021 (9) TMI 686 - CESTAT CHENNAI]. The Tribunal further held that the conditions of Notification No. 94/96-Customs stood satisfied because drawback had been repaid with interest, and the benefit under that notification could not be denied merely because it was not claimed in the bill of entry at the initial stage, following Share Medical Care Vs. Union of India [2007 (2) TMI 2 - SUPREME COURT]. The decisions cited by the Revenue in Commissioner of Customs, Kolkata Vs. Indian Rayon and Industries Limited [2008 (7) TMI 401 - SUPREME COURT] and Lahari Impex Private Limited Vs. Commissioner of Customs, Chennai [2017 (11) TMI 1529 - CESTAT CHENNAI] were not accepted on the facts because the present record established the necessary linkage and compliance. [Paras 9, 10, 11, 12, 13]

The appellant was entitled to exemption on the re-imported goods under Notification No. 158/95-Customs and, in any event, the alternative benefit under Notification No. 94/96-Customs as amended was also available.

Duty demand on re-imported frozen buffalo meat - Redemption fine and penalties - HELD THAT: - Once the Tribunal found that the appellant had complied with the conditions governing re-import exemption and that no proceedings could be initiated for alleged breach after cancellation of the bonds, the basis of the impugned duty demand failed. The same finding also removed the foundation for confiscation-related fine and for penalties imposed on the appellant and the co-noticees. [Paras 10, 14]

The differential duty demand, redemption fine and penalties were set aside.

Final Conclusion: The Tribunal held that the re-imported frozen buffalo meat satisfied the conditions for exemption and that the alternative exemption based on repayment of drawback was also available. Consequently, the impugned order confirming duty, redemption fine and penalties was set aside and the appeals were allowed.

Subsequent pleadings before NCLT - Additional objections and documents in Section 7 proceedings - Natural justice - Maintainability of writ petition - Power of Tribunal to entertain additional objections and supporting documents filed by the corporate debtor after its original reply in proceedings under Section 7 of the IBC

Subsequent pleadings before NCLT - Additional objections and documents in Section 7 proceedings - Inherent powers of Tribunal - HELD THAT: - The Court held that Rule 55 of the National Company Law Tribunal Rules, 2016 expressly permits pleadings subsequent to the reply with the leave of the Tribunal on such terms as it thinks fit. Read with Rule 11, the Tribunal had ample authority to accept the additional objections and documents. The impugned order proceeded on the erroneous premise that there was no provision under the Rules to entertain such additional objections, and was also internally inconsistent in simultaneously permitting reliance on the additional documents to a limited extent. Having regard to the short time originally granted for filing the reply, the reasons given for filing the additional objections were sufficient. The principle stated in Dena Bank v. Shivakumar Reddy [2021 (8) TMI 315 - SUPREME COURT] that there is no legal bar to amendment of pleadings or filing of additional documents in an application under Section 7 was applied by the Court to the objections of the corporate debtor as well. [Paras 11, 12, 13]

The finding that the Rules contained no provision to entertain additional objections was held unsustainable, and the additional objections and documents were directed to be considered by the Tribunal.

Natural justice - Writ jurisdiction despite alternative remedy - HELD THAT: - The Court accepted the petitioner's grievance that the application for additional objections was rejected and the main matter was posted for hearing on the very next day, compelling immediate recourse to writ jurisdiction. Referring to Ghanashyam Mishra and Sons Private Limited v. Edelweiss Asset Reconstruction Company Limited and Ors. [2021 (4) TMI 613 - SUPREME COURT], the Court held that a challenge in writ jurisdiction is justified where there is violation of natural justice. As the petitioner had only sought leave to place additional objections and documents on record, the refusal to entertain them in the circumstances was treated as procedurally unfair. [Paras 9, 14]

The objection based on alternative remedy did not bar interference, and the impugned order was set aside for violation of natural justice.

Final Conclusion: The writ petition was allowed. The impugned order refusing to entertain the additional objections was set aside, and the Tribunal was directed to consider the additional objections and documents while deciding the Section 7 application.

Threshold scrutiny of locus standi under Section 94 IBC - Jurisdictional fact of personal guarantor status -Insolvency resolution process - Interim moratorium - efficacious alternative statutory remedy - Whether, upon an application being filed under Section 94 of the Insolvency and Bankruptcy Code, 2016, the National Company Law Tribunal is empowered to examine and determine the locus standi of the applicant to invoke the said provision and, if so, whether such an examination and determination would amount to an adjudication on the merits of the insolvency application or constitute a mere threshold jurisdictional scrutiny?

HELD THAT: - It is a settled principle that every judicial and quasi-judicial authority possesses the power, and indeed the obligation, to ascertain whether the jurisdictional facts necessary for assumption of jurisdiction exist. Jurisdictional facts are those foundational facts upon the existence of which the authority's power to act depends. Unless such facts are established, the authority cannot be compelled to proceed further merely because an application has been presented before it.

The determination of locus standi at the threshold stage is therefore not only permissible but necessary for preserving the integrity of the insolvency framework. Such a determination is confined to maintainability and jurisdiction and does not amount to adjudication on the merits of the insolvency claim.

This Court finds that the Petitioner has failed to establish the very jurisdictional fact upon which his application is founded.

The Court held that Section 94 does not permit automatic acceptance of every application merely on filing, since the right to invoke the provision is conditioned by foundational statutory requirements. Every judicial or quasi-judicial authority must ascertain the existence of jurisdictional facts before assuming jurisdiction, and where the applicant invokes Section 94 on the basis of a claimed status as personal guarantor, that status itself becomes a foundational fact bearing directly on maintainability. The inquiry into such locus standi is distinct from adjudication on substantive insolvency rights and liabilities; it is only a preliminary scrutiny to determine whether the statutory mechanism can be set in motion. The Court further held that appointment of a Resolution Professional under Section 97 cannot be treated as automatic, since the process under Sections 97, 99 and 100 presupposes a validly instituted application. On facts, the documents relied upon by the petitioner described him only as a co-borrower, and no deed or contract of guarantee was produced despite opportunity. The subsequent demand notice describing him as a personal guarantor was held insufficient, as such status must arise from contractual documents and not from unilateral description in a notice. The Tribunal was therefore justified in concluding that the petitioner had failed to establish the foundational jurisdictional fact necessary to invoke Section 94. [Paras 45, 46, 47, 48, 49]

The Tribunal's threshold examination of locus standi was upheld as a permissible jurisdictional scrutiny, and the petitioner's failure to establish any personal guarantee justified dismissal of the application under Section 94.

Final Conclusion: The writ petition was dismissed. The Court upheld the Tribunal's refusal to entertain the Section 94 application on the ground that the petitioner failed to establish the foundational jurisdictional fact of being a personal guarantor, and it also imposed exemplary costs.

Seeking Grant of Bail under the PMLA - Twin conditions for bail - stringent twin conditions under Section 45 - Prolonged pre-trial incarceration under Article 21 - failure to satisfy the statutory twin conditions - economic offences - balancing of liberty and societal interest - risk of tampering with evidence - HELD THAT: - On the facts of the case, after hearing the parties this Court is not at all in a position to satisfy itself either that there are reasonable grounds for believing that the petitioner is not guilty of such offence or that he is not likely to commit any offence while on bail. Thus, the hurdle of the Section 45 of the PML Act cannot be surmounted in the present case. However, unduly long incarceration without trial may, in appropriate cases, outweigh the requirement to fulfil the rigors of Section 45 of the PML Act when tested on the anvil of Article 21 of the Constitution of India. A reference may be made to the decisions in Senthil Balaji [2024 (9) TMI 1497 - SUPREME COURT] and Manish Sisodia [2024 (8) TMI 614 - SUPREME COURT]. Therefore, it has to be seen whether the present case satisfies such scrutiny.

The Court held that, on merits, it was unable to record satisfaction that there were reasonable grounds for believing that the petitioner was not guilty or that he was not likely to commit any offence while on bail, and therefore the bar under Section 45 of the PMLA could not be crossed. At the same time, the Court accepted that unduly long incarceration without trial may, in an appropriate case, outweigh the rigours of Section 45 when tested on the touchstone of Article 21. In applying that principle, the Court weighed the seriousness and scale of the allegations, the petitioner's alleged capacity to influence witnesses, and the role of other influential co-accused, against the facts that the petitioner was not a public servant, had already obtained bail in the predicate offences after substantial custody, had remained in custody in the present case for about two years and three months, the maximum sentence under the PMLA was seven years, and the Enforcement Directorate had delayed both in taking him into custody and in moving on the question of sanction. The Court also noted that, unlike the public servants, no sanction was required in respect of the petitioner. On an overall balancing of aggravating and mitigating circumstances, the Court found the prolonged incarceration sufficient to justify release on bail subject to stringent conditions. [Paras 8, 9, 10, 11, 12]

Bail was granted, notwithstanding the Court's finding that the twin conditions under Section 45 were not met on merits, because the petitioner's prolonged incarceration and the attendant delay considerations warranted release subject to strict conditions.

Final Conclusion: The Court granted bail in the PMLA case, holding that although the statutory twin conditions were not satisfied on merits, the petitioner's prolonged custody, coupled with delay-related circumstances, justified release on stringent terms.

Scope of Binding effect of High Court precedent on Tribunal - Service taxability of mining-related activities - Stare decisis - The Tribunal's view that the activities of the respondent-company did not amount to taxable service - HELD THAT: - The Court held that where the law has been settled by a High Court decision, that decision continues to bind and hold the field until it is set aside or overruled by the Supreme Court, and the Tribunal cannot ignore it. On that basis, no error of law was found in the Tribunal relying on Commissioner of Service Tax, Kolkata vs. Electrosteel Castings Limited [2025 (1) TMI 633 - CALCUTTA HIGH COURT]. The Court also noticed that the position stood settled by an earlier order of the Supreme Court in the matter of Marmugao Port Trust vs. Commissioner of Customs, Central Excise & Service Tax [2016 (11) TMI 520 - CESTAT MUMBAI], and therefore found no ground to interfere with the impugned order. [Paras 4, 5]

No interference was called for with the Tribunal's order, and the appeal was dismissed.

Final Conclusion: The Supreme Court upheld the Tribunal's order and dismissed the appeal, holding that the Tribunal committed no error in following the Calcutta High Court decision, which remained binding until set aside or overruled, and noting that the position also stood settled by an earlier order of this Court.

Implementation of appellate order - Administrative determination of consequential refund - Extended period of limitation - refund of tax - interest on refund - Entitlement to refund with interest or was liable to make payment with interest in terms of the tribunal order - HELD THAT: - The Court noted that the appellate order had already set aside the demand relatable to the extended period of limitation while holding that any demand within the normal period remained payable with interest. Since the dispute before the Court concerned the working out of the consequence of that order, namely whether the result was a refund to the petitioner or a balance liability to the revenue, the Court held that this factual and arithmetical exercise was not to be undertaken by it in the present writ petition. The competent departmental authority was therefore required to act on the appellate order, hear the petitioner if necessary, determine the position, and communicate its decision within the time fixed by the Court, with all merits contentions left open. [Paras 6, 7, 9]

The concerned respondent was directed to implement the appellate order, determine in the first instance whether refund with interest was due or whether any amount with interest was payable by the petitioner, and communicate the decision within three months.

Final Conclusion: The writ petition was disposed of by directing the departmental authority to give effect to the appellate order and decide the consequential refund or liability issue after hearing the petitioner, without the High Court adjudicating the merits of that computation.

SEZ refund for authorised operations - Procedural defects vis-a-vis substantive exemption - Purposive interpretation of SEZ benefits - Overriding effect of SEZ Act - Works contract services for SEZ infrastructure - Refund of service tax paid on services used for authorised operations of the SEZ unit - invoice mismatches, rubber-stamp corrections, non-availability of some original invoices and variation in the description of services - HELD THAT: - The settled law is that procedural infractions which do not affect the substantive eligibility of a claimant cannot be made the basis for denial of exemption of refund. The purpose of invoice is to establish identity of recipient, nature of service and the payment of tax. These requirements stand substantially satisfied in the present case.

The Tribunal held that the controlling test for refund under the SEZ exemption scheme is the actual use of the services for authorised operations, together with undisputed payment of service tax. Since the Revenue did not dispute receipt of the services, payment of tax, or their use for the SEZ unit, rejection founded merely on defects in documentation was held to be unsustainable. As regards CHA services, transport services under reverse charge and rent-a-cab services, the documentary material was sufficient to establish receipt, tax payment and nexus, and clerical or presentational defects in invoices could not defeat substantive entitlement. In relation to works contract services for piling and infrastructure creation of the Hormone Block, the Tribunal held that infrastructure necessary for the approved manufacturing unit is intrinsically connected with authorised operations, and the expression "used for authorised operations" must receive a liberal and purposive construction. The SEZ Act being a beneficial enactment, and having overriding effect in case of inconsistency, refund could not be refused merely because the wording in the invoices did not identically match the approved list of services. [Paras 18, 19, 20, 21, 22]

The appellant was held entitled to refund of the service tax paid on the disputed services, and the rejection based on procedural deficiencies was set aside.

Final Conclusion: The Tribunal held that, for the services in dispute, substantive eligibility for SEZ refund stood established and could not be defeated by technical or procedural deficiencies in the supporting documents. The impugned order was therefore set aside and the refund held admissible with consequential relief.

Admissibility of CENVAT credit on leadership fee - Input Service Distributor procedural irregularity - Composite turnkey contract and impermissible vivisection- Entitlement to full credit under Rule 6(5) for specified input services under Rule 6(5) - Penalty in revenue neutral and interpretational dispute - composite contract - receipt of service and ISD distribution - Demand, interest and penalty

Input Service Distributor procedural irregularity - CENVAT credit distribution - Credit validly distributed through the Input Service Distributor could not be denied at the recipient's end when payment of tax, genuineness of invoices, receipt of service and distribution of credit were not disputed. - HELD THAT: - The Tribunal found that the Service Tax paid on the leadership fee had been distributed through the ISD mechanism and the Department had not disputed the tax payment, the invoices, the receipt of service, or the fact of distribution. No proceedings had been initiated against the ISD unit. In these circumstances, denial of credit to the recipient merely by alleging a procedural irregularity at the ISD stage was held to be legally unsustainable, substantial credit benefit not being liable to be denied where the underlying service and distribution remained undisputed. [Paras 9, 10, 11]

Denial of credit at the recipient's end on the alleged ISD irregularity was held unsustainable.

Composite turnkey contract and impermissible vivisection - Attribution of input service to exempt activity - The leadership fee could not be isolated and attributed only to the manufacture and supply contract so as to deny credit on the footing that it related to non-taxable or exempt activity. - HELD THAT: - The Tribunal held that the covering agreement and consortium arrangement showed a single integrated turnkey Blast Furnace Project executed through multiple interlinked contracts. The leadership fee was payable to the consortium leader for overall management, coordination, integration and successful execution of the entire project, and was not linked exclusively to the contract for manufacture and supply of indigenous equipment. The Department's approach of isolating one contract and proportionately attributing the leadership fee to non-taxable activity amounted to impermissible vivisection of a composite contractual arrangement. [Paras 12, 13]

The leadership fee was held relatable to the integrated turnkey project as a whole, and not exclusively to the manufacturing contract.

Full credit for specified input services under Rule 6(5) - Consulting Engineer Service - Full credit was admissible on the Service Tax paid on leadership fee classified and taxed as Consulting Engineer Service, the Department having failed to establish exclusive use in exempted activity. - HELD THAT: - The Tribunal accepted that the appellant had discharged Service Tax on the leadership fee under the category of Consulting Engineer Service. Since that service was one of the specified services covered by Rule 6(5), and the provision operated with a non-obstante clause, full credit was available unless the service was used exclusively in exempted goods or exempted services. The record, however, showed that the leadership fee related to the integrated project containing both supply and taxable service elements. As exclusive use for exempted activity was not established, the conditions for denying credit under Rule 6(5) were not satisfied. [Paras 14, 15]

The appellant was held entitled to full credit under Rule 6(5).

Revenue neutrality - Penalty in interpretational dispute - HELD THAT: - The Tribunal held that acceptance of the Service Tax paid under reverse charge, without disputing receipt of service, led to a revenue neutral situation, undermining any allegation of intent to evade. It further found that the dispute turned on interpretation of the consortium agreements, Rule 6 and the ISD provisions, and that the transactions stood disclosed in statutory records. In the absence of material showing fraud, collusion, willful misstatement or suppression of facts, imposition of equal penalty was held wholly unwarranted. [Paras 16, 17, 18]

The demand being unsustainable, the interest and penalty were also liable to be set aside, and the equal penalty was independently held unwarranted.

Final Conclusion: The Tribunal held that the Service Tax paid on leadership fee was admissible as CENVAT credit, the service having been validly distributed through ISD, forming part of an integrated turnkey project, and also qualifying for full credit as a specified service under Rule 6(5). The demand, interest and equal penalty were accordingly set aside.

Cum-tax valuation of service receipts - Extended limitation for service tax demand - Imposition of penalties under Sections 76, 77 and 78 of the Finance Act, 1994 - Waiver and deletion of penalties for reasonable cause - Entitlement to the benefit of Section 80 of the Finance Act, 1994 - Reasonable cause - Quantification of tax liability - Mens rea - Consequential relief

Cum-tax benefit - TDS component in taxable value - Re-quantification of service tax - receipts for architect services had to be recomputed by treating the amounts received as cum-tax and by properly considering the TDS component. - HELD THAT: - The Tribunal found that the Department had proceeded on the basis that the gross receipts reflected in the bank account were exclusive of service tax, though it was undisputed that in many transactions service tax had not been separately recovered from customers and the receipts constituted gross receipts. In the absence of any evidence from the Department to show that the consideration was exclusive of tax, the receipts had to be treated as cum-tax value. The adjudicating authority having not granted full cum-tax benefit, and the TDS component also requiring proper inclusion and consideration in valuation, the demand could not stand as quantified and required fresh computation on that basis. [Paras 12, 13, 19, 20]

The appellant was held entitled to cum-tax benefit, and the matter was remanded only for limited re-quantification of service tax liability after extending such benefit and considering the TDS component.

Suppression of facts - Extended period of limitation - Penalty for intent to evade tax - HELD THAT: - The entire demand had been raised by invoking the extended period. The Tribunal held that mere omission, negligence or incorrect interpretation of law does not amount to suppression, and that the Revenue must establish a deliberate act with intent to evade tax. Since the transactions were recorded in regular books, the information had been gathered by the Department from statutory records and audit verification, and no positive evidence of fraud, collusion, wilful misstatement or suppression was produced, the conditions for invoking the extended period were absent. For the same reason, penalty under Section 78, which requires proof of fraud, collusion, wilful misstatement or suppression with intent to evade tax, could not survive. [Paras 14, 15, 19]

The extended period of limitation was held not invocable, and the penalty imposed under Section 78 was set aside.

Reasonable cause for delayed payment - Waiver of penalty under Section 80 - Procedural penalty - Penalties for delayed payment and procedural lapse - HELD THAT: - The Tribunal noted that substantial service tax had already been paid before commencement of audit and that the remaining liability for October 2010 to March 2011 had also been discharged with applicable interest before adjudication. The explanation of financial hardship and delayed realization from clients was found plausible and unrebutted. On that basis, the Tribunal held that reasonable cause within the meaning of Section 80 stood established, warranting waiver of penalty under Section 76. As regards Section 77, the alleged violation was treated as purely procedural, and since the appellant had maintained statutory records and had substantially complied with tax obligations, imposition of that penalty was also found unwarranted. [Paras 16, 17, 18, 19]

Penalty under Section 76 was set aside by extending the benefit of Section 80, and penalty under Section 77 was also set aside.

Final Conclusion: The Tribunal held that the service tax demand had been wrongly quantified without full cum-tax benefit and proper consideration of the TDS component, and therefore remanded the matter only for limited re-quantification. The extended period was held inapplicable, and the penalties under Sections 78, 76 and 77 were set aside.

Preliminary objection - Continuation of the appeal - Effect of Supreme Court's interim stay order - Reference to Larger Bench - Cash refund of transitional CENVAT credit - Non-obstante clause in transitional refund provision - Undue hardship

Effect of interim stay order - Order in personam and not in rem - HELD THAT: - The Tribunal held that the Supreme Court, while condoning delay and admitting the appeal in Granules India Ltd.[2025 (5) TMI 2298 - SC ORDER], had only directed that if the refund pursuant to the Telangana High Court order had not already been made, that order should not be acted upon. The underlying High Court decision was not itself stayed. Such a conditional restraint on execution in that matter could not be treated as a general stay operating in all other proceedings involving other assessees. [Paras 4]

The departmental objection founded on the interim order in Granules India Ltd. was rejected.

Reference to Larger Bench- cash refund under Section 142(3) -Non-obstante clause in transitional refund provision - Mere reference of a similar question to a Larger Bench did not justify keeping the present appeal pending, since the Tribunal had already taken a consistent view that cash refund was permissible under the CGST transitional refund provision notwithstanding absence of such provision in the earlier law. - HELD THAT: - The Tribunal noted that earlier decisions, including Toyota Kirloskar Motor Pvt. Ltd. Vs. Pr. Commissioner of Central Tax, Pune [2025 (6) TMI 1006 - CESTAT MUMBAI] and M/s. Clariant Chemicals India Ltd. Vs. Commissioner of Central Excise & Service Tax, Raigad [2022 (10) TMI 796 - CESTAT MUMBAI], had already held that, having regard to the wording of section 142(3) read with section 142(6)(a) of the CGST Act and its non-obstante clause, admissible credit was refundable in cash except to the extent controlled by section 11B(2) of the Central Excise Act. On that reasoning, the absence of a corresponding provision in the erstwhile CENVAT Credit Rules or earlier enactments was rendered immaterial. The Tribunal therefore held that awaiting determination by a Larger Bench, which had not even been constituted, in another assessee's matter would cause undue hardship and was not warranted. [Paras 5]

The objection seeking deferment of the appeal till the Larger Bench decision was rejected, and the appeal was directed to proceed for hearing on merits.

Final Conclusion: The Tribunal rejected the Department's preliminary objection and held that neither the conditional interim order in another case nor the pendency of a reference to a Larger Bench barred continuation of the present appeal. The matter was directed to proceed for hearing on merits.

Validity of Show cause notice against distinct taxable entity - Composite works contract prior to 01.06.2007 - Extended period of limitation - service tax liability of an erstwhile partnership firm - proof of transfer or succession of business - composite works involving transfer of property in goods and labour/service - completion and finishing services

Show cause notice against distinct taxable entity - Successor liability for tax arrears - HELD THAT: - The Tribunal found that the proprietary concern and the erstwhile partnership firm held separate service tax registrations based on separate PANs, and that the partnership firm's registration had been surrendered before issuance of the show cause notice. Though the Department might proceed in law against unpaid dues of the erstwhile firm, it was required to establish that the proprietary concern had acquired the ongoing business in a manner fastening liability on its proprietor as successor. As the notice was addressed to the proprietary concern with a fresh registration, without any evidence of formal transfer, amalgamation, or other basis for transferee liability, the notice itself was held to be void at inception. It is settled law that the SCN is the foundation for demand of any duty, interest or penalty as per the decision of the Apex Court in CCE, Bangalore v. Brindavan Beverages P Ltd. [2007 (6) TMI 4 - SUPREME COURT]. The demand is liable to be set aside on this count alone. [Paras 9]

The demand, interest and penalty could not be enforced against the proprietary concern on the basis of the impugned show cause notice.

Composite works contract prior to 01.06.2007 - Completion and finishing services in composite contracts - The activities involving transfer of property in goods and discharge of VAT could not be subjected to service tax as completion and finishing services for the period prior to 01.06.2007. - HELD THAT: - On merits, the Tribunal noted that the appellant had produced VAT returns and registration material showing execution of works contracts, and that the contention regarding sale of goods in execution of the contracts remained uncontroverted. Applying the principle laid down in Commissioner of C. Ex & Cus, Kerala v. Larsen & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT], the Tribunal held that prior to 01.06.2007 the Finance Act, 1994 did not levy service tax on indivisible composite works contracts, as the charge then covered only service contracts simpliciter. Once the contracts in question involved deemed sale of materials and VAT had been discharged, the demand could not be sustained by classifying the same activities as completion and finishing services under commercial or industrial construction service. The basis of the demand having thus failed, the impugned order was unsustainable. [Paras 12]

Service tax was not payable on the impugned composite works contract activities for the period prior to 01.06.2007, and the demand was set aside on merits.

Extended period of limitation - HELD THAT: - The contentions on limitation urged in the alternate, particularly the fact that the SCN does not evidence any positive act on the part of the appellant that would qualify as the necessary ingredient to attract invoking the extended period of limitation, too appear to be in favour of the appellant, addressing the same has now become inconsequential. This court fortified by our own view taken in similar circumstances in the decision in M/s. Girlak v. Commissioner of GST & Central Excise, vide Final Order [2026 (1) TMI 1637 - CESTAT CHENNAI]. Resultantly, we set aside the impugned order.

Final Conclusion: The Tribunal set aside the impugned order and allowed the appeal with consequential relief. The demand failed both because the show cause notice was issued to a distinct entity without establishing successor liability, and because the activities were composite works contracts not exigible to service tax for the period prior to 01.06.2007.

Recovery of tax arrears under Section 42(9)(c) - Scope of Magistrate's jurisdiction - Production of statutory forms for exemption - HELD THAT: - The Court held that the proceeding before the Magistrate was confined to recovery of arrears of tax, interest and penalty, and the Magistrate's power extended only to such recovery. On that basis, any observation by the Magistrate touching upon production or acceptability of original 'H' Forms was beyond the permissible scope of those proceedings. Since the question of accepting the statutory forms pertained to the assessment domain, the proper course was not for the High Court to entertain those documents in the writ petition, but to leave it open to the petitioner to place the requisite Forms 'C' and 'H' before the Assessing Authority for consideration in accordance with law. [Paras 5]

Liberty was reserved to the petitioner to approach the Assessing Authority with the requisite statutory Forms 'C' and 'H' for the assessment year 2013-14, and the claim was directed to be considered by that authority in accordance with law.

Final Conclusion: The petition was disposed of on the holding that the Magistrate, in recovery proceedings, had no jurisdiction to examine the validity or acceptability of statutory forms bearing on exemption. The petitioner was left free to place the requisite Forms 'C' and 'H' before the Assessing Authority for decision in accordance with law.

Limitation for completion of assessment - Month-wise computation of tax period - Applicability of COVID-19 limitation extension to assessing authority -HELD THAT: - The Hon’ble Supreme Court in a subsequent judgment in S.Kasi vs. State through the Inspector of Police, [2020 (6) TMI 727 - SUPREME COURT] held that, order was passed to obviate the difficulties faced by the Lawyers and litigants, who had filed the cases in respective Courts and Tribunal and the same would not be available to an adjudicating authority. Following the said judgment, this Court in the case of Punjab Carbonic (P) Limited vs. The Commercial Tax Officer & Ors. [2025 (4) TMI 1284 - ANDHRA PRADESH HIGH COURT], had held that such extension of time was not available for the assessing authority.

The Court accepted the limitation objection to the extent indicated in the writ petitions and held that, for assessments made under Section 9(2) of the CST Act read with Section 21(4) of the APVAT Act, the period of limitation had to be reckoned with reference to the relevant tax period on a month-wise basis. Consequently, the impugned assessments could survive only for those months for which limitation had not expired. The contention that the assessing authority could take benefit of the extension of time granted by the Supreme Court in the suo motu proceedings [2020 (5) TMI 418 - SC ORDER] was rejected, the Court holding that such extension was intended to relieve difficulties of lawyers and litigants before courts and tribunals and was not available to an adjudicating authority. [Paras 9, 10]

The impugned assessment orders were set aside and the matter was remanded to the assessing authority only in relation to those months which were still within limitation, with exclusion of the period between the impugned orders and service of the present order for computing limitation.

Final Conclusion: The writ petitions were allowed on the ground of limitation. The assessment orders were set aside and the matter was remanded only for the months that remained within limitation, with the intervening period directed to be excluded for limitation purposes.

Entitlement to regular bail -Prolonged pre-trial custody - Parity with co-accused - Examination of protected witnesses - incubation of a larger conspiracy in the Kashmir Valley - physical and digital domains had been orchestrated by proscribed groups, whose description has been disclosed in the FIR and who are involved in radicalising local youth - HELD THAT: - The Court noted that the appellant had remained in custody since his arrest and that the protected witnesses relevant to the case against him had already been examined. It further recorded that the remaining vital and protected witnesses were concerned with the role of the co-accused. Taking into account the custody already undergone, the likelihood that the trial would still take reasonable time to conclude, and the parity claimed on the basis that some co-accused had been granted bail, the Court granted bail, while expressly refraining from any opinion on the nature or gravity of the allegations and imposing conditions to secure the appellant's presence and cooperation with the trial. [Paras 4, 5]

Regular bail was granted subject to conditions, including furnishing bail bonds, weekly appearance before the jurisdictional police station, and full cooperation with the ongoing trial.

Final Conclusion: The appeal was allowed and the appellant was directed to be released on regular bail subject to conditions. The order rested on prolonged custody, the present stage of evidence qua the appellant, the likely time for completion of trial, and parity with co-accused already on bail.